**UNITED
      STATES**





**SECURITIES
      AND EXCHANGE COMMISSION**





Washington,
      D. C. 20549





**FORM
      10-QSB**





Quarterly
      Report Pursuant to Section 13 or 15(d)


Of
      the
      Securities Exchange Act of 1934





For
      the
      quarter ended June 30, 2007


Commission
      File Number 0-21079





**PHLO
      CORPORATION**




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





Delaware
              11-3314168(State
                  or other jurisdiction
              (I.R.S.
                  Employerof
                  incorporation or organization)
              Identification
                  No.)6001-21
                  Argyle Forest Blvd.PMB
                  #117Jacksonville,
                  Florida
              32244-5705(Address
                  of principal executive offices)
              (Zip
                  code)








Registrant's
      telephone number, including area code: (904) 505-3834





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 of 15 (d) of the Securities and Exchange Act of 1934 during
      the preceding 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




The
      number of shares outstanding of the issuer's Common Stock as of August 14,
      2007,
      is 661,393,776.








**PHLO
      CORPORATION AND SUBSIDIARIES**


**Quarterly
      Report on Form 10-QSB for the**


**Quarterly
      Period Ending June 30, 2007**





Table
      of
      Contents








Page
                to PagePART
                I. FINANCIAL INFORMATIONItem 1.
            Financial
                StatementsCondensed
                Consolidated Balance Sheet as ofJune
                30, 2007 (Unaudited)
            3Condensed
                Consolidated Statements of Operations for thethree
                months ended June 30, 2007 and 2006(Unaudited)
            4Condensed
                Consolidated Statements of Cash Flows for thethree
                months ended June 30, 2007 and 2006(Unaudited)
            5Notes
                to Condensed Consolidated Financial Statements(Unaudited)
            6Item 2.
            Managements'
                Discussion and Analysis or Planof
                Operation
            8Item 3.
            Controls
                and Procedures
            9PART
              II. OTHER INFORMATION
            10Item 1.
            Legal
                Proceedings
            10Item 2.
            Unregistered
                Sale of Equity Securities and Use of Proceeds
            10Item 3.
            Exhibits
            10Signature
            10Certifications
            11





2


PHLO
      CORPORATION AND SUBSIDARIES


CONDENSED
      CONSOLIDATED BALANCE SHEET (Unaudited)


June
      30,
      2007




ASSETS


CURRENT
                ASSETSCash
            
            
            28,638Accounts
                Receivable
            
            
            14,563Inventory
            
            $
            61,002Total
                Current Assets
            
            
            104,203PROPERTY
                PLANT AND EQUIPMENT, Net
            
            
            4,361DEPOSITS
            
            
            8,486TOTAL
                ASSETS
            
            $
            117,050LIABILITIES
                AND DEFICIENCY IN STOCKHOLDERS' EQUITYCURRENT
                LIABILITIESAccounts
                payable
            
            $
            1,869,790Accrued
                expenses and taxes
            
            
            3,310,403Notes
                payable, current portion
            
            
            626,500Total
                Current Liabilities
            
            
            5,806,693Total
                liabilities
            
            
            5,806,693COMMITMENTS
                AND CONTINGENCIES
            
            
            --DEFICIENCY
                IN STOCKHOLDERS' EQUITY (Note C)Preferred
                stock 15,000,000, shares authorized:Series
                A convertible stock, $0.0001 par value, 500,000 shares
            
            
            50authorized,
                issued and outstanding (Liquidation preferences $100,000)Series
                B non-convertible stock, 500,000 shares authorized,none
                issued and outstanding
            
            
            --Series
                C preferred convertible stock, $0.0001 par value 3,000,000authorized,
                1,240,565 shares outstanding (Liquidation preference
                $12,406)
            
            
            124Series
                C preferred convertible stock, 15,298 shares subscribed
            
            
            1Common
                stock, $0.0001 par value, 250,000,000 shares authorized661,393,776
                shares issued and outstanding
            
            
            66,139Common
                stock, $0.0001 par value, 11,940,989 shares subscribed
            
            
            1,194Additional
                paid-in capital
            
            
            19,699,980Accumulated
                deficit
            
            
            (25,457,131
            )Total
                Deficiency in Stockholders' Equity
            
            
            (5,689,643
            )TOTAL
                LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
            
            $
            117,050








The
      accompanying notes are an integral part of these unaudited condensed
      consolidated financial statements.


