**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB/A**


**(Amendment
      No. 1)**




**x**
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE QUARTERLY PERIOD ENDED**September
                30, 2007**o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE TRANSITION PERIOD FROM ______________ TO
                ______________




**SKRM
      Interactive, Inc.**


**(Formerly
      SKREEM Entertainment Corp.)**


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




**Delaware**
            
            **0-2236**
            
            **33-0565710**(State
                or other jurisdiction of incorporation)
            
            (Commission
                File No.)
            
            (IRS
                Employer Identification No.)





**14553
      South 790 West**


**Bluffdale,
      Utah 84065**


(Address
      of principal executive offices, including zip code)





Issuer’s
      telephone number, including area code: (866) 922-9533





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 o .




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


Yes o No x





As
      of
      March 3 , 2008 the
      issuer had 77,320,292 shares
      of common stock outstanding.





Transitional
      Small Business Disclosure Format (check one): Yes o No x




















TABLE
      OF
      CONTENTS





SKRM
      Interactive, Inc.


(formerly
      SKREEM Entertainment Corp.)





Part
                I. Financial InformationExplanatory
                Note
            
            1Item
                1.
            
            Financial
                Statements
            
            2Consolidated
                Balance Sheets - as of September 30, 2007 (unaudited) (restated)
                and March
                31, 2007
            
            2Unaudited
                Consolidated Statements of Operations for the six months ended September
                30, 2007 (restated) and 2006 and for the period from inception, August
                19,
                1999 to September 30, 2007 (restated)
            
            3Unaudited
                Consolidated Statements of Operations for the three months ended
                September
                30, 2007 (restated) and September 30, 2006
            
            4Unaudited
                Consolidated Statement of Changes in Shareholders’ Deficit for the period
                from inception, August 19, 1999, to September 30, 2007
            
            5Unaudited
                Consolidated Statements of Cash Flows for the six months ended September
                30, 2007 (restated) and 2006 and for the period from inception, August
                19,
                1999, to September 30, 2007 (restated)
            
            6Notes
                to the Unaudited Consolidated Financial Statements
            
            7Item
                2.
            
            Management’s
                Discussion and Analysis or Plan of Operation
            
            9Item
                3.
            
            Controls
                and Procedures
            
            16Part
                II. Other InformationItem
                2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            16Item
                6.
            
            Exhibits
            
            16









**EXPLANATORY
      NOTE**




SKRM
      Interactive, Inc. (“SKRM” or the “Company”) is filing this Amendment No. 1
      to Quarterly Report on Form 10-QSB/A for the purposes of accounting for the
      revaluation of the embedded derivative financial instruments reflected in the
      Company’s financial statements for the fiscal quarter ended September 30, 2007,
      adjusting the amounts of expenses reported for the fiscal quarter ended
      September 30, 2007 and revising the disclosure presented under the heading
      “Management’s Discussion and Analysis or Plan of Operation” set forth in Part I,
      Item 2, modifying the disclosure presented under the heading “Controls and
      Procedures” set forth in Part I, Item 3 and updating the disclosure presented
      under the heading “Unregistered Sales of Equity Securities and Use of Proceeds”
set forth in Part II, Item 2.




The
      Items
      which are amended and restated herein are:




1.
        Part I, Item 1 - Financial Statements (including applicable
      footnotes);




2.
        Part I, Item 2 - Management’s Discussion and Analysis of
      Financial Condition or Plan of Operation




3.
        Part I, Item 3 - Controls and Procedures




4.
        Part II, Item 2 - Unregistered Sales of Equity Securities and
      Use of Proceeds





The
      remaining Items contained within this Amendment No. 1 to the Company’s
      Quarterly Report on Form 10-QSB/A consist of all other Items originally
      contained in the Company’s Quarterly Report on Form 10-QSB for the quarter
      ended September 30, 2007 as filed with the Securities and Exchange Commission
      on
      November 20, 2007. These remaining Items are not amended hereby, but are
      included for the convenience of the reader. In order to preserve the nature
      and
      character of the disclosures set forth in such Items as originally filed, except
      as expressly noted herein, this amendment continues to speak as of the date
      of
      the original filing, and the Company has not updated the disclosures in this
      report to speak as of a later date. While this report primarily relates to
      the
      historical periods covered, events may have taken place since the original
      filing that might have been reflected in this report if they had taken place
      prior to the original filing.









