UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


_______________




FORM
10-Q


_______________




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




For
the quarterly period ended September 30, 2008




o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the transition period from
______to______.




Sustut
Exploration, Inc.


(Exact
name of registrant as specified in Charter




Delaware
            
            333-143215(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (Commission
      File No.)
            
            (IRS
      Employee Identification No.)





1420
5th
Avenue #220


Seattle,
Washington 98101


(Address
of Principal Executive Offices)


_______________




(206)
274-5321


(Issuer
Telephone number)


_______________




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




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




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




Large
Accelerated Filer o     Accelerated
Filer o     Non-Accelerated
Filer o     Smaller
Reporting Company x




Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act.Yes x  No o




State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of November 4, 2008: 15,902,624 shares of common stock.











SUSTUT
EXPLORATION, INC.


FORM
10-Q


September
30, 2008


INDEX




PART
I-- FINANCIAL INFORMATION




Item
      1.
            Financial
      StatementsItem
      2.
            Management’s
      Discussion and Analysis of Financial ConditionItem
      3
            Quantitative
      and Qualitative Disclosures About Market RiskItem
      4T.
            Control
      and Procedures




PART
II-- OTHER INFORMATION




Item
      1
            Legal
      ProceedingsItem
      1A
            Risk
      FactorsItem
      2.
            Unregistered
      Sales of Equity Securities and Use of ProceedsItem
      3.
            Defaults
      Upon Senior SecuritiesItem
      4.
            Submission
      of Matters to a Vote of Security HoldersItem
      5.
            Other
      InformationItem
      6.
            Exhibits
      and Reports on Form 8-K




SIGNATURE















Item 1. Financial
Information






SUSTUT
EXPLORATION, INC.
 (an
exploration stage company)
 
 FINANCIAL
STATEMENTS
 
 AS OF
SEPTEMBER 30, 2008
 
   
 
 
  
 
 SUSTUT
EXPLORATION, INC.
 (an
exploration stage company)
 
 
 
  BALANCE
      SHEET
              F-1STATEMENT OF
      OPERATIONS
              F-2STATEMENT OF
      STOCKHOLDERS’ EQUITY
              F-3STATEMENT OF
      CASH FLOWS
              F-4FINANCIAL
      STATEMENT FOOTNOTES
              F-5
   
 
 SUSTUT
      EXPLORATION, INC.(an
      exploration stage company)BALANCE
      SHEETAs
      of September 30, 2008ASSETSCURRENT
      ASSETS
                    
                    9/30/2008
                    
                    
                    12/31/2007Cash
                    
                    $
                    -
                    
                    
                    $
                    10,157Total
      Current Assets
                    
                    
                    -
                    
                    
                    
                    10,157OTHER CURRENT
      ASSETSNone
                    
                    
                    -
                    
                    
                    
                    -Total
      Other Current Assets
                    
                    
                    -
                    
                    
                    
                    -TOTAL
      ASSETS
                    
                    $
                    -
                    
                    
                    $
                    10,157LIABILITIES AND
      STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccrued
      Expenses
                    
                    $
                    500
                    
                    
                    $
                    5,250Payable
      agreement for claim rights
                    
                    
                    -
                    
                    
                    
                    20,000Total
      Current Liabilities
                    
                    
                    500
                    
                    
                    
                    25,250LONG-TERM
      LIABILITIESPayable
      agreement for claim rights
                    
                    
                    -
                    
                    
                    
                    -TOTAL
      LIABILITIES
                    
                    
                    500
                    
                    
                    
                    25,250STOCKHOLDERS'
      EQUITYCommon
      Stock, $.001 par valueAuthorized:
      200,000,000Issued:
      15,902,624 and 15,902,624, respectively
                    
                    
                    15,903
                    
                    
                    
                    15,903Additional paid
      in capital
                    
                    
                    71,797
                    
                    
                    
                    71,797Accumulated
      deficit during development stage
                    
                    
                    (88,200
                    )
                    
                    
                    (102,793
                    )Total
      Stockholders' Equity
                    
                    
                    (500
                    )
                    
