---

UNITED STATES**SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-QSB

(Mark One)

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

For the quarterly period ended August 31 2007

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

For the transition period from __________ to __________

Commission file number 000-52782

MAINLAND RESOURCES INC.(Exact name of small business issuer as specified in its
charter)

|Nevada                                                               | N/A                              
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

1404-1228 West Hastings Street, Vancouver, British
Columbia, Canada V6E 4S6(Address of principal executive offices)

604.728.1514(Issuer's telephone number)

512 EAST 57th Avenue, Vancouver, Britisl Columbia, Canada
V5X 1S9(Former name, former address and former fiscal year, if
changed since last report)

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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court. Yes [ 
 ]  No [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 720,500
common shares issued and outstanding as of October 12, 2007

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

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2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

It is the opinion of management that the interim
consolidated financial statements for the quarter ended August 31, 2007 include
all adjustments necessary in order to ensure that the interim consolidated
financial statements are not misleading.

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Mainland Resources Inc. (An Exploration Stage Company)





|Unaudited financial statements
      for the six months period ended August 31, 2007 |                                                                                       
|------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------
|                                                                                     |                                                                                       
|                                                                                     | Balance Sheets as at August 31, 2007                                                  
|                                                                                     |                                                                                       
|                                                                                     | Statements of Operations for six months ended August 31,
      2007                   
|                                                                                     |                                                                                       
|                                                                                     | Statements of Cash Flows for six months ended August 31,
      2007                   
|                                                                                     |                                                                                       
|                                                                                     | Statement of Stockholders Equity (Deficit) for six
      months ended August 31, 2007
|                                                                                     |                                                                                       
|                                                                                     | Notes to the unaudited financial statements                                           

F-1

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Mainland Resources Inc. (An Exploration Stage Company)
Balance Sheet

|                                                       |   | August 31,  |   |   | February 28, |  
|------------------------------------------------------ | - | ----------- | - | - | ------------ | -
|                                                       |   | 2007        |   |   | 2007         |  
|                                                       |   | (Unaudited) |   |   |              |  
|                                                       |   |             |   |   |              |  
|ASSETS                                                 |   |             |   |   |              |  
|Current Assets                                         |   |             |   |   |              |  
|Cash                                                   | $ | 3,127       |   | $ | 14,236       |  
|Prepaid expenses                                       |   |            |   |   | 3,000        |  
|Total Assets                                           | $ | 3,127       |   | $ | 17,236       |  
|                                                       |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY
      (DEFICIT)   |   |             |   |   |              |  
|Current Liabilities                                    |   |             |   |   |              |  
|Accounts Payable and Accrued
      Liabilities         | $ | 14,766      |   | $ |             |  
|Loan
      Payable (Note 2)                            |   | 9,900       |   |   |             |  
|Total Liabilities                                      |   | 24,666      |   |   |             |  
|Going Concern Contingency (Note 1)                     |   |             |   |   |              |  
|Stockholders Equity (Deficit)                         |   |             |   |   |              |  
|Common Stock ,                                         |   |             |   |   |              |  
|10,000,000 shares authorized,
      $0.0001 par value  |   |             |   |   |              |  
|720,500 shares issued and outstanding                  |   |             |   |   |              |  
|(February 28, 2007 -720,500
      shares)              |   | 72          |   |   | 72           |  
|Additional Paid-in Capital                             |   | 32,333      |   |   | 28,225       |  
|Other Accumulated Comprehensive Income                 |   | 703         |   |   | 195          |  
|Deficit
      Accumulated During the Exploration Stage |   | (54,647     | ) |   | (11,256      | )
|                                                       |   |             |   |   |              |  
|Total
      Stockholders Equity (Deficit)             |   | (21,539     | ) |   | 17,236       |  
|Total Liabilities and Stockholders Equity (Deficit)   | $ | 3,127       |   | $ | 17,236       |  

The accompanying notes are an integral part of these financial
statements

F-2

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Mainland Resources Inc. (An Exploration Stage Company)
Statements of Operations (Unaudited)

|                                              |   | Three months    |   |   | Six months      |   |   | May 12, 2006             |   |   | May 12, 2006             |  
|--------------------------------------------- | - | --------------- | - | - | --------------- | - | - | ------------------------ | - | - | ------------------------ | -
|                                              |   | ended           |   |   | ended           |   |   | (Date of Inception)      |   |   | (Date of Inception)      |  
|                                              |   | August 31, 2007 |   |   | August 31, 2007 |   |   | To August
      31, 2006 |   |   | To August
      31, 2007 |  
|                                              |   |                 |   |   |                 |   |   |                          |   |   |                          |  
|                                              |   |                 |   |   |                 |   |   |                          |   |   |                          |  
|                                              |   |                 |   |   |                 |   |   |                          |   |   |                          |  
|Expenses                                      |   |                 |   |   |                 |   |   |                          |   |   |                          |  
|                                              |   |                 |   |   |                 |   |   |                          |   |   |                          |  
|Office and
      general (Note 3)             | $ | 2,268           |   | $ | 5,908           |   | $ | 2,042                    |   | $ | 12,293                   |  
|Mineral property costs                        |   |                |   |   | 857             |   |   | 4,440                    |   |   | 5,297                    |  
|Professional fees                             |   | 14,999          |   |   | 36,626          |   |   |                         |   |   | 37,057                   |  
|                                              |   |                 |   |   |                 |   |   |                          |   |   |                          |  
|Net Loss                                      | $ | (17,267         | ) | $ | (43,391         | ) | $ | (6,482                   | ) | $ | (54,647                  | )
|                                              |   |                 |   |   |                 |   |   |                          |   |   |                          |  
|Net Loss Per Share  Basic and Diluted        | $ | (0.02           | ) | $ | (0.06           | ) | $ | (0.05                    | ) |   |                          |  
|                                              |   |                 |   |   |                 |   |   |                          |   |   |                          |  
|Weighted Average Number of Shares Outstanding |   | 720,500         |   |   | 720,500         |   |   | 119,658                  |   |   |                          |  