**Item
      1. FINANCIAL STATEMENTS**




SKRM
      Interactive, Inc.


(formerly
      SKREEM ENTERTAINMENT CORPORATION)


(A
      DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
      BALANCE SHEETS


As
      of
      September 30, 2007 and March 31, 2007




September
                30,
              2007
            
            March
                31,
              2007Unaudited
              (Restated)
            
            AuditedASSETSCurrent
                assets:Cash
                and Cash equivalents
            
            $
            429
            
            $
            1,781Due
                from affiliate
            
            
            14,123
            
            
            -Note
                receivable, net of impairment allowance of $0 and $10,710
            
            
            -
            
            
            400,000Deferred
                financing costs
            
            
            -
            
            
            11,438Total
                current assets
            
            
            14,552
            
            
            413,219Deferred
                financing costs, net of amortization of $7,022 and $2,806
            
            
            78,226
            
            
            75,756Total
                assets
            
            $
            92,778
            
            $
            488,975LIABILITIES
                AND SHAREHOLDERS' DEFICITCurrent
                liabilities:Accounts
                payable and accrued liabilities
            
            $
            221,194
            
            $
            154,410Derivative
                liabilities
            
            
            8,434,122
            
            
            1,396,245Notes
                payable - shareholder
            
            
            19,800
            
            
            35,000Due
                to affiliate
            
            
            -
            
            
            13,078Total
                current liabilities
            
            
            8,675,116
            
            
            1,598,733C 
                Callable secured convertible notes payable net of unamortized discount
                of
                $588,720 and $592,806
            
            
            11,280
            
            
            7,194Total
                liabilities
            
            
            8,686,396
            
            
            1,605,927Shareholders'
                deficit:Preferred
                shares - $0.001 par value; 1,000,000 authorized, no shares issued
                or
                outstanding
            
            
            -
            
            
            -C 
                Common shares - $0.001 par value; 50,000,000 authorized; 26,548,292
                shares
                issued and outstanding
            
            
            26,548
            
            
            26,548Additional
                paid - in capital
            
            
            7,080,898
            
            
            7,080,898Deficit
                accumulated during the development stage
            
            
            (15,701,064
            )
            
            (8,224,398
            )Total
                shareholders' deficit
            
            
            (8,593,618
            )
            
            (1,116,952
            )Total
                liabilities and shareholders' deficit
            
            $
            92,778
            
            $
            488,975




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




2




SKRM
      Interactive, Inc.


(formerly
      SKREEM ENTERTAINMENT CORPORATION)


(A
      DEVELOPMENT STAGE COMPANY)


UNAUDITED
      CONSOLIDATED STATEMENTS OF OPERATIONS


For
      the
      Six Months Ended
      September 30, 2007 and 2006 and for the Period


From
      Inception, August 19, 1999, to
      September 30, 2007




Six
                Months Ended
            
            Inception
                toSeptember
                30,
            
            September
                30,
            
            September
                30,2007
            
            2006
            
            2007(Restated)
            
            
            
            (Restated)ExpensesGeneral
                and administrative
            
            
            412,696
            
            
            257,975
            
            
            1,334,930Impairment
                of note receivable
            
            
            -
            
            
            -
            
            
            10,701Total
                expenses
            
            
            412,696
            
            
            257,975
            
            
            1,345,631Loss
                from operations
            
            
            (412,696
            )
            
            (257,975
            )
            
            (1,345,631
            )Other
                income (expense)Interest
                income
            
            
            -
            
            
            -
            
            
            10,701Interest
                expense
            
            
            (26,093
            )
            
            (48,760
            )
            
            (52,290
            )Change
                in fair value of derivatives
            
            
            (7,037,877
            )
            
            -
            
            
            (7,834,122
            )Total
                other income/(expense)
            
            
            (7,063,970
            )
            
            (48,760
            )
            
            (7,875,711
            )Loss
                from continuing operations
            
            
            (7,476,666
            )
            
            (306,735
            )
            
            (9,221,342
            )Discontinued
                operationsLoss
                from operations of subsidiary
            
            
            -
            
            
            (763,605
            )
            
            (6,778,804
            )Gain
                on disposal of subsidiary
            
            
            -
            
            
            -
            
            
            299,082Loss
                from discontinued operations
            
            
            -
            
            
            (763,605
            )
            
            (6,479,722
            )Net
                loss
            
            $
            (7,476,666
            )
            $
            (1,070,340
            )
            $
            (15,701,064
            )Weighted
                Average Shares Outstanding - basic and diluted
            
            
            26,548,292
            
            
            24,726,300Basic
                and diluted loss per shareContinuing
                Operations
            
            $
            (0.28
            )
            $
            (0.01
            )Discontinued
                Operations
            
            $
            -
            
            $
            (0.03
            )Net
                Loss
            
            $
            (0.28
            )
            $
            (0.04
            )




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




3





SKRM
      Interactive, Inc.