                    
                    (15,093
                    )TOTAL
      LIABILITIES AND EQUITY
                    
                    $
                    -
                    
                    
                    $
                    10,157
 The
accompanying notes are an integral part of these financial
statements
 
 F-1
 
 SUSTUT
      EXPLORATION, INC.(an
      exploration stage company)STATEMENT
      OF OPERATIONSFor
      the nine months ended September 30, 2008 and 2007, andFrom
      inception (April 11, 2006) through September 30, 20089
      MONTHS
                
                
                9
      MONTHSENDING
                
                
                ENDING
                
                
                FROM09/30/08
                
                
                09/30/07
                
                
                INCEPTIONREVENUE
                
                $
                -
                
                
                $
                -
                
                
                $
                -COST OF
      SERVICES
                
                
                -
                
                
                
                -
                
                
                
                -GROSS PROFIT OR
      (LOSS)
                
                
                -
                
                
                
                -
                
                
                
                -GENERAL AND
      ADMINISTRATIVE EXPENSES
                
                
                5,407
                
                
                
                9,976
                
                
                
                33,200GENERAL
      EXPLORATION
                
                
                -
                
                
                
                -
                
                
                
                75,000OTHER
      INCOME
                
                
                20,000
                
                
                
                -
                
                
                
                20,000OPERATING
      INCOME
                
                
                14,593
                
                
                
                (9,976
                )
                
                
                (88,200
                )ACCUMULATED DEFICIT,
      BEGINNING
                
                
                (102,793
                )
                
                
                (87,607
                )
                
                
                -ACCUMULATED DEFICIT,
      ENDING
                
                $
                (88,200
                )
                
                $
                (97,583
                )
                
                $
                (88,200
                )Earnings (loss) per
      share, basic
                
                $
                0.00
                
                
                $
                (0.00
                )Weighted average
      number of common shares
                
                
                15,902,624
                
                
                
                15,902,624
 The
accompanying notes are an integral part of these financial
statements
 
 F-2
 
 SUSTUT
      EXPLORATION, INC.(an
      exploration stage company)STATEMENT
      OF OPERATIONSFor
      the three months ended September 30, 2008 and 20073
      MONTHS
                
                
                3
      MONTHSENDING
                
                
                ENDING09/30/08
                
                
                09/30/07REVENUE
                
                $
                -
                
                
                $
                -COST OF
      SERVICES
                
                
                -
                
                
                
                -GROSS PROFIT OR
      (LOSS)
                
                
                -
                
                
                
                -GENERAL AND
      ADMINISTRATIVE EXPENSES
                
                
                3,074
                
                
                
                2,969GENERAL
      EXPLORATION
                
                
                -
                
                
                
                -OTHER
      INCOME
                
                
                20,000
                
                
                
                -OPERATING
      INCOME
                
                
                16,926
                
                
                
                (2,969
                )ACCUMULATED DEFICIT,
      BEGINNING
                
                
                (105,126
                )
                
                
                (94,614
                )ACCUMULATED DEFICIT,
      ENDING
                
                $
                (88,200
                )
                
                $
                (97,583
                )
 The
accompanying notes are an integral part of these financial
statements
 
 F-3
  SUSTUT
      EXPLORATION, INC.(an
      exploration stage company)STATEMENT
      OF STOCKHOLDERS' EQUITYAs
      of September 30, 2008ADDITIONALCOMMON
                
                
                PAR
                
                
                PAID
      IN
                
                
                ACCUM.
                
                
                TOTALSTOCK
                
                
                VALUE
                
                
                CAPITAL
                
                
                DEFICIT
                
                
                EQUITYCommon
      stock issued for compensationAprill
      11, 2006 at $0.001 per share
                
                
                9,902,624
                
                
                $
                9,903
                
                
                $
                97
                
                
                $
                -
                
                
                $
                10,000Common
      stock issued for cashApril
      16, 2006 at $0.01per
      share on private placement
                
                
                5,941,575
                
                
                
                5,942
                
                
                
                54,058
                
                
                
                -
                
                
                
                60,000Net
      income (loss)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (87,607
                )
                
