SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q








(Mark
One)





[ X
]QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For
the quarterly period ended March 31, 2009





OR





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





From the
transition period from ___________ to ____________.





Commission File Number333-145831





SURFACE COATINGS,
INC.


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





Nevada
            
            20-8611799(State
      or other jurisdiction of incorporation or organization)
            
            (IRS
      Employer Identification No.)





2010
Industrial Blvd., Suite 605, Rockwall, Texas 75087


(Address
of principal executive offices)





(972)
722-7351


(Issuer's
telephone number)





N/A


(Former
name, former address and former fiscal year, if changed since last
report)





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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act:




Large
      Accelerated Filer
            [  ]
            
            Accelerated
      Filer
            [  ]Non-Accelerated
      Filer
            [  ]
            
            Smaller
      Reporting Company
            [X]





Indicate
by a check mark whether the company is a shell company (as defined by Rule 12b-2
of the Exchange Act:  Yes
[    ]   No [ X ].





As of
April 29, 2009, there were 5,000,000 shares of Common Stock of the issuer
outstanding.





TABLE OF
CONTENTS








PART I
FINANCIAL STATEMENTS





Item
      1.
            Financial
      Statements
            3Item
      2.
            Management's
      Discussion and Analysis or Plan of Operation
            16





PART II
OTHER INFORMATION





Item
      1.
                Legal
      Proceedings
                19Item
      2.
                Changes
      in Securities
                19Item
      3.
                Default
      upon Senior Securities
                19Item
      4.
                Submission
      of Matters to a Vote of Security Holders
                19Item
      5.
                Other
      Information
                19Item
      6.
                Exhibits
      and Reports on Form 8-K
                19




















2










SURFACE
      COATINGS, INC.
              Consolidated
      Balance Sheets
              As
      of March 31, 2009 and December 31,
2008




As
      of
                        March
      31, 2009
                        (Unaudited)
                      
                      
                      As
      of
                        December
      31, 2008
                        (Audited)AssetsCurrent
      AssetsCash
      and Cash Equivalents
                      
                      $
                      76,226
                      
                      
                      $
                      33,123Accounts
      Receivable (Net of Allowance for Doubtful
                        Accounts
      of  $1,850 and $1,850)
                      
                      
                      33,131
                      
                      
                      
                      48,587Allowances
      for Estimated Returns
                      
                      
                      (3,750
                      )
                      
                      
                      (3,750
                      )Prepaid
      Expense
                      
                      
                      0
                      
                      
                      
                      1,000Inventory
                      
                      
                      69,460
                      
                      
                      
                      61,977Total
      Current Assets
                      
                      
                      175,067
                      
                      
                      
                      140,937Fixed
      Assets:Machinery
      and Equipment
                      
                      
                      19,184
                      
                      
                      
                      21,470Leasehold
      Improvements
                      
                      
                      1,406
                      
                      
                      
                      1,406Less:
      Accumulated Depreciation
                      
                      
                      (3,969
                      )
                      
                      
                      (3,245
                      )Total
      Fixed Assets
                      
                      
                      16,621
                      
                      
                      
                      19,631Total
      Assets
                      
                      $
                      191,688
                      
                      
                      $
                      160,658Liabilities
      and Stockholders’ Equity/(Deficit)Current
      LiabilitiesAccounts
      Payable
                      
                      $
                      37,262
                      
                      
                      $
                      25,238Accrued
      Expenses
                      
                      
                      62,497
                      
                      
                      
                      53,913Bank
      Overdraft
                      
                      
                      0
                      
                      
                      
                      16,892Advances
                      
                      
                      25,000
                      
                      
                      
                      0Due
      to Related Parties
                        Note
      Payable to Sahreholder
                        Notes
      Payable to Related Parties
                      
                      
                      41,454
      12,122
      62,954
                      
                      
                      
                      33,954
      0
      0Line-of-Credit
                      
                      
                      25,979
                      
                      
                      
                      33,139Subscription
      Deposits
                      
                      
                      54,050
                      
                      
                      
                      33,150Current
      Portion of Long-Term Debt
                      
                      
                      3,336
                      
                      
                      
                      14,869Total
      Current Liabilities
                      
                      
                      324,654
                      
                      
                      
                      211,155Long-Term
      LiabilitiesNote
      Payable To Shareholder
                      
                      
                      0
                      
                      
                      
                      14,869Note
      Payable – Equipment
                      
                      
                      10,290
                      
                      
                      
                      11,219Notes
      Payable to Related Parties
                      
                      
                      0
                      
                      
                      
                      74,596Less:
      Current Portion of Long Term Debt
                      
                      
                      (3,336
                      )
                      
                      
                      (14,869
                      )Total
      Long-Term Liabilities
                      
                      
                      6,954
                      
                      
                      
                      85,815Total
      Liabilities
                      
                      
                      331,608
                      
                      
                      
                      296,970Stockholders’
      Equity/(Deficit):Preferred
      stock, $.001 par value, 20,000,000 shares
                        authorized,
      -0- shares issued and outstanding
                      