(formerly
      SKREEM ENTERTAINMENT CORPORATION)


(A
      DEVELOPMENT STAGE COMPANY)


UNAUDITED
      CONSOLIDATED STATEMENTS OF OPERATIONS


For
      the
      Three Months Ended September
      30, 2007 and September 30, 2006


Three
                  Months EndedSeptember
                  30,
              
              September
                  30,2007
              
              2006(Restated)ExpensesGeneral
                  and administrative
              
              
              87,067
              
              
              108,624Impairment
                  of note receivable
              
              
              -
              
              
              -Total
                  expenses
              
              
              87,067
              
              
              108,624Loss
                  from operations
              
              
              (87,067
              )
              
              (108,624
              )Other
                  income (expenses)Interest
                  income
              
              
              -
              
              
              -Interest
                  expense
              
              
              (7,022
              )
              
              (20,985
              )Change
                  in fair value of derivatives
              
              
              (6,563,913
              )
              
              -Total
                  other income (expense)
              
              
              (6,570,935
              )
              
              (20,985
              )Loss
                  from continuing operations
              
              
              (6,658,002
              )
              
              (129,609
              )Discontinued
                  operationsLoss
                  from operations of subsidiary
              
              
              -
              
              
              (507,194
              )Gain
                  on disposal of subsidiary
              
              
              -
              
              
              -Loss
                  from discontinued operations
              
              
              -
              
              
              (507,194
              )Net
                  loss
              
              $
              (6,658,002
              )
              $
              (636,803
              )Weighted
                  Average Shares Outstanding - basic and diluted
              
              
              26,548,292
              
              
              24,838,907Basic
                  and diluted loss per shareContinuing
                  Operations
              
              
              (0.25
              )
              
              (0.01
              )Discontinued
                  Operations
              
              
              -
              
              
              (0.02
              )Net
                  Loss
              
              $
              (0.25
              )
              $
              (0.03
              )





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




4


SKRM
      Interactive, Inc.


(formerly
      SKREEM ENTERTAINMENT CORPORATION)


(A
      DEVELOPMENT STAGE COMPANY)


CONSOLIDATED
      STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT


For
      the
      period from inception, August 19, 1999, to September 30, 2007




Additional
            
            During the
            
            LossesCommon Stock
            
            Paid-In
            
            Development
            
            AccumulatedShares
            
            Amount
            
            Capital
            
            Stage
            
            TotalBalance
                at March 31, 2007
            
            
            26,548,292
            
            $
            26,548
            
            $
            7,080,898
            
            $
            (8,224,398
            )
            $
            (1,116,952
            )Net
                loss (Unaudited)
            
            
            -
            
            
            -
            
            
            -
            
            
            (818,664
            )
            
            (818,664
            )Balance
                at June 30, 2007 (Unaudited)
            
            
            26,548,292
            
            
            26,548
            
            
            7,080,898
            
            
            (9,043,062
            )
            
            (1,935,616
            )Net
                loss (Unaudited)
            
            
            -
            
            
            -
            
            
            -
            
            
            (6,658,002
            )
            
            (6,658,002
            )Balance
                at September 30, 2007 (Unaudited)
            
            
            26,548,292
            
            $
            26,548
            
            $
            7,080,898
            
            $
            (15,701,064
            )
            $
            (8,593,618
            )




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




5




SKRM
      Interactive, Inc.