The accompanying notes are an integral part of these financial
statements

F-3

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Mainland Resources Inc. (An Exploration Stage Company)
Statements of Cash Flows (Unaudited)

|                                                     |   | Six months ended |   |   | May 21, 2006             |   |   | May 21, 2006             |  
|---------------------------------------------------- | - | ---------------- | - | - | ------------------------ | - | - | ------------------------ | -
|                                                     |   | August 31,       |   |   | (Date of Inception),     |   |   | (Date of Inception),     |  
|                                                     |   | 2007             |   |   | To August
      31, 2006 |   |   | To August
      31, 2007 |  
|                                                     |   |                  |   |   |                          |   |   |                          |  
|Operating Activities                                 |   |                  |   |   |                          |   |   |                          |  
|Net loss                                             | $ | (43,391          | ) | $ | (6,482                   | ) | $ | (54,647                  | )
|Non Cash items:                                      |   |                  |   |   |                          |   |   |                          |  
|Mineral property costs                               |   |                 |   |   | 4,440                    |   |   | 4,440                    |  
|Donated services
      and expenses                  |   | 4,108            |   |   | 2,007                    |   |   | 9,901                    |  
|Changes in operating assets and liabilities          |   |                  |   |   |                          |   |   |                          |  
|Increase
      (decrease) in prepaid expenses        |   | 3,000            |   |   |                         |   |   |                         |  
|Increase in accounts payable and accrued liabilities |   | 14,766           |   |   |                         |   |   | 14,766                   |  
|Net Cash Used in Operations                          |   | (21,517          | ) |   | (35                      | ) |   | (25,540                  | )
|Financing Activities                                 |   |                  |   |   |                          |   |   |                          |  
|Common stock issued                                  |   |                 |   |   | 172                      |   |   | 18,064                   |  
|Common stock subscribed                              |   |                 |   |   | 22,230                   |   |   |                         |  
|Proceeds on loan payable                             |   | 9,900            |   |   |                         |   |   | 9,900                    |  
|Net Cash Provided
      by Financing Activities      |   | 9,900            |   |   | 22,402                   |   |   | 27,964                   |  
|Effect of exchange rate changes on cash              |   | 508              |   |   | 8                        |   |   | 703                      |  
|Change in Cash                                       |   | (11,109          | ) |   | 22,375                   |   |   | 3,127                    |  
|Cash - Beginning                                     |   | 14,236           |   |   |                         |   |   |                         |  
|Cash - Ending                                        | $ | 3,127            |   | $ | 22,375                   |   | $ | 3,127                    |  
|                                                     |   |                  |   |   |                          |   |   |                          |  
|Non-Cash Financing and Investing Activities          |   |                  |   |   |                          |   |   |                          |  
|Issue of common stock for mineral property           | $ |                 |   | $ | 4,440                    |   | $ | 4,440                    |  
|                                                     |   |                  |   |   |                          |   |   |                          |  
|Supplemental Disclosures:                            |   |                  |   |   |                          |   |   |                          |  
|Interest paid                                        | $ |                 |   | $ |                         |   | $ |                         |  
|Income taxes paid                                    | $ |                 |   | $ |                         |   | $ |                         |  

The accompanying notes are an integral part of these financial
statements

F-4

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Mainland Resources Inc. (An Exploration Stage Company)
Statement of Stockholders Equity (Deficit)

DeficitOther
      
      
      accumulatedAdditional
      
      
      Accumulated
      
      
      during theNumber of
      
      
      
      
      
      paid-in
      
      
      Comprehensive
      
      
      explorationShares
      
      
      Amount
      
      
      capital
      
      
      Income
      
      
      stage
      
      
      TotalBalance  May 12, 2006 (Date of 
        Inception)
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      June 15, 2006  Common stock issuedfor cash at $0.001 per share
      200,000
      
      
      20
      
      
      152
      
      
      
      
      
      
      
      
      172July 1, 2006  Common stock issued formineral properties at $0.043 per share
      103,500
      
      
      10
      
      
      4,430
      
      
      
      
      
      
      
      
      4,440October 6, 2006  Common stockissued for cash at $0.043 per share
      417,000
      
      
      42
      
      
      17,850
      
      
      
      
      
      
      
      
      17,892Donated services and rent
      
      
      
      
      
      
      5,793
      
      
      
      
      
      
      
      
      5,793Foreign currency translation adjustment
      
      
      
      
      
      
      
      
      
      195
      
      
      
      
      
      195Net loss
      
      
      
      
      
      
      
      
      
      
      
      
      (11,256
      )
      
      (11,256
      )Balance  February 28, 2007
      720,500
      
      
      72
      
      
      28,225
      
      
      195
      
      
      (11,256
      )
      
      17,236Donated services and rent
      
      
      
      
      
      
      4,108
      
      
      
      
      
      
      
      
      4,108Foreign currency translation adjustment
      
      
      
      
      
      
      
      
      
      508
      
      
      
      
      
      508Net loss
      
      
      
      
      
      
      
      
      
      
      
      
      (43,391
      )
      