                      
                      0
                      
                      
                      
                      0Common
      stock, $.001 par value, 50,000,000 shares
                        authorized,
      5,000,000 and 5,000,000 shares issued
                        and
      outstanding respectively
                      
                      
                      5,000
                      
                      
                      
                      5,000Additional
      Paid In Capital
                      
                      
                      51,492
                      
                      
                      
                      51,492Accumulated
      Deficit
                      
                      
                      (196,412
                      )
                      
                      
                      (192,894
                      )Total
      Stockholders’ Equity/(Deficit)
                      
                      
                      (139,920
                      )
                      
                      
                      (136,402
                      )Total
      Liabilities and Stockholder’ Equity/(Deficit)
                      
                      $
                      191,688
                      
                      
                      $
                      160,568




See
accompanying summary of accounting policies and notes to financial
statements.


3











SURFACE
      COATINGS, INC.
              Consolidated
      Statement of Operations
              For
      the Three Months Ended March 31, 2009 and 2008
              (Unaudited)




Three
      Months EndedMarch
      31, 2009
                  
                  
                  March
      31, 2008RevenueRevenue
                  
                  $
                  153,529
                  
                  
                  $
                  143,997Cost
      of Sales
                  
                  
                  82,410
                  
                  
                  
                  89,352Gross
      Profit
                  
                  
                  71,119
                  
                  
                  
                  54,645Operating
      Expenses:Depreciation
      Expense
                  
                  
                  1,076
                  
                  
                  
                  191Advertising
      Expense
                  
                  
                  6,376
                  
                  
                  
                  7,130General
      and Administrative
                  
                  
                  65,123
                  
                  
                  
                  65,687Total
      Operating Expenses
                  
                  
                  72,575
                  
                  
                  
                  73,008Net
      Operating Income
                  
                  
                  (1,456
                  )
                  
                  
                  (18,363
                  )Other
      Income (Expense)Interest
      Income
                  
                  
                  0
                  
                  
                  
                  0Loss
      on Sale of Asset
                  
                  
                  (133
                  )
                  
                  
                  0Interest
      Expense
                  
                  
                  (1,929
                  )
                  
                  
                  (1,883
                  )Total
      Other Income (Expense)
                  
                  
                  (2,062
                  )
                  
                  
                  (1,883
                  )Net
      Loss
                  
                  $
                  (3,518
                  )
                  
                  $
                  (20,246
                  )Basic
      and Diluted Earnings (Loss) per share
                  
                  $
                  0.00
                  
                  
                  $
                  0.00Weighted
      Average Shares Outstanding:Basic
      and Diluted
                  
                  
                  5,000,000
                  
                  
                  
                  5,000,000








See
accompanying summary of accounting policies and notes to financial
statements.





4








SURFACE COATINGS, INC.
              Consolidated Statement of Stockholders' Equity
              For
      the Three Months Ended March 31, 2009 (Unaudited) and
              the
      Year Ended December 31, 2008




AdditionalCommon
      Stock
                                            
                                            Paid-in
                                            
                                            
                                            Receivable
      from
                                            
                                            
                                            AccumulatedShares
                                            
                                            
                                            Par Value
                                            
                                            
                                            Capital
                                            
                                            
                                            Stockholder
                                            
                                            
                                            Deficit
                                            
                                            
                                            TotalsDecember
      31, 2007
                                            
                                            
                                            5,000,000
                                            
                                            
                                            $
                                            5,000
                                            
                                            
                                            $
                                            51,492
                                            
                                            
                                            $
                                            0
                                            
                                            
                                            $
                                            (139,341
                                            )
                                            
                                            $
                                            (82,849
                                            )Net
      loss
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            (53,553
                                            )
                                            
                                            
                                            (53,553
                                            )December
      31, 2008
                                            
                                            
                                            5,000,000
                                            
                                            
                                            $
                                            5,000
                                            
                                            
                                            $
                                            51,492
                                            
                                            
                                            $
                                            0
                                            
                                            
                                            $
                                            (192,894
                                            )
                                            
                                            $
                                            (136,402
                                            )Net
      loss
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            (3,518
                                            )
                                            
                                            
                                            (3,518
                                            )March
      31, 2009
                                            
                                            
                                            5,000,000
                                            
                                            
                                            $
                                            5,000
                                            
                                            
                                            $
                                            51,492
                                            
                                            
                                            $
                                            0
                                            
                                            
                                            $
                                            (196,412
                                            )
                                            
                                            $
                                            (139,920
                                            )





See
accompanying summary of accounting policies and notes to financial
statements.