3


PHLO
      CORPORATION AND SUBSIDARIES


CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


For
      the
      Three Months Ended June 30, 2007 and 2006











Three
                Months
            
            Three
                Months2007
            
            2006REVENUES
            
            $
            13,624
            
            $
            875COST
                OF REVENUES
            
            
            4,591
            
            
            --GROSS
                PROFIT
            
            
            9,033
            
            
            875OPERATING
                COSTS AND EXPENSESGeneral
                and Administrative
            
            
            610,694
            
            
            420,110Research
                and Development
            
            
            60,000
            
            
            25,000LOSS
                FROM OPERATIONS
            
            
            (661,661
            )
            
            (444,235
            )OTHER
                (EXPENSES)Financing
                Cost
            
            
            (634,628
            )
            
            (
                33,396
            )Interest
                expense
            
            
            (
                16,838
            )
            
            (
                16,838
            )TOTAL
                OTHER EXPENSE
            
            
            (651,466
            )
            
            (
                50,234
            )LOSS
                BEFORE INCOME TAXES
            
            
            (1,313,127
            )
            
            (494,469
            )INCOME
                TAXES
            
            
            --
            
            
            --NET
                LOSS
            
            $
            (1,313,127
            )
            $
            (494,469
            )WEIGHTED
                AVERAGE COMMON SHARES OUTSTANDING
            
            
            646,435,999
            
            
            417,514,475NET
                LOSS PER SHARE (BASIC AND DILUTED)
            
            $
            (0.00
            )
            $
            (0.00
            )








The
      accompanying notes are an integral part of these unaudited condensed
      consolidated financial statements.


4


PHLO
      CORPORATION AND SUBSIDARIES


CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)


For
      the
      Three Months Ended June 30, 2007 and 2006





2007
            
            2006CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (1,313,127
            )
            $
            (494,469
            )Adjustments
                to reconcile net loss to netcash
                used in operating activities:Common
                stock reimbursement to shareholder
            
            
            634,628
            
            
            33,396Common
                stock issued for services
            
            
            446
                396
            
            
            --Depreciation
                and amortization
            
            
            617
            
            
            616Deposit
                applied to rent
            
            
            4,100
            
            
            --Changes
                in operating assets and liabilities:Inventory
            
            
            (22,585
            )
            
            (29,233
            )Accounts
                receivable
            
            
            (13,332
            )
            
            612Settlement
                receivable
            
            
            --
            
            
            45,000Other
                receivable
            
            
            --
            
            
            6,964Accounts
                payable
            
            
            (3,204
            )
            
            295,364Accrued
                expenses and taxes
            
            
            64,925
            
            
            94,681NET
                CASH USED IN OPERATING ACTIVITIES
            
            
            (201,582
            )
            
            (
                47,069
            )CASH
                FLOW FROM FINANCING ACTIVITIESProceeds
                from sale and subscription of equitysecurities
            
            
            187,500
            
            
            55,500NET
                CASH PROVIDED BY FINANCING ACTIVITIES
            
            
            187,500
            
            
            55,500NET
                (DECREASE) INCREASE IN CASH
            
            $
            (14,082
            )
            $
            8,431Cash
                and cash equivalents, beginning of the period
            
            
            42,720
            
            
            --Cash
                and cash equivalents, end of the period
            
            $
            28,638
            
            $
            8,431Supplemental
                Disclosures of Cash Flow Information:Cash
                paid during the period for interest
            
            $
            --
            
            $
            --Income
                taxes paid
            
            
            --
            
            
            --





The
      accompanying notes are an integral part of these unaudited condensed
      consolidated financial statements.


5


PHLO
      CORPORATION AND
      SUBSIDARIES


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007**


**(Unaudited)**




**NOTE
      A - SUMMARY OF ACCOUNTING POLICIES**





General





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information. Accordingly, they
      do
      not include all of the information and footnotes required by accounting
      principles generally accepted in the United States of America for complete
      financial statements. In the opinion of management, all adjustments (consisting
      of normal recurring accruals) considered necessary in order to make the
      financial statements not misleading have been included. Results for the three
      months ended June 30, 2007 are not necessarily indicative of the results that
      may be expected for the fiscal year ending March 31, 2008. For further
      information refer to the consolidated financial statements and footnotes thereto
      included in the Phlo Corporation and Subsidiaries' annual report on Form 10-KSB
      for the year ended March 31, 2007.