      (43,391
      )Balance  August 31, 2007
      720,500
      
      $
      72
      
      $
      32,333
      
      $
      703
      
      $
      (54,647
      )
      $
      (21,539
      )


The accompanying notes are an integral part of these financial
statements

F-5

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Mainland Resources Inc. (An Exploration Stage Company)
Notes to the unaudited financial statements

|1. | Nature and Continuance of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company was incorporated in the State of Nevada on
      May 12, 2006. The Company is an Exploration Stage Company, as defined by
      Statement of Financial Accounting Standard (SFAS) No.7 Accounting and
      Reporting for Development Stage Enterprises. The Companys principal
      business is the acquisition and exploration of mineral resources. The
      Company has not presently determined whether its properties contain
      mineral reserves that are economically recoverable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | These financial statements have been prepared on a going
      concern basis, which implies the Company will continue to realize its
      assets and discharge its liabilities in the normal course of business. The
      Company has never generated revenues since inception and has never paid
      any dividends and is unlikely to pay dividends or generate earnings in the
      immediate or foreseeable future. The continuation of the Company as a
      going concern is dependent upon the continued financial support from its
      shareholders, the ability of the Company to obtain necessary equity
      financing to continue operations, and the attainment of profitable
      operations. As at August 31 2007, the Company has accumulated losses of
      $54,647 since inception. These factors raise substantial doubt regarding
      the Companys ability to continue as a going concern. These financial
      statements do not include any adjustments to the recoverability and
      classification of recorded asset amounts and classification of liabilities
      that might be necessary should the Company be unable to continue as a
      going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Management intends to finance operating costs over the
      next twelve months with existing cash on hand and loans from its sole
      director and, or, a private placement of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The accompanying unaudited interim financial statements
      have been prepared in accordance with generally accepted accounting
      principles in the United States (US GAAP) for interim financial
      information and with the instructions to Form 10-QSB of Regulation S-B.
      They may not include all information and footnotes required by US GAAP for
      complete financial statements. The interim unaudited financial statements
      should be read in conjunction with those financial statements included in
      the Form 10-KSB as at February 28, 2007. In the opinion of Management, all
      adjustments considered necessary for a fair presentation, consisting
      solely of normal recurring adjustments, have been made. Operating results
      for the period ended August 31, 2007, are not necessarily indicative of
      the results that may be expected for the year ending February 28,
    2008.                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. | Loan Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the six months ended August 31, 2007, the Company
      arranged a short term non interest bearing loan for $9,900. This loan was
      provided by an arms length, existing shareholder of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the six months ended August 31, 2007 the Company
      recognized $2,739 (CDN$ 3,000) ($1,338-2006) for donated services at $456
      (CDN$ 500) per month, and $1,369 (CDN$ 1,500) ($669-2006) for donated rent
      for office premises provided by the President of the Company at $228 (CDN$
      250) per month, which has been recorded in office and general
    expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4. | Subsequent to August 31, 2007, the Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Received $20,000 in share subscriptions on a private
      placement to raise up to $50,000 by issuing 1,000,000 shares priced at
      $0.05 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-6

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4

Item 2. Management's Discussion and Analysis or Plan
of Operation.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as
that term is defined in Section 27A of the United States Securities Act of 1933
and Section 21E of the United States Securities Exchange Act of 1934. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as "may",
"should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Financial information contained in this quarterly report and in
our consolidated unaudited financial statements are stated in United States
dollars and are prepared in accordance with United States generally accepted
accounting principles. The following discussion should be read in conjunction
with our unaudited financial statements and the related notes that appear
elsewhere in this quarterly report.

As used in this quarterly report, and unless otherwise indicated,
  the terms "we", "us" and "our" refer to Mainland Resources Inc.

PLAN OF OPERATIONS

Overview

We are a start-up company and have not yet generated or
realized any revenues from our business operations. The mineral properties in
which we have an interest, which properties are held in trust for our company by
Mr. Rahim Jivraj, pursuant to a Trust Agreement dated September 24, 2007, are in
the pre-exploration stage and are not commercially viable at this time. The
properties require further exploration before we are able to ascertain whether
commercially viable quantities of ore exist on these properties. There is no
assurance that a commercially viable mineral deposit exists on any of these
properties.

Corporate History

We were incorporated on May 12, 2006 under the laws of the
State of Nevada. Our principal executive office is located at 512 East 57th
Avenue, Vancouver, British Columbia, Canada V5X 1S9. The telephone number of our
principal executive office is 604-719.4047. We do not have any subsidiaries, nor
are we planning to acquire any subsidiaries.

Our Current Business

We are a resource company engaged in the acquisition,
exploration, development and exploitation of mineral properties. Our main focus
has been the identification and potential development of mineral properties that
contain economically recoverable reserves, which has resulted in the acquisition
of our interest in certain properties located in the Province of British
Columbia, Canada.

Exploration Plan

Our plan of operation for the next twelve months is to complete
the following objectives within the time periods specified, subject to our
obtaining any additional funding necessary for the continued exploration of our
Southwest and Sedona mineral claims. We have enough funds to complete our phase
one exploration program. We do not have enough funds to

---

5

complete our phase two or phase three programs which we would
plan to start in the summer of 2008 if the results of our phase one exploration
program are encouraging. The following is a brief summary of our three phase
exploration program:

As recommended by our consulting
geologist, we have conducted the first phase of our three phase exploration
program, which began in August 2007. This phase one exploration program cost
approximately $9,000 and consisted of library research to acquire existing
geochemical and geophysical data and aerial photo interpretation; five days of
field work comprising prospecting, collecting 186 soil samples and mapping.