(formerly
      SKREEM ENTERTAINMENT CORPORATION)


(A
      DEVELOPMENT STAGE COMPANY)


UNAUDITED
      CONSOLIDATED STATEMENTS OF CASH FLOWS


For
      the
      Six Months Ended
      September 30, 2007 and 2006 and for the Period


From
      Inception, August 19, 1999, to
      September 30, 2007




Six
                Months Ended
            
            Inception
                toSeptember
                30,
            
            September
                30,
            
            September
                30,2007
            
            2006
            
            2007(Restated)
            
            
            
            (Restated)Cash
                Flows from Operating Activities:Net
                loss
            
            $
            (7,476,666
            )
            $
            (1,070,340
            )
            $
            (15,701,064
            )Loss
                on discontinued operations
            
            
            -
            
            
            -
            
            
            6,479,722Loss
                from continuing operations
            
            
            (7,476,666
            )
            
            (1,070,340
            )
            
            (9,221,342
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
            
            
            -
            
            
            2,094
            
            
            -Accrued
                interest converted to equity
            
            
            -
            
            
            33,439
            
            
            -Impairment
                of loan receivable
            
            
            -
            
            
            -
            
            
            10,701Expenses
                paid by shareholder and affiliate
            
            
            
            
            
            515,000Stock
                issued for services
            
            
            -
            
            
            250,000
            
            
            692,650Amortization
                of deferred financing costs
            
            
            8,968
            
            
            -
            
            
            18,796Accretion
                of discount on convertible notes
            
            
            4,086
            
            
            -
            
            
            -Change
                in fair value of derivatives
            
            
            7,037,877
            
            
            -
            
            
            7,834,122Changes
                inAccounts
                payable and accrued liabilities
            
            
            66,784
            
            
            41,629
            
            
            221,192Due
                to affiliate
            
            
            (27,201
            )
            
            -
            
            
            (14,123
            )Interest
                receivable
            
            
            -
            
            
            (1,093
            )
            
            (10,701
            )Deferred
                revenue
            
            
            -
            
            
            2,712
            
            
            -Net
                cash used in operating activities
            
            
            (386,152
            )
            
            (226,559
            )
            
            (464,447
            )Cash
                Flows from Investing ActivitiesPurchase
                of property and equipment
            
            
            -
            
            
            (2,030
            )
            
            -Loan
                receivable
            
            
            -
            
            
            (100,000
            )
            
            -Investment
                in note receivable
            
            
            -
            
            
            -
            
            
            (400,000
            )Proceeds
                from note receivable
            
            
            400,000
            
            
            -
            
            
            400,000Net
                cash provided by (used in) investing activities
            
            
            400,000
            
            
            (102,030
            )
            
            -Cash
                Flows from Financing ActivitiesProceeds
                from issuance of common stock
            
            
            -
            
            
            24,695
            
            
            24,695Proceeds
                from notes payable - shareholder / affiliate
            
            
            19,800
            
            
            254,700
            
            
            54,800Proceeds
                from convertible notes payable
            
            
            -
            
            
            -
            
            
            600,000Payments
                on notes payable - shareholder
            
            
            (35,000
            )
            
            (2,181
            )
            
            (35,000
            )Debt
                issuance costs
            
            
            -
            
            
            (5,000
            )
            
            (90,000
            )Net
                cash provided by (used in) financing activities
            
            
            (15,200
            )
            
            272,214
            
            
            554,495Discontinued
                operationsDiscontinued
                operating activities
            
            
            -
            
            
            -
            
            
            (4,506,211
            )Discontinued
                investing activities
            
            
            -
            
            
            -
            
            
            (187,748
            )Discontinued
                financing activities
            
            
            -
            
            
            -
            
            
            4,604,340Net
                cash provided by (used in) discontinued operations
            
            
            -
            
            
            -
            
            
            (89,619
            )Net
                increase (decrease) in cash and cash equivalents
            
            
            (1,352
            )
            
            (56,375
            )
            
            429Cash
                and cash equivalentsBeginning
                of period - continuing operations
            
            
            1,781
            
            
            62,383
            
            
            -Beginning
                of period - discontinued operations
            
            
            -
            
            
            -
            
            
            -End
                of period - continuing operations
            
            $
            429
            
            $
            6,008
            
            $
            429End
                of period - discontinued operations
            
            $
            -
            
            $
            -
            
            $
            -




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





6


SKRM
      Interactive, Inc.