5








SURFACE
      COATINGS, INC.
              Consolidated
      Statements of Cash Flows
              For
      the Three Months Ended March 31, 2009 and 2008
              (Unaudited)




Three
      Months Ended March 31, 2009
                      
                      
                      Three
      Months Ended March 31, 2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                      
                      $
                      (3,518
                      )
                      
                      $
                      (20,246
                      )Adjustments
      to reconcile net deficit to cash used
                        by
      operating activities:Depreciation
                      
                      
                      1,076
                      
                      
                      
                      191Change
      in assets and liabilities:Decrease
      in Accounts Receivable
                      
                      
                      15,456
                      
                      
                      
                      4,840(Increase)  in
      Inventory
                      
                      
                      (7,483
                      )
                      
                      
                      (12,224
                      )Decrease  in
      Other Assets
                      
                      
                      1,001
                      
                      
                      
                      0Increase  in
      Accounts Payable
                      
                      
                      12,024
                      
                      
                      
                      27,186(Decrease)
      in Overdraft
                      
                      
                      (16,892
                      )
                      
                      
                      0Increase  in
      Accrued Expenses
                      
                      
                      8,584
                      
                      
                      
                      5,571Increase
      (decrease) in Line-of-Credit
                      
                      
                      (7,160
                      )
                      
                      
                      4,304CASH
      FLOWS FROM (USED) IN OPERATING ACTIVITIES
                      
                      
                      3,088
                      
                      
                      
                      9,619CASH
      FLOWS USED IN INVESTING ACTIVITIESSale
      of fixed assets
                      
                      
                      1,800
                      
                      
                      
                      0Loss
      on Sale of Fixed Asset
                      
                      
                      133CASH
      FLOWS USED IN INVESTING ACTIVITIES
                      
                      
                      1,933
                      
                      
                      
                      0CASH
      FLOWS FROM FINANCING ACTIVITIESPayments
      on Shareholder Note
                      
                      
                      (2,847
                      )
                      
                      
                      (2,577
                      )Subscription
      Deposits
                      
                      
                      20,900
                      
                      
                      
                      0Payments
      on Capitalized Lease Obligation
                      
                      
                      (829
                      )
                      
                      
                      0Note
      from Related Party
                      
                      
                      20,858
                      
                      
                      
                      9,429CASH
      FLOWS PROVIDED BY FINANCING ACTIVITIES
                      
                      
                      38,082
                      
                      
                      
                      6,852NET
      INCREASE IN CASH
                      
                      
                      43,103
                      
                      
                      
                      16,471Cash,
      beginning of period
                      
                      
                      33,123
                      
                      
                      
                      3,646Cash,
      end of period
                      
                      $
                      76,226
                      
                      
                      $
                      20,117SUPPLEMENTAL
      CASH FLOW INFORMATIONInterest
      paid
                      
                      $
                      1,929
                      
                      
                      $
                      1,883Income
      taxes paid
                      
                      $
                      0
                      
                      
                      $
                      0








See
accompanying summary of accounting policies and notes to financial
statements.


6







SURFACE
COATINGS, INC.


Notes
to the Consolidated Financial Statements


March
31, 2009


(Unaudited)





NOTE
1 – NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES





Nature of Activities,
History and Organization:





Surface
Coatings, Inc. (“Surface Coatings”, the “Company”) is the parent company of
Surface Armor, LLC, (“Surface Armor”) a company incorporated under the laws of
the State of Texas on July 19, 2005.  The Company operates as a
converter and distributor of temporary surface protection tapes, mainly to the
construction industry and for the past two years has been developing its
business. The Company is located in Texas and sells its product locally as a
distributor and throughout the U.S. over the internet.





Surface
Coatings is a private holding company established under the laws of Nevada on
February 12, 2007, was formed in order to acquire 100% of the outstanding
membership interests of Surface Armor.  On February 15, 2007, Surface
Coatings issued 5,000,000 shares of common stock in exchange for a 100% equity
interest in Surface Armor.  As a result of the share exchange, Surface
Armor became the wholly owned subsidiary of Surface Coatings.  As a
result, the members of Surface Armor owned a majority of the voting stock of
Surface Coatings.  The transaction was accounted for as a reverse
merger whereby Surface Armor was considered to be the accounting acquirer as its
members retained control of Surface Coatings after the exchange, although
Surface Coatings is the legal parent company.  The share exchange was
treated as a recapitalization of Surface Coatings.  As such, Surface
Armor, (and its historical financial statements) is the continuing entity for
financial reporting purposes. The financial statements have been prepared as if
Surface Coatings had always been the reporting company and then on the share
exchange date, had changed its name and reorganized its capital
stock.  The share exchange transaction was effected to change the
state of incorporation to allow the opportunity for a reduction of franchise
taxes under the new Texas franchise tax calculations and to facilitate the
initial public offering.  At the time of the exchange transaction,
Surface Coatings had no assets or liabilities and Surface Armor had assets of
approximately $57,000 with equity of approximately $19,500.





The
capital structure of Surface Coatings is presented as a consolidated entity as
if the transaction had been effected in 2005 to consistently reflect the number
of shares outstanding. However, the capital structure as presented is different
that the capital structure that appears in the historical statements of Surface
Armor, LLC in earlier periods due to the recapitalization
accounting.