We will review the results of the phase
one exploration program in November 2007. If we are able to identify favorable
geological formations and structures with increased mineral values we will plan
and conduct a Phase two program in the summer of 2008. Our consulting geologist
has indicated that we should budget approximately $30,000 for our phase two
program. This will include further field work to expand and enhance geological
and analytical data in the most promising parts of the property.

In the case that the phase two
exploration program takes place, we will review its results in September 2008.
If we are able to continue to confirm increased mineral values at specific hand
drilled targets we would consider phase two a success and would plan for a phase
three exploration program. The phase three exploration program is expected to
cost approximately $100,000 (CAD$100,000) and begin in the summer of 2009. The
phase three program will comprise of detailed studies, including geophysical
surveys, in order to identify the best sites for a future diamond drilling
campaign. At this stage, we would seek to link with a major resource company in
a joint venture relationship in recognition of financing requirements.

As at August 31, 2007, we had a cash balance of $3,127. Our
primary offering is underway and we have enough cash on hand to complete only
our phase one exploration program. If the results of the phase one exploration
program are encouraging, we will have to raise additional funds starting in
January 2008 so that Phase two exploration could commence in July 2008.

During the next 12 months, we do not anticipate generating any
revenue. We anticipate that any additional funding will come from equity
financing from the sale of our common stock or sale of part of our interest in
the Southwest and Sedona mineral claims. If we are successful in completing an
equity financing, existing shareholders will experience dilution of their
interest in our company. We cannot provide investors with any assurance that we
will be able to raise sufficient funding from the sale of our common stock to
fund our phase two and phase three exploration programs. In the absence of such
financing, our business will fail.

We may consider entering into a joint venture partnership by
linking with a major resource company to provide the required funding to
complete our phase two and phase three exploration programs. We have not
undertaken any efforts to locate a joint venture partner for phase two or Phase
three. If we enter into a joint venture arrangement, we will assign a percentage
of our interest in the Southwest and Sedona claims to the joint venture partner.

Based on the nature of our business, we anticipate incurring
operating losses in the foreseeable future. We base this expectation, in part,
on the fact that very few mineral claims in the exploration stage ultimately
develop into producing, profitable mines. Our future financial results are also
uncertain due to a number of factors, some of which are outside our control.
These factors include, but are not limited to:

our ability to raise additional
funding;

the market price for diamonds and
copper;

the results of our proposed exploration
programs on the mineral property; and

our ability to find joint venture
partners for the development of our property interests

Due to our lack of operating history and present inability to
generate revenues, our auditors have stated their opinion that there currently
exists substantial doubt about our ability to continue as a going concern.

---

6

Accounting and Audit Plan

We intend to continue to have our outside consultant assist in
the preparation of our quarterly and annual financial statements and have these
financial statements reviewed or audited by our independent auditor. Our outside
consultant is expected to charge us approximately $900 to prepare our quarterly
financial statements and approximately $1,100 to prepare our annual financial
statements. Our independent auditor is expected to charge us approximately
$2,000 to review our quarterly financial statements and approximately $5,000 to
audit our annual financial statements. In the next twelve months, we anticipate
spending approximately $15,000 to pay for our accounting and audit requirements.

Functional Currency

Our functional currency is the Canadian dollar. We have
determined this based on the following reasons:

- Our current financings are in Canadian dollars;
- We maintain our cash holdings primarily in Canadian dollars only;
- Our administrative expenses are undertaken in Canadian dollars; and
- Our mining claims are located in Canada and the exploration expenses are
  estimated in Canadian dollars.

Exploration Expenses  Canadian GAAP vs. US GAAP

Under generally accepted accounting principles in Canada
(Canadian GAAP), mineral properties including exploration, development and
acquisitions costs, are carried at cost and charged to operations if the
properties are abandoned or impaired. Under U.S. GAAP, all expenditures relating
to mineral interests prior to the completion of a definitive feasibility study,
which establishes proven and probable reserves, must be expensed as incurred.
Once a final feasibility study has been completed, additional costs incurred to
bring a mine into production are capitalized as development costs. Our audited
financial statements use U.S. GAAP.

Results of Operations

We have had no operating revenues since our inception on May
12, 2006, through to August 31, 2007. Our activities have been financed from the
proceeds of share subscriptions. From our inception on May 12, 2006 to August
31, 2007 we have raised a total of $18,064 from private offerings of our common
stock.

For the period ending February 28, 2007 and August 31, 2007, we
incurred total expenses of $11,256 and $43,391. The increase in expenses was due
to the legal and accounting costs associated with filing our companys
registration statement.

Liquidity and Capital Resources

For the period ending February 28, 2007, we had a cash balance
of $14,236 as compared to $3,127 for the period ending August 31, 2007. This
decrease in cash balance is due to the payment of legal and accounting expense
associated with filing our companys registration statement.

There are no assurances that we will be able to achieve further
sales of our common stock or any other form of additional financing. If we are
unable to achieve the financing necessary to continue our plan of operations,
then we will not be able to continue our exploration of the Claims and our
business will fail.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements including
arrangements that would effect our liquidity, capital resources, market risk
support and credit risk support or other benefits.

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7

Forward Looking Statements

The information in this quarterly 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 Exchange Act ). These forward-looking statements involve
risks and uncertainties, including statements regarding the Company's capital
needs, business strategy and expectations. Any statements contained herein that
are not statements of historical facts may be deemed to be forward-looking
statements. In some cases, you can identify forward-looking statements by
terminology such as may, will, should, expect, plan, intend, anticipate,
believe, estimate, predict, potential or continue, the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks outlined from time to time, in other reports we file with the Securities
and Exchange Commission (the SEC ). These factors may cause our actual
results to differ materially from any forward-looking statement. We disclaim any
obligation to publicly update these statements, or disclose any difference
between its actual results and those reflected in these statements. The
information constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.