                
                (87,607
                )Balance,
      December 31, 2006
                
                
                15,844,199
                
                
                $
                15,844
                
                
                $
                54,156
                
                
                $
                (87,607
                )
                
                $
                (17,607
                )Common
      stock issued for cash
                
                
                58,425
                
                
                
                58
                
                
                
                17,642
                
                
                
                
                
                
                
                17,700February
      21, 2007 at $0.30per
      share on private placementCancellation
      of common stock
                
                
                (990
                )
                
                
                (1
                )
                
                
                (299
                )
                
                
                
                
                
                
                (300
                )issued
      for cash March 21, 2007at
      $.30 per shareCommon
      Stock issued for cash
                
                
                990
                
                
                
                1
                
                
                
                299
                
                
                
                
                
                
                
                300July
      4, 2007 at $0.30 pershare
      on private placementNet
      income (loss)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (15,186
                )
                
                
                (15,186
                )Balance,
      December 31, 2007
                
                
                15,902,624
                
                
                $
                15,903
                
                
                $
                71,797
                
                
                $
                (102,793
                )
                
                $
                (15,093
                )Retroactively
      applied shareissuance
      treated as a 0.99026241954-to-1reverse
      stock split at par value,$0.001
      per share on April 17, 2008Net
      income (loss)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                14,593
                
                
                
                14,593Balance,
      September 30, 2008
                
                
                15,902,624
                
                
                $
                15,903
                
                
                $
                71,797
                
                
                $
                (88,200
                )
                
                $
                (500
                )
  The
accompanying notes are an integral part of these financial
statements
  F-4
 SUSTUT
      EXPLORATION, INC.(an
      exploration stage company)STATEMENTS
      OF CASH FLOWSFor
      the nine months ended September 30, 2008 and 2007,
andFrom
      inception (April 11, 2006) through September 30, 20089
      MONTHS
                  
                  
                  9
      MONTHSENDING
                  
                  
                  ENDING
                  
                  
                  FROMCASH FLOWS FROM
      OPERATING ACTIVITIES
                  
                  09/30/08
                  
                  
                  09/30/07
                  
                  
                  INCEPTIONNet
      income (loss)
                  
                  $
                  14,593
                  
                  
                  $
                  (9,976
                  )
                  
                  $
                  (88,200
                  )Adjustments to
      reconcile net income to net cashprovided
      by  (used in) operating activities:Stock
      issued in the form of compensation
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  10,000Increase
      (Decrease) in Accrued Expenses
                  
                  
                  (4,750
                  )
                  
                  
                  1,000
                  
                  
                  
                  500Increase
      (Decrease) in claims payable
                  
                  
                  (20,000
                  )
                  
                  
                  -
                  
                  
                  
                  -Total
      adjustments to net income
                  
                  
                  (24,750
                  )
                  
                  
                  1,000
                  
                  
                  
                  10,500Net
      cash provided by (used in) operating activities
                  
                  
                  (10,157
                  )
                  
                  
                  (8,976
                  )
                  
                  
                  (77,700
                  )CASH FLOWS FROM
      INVESTING ACTIVITIESNone
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Net
      cash flows provided by (used in) investing activities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -CASH FLOWS FROM
      FINANCING ACTIVITIESCash
      paid to related party
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Proceeds from
      stock issuance
                  
                  
                  .
                  
                  
                  
                  17,700
                  
                  
                  
                  77,700Net
      cash provided by (used in) financing activities
                  
                  
                  -
                  
                  
                  
                  17,700
                  
                  
                  
                  77,700CASH
      RECONCILIATIONNet
      increase (decrease) in cash
                  
                  
                  (10,157
                  )
                  
                  
                  8,724
                  
                  
                  
                  -Cash -
      beginning balance
                  
                  
                  10,157
                  
                  
                  
                  4,893
                  
                  
                  
                  -CASH BALANCE END OF
      PERIOD
                  
                  $
                  -
                  
                  
                  $
                  13,617
                  
                  
                  $
                  -
 
 The
accompanying notes are an integral part of these financial
statements
  F-5
  
 NOTE  1  -  OPERATIONS  AND  BASIS  OF  PRESENTATION
 
 Sustut
Exploration, Inc. (the Company), an exploration stage company, was incorporated
on April 11, 2006 in the State of Delaware. The Company was an exploration stage
mineral company. However, after the change in ownership on September 12, 2008,
the Company plans to locate and negotiate with a business entity for the
combination of that target company with The Company. The combination will
normally take the form of a merger, stock-for-stock exchange or stock-for assets
exchange. In most instances the target company will wish to structure the
business combination to be within the definition of a tax-free reorganization
under Section 351 or Section 368 of the Internal Revenue Code of 1986, as
amended. No assurances can be given that The Company will be successful in
locating or negotiating with any target company.
 