During
2008, the Company field a Form S-1 to register the sale of their common
stock.  The registration was declared effective on Ocotber 14,
2008.  Since then the Company has filed a post effective amendment
reduing their minimum amount under the registration from $75,000 to
$50,000.  As of March 31, 2009, the Company had received $54,050 in
subscription deposits which are being held in a separate non-interest bearing
account.  The funds will be available to be realeased to the Company
subject to the effectiveness and conditions of the post effective
amendment.





The
Company operates on a calendar year-end.    Due to the
nature of their operations, the Company operates in only one business
segment.








7





Unaudited Interim Financial
Statements:





The
accompanying unaudited interim financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
and applicable Securities and Exchange Commission (“SEC”) regulations for
interim financial information. These financial statements are unaudited and, in
the opinion of management, include all adjustments (consisting of normal
recurring accruals) necessary to present fairly the balance sheets, statements
of operations and statements of cash flows for the periods presented in
accordance with accounting principles generally accepted in the United States.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to SEC rules and
regulations. It is presumed that users of this interim financial information
have read or have access to the audited financial statements and footnote
disclosure for the preceding fiscal year contained in the on Form S-1/A that was
effective on October 14, 2008.   Operating results for the
interim periods presented are not necessarily indicative of the results that may
be expected for the year ending December 31, 2009 and should be read in
conjunction with the Company’s Form 10-K filing for 2008 dated March 31,
2009.





Significant Accounting
Policies:





The
Company’s management selects accounting principles generally accepted in the
United States of America and adopts methods for their
application.  The application of accounting principles requires the
estimating, matching and timing of revenue and expense.





The
financial statements and notes are representations of the Company’s management
which is responsible for their integrity and objectivity. Management further
acknowledges that it is solely responsible for adopting sound accounting
practices, establishing and maintaining a system of internal accounting control
and preventing and detecting fraud.  The Company's system of
internal  accounting control is designed to assure, among other items,
that  1) recorded  transactions  are
valid;  2) valid  transactions  are
recorded;  and  3)
transactions  are  recorded in the proper  period
in a timely  manner to produce financial  statements which
present fairly the financial  condition,  results of
operations  and cash  flows of
the  Company  for
the  respective  periods  being
presented.





Basis of
Presentation:





The
Company prepares its financial statements on the accrual basis of
accounting.  All intercompany balances and transactions are
eliminated.  Investments in subsidiaries are reported using the equity
method.





Cash and Cash
Equivalents:





Cash and
cash equivalents includes cash in banks with original maturities of three months
or less and are stated at cost which approximates market value, which in the
opinion of management, are subject to an insignificant risk of loss in
value.











8







Fair Value of Financial
Instruments:





The
carrying amounts of cash, cash equivalents, accounts receivable, accounts
payable and notes payable approximate  their fair values due to the
short-term maturities of these instruments.  The carrying amount of
the Company’s marketable securities and capital leases approximate fair value
due to the stated interest rates approximating market rates.





Accounts
      Receivable:





Accounts
receivable are carried at their face amount, less an allowance for doubtful
accounts.  On a periodic basis, the Company evaluates accounts
receivable and establishes the allowance for doubtful accounts based on a
combination of specific customer circumstances and credit conditions, based on a
history of write offs and collections. The Company’s policy is generally not to
charge interest on trade receivables after the invoice becomes past
due.  A receivable is considered past due if payments have not been
received within agreed upon invoice terms.   Write-offs are
recorded at a time when a customer receivable is deemed
uncollectible.  The Company has a large number of customers in various
industries and geographies and establishes reasonable credit lines to limit
credit risk.





Inventory:





Inventory
is comprised of goods purchased for resale; therefore the Company has no raw
materials or work in process.  The Company uses the specific
identification and FIFO (“First In, First Out”) methods for inventory tracking
and valuation.    Inventory is stated at the lower of cost
or market value.





Fixed
Assets:





Fixed
assets are stated at cost less accumulated depreciation. Major renewals and
improvements are capitalized; minor replacements, maintenance and repairs are
charged to current operations.  Depreciation is calculated on a
straight-line basis over five to seven years.





Revenue
Recognition:





The
Company recognizes revenue from the sale of products in accordance with the
Securities and Exchange Commission Staff Accounting Bulletin No. 104 ("SAB
104"), "Revenue Recognition in Financial Statements." Revenue will be recognized
only when all of the following criteria have been met:





· Persuasive
      evidence of an arrangement exists;· Ownership and
      all risks of loss have been transferred to buyer, which is
      generally      upon
  shipment;· The price is
      fixed and determinable; and·
      Collectability is reasonably
assured





All
inventory is shipped to customers FOB shipping point.  The risk of
loss transfers to the customer at the time of shipment.  Currently all
revenue is generated from the sale of products and no revenue is earned from
services rendered.








9





The
Company’s return policy allows customers to return products for up to 15 days
after shipment.  Customer returns were $1,584 for the quarter ended
March 31, 2009 and $8,279  for the three months ended March 31,
2008.  In accordance with Statement of Financial Accounting Standards
("SFAS") No. 48, "Revenue
Recognition when Right of Return Exists," revenue is recorded net of a
reserve to estimate returns, markdowns, price concessions and warranty costs.
Such reserve is based on management's evaluation of historical experience and
company and industry trends.  As of March 31, 2009, the allowance for
estimated returns was $ 3,750.