RISK FACTORS

Much of
the information included in this quarterly report includes or is based upon
estimates, projections or other forward-looking statements. Such forward looking
statements include any projections or estimates made by us and our management in
connection with our business operations. While these forward-looking statements,
and any assumptions upon which they are based, are made in good faith and
reflect our current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any estimates,
predictions, projections, assumptions or other future performance suggested
herein.

Such
estimates, projections or other forward-looking statements involve various risks
and uncertainties as outlined below. We caution the reader that important
factors in some cases have affected and, in the future, could materially affect
actual results and cause actual results to differ materially from the results
expressed in any such estimates, projections or other forward-looking
statements. Prospective investors should consider carefully the risk factors set
out below.

Risks associated with our business

We have no operating history on which to base an evaluation
of our business and prospects.

We were incorporated on May 12, 2006 and have not yet commenced
our proposed business operations or realized any revenues. As we have no
operating history, we cannot evaluate our financial performance and prospects at
this moment. We anticipate that we will incur increased operating costs without
realizing any revenues during the period when we are exploring our properties.
For the year ending February 28, 2008, we expect to spend $15,000 on the
exploration of the properties in which we hold our interests and approximately
$5,500 on the operation of our company. We therefore expect to incur significant
losses into the foreseeable future. We recognize that if we are unable to
generate significant revenues from mining operations and any dispositions of our
properties, we will not be able to earn profits or continue operations. At this
early stage of our operation, we also expect to face the risks, uncertainties,
expenses and difficulties frequently encountered by companies at the start up
stage of their business development. We cannot be sure that we will be
successful in addressing these risks and uncertainties and our failure to do so
could have a materially adverse effect on our financial condition. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful and we can provide investors with no assurance that we will
generate any operating revenues or ever achieve profitable operations.

The fact that we have not earned any revenues since our
incorporation raises substantial doubt about our ability to continue as a going
concern.

We have not generated any revenues since our incorporation and
we will, in all likelihood, continue to incur operating expenses without
revenues until our mining properties are fully developed and in commercial
production. We had cash in the amount of $3,127 as of August 31, 2007. We
estimate our average monthly operating expenses to be approximately $1,000 each
month. As a result, we need to generate significant revenues from our operations
or acquire financing. We cannot assure that we will be able to successfully
explore and develop our mining properties or assure that viable reserves exist
on the properties for extraction. These circumstances raise substantial doubt
about our ability to continue as a going

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8

concern as described in an explanatory paragraph to our
independent auditors report on our financial statements for the period from
inception to February 28, 2007. In addition, our auditors in their audit report
dated April 5, 2007, have stated that there is substantial doubt that we will be
able to continue as a going concern. The financial statements do not include any
adjustments that might result from the uncertainty about our ability to continue
in business.

We have been unable to fund our operations with internally
generated funds because our business has not generated any revenue. Without
additional financing, we will need to generate funds internally to fund our
operations for the twelve month period ending August 31, 2008 or we will be
unable to continue our operations and business.

As of August 31, 2007, we had cash in the amount of $3,127. We
currently do not have any ore reserves or any operations which generate any
income or cash flow. We have not generated any revenues since our incorporation
and we have required and will continue to require substantial capital to fund
the exploration and development of our mining properties. We also anticipate
spending at least $12,000 for the operation of our company for the 12 month
period ending February 28, 2008. It is unlikely that we will generate any funds
internally until we discover commercially viable quantities of ore. If we are
unable to generate revenue from our business during the twelve month period
ending August 31, 2008, we may be forced to delay, scale back, or eliminate our
exploration activities. If any of these actions were to become necessary, we may
not be able to continue to explore our properties or operate our business and if
either of those events happen, then there is a substantial risk our business
would fail.

We have not generated any revenue from our business and we
may need to raise additional funds in the near future. If we are not able to
obtain future financing when required, we might be forced to discontinue our
business.

Because we have not generated any revenue from our business and
we cannot anticipate when we will be able to generate revenue from our business,
we will need to raise additional funds for the further exploration and future
development of our mining claims and to respond to unanticipated requirements or
expenses. We anticipate that we will need to raise further financing for the 12
month period ending August 31, 2008 in the approximate amount of $120,000. We do
not currently have any arrangements for financing and we can provide no
assurance to investors we will be able to find such financing if required. The
most likely source of future funds presently available to us is through the sale
of equity capital. Any sale of share capital will result in dilution to existing
shareholders. Furthermore, there is no assurance that we will not incur debt in
the future, that we will have sufficient funds to repay our future indebtedness
or that we will not default on our future debts, jeopardising our business
viability. Finally, we may not be able to borrow or raise additional capital in
the future to meet our needs or to otherwise provide the capital necessary to
conduct business and explore our properties, which might result in the loss of
some or all of your investment in our common stock.

Our properties are in the pre-exploration stage, are not
commercially viable at this time and there is no assurance that commercially
viable quantities of ore will be discovered.

Our mineral properties are in the early exploration stage and
are not commercially viable at this time. Mineral exploration involves a high
degree of risk. There is no assurance that commercially viable quantities of ore
will be discovered. There is also no assurance that if found, commercially
viable properties will be brought into commercial production. If we are not able
to locate sufficient quantities of commercially viable ore and bring our
properties into commercial production, we will not be able to continue
operations and as a result our shareholders may lose any investment in our
company.