(formerly
      SKREEM ENTERTAINMENT CORPORATION)


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





Note
      1 -
      BASIS OF PRESENTATION





The
      accompanying unaudited consolidated condensed financial statements of SKRM
      Interactive, Inc (“SKRM” or the “Company”), have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      for interim financial information and with the instructions to Form 10-QSB
      and
      Item 310(b) of Regulation S-B. They do not include all of the information and
      footnotes required by accounting principles generally accepted in the United
      States of America for complete financial statements. In the opinion of
      management, all adjustments, consisting only of normal recurring adjustments,
      considered necessary for a fair presentation, have been included in the
      accompanying unaudited consolidated financial statements. Operating results
      for
      the periods presented are not necessarily indicative of the results that may
      be
      expected for the full year.





These
      unaudited consolidated financial statements should be read in conjunction with
      the consolidated financial statements and footnotes, which are included as
      part
      of consolidated financial statements as of March 31, 2007 included in Skreem's
      Form 10KSB.





NOTE
      2 -
      CALLABLE SECURED CONVERTIBLE NOTES PAYABLE AND WARRANTS





The
      Company entered into a securities purchase agreement with four investors (“Note
      Holders”) on November 30, 2006, for the sale of (i) $1,000,000 in callable
      secured convertible notes and (ii) warrants to purchase 10,000,000 shares of
      the
      Company’s common stock (“Common Stock”) at an exercise price of $1.75 per share
      (the “Warrants”). On November 30, 2006, the Company sold to the note holders
      $600,000 in callable secured convertible notes (“Convertible Notes”) and issued
      Warrants to purchase 10,000,000 shares of Common Stock at an exercise price
      of
      $1.75 per share.





The
      Convertible Notes with the notional balance of $600,000 bear interest at 8%
      per
      annum from the date of issuance. Interest is computed on the basis of a 365-day
      year and is payable quarterly in cash, provided that no interest shall be due
      and payable for any month in which the trading price is greater than $1.5875
      for
      each trading day of the month. The Convertible Notes mature three years from
      the
      date of issuance, and are convertible into shares of Common Stock at the Note
      Holders’ option, at 50% of the average of the three lowest trading price for the
      Common Stock on the OTC Bulletin Board for the 20 trading days before but not
      including the conversion date; however, such percentage increases to 55% upon
      the filing of a registration statement registering the shares of Common Stock
      underlying the Convertible Notes by the appropriate deadline and increases
      to
      60% if such registration statement becomes effective on or before the
      effectiveness deadline. The Note Holders are not permitted to convert all or
      part of the outstanding balance of the Convertible Notes if the trading volume
      weighted average price of the Common Stock for the thirty days prior to
      conversion is below the initial market price of $1.27. Accordingly, there is
      no
      limit to the number of shares of Common Stock into which the Convertible Notes
      may be converted. The Convertible Notes are secured by substantially all of
      the
      Company’s assets.





The
      Warrants are exercisable for a period of 7 years from the date of issuance
      and
      have an exercise price of $1.75 per share. In addition, the conversion price
      of
      the Convertible Notes and exercise price of the Warrants will be adjusted in
      the
      event that the Company issues Common Stock at a price below the initial fixed
      conversion price. The conversion price of the Convertible Notes and exercise
      price of the Warrants may also be adjusted in certain circumstances such as
      if
      the Company pays a stock dividend, subdivides or combines outstanding shares
      of
      Common Stock into a greater or lesser number of shares, or takes such other
      actions as would other wise result in dilution of the Note Holders’
position.





The
      convertible note agreement restricts the Note Holders’ ability to convert their
      Convertible Notes or exercise their Warrants and receive shares of Common Stock
      such that the number of shares of Common Stock held by them in the aggregate
      and
      their affiliates after such conversion or exercise does not exceed 4.99% of
      the
      then issued and outstanding shares of Common Stock. However, the Note Holders
      may repeatedly sell shares of Common Stock in order to reduce their ownership
      percentage, and subsequently convert additional Convertible Notes.