Revenue
is recorded net of any sales taxes charged to customers.





Cost of Goods
Sold:





The types
of costs included in Cost of Goods Sold are:





· Direct
      material costs· Purchasing,
      receiving and inspection· Ingoing and
      outgoing freight




Advertising
Costs”





The
Company incurred $6,376 and $7,130 in advertising costs for the three months
ended March 31, 2009 and 2008.




Income
Taxes:





Income
from the corporation is taxed at regular corporate rates per the Internal
Revenue Code.  There are no provisions for current taxes due to net
available operating losses.





Comprehensive
Income:





SFAS No.
130, "Reporting Comprehensive
Income", establishes standards for reporting and display of comprehensive
income and its components in a full set of general-purpose financial
statements.  For the three month period ended March 31, 2009, the
Company had no items of other comprehensive income. Therefore, the net loss
equals comprehensive loss for the periods then ended.




Reclassification:





Certain
prior year amounts have been reclassified in the consolidated balance sheets,
consolidated statements of operations and consolidated statements of cash flows
to conform to current period presentation.  These reclassifications
were not material to the consolidated financial statements and had no effect on
net earnings reported for any period.








10





Recent Accounting
Pronouncements:





The
Company  does not
expect  the  adoption  of  recently  issued  accounting
pronouncements  to have a significant  impact on the
Company’s  results of  operations, financial position or
cash flow. .





Use of
Estimates:





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.  Accordingly, actual
results could differ from those estimates.




NOTE 2 – FIXED
ASSETS





Fixed
Assets at March 31, 2009 and December 31, 2008 are as follows:





2009
                
                
                2008Property
      & Equipment
                
                $
                19,184
                
                
                $
                21,470Telephone
      System
                
                
                1,406
                
                
                
                1,406Less:  Accumulated
      Depreciation
                
                
                (3,969
                )
                
                
                (3,245
                )Total
      Fixed Assets
                
                $
                16,621
                
                
                $
                19,631




The
Company’s fixed assets are depreciated on a straight-line basis over the asset’s
useful lives, ranging from five to seven years.   Depreciation
expense was $1,076 and $191 for the three months ended March 31, 2009 and 2008
respectively.





During
the three month period ending March 31, 2009, the Company disposed of an asset
with a cost basis of $2,000 and recognized a loss on the sale of the asset of
$133.








NOTE 3 – DUE TO RELATED
PARTIES





The
Company had the following amounts due to related parties as of March 31, 2009
and December 31, 2008:





2009
                
                
                2008Accounts
      Payable – Related Parties
                
                $
                41,454
                
                
                $
                33,954Advances
      – Related Parties
                
                
                25,000
                
                
                
                0Total
                
                $
                66,454
                
                
                $
                33,954




These
amounts represent accounts payable to a minority shareholder and a cash advance
from a minority shareholder. There were no specified terms attached to the
advances, and they would be repaid when the Company has the available cash to do
so.








11






NOTE 4 – NOTES PAYABLE TO
RELATED PARTIES





Note Payable to
Shareholder:





The
Company’s President has loaned the Company $33,028 since inception and the
balance was converted into a note on January 2, 2007.  This note bears
interest at a rate of 10% and requires monthly payments of $1,066 for 36 months.
The total amount owed at March 31, 2009 was $12,122 and at December 31, 2008 was
$14,969.  The balance at March 31, 2009 is classified as current
liability as it is due in March 2010.








Notes Payable to Related
Parties:





As of
March 31, 2009 and December 31, 2008, the Company owed the following amounts
under note agreements with a related party:





2009
                
                
                2008Trinity
      Operations Note
                
                $
                42,954
                
                
                $
                54,596Trinity
      Advance Note
                
                
                20,000
                
                
                
                20,000Total
      (All Long-Term)
                
                $
                62,954
                
                
                $
                74,596





The
Company has borrowed $42,954 from Trinity Heritage Construction, L.L.C
(“Trinity”) to fund operations (“Trinity Operations Note”).  This note
bears interest at a rate of 10% and is due in full on March 1, 2010 and is
classified as a current  liability.





The
Company borrowed $20,000 from Trinity in 2005 and 2006 as start-up capital
(“Trinity Advance Note”).  This note bears interest at a rate of 10%
and is due in full on March 1, 2010 and is classified as a
current  liability.





The
Company’s Vice-President, who is a shareholder of the company, is also an
officer and shareholder in Trinity.








NOTE 5 – NOTE PAYABLE
(CAPITAL LEASES)




In June
2008, the Company entered into a capital lease agreement for the lease of
equipment.  The lease requires monthly payments of $278 for four
years.  At the end of the lease term, the Company is entitled to
purchase the equipment for $1.  The total amount owed at March 31,
2009 and December 31, 2008 was $10,290 and $11,119 respectively, of which $3,336
is due during the next 12 months and is classified as a current liability. At
March 31, 2009,  capitalized interest associated with the lease was
$3,521.