There is substantial risk that no commercially exploitable
minerals will be found and our business will fail.

The search for valuable minerals as a business is extremely
risky. We can provide investors with no assurance that the minerals claims that
we have acquired certain commercially exploitable reserves. Exploration for
minerals is a speculative venture necessarily involving substantial risk. The
probability of an individual prospect having reserves and being commercially
profitable is remote and in all probability, the Southwest and Sedona claims do
not contain any reserves and in such a case the funds we have spent or will
spend on exploration of these claims will be lost.

We are subject to environmental protection legislation with
which we must comply or suffer sanctions from regulatory authorities.

If the results of our geological exploration program indicate
commercially exploitable reserves and we decide to pursue commercial production
of our mineral claim, we may be subject to an environmental review process under
environmental

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9

assessment legislation. Compliance with an environmental review
  process may be costly and may delay commercial production. Furthermore, there
  is the possibility that we would not be able to proceed with commercial production
  upon completion of the environmental review process if government authorities
  do not approve our mine or if the costs of compliance with government regulation
  adversely affect the commercial viability of the proposed mine.

There may be defects to the title of the mineral claims and
as result we could lose our interest in such claims.

To the best of our knowledge, title to our properties
underlying are in good standing. This should not be construed as a guarantee of
title and there is no guarantee that title to such properties will not be
challenged or impugned. The properties may have been acquired in error from
parties who did not possess transferable title, may be subject to prior
unregistered agreements or transfers and title may be affected by undetected
defects or aboriginal, indigenous peoples or native land claims. If there any
defects in the title to the properties that we intend to explore, we may be
unable to proceed with our development of such properties and as a result would
have to cease operations or acquire interests in further properties.

If we cannot locate qualified personnel, we may have to
suspend or cease operations which will result in the loss your investment.

Currently, we have one individual acting as a director and
officer. This individual has no direct training or experience in metals
exploration or mining and as a result, he may not be fully aware of any of the
specific requirements related to working within the industry. His decisions and
choices may not take into account standard engineering or managerial approaches
that mineral exploration companies commonly use. Consequently, our operations,
earnings and ultimate financial success could suffer irreparable harm due to the
lack of experience of our management in this industry. As a result, we may have
to suspend or cease operations which will result in the loss of your investment.

We have one individual serving as a director and officer of
our company and, as a result, we may be subject to certain risks from a
corporate governance perspective.

We have one individual, Rahim Jivraj, serving as a director and
officer of our company. Because we do not have any independent directors, we may
be subject to certain risks from a corporate governance perspective, including
risks relating to the approval of related party transactions, the compensation
of executive officers, the oversight of the accounting function and the
segregation of duties. We presume that our sole director and officer will act in
accordance with the fiduciary duties owed to our company, however, there can be
no assurance that this will in fact be the case. Our sole director and officer
may act in a self interested manner in relation to dealings with our company
which could adversely affect our financial condition and the ability to attract
new investors.

There are certain similarities and connections between our
company and (i) Gulf Western Petroleum Corp., which consummated a merger and
change of business approximately six months after the effectiveness of its
registration statement and (ii) Arris Resources Inc., which completed a share
exchange and change of business.

Gulf Western

On May 3, 2006, Gulf Western Petroleum Corp. (formerly Georgia
Exploration Inc.) filed a registration statement on form SB-2 that went
effective on June 30, 2006. Approximately six months after the effectiveness of
Gulf Westerns form SB-2, Gulf Western consummated a merger with Wharton
Resources Corp. and changed its business from that of mineral exploration to the
identification, acquisition and development of oil and gas resource
opportunities. In Gulf Westerns registration statement, Gulf Western described
itself, as we do, as a mineral exploration company and had a business plan
substantially similar to our business plan. Certain other similarities exist
between our company and Gulf Western, including: (i) the location of our mineral
properties, which are located in the Similkameen Mining District, near the town
of Princeton, in the Province of British Columbia; (ii) our sole officer and
director has, and Gulf Westerns sole officer and director had, no previous
mining experience; (iii) our sole officer and director owns our mining claims,
and Gulf Westerns sole officer and director owned its mining claims, in trust
for our company and Gulf Western respectively; (iv) certain of the selling
shareholders named in our registration statement were named as selling
shareholders in Gulf Westerns registration statement; and (v) Mr. Sukvinder
Puar holds 6.94% of the issued and outstanding shares of our common stock and
was one of the contact persons between Gulf Western, our company and certain of
the selling security holders listed in our registration statement, and Mr. Puar
became the sole officer and director of Gulf Western after the original sole
officer and director resigned prior to the reverse merger. Despite the apparent
similarities between our company and Gulf

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10

Western, at this time: (i) we intend to follow our proposed
business plan, including the recommendations of our consulting geologist; (ii)
subject to us raising the required funding, we intend to complete our three
phased exploration program; and (iii) we have neither discussed nor agreed to
any merger between our company and any third party. Management plans to operate
our company consistent with the best interests of our company and in a way that
maximizes shareholder value, however, there is no assurance that our exploration
program will be successful, or that we will never change our current business.

In order to complete our three-phased exploration program, we
will require approximately $136,000, as described under the section entitled
Plan of Operation of this quarterly report. As of August 31, 2007, we had
$3,127 in cash. In order to complete our exploration program, we will require,
at least, an additional $132,873. We will need to raise funds through the sale
of our equity securities. Any sale of equity securities will result in dilution
to our shareholders. However, there is no assurance that we will be able to
raise the required funds to complete our exploration program.