Business
      and Basis of Presentation





Phlo
      Corporation, a Delaware corporation incorporated in December 1995, and its
      affiliates (hereinafter collectively referred to as the "Company") is a
      manufacturer of beverages and liquids containing patented and patent-pending
      biotechnologies. The Company markets its products to institutional purchasers,
      such as colleges and universities and sports teams, and to distributors which
      offer the products for sale in high volume chain stores, such as supermarkets
      and drug and convenience stores. The Company is positioned as a biotechnology
      company which is using high volume distribution networks to commercialize its
      technology. Central to the Company’s strategic development plan is the
      development, acquisition and/or exclusive licensing of proprietary technology,
      nutraceutical, biotechnological and/or pharmaceutical in nature, which the
      Company initially plans to convey to consumers through the use of liquid
      formulations and beverage systems. The Company is focusing its technology
      acquisition efforts on those technologies related to preventing or ameliorating
      cancer, reducing the effects of aging, and enhancing cognition and personal
      performance.





The
      consolidated financial statements include the accounts of the Company and its
      majority owned subsidiaries and affiliates .





Reclassifications





Certain
      reclassifications have been made in prior period’s financial statements to
      conform to classifications used in the current period.








**NOTE
      B - CAPITAL STOCK**





The
      Company has authorized 15,000,000 shares of preferred stock, with 500,000 shares
      designated as Series A convertible preferred stock with par value of $.0001
      per
      share; 500,000 shares designated as Series B non-convertible preferred stock
      with par value of $0.0001 per share; and 3,000,000 shares designated as Series
      C
      convertible preferred stock with par value of $.0001 per share. The Company
      also
      has authorized 250,000,000 shares of common stock with par value $0.0001 per
      share (the “Common Stock”).





Each
      share of Series C Preferred Stock initially was convertible into 100 shares
      of
      Common Stock without the payment of any additional consideration at any time
      after September 30, 2001. However, the conversion rate is subject to adjustment
      in the case of certain corporate transactions or events, including stock splits
      and combinations; certain dividends and distributions; reclassification,
      exchange or substitution of the Common Stock; reorganizations, mergers
      consolidations or sale of assets; and the sale of shares of Common Stock at
      a
      price that is less than the then-effective Series C Conversion Price. In the
      event of a sale of shares of Common Stock at a price that is less than the
      then-effective Series C Conversion Price, then, in each such event, an
      adjustment to such conversion price is made to allow the holder of the Series
      C
      Preferred Stock to convert into shares of Common Stock at a rate greater than
      the rate effective immediately preceding such issuance. Currently, as a result
      of the foregoing applicable adjustments, each share of Series C Preferred Stock
      is convertible into 490 shares of Common Stock.




6


**PHLO
      CORPORATION AND SUBSIDARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**JUNE
      30, 2007**


**(Unaudited)**




**NOTE
      B - CAPITAL STOCK (continued)**





Subsequent
      to the fiscal quarter ended June 30, 2007, the Company’s Board of Director’s
      voted to amend the Company’s articles of incorporation to increase the number of
      authorized shares of Common Stock from 250,000,000 to 700,000,000. The board
      of
      directors’ vote shall be followed by shareholder approval of such increase by
      shareholders holding the majority of the shares entitled to vote on such matter
      through shareholder written consent and the issuance of an Information Statement
      to shareholders to inform them of the amendment to the Company’s articles of
      incorporation.





As
      of
      June 30, 2007, the Company has 500,000 shares of Series A convertible preferred
      stock, 1,240,565 shares of Series C convertible preferred stock, and 661,393,776
      shares of Common Stock issued and outstanding. The Company has no Series B
      non-convertible preferred stock issued and outstanding at June 30,
      2007.





In
      the
      fiscal quarter ended June 30, 2007, in consideration of $187,500, the Company
      issued 15,866,665 shares of Common Stock and warrants to purchase 3,000,000
      shares of Common Stock at an exercise price of $0.05 per share. It also issued
      20,833,333 shares of Common Stock, valued at $446,396, in exchange for services.
      Additionally, the Company issued 29,618,179 shares of Common Stock to officers
      of the Company in connection with such financing and in consideration of
      guarantees and supplying of shares of stock as collateral which were sold to
      satisfy obligations of the Company. The Company accounted for and charged to
      operation such shares in the amount of $634,628, which approximated the fair
      value of the Common Stock at the time the shares were issued. In the fiscal
      quarter ended June 30, 2007, the Company also issued 2,190,665 shares of Common
      Stock that had been previously subscribed.








**NOTE
      C - COMMITMENTS AND CONTINGENCIES**





Litigation





The
      Company is a party to certain other legal matters arising in the ordinary course
      of business. Management believes the ultimate disposition of these matters
      will
      not have a material adverse effect on the Company's financial position or
      results of operations.





**NOTE
      D - SUBSEQUENT EVENTS**





Equity





Subsequent
      to June 30, 2007, the Company issued a warrant to purchase 3,000,000 shares
      of
      Common Stock at an exercise price of $0.018 per share in exchange for the
      provision of services.