12







NOTE 6 – LINE OF
CREDIT





The
Company has a line of credit (“LOC”) with Bank of America.  The LOC
has a $30,000 credit limit, and bears an interest rate of 12.24% per
annum.  The Company is required to make monthly payments equal to 1%
of the outstanding balance plus the interest expense for the previous
month.    As of March 31, 2009 and December 31, 2008, the
amounts outstanding under this line of credit were $25,979 and $33,139,
respectively.








NOTE 7 –
EQUITY





The
Company is authorized to issue 20,000,000 preferred shares at a par value of
$.001 per share.  There were 0 and 0 shares outstanding as of March
31, 2009 and December 31, 2008, respectively.





The
Company is authorized to issue 50,000,000 common shares at a par value of $.001
per share.  These shares have full voting rights.  There
were 5,000,000 and 5,000,000 shares issued and outstanding as of March 31, 2009
and December 31, 2008, respectively, respectively.





As of
March 31, 2009, the Company had received deposits totaling $54,050 for the sale
of 108,100 shares of common stock under the registration statement which became
effective in October, 2008, contingent upon raising additional capital after
December 31, 2008.  Therefore, this amount is carried as a liability
as of March 31, 2009 and December 31, 2008.





The
Company does not have any stock option plans or stock warrants








NOTE 8 – COMMITMENTS AND
CONTINGENCIES





The
Company leases office and warehouse space in Rockwall, Texas at a rate of $1,380
per month.  The payments are made up by a $1,000 per month lease which
expires in July 2011, and a $380 month-to-month rent
agreement.  Future lease obligations are $9,000 in 2009, $12,000 in
2010 and $7,000 thereafter.








NOTE 9 – INCOME
TAXES





The
Company has adopted SFAS no. 109, which requires the use of the liability method
in computation of income tax expense and the current and deferred income tax
payable (deferred tax liability) or benefit (deferred tax
asset).  Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.





Deferred
tax assets at March 31, 2009 and December 31, 2008 consisted of the
following:





2009
                
                
                2008Net
      Operating Loss Carryforward
                
                $
                66,780
                
                
                $
                65,584Less:
      Valuation Allowance
                
                
                (66,780
                )
                
                
                (65,584
                )Net
      Deferred Tax Asset
                
                $
                0
                
                
                $
                0








13






The net
deferred tax asset generated by the loss carryforward has been fully reserved.
The cumulative net operating loss carry-forward is approximately $196,412 at
March 31, 2009 and $192,894 at December 31, 2008, and will expire in the years
2025 through 2029.





The
difference in the income tax benefit not shown in the consolidated statements of
operations and the amount that would result if the U.S. Federal statutory rate
of 34% were applied to pre-tax loss for 2009 and 2008 is attributable to the
valuation allowance.





The
realization of deferred tax benefits is contingent upon future earnings and is
fully reserved at March 31, 2009 and December 31, 2008.








NOTE 10 – FINANCIAL
CONDITION AND GOING CONCERN





The
Company has an accumulated deficit through March 31, 2009 totaling $196,412 and
had negative working capital of $149,587 .  Because of this
accumulated deficit, the Company will require additional working capital to
develop its business operations.





The
Company has experienced no loan defaults, labor stoppages, legal proceedings or
any other operating interruption in 2009.  Therefore, these items will
not factor into whether the business continues as a going concern, and
accordingly, Management has not made any plans to dispose of assets or factor
receivables to assist in generating working capital.





The
Company intends to raise additional working capital either through private
placements, public offerings and/or bank financing, or additional loans from
Management if there is need for liquidity.   Management may also
consider reducing administrative costs and suspending all bonus and incentive
programs.  There are no assurances that the Company will be able to
either (1) achieve a level of revenues adequate to generate sufficient cash flow
from operations; or (2) obtain additional financing through either private
placement, public offerings and/or bank financing necessary to support the
Company’s working capital requirements.  To the extent that funds
generated from private placements, public offerings and/or bank financing are
insufficient, the Company will have to raise additional working
capital.   No assurance can be given that additional financing
will be available, or if available, will be on terms acceptable to the
Company.  If adequate working capital is not generated from
operations, financing is not available, or the Management cannot loan sufficient
funds, the Company may not be able to continue its operations.





Management
believes that the efforts it has made to promote its operation will continue for
the foreseeable future.  These conditions raise substantial doubt
about the Company’s ability to continue as a going concern.  The
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.









14





NOTE 11 - NEW ACCOUNTING
PROUNCEMENTS





In June
2003, the Securities and Exchange Commission (“SEC”) adopted final rules under
Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404 (b)”), as amended by
SEC Release No. 33-8760 on December 15, 2006.  Commencing with the
Company’s Annual Report for the year ending December 31, 2008, the Company is
required to include a report of management on the Company’s internal control
over financial reporting.  The internal control report must include a
statement of management’s responsibility for establishing and maintaining
adequate internal control over financial reporting for the Company; of
management’s assessment of the effectiveness of the Company’s internal control
over financial reporting as of its year-end and of the framework used by
management to evaluate the effectiveness of the Company’s internal control over
financial reporting.