In addition, there is no certainty that we will be more
successful in the execution of our business plan than Gulf Western. After
completing the primary offering, we anticipate that we will have enough capital
to complete the second phase of our three-phased exploration program. Based on
the results of the second phase, we will determine if it is feasible to proceed
with phase three of our exploration program. There is no certainty that we will
undertake phase three of our exploration program.

If and when we complete our exploration program, it is our
intention to build our company with a portfolio of resource assets and to
explore resource-related opportunities that are in the best interest of and will
add value to our shareholders. As with other junior resource companies, our
objective will be to prove significant asset value through exploration and
eventually to produce our resources or enter into a joint-venture with another
resource company with greater expertise and capital than our company to produce
such resources. If our company is to produce the resources, we will need to
raise additional capital to complete such production. At this time, we can not
estimate how much capital will be needed to produce any such resources or
whether any such resources will warrant production.

Arris Resources

Arris Resources (formerly Bassett Ventures Inc.) was
incorporated on September 15, 1987 under the laws of British Columbia under the
name Grand Resources Inc. Arris Resources has undergone several changes of
business, including an oil and gas business, internet gaming business and a
facility management software business, with relative name changes since its
incorporation. On June 2, 2003, Arris Resources sold all of its subsidiaries
(then engaged in the internet gaming casino business) for $1.00. On July 6,
2003, Arris Resources acquired AssistGlobal.com Communications, Inc. through a
share exchange and later changed its name. Mr. Puar, a shareholder of our
company that owns more than 5% of the issued and outstanding shares of our
common stock was also a shareholder and a director of Arris Resources. Mr. Puar
ceased to be involved in the business and affairs of Arris Resources as of April
19, 2007, however, his previous involvement with Arris Resources may be material
to persons considering an investment in our company.

Certain of our shareholders that own more than 5% of the
issued and outstanding shares of our common stock were involved with a prior
failed offering.

Messers. Sukvinder Puar and Rahim Jivraj hold 6.94% and 5.55%
of the issued and outstanding shares our common stock. In addition, Messers.
Puar and Jivraj were the contact persons between our company and certain of our
shareholders. Prior to their involvement with our company, Messers. Puar and
Jivraj were controlling shareholders, executive officers and directors of
Bloorcom Corp. Bloorcom filed a registration statement on Form SB-2 in February
2005. In its registration statement, Bloorcom indicated that it would provide
e-commerce solutions to medium sized retail businesses, which were designed to
integrate with such businesss existing enterprise management software and
existing customer websites. Bloorcom had minimal assets and revenues before it
withdrew its registration statement in March 2006. Messers. Puars and Jivrajs
involvement in Bloorcoms failed offering may be material to persons considering
an investment in our company.

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11

Risks associated with our industry

Because of the unique difficulties and uncertainties
inherent in mineral exploration ventures, we face a high risk of business
failure.

Potential investors should be aware of the difficulties
normally encountered by new mineral exploration companies and the high rate of
failure of such enterprises. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. The expenditures to be made by us in
the exploration of the mineral claim may not result in the discovery of mineral
deposits. Problems such as unusual or unexpected formations and other conditions
are involved in mineral exploration and often result in unsuccessful exploration
efforts. If the results of our exploration do not reveal viable commercial
mineralization, we may decide to abandon our claims. If this happens, our
business will likely fail.

Because of the inherent dangers involved in mineral
exploration and exploitation, there is a risk that we may incur liability or
damages as we conduct our business.

The search for valuable minerals involves numerous hazards. As
a result, we may become subject to liability for such hazards, including
pollution, cave-ins and other hazards against which we cannot insure or against
which we may elect not to insure. At the present time we have no coverage to
insure against these hazards. The payment of such liabilities may have a
material adverse effect on our financial position.

The potential profitability of mineral ventures depends in
part upon factors beyond the control of our company and even if we discover and
exploit mineral deposits, we may never become commercially viable and we may be
forced to cease operations.

The commercial feasibility of mineral properties is dependent
upon many factors beyond our control, including the existence and size of
mineral deposits in the properties we explore, the proximity and capacity of
processing equipment, market fluctuations of prices, taxes, royalties, land
tenure, allowable production and environmental regulation. These factors cannot
be accurately predicted and any one or a combination of these factors may result
in our company not receiving an adequate return on invested capital. These
factors may have material and negative effects on our financial performance and
our ability to continue operations.

Exploration and exploitation activities are subject to
comprehensive regulation which may cause substantial delays or require capital
outlays in excess of those anticipated causing an adverse effect on our company.

Exploration and exploitation activities are subject to federal,
provincial, and local laws, regulations and policies, including laws regulating
the removal of natural resources from the ground and the discharge of materials
into the environment. Exploration and exploitation activities are also subject
to federal, provincial, and local laws and regulations which seek to maintain
health and safety standards by regulating the design and use of drilling methods
and equipment.

Various permits from government bodies are required for
drilling operations to be conducted; no assurance can be given that such permits
will be received. Environmental and other legal standards imposed by federal,
provincial, or local authorities may be changed and any such changes may prevent
us from conducting planned activities or increase our costs of doing so, which
would have material adverse effects on our business. Moreover, compliance with
such laws may cause substantial delays or require capital outlays in excess of
those anticipated, thus causing an adverse effect on us. Additionally, we may be
subject to liability for pollution or other environmental damages which we may
not be able to or elect not to insure against due to prohibitive premium costs
and other reasons. Any laws, regulations or policies of any government body or
regulatory agency may be changed, applied or interpreted in a manner which will
alter and negatively affect our ability to carry on our business.