Subsequent
      to June 30, 2007, in connection with $534,000 in financing received by the
      Company and in consideration of guarantees and supplying of shares of stock
      as
      collateral which were sold to satisfy obligations of the Company in connection
      therewith, the Company issued 238,702 shares of Series C Convertible Preferred
      Stock to officers of the Company.


7


**Item
      2.**





**PHLO
      CORPORATION**


**MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**





**SAFE
      HARBOR STATEMENT**





The
      Company has made, and may continue to make, various forward-looking statements
      with respect to its financial position, business strategy, and plans and
      objectives of management. Such forward-looking statements are identified by
      the
      use of forward-looking phrases such as “anticipates”, “intends”, “expects”,
“plans”, “believe”, “estimates”, or words or phrases of similar import. These
      forward-looking statements are subject to numerous assumptions, risks, and
      uncertainties, and the statements looking forward beyond 2007 are subject to
      greater uncertainty because of the increased likelihood of changes in underlying
      factors and assumptions. Actual results could differ materially from those
      anticipated by the forward-looking statements.





The
      Company's forward-looking statements represent its judgment only on the dates
      such statements are made. By making any forward-looking statements, the Company
      assumes no duty to update them to reflect new, changed, or unanticipated events
      or circumstances.





**OVERVIEW**





The
      following discussion of the Company's financial condition as of June 30, 2007
      and results of operations for the three months ended June 30, 2007 and 2006
      includes Phlo Corporation and its affiliates (collectively, the “Company”) and
      should be read in conjunction with the condensed consolidated financial
      statements and notes appearing elsewhere in this 10-QSB.





**RECENT
      DEVELOPMENTS**





During
      the fiscal year ended March 31, 2007, the Company announced that it had
      commenced shipments of its ready-to-drink version of its performance/vitality
      beverage to fill orders of the product. Initial shipments were primarily to
      accounts in the Northern California area. During the fiscal quarter ended June
      30, 2007, the Company announced that, as a result of the excellent response
      to
      the ready-to-drink product from the initial test markets in this region, the
      Company had commenced a roll-out of the beverage line in Northern California
      to
      a significant account base. The roll-out has included accounts (both on and
      off
      premises) in all channels of distribution, including independent grocers,
      independent convenience stores, mass merchandisers, chain grocers, chain
      convenience stores, and chain drug stores.





Subsequent
      to the fiscal quarter ended June 30, 2007, the Company’s Board of Director’s
      voted to amend the Company’s articles of incorporation to increase the number of
      authorized shares of Common Stock from 250,000,000 to 700,000,000. The board
      of
      directors’ vote shall be followed by shareholder approval of such increase by
      shareholders holding the majority of the shares entitled to vote on such matter
      through shareholder written consent and the issuance of an Information Statement
      to shareholders to inform them of the amendment to the Company’s articles of
      incorporation.





**RESULTS
      OF OPERATIONS**





During
      the quarter ended June 30, 2007, the Company generated revenue of $13,624 and
      reported a cost of sales of $4,591, as compared with $875 of revenue and no
      direct cost of sales during the three month period ended June 30, 2006. The
      selling, general and administrative expenses for the three month period ended
      June 30, 2007 were $610,694, as compared to $420,110 for the comparable three
      month period during 2006, in part as a result of increased marketing expenses
      related to the California product launch. The Company incurred research and
      development costs of $60,000 during the three-month period ended June 30, 2007,
      as compared with $25,000 for the comparable three month period during 2006.
      The
      Company's operating loss was $661,661 for the three month period ended June
      30,
      2007, as compared with an operating loss of $444,235 for the comparable period
      ended June 30, 2006.





The
      Company's proprietary biotechnology base (including its commercialization
      capabilities and ability to produce technological preparations related thereto),
      the products generated therefrom, and the access to major markets as a result
      thereof represent the core of the Company's business plan, which emphasizes
      the
      building of major, long-term fundamental value. Although the process of
      executing this business plan requires significant time, the Company should
      be
      able to produce significantly greater positive operating results and greater
      shareholder value than would otherwise be possible.


8


**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      Company's working capital deficit increased by $39,886 during the three month
      period ended June 30, 2007, to $5,702,490. In addition, the Company's
      Stockholders' Deficiency increased slightly from $5,645,040 to $5,689,643 during
      the same three-month period.