In June
2008, the SEC approved a one year extension of the compliance data for smaller
public companies to meet the Section 404 (b) auditor attestation requirement of
the Sarbanes-Oxley Act regarding the Company’s internal control over financial
reporting on whether it believes that the Company has maintained, in all
material respects, effective internal control over financial
reporting.





In 2007,
the FASB issued the following:





-
            SFAS No. 141: (Revised 2007),
      “Business Combinations”





-
            SFAS No. 159:  “The
      Fair Value Option for Financial Assets and Financial
      Liabilities”





-
            SFAS No.
      160:  “Noncontrolling Interest in Consolidated Financial
      Statements”





In 2008,
the FASB issued the following:





-
            SFAS No. 161: “Disclosures about Derivative
      Instruments and Hedging
Activities”





-
            SFAS No. 162:  “The
      Hierarchy of Generally Accepted Accounting
    Principles”





-
            SFAS No.
      163:  “Accounting for Financial Guarantee Insurance
      Contracts”





Management
has reviewed these new standards and believes that they have no material impact
on the financial statements of the Company.










15





Item
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS





This
report contains forward looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company’s actual results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in the Company’s filings with the Securities and Exchange
Commission, general economic conditions, and changes in the assumptions used in
making such forward looking statements.





General





Surface
Armor, LLC was formed in 2005 and our stated goal is to serve the ever-expanding
market of protecting expensive finishes and all types of surfaces from damage
during manufacturing processes, shipping, handling and
installation.   In February 2007 Surface Coatings, Inc. was
created with the express purpose to acquire Surface Armor, LLC.  The
shareholders are the same as Surface Armor, LLC and therefore there was no cash
consideration in the transaction.  Consequently the Surface Armor, LLC
operations became Surface Coatings, Inc.





The
company offers the most progressive and complete solutions to our customer’s
temporary surface protection needs.  Our business model is set-up to
serve The Americas from our facility in Rockwall, Texas where we inventory and
convert all our materials and products.  Our warehouse is climate
controlled ensuring consistent quality in the Texas heat in the summer and the
freeze/thaw weather pattern in the winter.





We
inventory a wide assortment of self-adhering, bulk films and convert them into
rolls at customer-specified widths, lengths, and quantities. We specialize in
providing custom products, in reasonable quantities, at standard prices, and at
off-the-shelf turnaround times.  This model has enabled us to gain
traction in the market place while we grow our business.  Providing
the converted product is just one part of our product offering – the other,
service.  We have a customer focused, server-based relationship model
that assists our customers in finding solutions to their surfacing needs as well
as any out-of-the-ordinary problems.





As is the
case in many industries, efficiency is critical, and the construction business
is no different.  Contractors are under increasing pressure to
complete projects and therefore are more aware of damage done to already
completed work.  Our products are solutions to real needs that
companies experience every day.





With
respect to our competitive position in the industry, it is our belief that the
surface protection industry is served by at least 30 foreign and domestic
manufacturers of films and tapes, the world-wide markets for coatings based on
annual sales of paint, coatings, adhesives, sealants and related products is
approximately $75 billion. Of this amount, the US Market accounts for
approximately $30 billion. These sales represent manufacturers and distributors.
We distribute the product and as such serve the small manufacturer and
contractor. Our competitive position in the industry is defined by our ability
to deliver timely and of a high quality coupled with price competitiveness. To
that end, our revenue in 2008 was 220% of 2007 and our margins improved 1.9%
points to 43.2%.  Consequently, we believe our business model affirms
our competitive position in the industry relative to the customers we are
targeting. Historically, customers primarily purchased from local distributors.
With the broad reach of the internet, low order quantity customers, that don’t
require direct assistance from a local distributor, prospect the web for an
effective product at a reasonable price. Once a film/tape has been approved for
use in production, customers are slow to change to another product as the cost
of evaluating a new product can exceed the potential savings to be gained by
changing.




Because
we do not have field sales people knocking on high-volume prospects’ doors, we
don’t really compete on a head to head basis. Our competitive position is based
on servicing the customer needs:




16







·
            Low
      order minimum quantity


·
            Fast
      turnaround


·
            High
      quality







RESULTS
FOR THE QUARTER ENDED March 31, 2009





Our
quarter ended on March 31, 2009.  Any reference to the end of the
fiscal quarter refers to the end of the first quarter for the period discussed
herein.





REVENUE.  Revenue
for the three months ended March 31, 2009, was $153,529 compared to $143,997 for
the period ended March 31, 2008.  In this slow economy we were still
able to increase revenue and this is attributed to our position in the market
place due to establishing ourselves as a quality supplier within the
market.





GROSS
PROFIT.  Gross profit for the three months ended March 31, 2009 was
$71,119 compared to $54,645 for the three month period ended March 31,
2008.  Margins improved in the quarter ended March 31, 2009 versus the
same period in 2008 from 37.9% to 46.3%.  The improvement is
attributable to product mix and better inventory control.