 The
Company’s fiscal year end is December 31.
 
 The
Company's financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of the mineral properties
and other assets and the satisfaction of liabilities in the normal course of
business. The Company has incurred losses from inception to September 30, 2008.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. Management continues to actively seek additional sources of
capital to fund current and future operations. There is no assurance that the
Company will be successful in continuing to raise additional capital,
establishing probable or proven reserves. These financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
  NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
 
 Revenue
and Cost Recognition
  The
Company uses the accrual basis of accounting for financial statement reporting.
Revenues and expenses are recognized in accordance with Generally Accepted
Accounting Principles for the industry. Certain period expenses are recorded
when obligations are incurred.
 
 Use  of  Estimates
  The
preparation of the financial statements in conformity with generallyaccepted
accounting principles requires management to make estimates andassumptions
that affect the reported amount of assets and liabilities, anddisclosure
of contingent liabilities at the date of the financial statements,and the
reported amount of revenues and expenses during the reporting period. Actual results could
differ from those results.
   F-6
 
 Accounts
Receivable, deposits, Accounts Payable and accrued Expenses
  Accounts
receivable have historically been immaterial and therefore no allowance for
doubtful accounts has been established.  Normal operating refundable
Company deposits are listed as Other Assets.  Accounts payable and
accrued expenses consist of trade payables created from the normal course of
business.
 
 Non-mining
Property and Equipment
  Property
and equipment purchased by the Company are recorded at cost. Depreciation is
computed by the straight-line method based upon the estimated useful lives of
the respective assets.  Expenditures for repairs and maintenance are
charged to expense as incurred as are any items purchased which are below the
Company’s capitalization threshold of $1,000.
 
 For
assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from accounts, and any related gain or loss is
reflected in income for the period.
 
 Income  Taxes
  The
Company accounts for income taxes using the liability method which requires
recognition of deferred tax liabilities and assets for the expected future tax consequences
of events that have been included in the financial statements or tax
returns. Deferred tax assets and liabilities are determined based on the difference
between the financial statements and tax basis of assets and liabilities
using enacted tax rates in effect for the year in which the differences
are expected to reverse. The Company’s management determines if a valuation
allowance is necessary to reduce any tax benefits when the available benefits
are more likely than not to expire before they can be used.
 
 
 
 F-7
 
 
 Stock  Based  Compensation
  The Financial Accounting Standards Board issued Statement ofFinancial Accounting Standards No. 123(R), "Accounting for Stock-BasedCompensation," (SFAS 123(R)). SFAS 123(R) requires that companies
recognizecompensation expense for grants of stock, stock options, and other equityinstruments based on fair value. The Company has adopted SFAS 123(R) in
accounting for stock-based compensation.
 
 Cash
and Cash Equivalents, and Credit Risk
  For
purposes of reporting cash flows, the Company considers all cash accounts with
maturities of 90 days or less and which are not subject to withdrawel
restrictions or penalties, as cash and cash equivalents in the accompanying
balance sheet.
 
 The
portion of deposits in a financial institution that insures its deposits with
the FDIC up to $100,000 per depositor in excess of such insured amounts are not
subject to insurance and represent a credit risk to the Company.
 
 Foreign
Currency Translation and Transactions
  The
Company’s functional currency is the US dollar.  No material
translations or transactions have occurred.  Upon the occurrence of
such material transactions or the need for translation adjustments, the Company
will adopt Financial Accounting Standard No. 52 and other methods in conformity
with Generally Accepted Accounting Principles.
  Earnings  Per  Share
 
 In
February 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per Share". SFAS
128 replaces the presentation of primary earnings per share with a presentation
of basic earnings per share based upon the weighted average number of common
shares for the period.
 