During
      the fiscal year ending March 31, 2008 and beyond, the Company is taking steps
      to
      reduce or eliminate the Stockholders' Deficiency and to create a positive
      working capital position. The Company believes it is more likely than in prior
      years to raise substantial financing as a result of the prospects for national
      distribution of its products through joint venture undertakings with entities
      possessing marketing and distribution infrastructure and capabilities, the
      existence of products containing commercialized biotechnology, the prospects
      for
      numerous additional products based on the Company's biotechnology foundation,
      and significantly increased scientific and commercialization capabilities.
      Finally, the Company has taken steps to convert certain existing debts into
      equity and will continue to pursue these steps.





While
      the
      Company has raised sufficient capital to meet its operating requirements in
      the
      past, additional financing is required in order to meet such operating
      requirements in the future. The Company can give no assurances that the
      necessary funding will be completed or, if completed, on terms favorable to
      the
      Company.




There
      can
      be no assurance that management's plans will be realized and therefore, until
      the present conditions referred to above are either removed or substantially
      improved, there is substantial doubt about the Company's ability to continue
      as
      a going concern.





The
      Company's registered independent certified public accounting firm has stated
      in
      its report included in the Company's March 31, 2007 Form 10-KSB, that the
      Company has incurred operating losses in the last two years, and that the
      Company is dependent upon management's ability to develop profitable operations.
      These factors among others may raise substantial doubt about the Company's
      ability to continue as a going concern.





**Impact
      of Inflation**





The
      Company does not believe that inflation has had a material adverse effect on
      sales or income during the past periods. Future increases in supplies or other
      operating costs could adversely affect the Company's operations; however, the
      Company believes it could increase prices to offset increases in costs of goods
      sold or other operating costs.





**Off-Balance
      Sheet Arrangements**




The
      Company does not have any off-balance sheet arrangements.







**Item
      3.**





**CONTROLS
      AND PROCEDURES**





Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed by the Company in the reports
      that the Company files or submits under the Exchange Act is recorded, processed,
      summarized and reported, within the time periods specified in the Securities
      and
      Exchange Commission’s rules and forms. Disclosure controls and procedures
      include, without limitation, controls and procedures designed to ensure that
      information required to be disclosed by the Company in the reports that the
      Company files under the Exchange Act is accumulated and communicated to the
      Company’s management, including its principal executive and financial officers,
      as appropriate to allow timely decisions regarding required
      disclosure.




*Evaluation
      of Disclosure and Controls and Procedures.* As of
      the end of the period covered by this Quarterly Report, the Company conducted
      an
      evaluation, under the supervision and with the participation of its chief
      executive officer and chief financial officer, of the Company’s disclosure
      controls and procedures (as defined in Rules 13a-15(e) of the Exchange Act).
      Based on this evaluation, the Company’s chief executive officer and chief
      financial officer concluded that its disclosure controls and procedures are
      effective to ensure that information required to be disclosed by the Company
      in
      reports that the Company files or submits under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in
      Securities and Exchange Commission rules and forms.




*Changes
      in Internal Controls Over Financial Reporting.* There
      was no change in the Company’s internal controls, which are included within
      disclosure controls and procedures, during its most recently completed fiscal
      quarter that has materially affected, or is reasonably likely to materially
      affect, the Company’s internal controls.


9


**PART
      II**





**ITEM
      1. LEGAL PROCEEDINGS**





The
      Company is a party to certain other legal matters arising in the ordinary course
      of business. Management believes the ultimate disposition of these matters
      will
      not have a material adverse effect on the Company's financial position or
      results of operations.





**ITEM
      2.**  **UNREGISTERED
      SALE OF EQUITY SECURITIES AND USE OF PROCEEDS**





During
      the period covered by this report, the Company issued shares of its Common
      Stock
      as follows:





In
      the
      fiscal quarter ended June 30, 2007, in consideration of $187,500, the Company
      issued 15,866,665 shares of Common Stock and warrants to purchase 3,000,000
      shares of Common Stock at an exercise price of $0.05 per share. It also issued
      20,833,333 shares of Common Stock in exchange for services. Additionally, the
      Company issued 29,618,179 shares of Common Stock to officers of the Company
      in
      connection with such financing and in consideration of guarantees and supplying
      of shares of stock as collateral which were sold to satisfy obligations of
      the
      Company. In the fiscal quarter ended June 30, 2007, the Company also issued
      2,190,665 shares of Common Stock that had been previously subscribed. The
      Company has relied on exemptions from the registration requirements of the
      Securities Act of 1933, as amended.





**ITEM
      3.**  **EXHIBITS**








**Signatures**





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





**Phlo
      Corporation**





*August
                15, 2007*
            *By:  
                /s/ James B.
                Hovis**James
                B. Hovis**President
                and Chief Executive Officer*








10