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12

We face intense competition in the mineral exploration and
exploitation industry. We compete with larger companies with greater resources
for financing and for qualified managerial and technical employees.

Our Southwest and Sedona claims are in the Similkameen Mining
Division of British Columbia, Canada, and our competition there includes large
established mining companies with substantial capabilities and with greater
financial and technical resources than we have. As a result of this competition,
we may have to compete for financing, and recruitment and retention of qualified
managerial and technical employees. If we are unable to successfully compete for
financing or for qualified employees, our exploration programs may be slowed
down or suspended, which may cause us to cease operations as a company.

Other risks

Because the majority of our assets and our director/officer
are located outside the United States of America, it may be difficult for an
investor to enforce within the United States any judgments obtained against our
property and our director/officer.

The majority of our assets and all of our directors and
officers are residents of Canada and all or a substantial portion of such
persons assets are located outside the United States. As a result, it may be
difficult for an investor to effect service of process or enforce within the
United States any judgments obtained against our officers or directors or that
portion of our assets located outside the United States, including judgments
predicated upon the civil liability provisions of the securities laws of the
United States or any state thereof. In addition, there is uncertainty as to
whether the courts of Canada and other jurisdictions would recognize or enforce
judgments of United States courts obtained against our Canadian assets or our
directors and officers predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof, or be competent to
hear original actions brought in Canada or other jurisdictions against us or our
directors and officers predicated upon the securities laws of the United States
or any state thereof.

Our stock is a penny stock. Trading of our stock may be
restricted by the Securities and Exchange Commission's penny stock regulations
which may limit a stockholder's ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines "penny stock" to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and "accredited investors". The term
"accredited investor" refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the Securities and Exchange Commission which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholder's ability
to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers

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13

must make reasonable efforts to obtain information about the
customer's financial status, tax status, investment objectives and other
information. Under interpretations of these rules, FINRA believes that there is
a high probability that speculative low priced securities will not be suitable
for at least some customers. FINRA requirements make it more difficult for
broker-dealers to recommend that their customers buy our common stock, which may
limit your ability to buy and sell our stock and have an adverse effect on the
market for our shares.

Item 3. Controls and Procedures.

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (who
is also our secretary and treasurer) to allow for timely decisions regarding
required disclosure. In designing and evaluating our disclosure controls and
procedures, our management recognizes that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and our management is required to
apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures.

As of August 31, 2007, the three month period year covered by
this report, we carried out an evaluation, under the supervision and with the
participation of our management, including our president (who is also our
secretary and treasurer), of the effectiveness of the design and operation of
our disclosure controls and procedures. Based on the foregoing, our president
(who is also our secretary and treasurer) concluded that our disclosure controls
and procedures were effective as of the end of the period covered by this
report.

There have been no significant changes in our internal controls
over financial reporting that occurred during the quarter ended August 31, 2007
that have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information

On September 24, 2007, Vijesh Harakh resigned as our president,
secretary, treasurer and a director of company. On the same date we appointed
Rahim Jivraj as our president, secretary, treasurer and a director of our
company.

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14

Item 6. Exhibits.

| | Exhibit |                                                                                                                                                                                                                       
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Number  | Description                                                                                                                                                                                                           
| |         |                                                                                                                                                                                                                       
| | 3.1     | Bylaws of the
        Company (incorporated by reference from our Registration Statement on
        Form SB-2 filed on April 11, 2006)                                                                                
| |         |                                                                                                                                                                                                                       
| | 3.2     | Articles of
        Incorporation dated May 12, 2006 (incorporated by reference from our Registration
        Statement on Form SB-2 filed on April 11, 2006)                                                         
| |         |                                                                                                                                                                                                                       
| | 4.1     | Specimen Stock
        Certificate (incorporated by reference from our Registration Statement
        on Form SB-2 filed on April 11, 2006)                                                                           
| |         |                                                                                                                                                                                                                       
| | 10.1    | Property Agreement,
        dated July 1, 2006, between Mainland Resources Inc. and Mr. Vijesh Harakh
        (incorporated by reference from our Registration Statement on Form SB-2
        filed on April 11, 2006)
| |         |                                                                                                                                                                                                                       
| | 10.2    | Trust Agreement,
        dated July 1, 2006, between Mainland Resources Inc. and Mr. Vijesh Harakh
        (incorporated by reference from our Registration Statement on Form SB-2
        filed on April 11, 2006)   
| |         |                                                                                                                                                                                                                       
| | 10.3    | Form of Subscription
        Agreement (incorporated by reference from our Registration Statement on
        Form SB-2 filed on April 11, 2006)                                                                       
| |         |                                                                                                                                                                                                                       
| | 10.4    | Form of Subscription
        Agreement for direct public offering (incorporated by reference from our
        Registration Statement on Form SB-2 filed on April 11, 2006)                                            
| |         |                                                                                                                                                                                                                       
| | 31.1*   | Certification
        of Principal Executive Officer and Principal Financial Officer filed pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002                                                          
| |         |                                                                                                                                                                                                                       
| | 32.1*   | Certification
        of Principal Executive Officer and Principal Financial Officer pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002         
| |         |                                                                                                                                                                                                                       
| | 99.1    | Technical Report
        prepared by Erik A. Ostensoe, P.Geo., dated May 6, 2006 (incorporated
        by reference from our Registration Statement on Form SB-2 filed on April
        11, 2006)                     

* Filed herewith.

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15

SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

MAINLAND RESOURCES INC.



/s/ Rahim Jivraj By: Rahim Jivraj, President, Secretary and
Treasurer (Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer)

Dated: October 16, 2007

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