7




The
      Company analyzed the Convertible Notes and the Warrants for derivative financial
      instruments, in accordance with SFAS No. 133, *Accounting
      for Derivative Instruments and Hedging Activities* ****** and
      EITF
      00-19, *Accounting
      for Derivative Financial Instruments Indexed to, and Potentially Settled in,
      a
      Company's Own Stock.* The
      Convertible Notes are hybrid instruments which contains more than one embedded
      derivative feature which would individually warrant separate accounting as
      derivative instruments under SFAS 133. The various embedded derivative features
      have been bundled together as a single, compound embedded derivative instrument
      that has been bifurcated from the debt host contract. The single compound
      embedded derivative features include the conversion feature with the Convertible
      Notes, the interest rate adjustment, maximum ownership and default provisions.
      The Company valued the compound embedded derivatives based on a probability
      weighted discounted cash flow model. The value at inception of the single
      compound embedded derivative liability was $139,286 and was bifurcated from
      the
      debt host contract and recorded as a derivative liability. The discount for
      the
      derivative will be accreted to interest expense using the effective interest
      method over the life of the Convertible Notes, or 36 months. Total accretion
      expense was di minimis for the quarter ended September 30, 2007.





The
      embedded derivative liability and the Warrants were marked to market at
      September 30, 2007 and the change in fair value was recorded as a loss in the
      amount of $6,563,913 in the Company’s consolidated statement of
      operations.




Note
      3 -
      GOING CONCERN





As
      of
      September 30, 2007, the Company’s revenue generating activities were not in
      place, and the Company has incurred significant losses since inception. These
      factors raise substantial doubt about the Company’s ability to continue as a
      going concern.





Management
      intends to seek additional capital through equity and/or debt financing to
      assist the Company until profitable operations can be achieved. There can be
      no
      assurance that such funds will be available to the Company or available on
      terms
      acceptable to the Company. The financial statements do not include any
      adjustments that might result from the outcome of these uncertainties.





Note
      4 -
      INCOME TAXES





Income
      taxes are accounted for using the asset and liability method. Deferred tax
      assets and liabilities are recognized for the future tax consequences
      attributable to differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax bases and net operating
      loss carryforwards. Valuation allowances are established when necessary to
      reduce net deferred tax assets to the amount expected to be realized.





The
      Company’s financial statements for the three and six-month periods ended
      September 30, 2007 and 2006 do not include any provision for income taxes.
      Accordingly, deferred tax assets have been entirely offset by valuation
      allowances. The difference between the amounts of income tax benefit that would
      result from applying domestic federal statutory income tax rates to the net
      loss
      and the net deferred tax assets is related to certain nondeductible expenses,
      state income taxes, and the change in the valuation allowance.





In
      June
      2006, FASB issued FIN48, *Accounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement No.
      109.* It is
      effective for fiscal years beginning after December 15, 2006. The Company has
      determined that the application of FIN 48 is immaterial to the Company’s
      financial statements for the current period. As the Company expects the business
      to change significantly in the future, an evaluation regarding the impact of
      FIN
      48 will be reviewed on a quarterly basis.




8




Note
      5 -
      RESTATEMENT OF FINANCIAL STATEMENTS





The
      financial statements for the six months ended September 30, 2007 were restated.
      The prior management resigned shortly before September 30, 2007. After the
      Stock
      Exchange Agreement closed in November 2007, new management was able to review
      all details pertaining to the Company financial statements. Upon this review,
      it
      was determined that significant adjustments related to the change in value
      of
      derivatives were not properly reflected in the original financial statement
      reports that were filed on November 20, 2007. Accordingly, management restated
      the financial statements to properly reflect the revaluation of the embedded
      derivative financial instruments reflected in the Company’s financial statements
      for the fiscal quarter ended September 30, 2007and to adjust the amounts of
      expenses reported for the fiscal quarter ended September 30, 2007. A summary
      of
      net adjustments is as follows:




Previously
                Reported
            
            Adjustments
            
            As
                RestatedAssets
                -DR(CR)
            
            
            99,768
            
            
            (6,990
            )
            
            92,778Liabilities
                -DR
                (CR)
            
            
            (2,035,384
            )
            
            (6,651,012
            )
            
            (8,686,396
            )YTD
                Net Loss
            
            
            (818,664
            )
            
            (6,658,002
            )
            
            (7,476,666
            )Loss
                Per Share
            
            
            (0.03
            )
            
            (0.25
            )
            
            (0.28
            )




Note
      6 -
      SUBSEQUENT EVENTS





On
      November 30, 2007, the Company’s management entered into a repurchase agreement
      with the Note Holders identified in Note 2 above to repurchase the Convertible
      Notes in exchange for the transfer of 1,200,000 shares of Company Stock from
      a
      shareholder of the Company to the Note Holders. In addition, the Warrants were
      amended to fix the number of outstanding warrants and remove the variable
      component that would impact the valuation of the outstanding warrants. As a
      result of this agreement and related changes, the Company no longer will be
      accounting for the Convertible Notes or the Warrants as derivatives on the
      Company’s financial statements.