 NOTE  3  -  AFFILIATES  AND  RELATED  PARTIES
 
 Significant
relationships with (1) companies affiliated through common ownership and/or  management,  and  (2)  other  related  parties  are  as  follows:
 
 F-8
  The
Company had ownership of the Don 1-2 claims which were placed in trust with the
Company’s President. The mineral claims, per the purchase agreement, had been
reverted back to the seller.
 
 The
Company has stock-based compensation with directors of the Company as disclosed
in Footnote No. 7.
 
 NOTE  4  -  MINERAL  PROPERTIES
 
 The  Company's  net  investment
in mineral properties include one claim as described in footnote number 1 have
all costs related to the claim have be expended in accordance with Generally
Accepted Accounting Principles for the industry .
 
 NOTE  5
-  INCOME  TAXES
 
 The income tax payable that was accrued from inception through September
12, 2008 was offset by the Company’s net operating loss carry-forward therefore
the provisions for income tax in the income statement is $0.  The
accounting for these losses derives a deferred tax asset for the period from
inception to September 12, 2008 of 17,540. However, $87,700 of the net operating
loss carryforwards are disallowed due to the change in ownership of more than
50% and the change in continuity of business enterprise.
  No
provision was made for federal income tax since the Company has significant net
operating losses. From September 12 through September 30, 2008, the Company
incurred net operating losses for tax purposes of approximately $500. The net
operating loss carry forwards may be used to reduce taxable income through 2028.
The availability of the Company’s net operating loss carry-forwards are subject
to limitation if there is a 50% or more positive change in the ownership of the
Company’s stock. The provision for income taxes consists of the federal and
state minimum tax imposed on corporations.
  Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
statement purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and assets as of September
30, 2008 are as follows:
 
  Deferred
      tax assets:Federal
      net operating loss
              
              $
              75State
      net operating loss
              
              
              25Total
      deferred tax assets
              
              
              100Less
      valuation allowance
              
              
              (100
              )$
              --
   F-9
 
 The Company has provided a 100% valuation allowance on the deferred tax
assets at September 30, 2008 to reduce such asset to zero, since there is no
assurance that the Company will generate future taxable income to utilize such
asset. Management will review this valuation allowance requirement periodically
and make adjustments as warranted.
  The reconciliation of the effective income tax rate to the federal
statutory rate for the periods ended September 30, 2008 and September 30, 2007
is as follows:
  
 2008
              
              2007Federal
      income tax rate
              
              
              (15.0
              %)
              
              (15.0
              %)State
      tax, net of federal benefit
              
              
              (5.0
              %)
              
              (5.0
              %)Increase
      in valuation allowance
              
              
              20.0
              %
              
              20.0
              %Effective
      income tax rate
              
              
              0.0
              %
              
              0.0
              %
 
 
 
 NOTE
6  - CLAIM AGREEMENT
 
 On May 5,
2006, the Company entered into an agreement with Richard Simpson of Vancouver,
BC to acquire one rock mineral claim covering 445.70 hectares.  The
agreement called for a 100% interest in the claims subject to a 2.5% Net Smelter
Royalty (NSR) for a total of $25,000.  1.5% of the NSR can be acquired
for $1.0 million within 12 months from commencement of commercial
production.  Advance royalties of $20,000 shall be paid annually
commencing January 17, 2010.  The purchase of the claim required
payment of $55,000 on May 15, 2006 and a further $20,000 on or before May 15,
2008. The Company has satisfied the initial payment of $55,000. Subsequently
from the initial payment the Company defaulted on the next payment per the
purchase agreement.  The mineral claims, per the purchase agreement,
have reverted back to the seller.
 
  F-10
  
 NOTE  7
-  SHAREHOLDERS'  EQUITY
 
 Common
Stock
  The
Company has authorized two hundred million (200,000,000) shares of common stock
with a par value of $.001.
 
 Upon
incorporation the Company issued 10,000,000 common shares to directors of the
Company as compensation in the amount of $10,000, or $0.001 per
share.
 