OPERATING
EXPENSES. Total  operating expenses, for the three months ended March
31, 2009, were $71,499 compared to expenses for the period ended March 31, 2008
of $72,817.  Now that the Company has two full years of operation
expense levels have been identified and there were no great shifts in costs from
period versus period.  The above expenses do not include depreciation
which was $1,076 and $191 for the three months ended March 31, 2009 and 2008,
respectively.





NET
INCOME (LOSS). Net loss for the three months ended March 31, 2009 was $3,518
compared to the period ended March 31, 2008 of $20,246.   The
improvement in gross margins as previously discussed is attributable to the
increase.




LIQUIDITY
AND CAPITAL RESOURCES:
 In 2008,
the Company filed a Form S-1 registration statement with the U.S. Securities
& Exchange Commission ("SEC") in order to raise funds to expand its business
and execute its business plan. The filing became effective in October 2008 which
gave the Company the opportunity to sell up to 1,000,000 shares of common stock
at $0.50 per share. As of May 12, 2009, the Company had received $77,050 in
subscription deposits which are being held in a separate non-interest bearing
account. The funds will be available to be released to the Company subject to
the effectiveness and conditions of the post effective amendment. We will close
our offering on September 5, 2009.
  In
addition to the preceding, the company plans for liquidity needs on a short term
and long term basis as follows:
  Short
Term Liquidity:
 The
company relies on two primary funding sources for short term liquidity needs.
One is short term advances from major shareholders and/or Directors of the
company. The largest advance is from Trinity Heritage Construction Partners,
LLC, and the capital is for funding operations. The second is through a
revolving working capital line of credit in the amount of $30,000 issued by a
major national US bank. The line has a credit limit of $30,000 and bears an
interest rate of 12.24% per annum.  Detail of these two liquidity sources
is documented in detail in Footnotes 4 and 6 respectively to the financial
statements of the 2008 Form 10-K.
  Long Term
Liquidity:
 The long
term liquidity needs of the company are projected to be met primarily through
the cash flow provided by operations. Cash flow from operations from 2007 to
2008 improved by $44,400 to -$18,600 and operating cash flows at March 2009 were
positive $3,100.  This improvement has been a result of our growth and we
expect the funds generated through this public offering to provide the capital
to position the company to continue to grow revenues and thereby increase cash
flows and liquidity. In addition, with the growth of revenues, the company
anticipates requesting the bank to increase the amount of the line of credit
offered the company to supplement on-going liquidity
needs.


Employees





At March
31, 2009, the Company had two employees.





17







Item 3:
Quantitative and
Qualitative Disclosures About Market Risk







Not
applicable.





Item 4.
Controls and
Procedures







Evaluation of Disclosure
Controls and Procedures




We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) as of March 31, 2009.  This
evaluation was accomplished under the supervision and with the participation of
our chief executive officer / principal executive officer, and chief financial
officer / principal financial officer who concluded that our disclosure controls
and procedures are not effective to ensure that all material information
required to be filed in the quarterly Form 10-Q has been made known to
them.




For
purposes of this section, the term disclosure controls and procedures means
controls and other procedures of an issuer that are designed to ensure that
information required to be disclosed by the issuer in the reports that it files
or submits under the Act (15 U.S.C. 78a et seg.) is recorded, processed,
summarized and reported, within the time periods specified in the 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 in our reports filed under the Securities Exchange Act of
1934, as amended (the "Act") is accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.




Based
upon an evaluation conducted for the period ended March 31, 2009, our Chief
Executive and Chief Financial Officer as of March 31, 2009 and as of the date of
this Report, has concluded that as of the end of the periods covered by this
report, we have identified the following material weakness of our internal
controls:




·
            Reliance
      upon independent financial reporting consultants for review of critical
      accounting areas and disclosures and material non-standard
      transaction.




·
            Lack
      of sufficient accounting staff which results in a lack of segregation of
      duties necessary for a good system of internal
  control.




In order
to remedy our existing internal control deficiencies, as our finances allow, we
will hire additional accounting staff.




Changes in Internal Controls
over Financial Reporting




We have
not yet made any changes in our internal controls over financial reporting that
occurred during the period covered by this report on Form 10-Q that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.











18


PART
II





Items No.
1, 2, 3, 4, 5 - Not Applicable.








Item No.
6 - Exhibits and Reports on Form 8-K





(a)  None





(b)   Exhibits





Exhibit
Number                                                      Name
of Exhibit





31.1      Certification
of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as
enacted by Section 302 of the Sarbanes-Oxley Act of 2002.





31.2      Certification
of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as
enacted by Section 302 of the Sarbanes-Oxley Act of 2002.





32.1      Certification
of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United
States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of
2002.











SIGNATURES





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





Surface
Coatings, Inc.





By /s/  Rick
Pietrykowski




Rick
Pietrykowski, President, CFO





Date: May
8, 2009


19