 During
April 2006 the Company undertook a Section 4(2) registration under the
Securities Act of 1933 to raise $60,000 in the issuance of 6,000,000 shares of
common stock for the purpose of acquisition and exploration of mining
properties.  The Company’s management considers this offering to be
exempt under the Securities Act of 1933.
 
 During
February 2007, the Company undertook a Section 4(2) registration under the
Securities Act of 1933 to raise $17,700 in the issuance of 59,000 shares of
common stock at $.30 per share. The Company’s management considers this offering
to be exempt under the Securities Act of 1933.
 
 During
March 2007, the Company cancelled the issuance of 1,000 shares of common stock
at $.30 per share.
 
 During
July 2007, the Company reissued 1,000 shares of common stock at $0.30 per share
that were cancelled during March 2007.
 
 During
April 2008, the Company undertook a 0.99026241954-for-1 reverse stock split of
the Corporation’s issued and outstanding shares of common stock.
 
 On
September 12, 2008, the Company authorized the issuance of 10,000,000
shares of common stock to Andrey Oks as compensation for his appointment as the
new sole officer and director. On September 12, 2008, Terry Hughes resigned from
his position as the sole officer and director of the Company, and agreed to
cancel all 10,000,000 shares of the Company common stock that he owned as of
that date, and hereby waived all rights, title and interest he had or may have
with respect to the 10,000,000 shares.
 
 NOTE  8
-  COMMITMENTS  AND  CONTINGENCIES
 
 Management
is not aware of any contingent matters that could have a material adverse effect
on the Company’s financial condition, results of operations, or
liquidity.
 
 
 F-11
   NOTE  9
-  LITIGATION, CLAIMS AND ASSESSMENTS
 
 From time
to time in the normal course of business the Company will be involved in
litigation.  The Company’s management has determined any asserted or
unasserted claims to be immaterial to the financial statements.
 
 NOTE
10 – CONTROLS AND PROCEDURES
 
 a)
              Evaluation
      of disclosure controls and
procedures.
 
 Our Chief
Executive Officer and Chief Financial Officer (collectively the "Certifying
Officers") maintain a system of disclosure controls and procedures that is
designed to provide reasonable assurance that information, which is required to
be disclosed, is accumulated and communicated to management timely. Under the
supervision and with the participation of management, the Certifying Officers
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)] under the
Exchange Act) within 90 days prior to the filing date of this report. Based upon
that evaluation, the Certifying Officers concluded that our disclosure controls
and procedures are effective in timely alerting them to material information
relative to our company required to be disclosed in our periodic filings with
the SEC.
 
 b)
              Changes
      in internal controls.
 
 Our
Certifying Officer has indicated that there were no significant changes in our
internal controls or other factors that could significantly affect such controls
subsequent to the date of his evaluation, and there were no such control actions
with regard to significant deficiencies and material weaknesses.


F-12




ITEM
2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS




Plan
of Operation




Sustut
Exploration, Inc. (the Company), an exploration stage company, was incorporated
on April 11, 2006 in the State of Delaware.  The Company was an
exploration stage mineral company. However, after the change in ownership on
September 12, 2008, the Company plans to locate and negotiate with a business
entity for the combination of that target company with The Company. The
combination will normally take the form of a merger, stock-for-stock exchange or
stock-for assets exchange. In most instances the target company will wish to
structure the business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue Code of
1986, as amended. No assurances can be given that The Company will be successful
in locating or negotiating with any target company.




The
Company’s fiscal year end is December 31.




The
Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of the mineral properties and
other assets and the satisfaction of liabilities in the normal course of
business. The Company has incurred losses from inception to September 30, 2008.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. Management continues to actively seek additional sources of
capital to fund current and future operations. There is no assurance that the
Company will be successful in continuing to raise additional capital,
establishing probable or proven reserves. These financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.




Recent Accounting
Pronouncements




In March
2008, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
objective of SFAS 157 is to increase consistency and comparability in fair value
measurements and to expand disclosures about fair value measurements. SFAS 157
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS 157 applies under other accounting pronouncements that
require or permit fair value measurements and does not require any new fair
value measurements. The provisions of SFAS No. 157 are effective for fair value
measurements made in fiscal years beginning after November 15, 2007. The
adoption of this statement is not expected to have a material effect on the
Company's future reported financial position or results of
operations.











In
February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
159, “The Fair Value Option
for Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115”. This statement permits entities to choose to measure
many financial instruments and certain other items at fair value. Most of the
provisions of SFAS No. 159 apply only to entities that elect the fair value
option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments
in Debt and Equity Securities” applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective as of the
beginning of an entity’s first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provision of SFAS No. 157, “Fair Value Measurements”. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.





Critical Accounting
Policies




Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenues and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.




Our
significant accounting policies are summarized in Note 1 of our financial
statements. While all these significant accounting policies impact our financial
condition and results of operations, we view certain of these policies as
critical. Policies determined to be critical are those policies that have the
most significant impact on our financial statements and require management to
use a greater degree of judgment and estimates. Actual results may differ from
those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our consolidated results of
operations, financial position or liquidity for the periods presented in this
report.




Off Balance Sheet
Arrangements




We have
no off-balance sheet arrangements.













Item
3. Quantitative and Qualitative Disclosures About Market Risk





Not required for smaller reporting
companies.


Item
4T.  Controls and Procedures





a)Evaluation of
Disclosure Controls.Andrey
Oks, our Chief Executive Officer and our Principal Accounting Officer,
evaluated the effectiveness of our disclosure controls and procedures as of the
end of our third fiscal quarter 2008 pursuant to Rule 13a-15(b) of the
Securities and Exchange Act. Disclosure controls and procedures are controls and
other procedures that are designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by us in the reports that we file under the Exchange
Act is accumulated and communicated to our management, as appropriate to allow
timely decisions regarding required disclosure. Based on the evaluations, Mr.
Oks concluded that our disclosure controls and procedures were effective as of
September 30, 2008.
  It should be noted that any system of
controls, however well designed and operated, can provide only reasonable, and
not absolute, assurance that the objectives of the system are met. In addition,
the design of any control system is based in part upon certain assumptions about
the likelihood of future events. Because of these and other inherent limitations
of control systems, there can be no assurance that any design will succeed in
achieving its stated goals under all potential future
conditions
 
 (b)Changes in internal
control over financial reporting.There have been no changes in our
internal control over financial reporting that occurred during the last fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting. Our management team will
continue to evaluate our internal control over financial reporting in 2008 as we
implement our Sarbanes Oxley Act testing.












PART
II - OTHER INFORMATION




Item
1. Legal Proceedings.




Currently
we are not aware of any litigation pending or threatened by or against the
Company.





Item 1A.  Risk Factors




None.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds




On
September 15, 2008, the Company authorized the issuance of 10,000,000
shares of common stock to Andrey Oks as compensation for his appointment as the
new sole officer and director. On September 12, 2008, Terry Hughes resigned from
his position as the sole officer and director of the Company, and agreed to
cancel all 10,000,000 shares of the Company common stock that he owned as of
that date, and hereby waived all rights, title and interest he had or may have
with respect to the 10,000,000 shares.




Item
3. Defaults Upon Senior Securities.




None




Item
4. Submission of Matters to a Vote of Security Holders.




On
September 15, 2008, by a majority vote of the shareholders, Andrey Oks was
appointed as our sole director.


Item
5. Other Information.




None




Item
6. Exhibits and Reports of Form 8-K.




(a)      
Exhibits




31.1
Certifications pursuant to Section 302 of Sarbanes Oxley Act of
2002




32.1
Certifications pursuant to Section 906 of Sarbanes Oxley Act of
2002




(b)     
Reports of Form 8-K




On
September 15, 2008 we filed an 8-K disclosing the appointment of Andrey Oks as
sole officer and director effective as of September 15, 2008 and the
resignation of Terry Hughes as a member of the Company's Board of Directors
effective as of September 12, 2008.















SIGNATURES




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




SUSTUT
      EXPLORATION, INC.Date:
      November  13, 2008
            By:
            /s/ Andrey OksAndrey
      Oks
              President