In
      November, 2007, the Stock Exchange Agreement between the Company and Sector
      10
      was completed. Based
      upon the approval of the Company’s shareholders holding a majority of the
      outstanding shares of the Company’s common stock of the Certificate of
      Amendment, and the filing of the Certificate of Amendment with the Secretary
      of
      State of the State of Delaware, the Company completed the transactions
      contemplated by the Exchange Agreement, including the issuance and delivery
      to
      Sector 10 Holdings and the DeAvila Institute of 47,058,824 and 2,941,176
      newly-issued shares of the Company’s common stock, respectively. The Company
      believes the issuance of such shares to Sector 10 Holdings and the DeAvila
      Institute was exempt from registration under the Securities Act of 1933, as
      amended (the “Securities Act”), pursuant to the provisions of Section 4(2)
      thereof. The
      shareholders of Sector 10 Services owned 85% of the issued and outstanding
      shares of Common Stock immediately after the Sector 10 Transaction was completed
      in November 2007. The Sector 10 Transaction is treated as a reverse merger
      for
      accounting purposes, with Sector 10 Services treated as the surviving entity.





**Item**  **2:**  **Management’s
      Discussion And Analysis Or Plan Of Operation**




This
      report contains forward-looking statements within the meaning of Section 29a
      of
      the Securities Act of 1933, as amended, and Section 21e of the Securities
      Exchange Act of 1934, as amended. These forward-looking statements are subject
      to numerous risks and uncertainties that could cause actual results to differ
      materially from historical or anticipated results. You should not place undue
      reliance on such forward-looking statements, and, when considering such
      forward-looking statements, you should keep in mind the risk factors noted
      in
      this report, including the section of this report entitled “Risks Related to Our
      Business and Operations.” You should also keep in mind that all forward-looking
      statements are based on management’s existing beliefs about present and future
      events outside of management’s control and on assumptions that may prove to be
      incorrect. The following discussion and analysis should be read in conjunction
      with the Company’s financial statements and notes thereto, which are included
      elsewhere in this report.




**Overview**




On
      February 5, 2007, we spun off our wholly owned subsidiary SKREEM Entertainment
      Corporation (“SKREEM”) whose business was to find and manage artists in the
      music industry.





On
      September 12, 2007, the Company, Jeffrey Martin (a principal shareholders of
      the
      Company), Sector 10 Services-USA, Inc. (“Sector 10 Services”), Sector 10
      Holdings, Inc. (“Sector 10 Holdings”) and the Pericles DeAvila Institute for
      Humanitarian Studies (the “DeAvila Institute”) entered into a Stock Exchange
      Agreement (the “Exchange Agreement”) setting forth the terms and conditions upon
      which the above named parties thereto proposed to consummate a stock exchange
      transaction pursuant to which Sector 10 Holdings and the DeAvila Institute
      would
      transfer to the Company approximately 75% of the issued and outstanding shares
      of common stock of Sector 10 Services in exchange for (i) the Company’s issuance
      and delivery to Sector 10 Holdings and the DeAvila Institute of 47,058,824
      and
      2,941,176 newly-issued shares of the Company’s common stock (the “Common
      Stock”), respectively, and (ii) Mr. Martin’s transfer and delivery to Sector 10
      Holdings and the DeAvila Institute of 14,117,674 and 882,353 outstanding shares
      of Common Stock, respectively (collectively, the “Sector 10 Transaction”). A
      summary of the terms of the Exchange Agreement and related details were
      originally disclosed in a Current Report on Form 8-K filed with the Securities
      and Exchange Commission on October 11, 2007 (the “October Form 8-K).




9





The
      consummation of the transactions contemplated by the Exchange Agreement was
      conditioned upon the Company’s amendment of its Certificate of Incorporation to
      authorize the issuance of sufficient shares of the Common Stock to consummate
      the transactions contemplated by the Exchange Agreement. On or about September
      13, 2007 the Company obtained the written consent of the holders of sufficient
      shares of the issued and outstanding shares of Common Stock to amend the
      Company’s Certificate of Incorporation for the purpose of increasing the
      authorized capital of the Company to 200,000,000 shares of capital stock,
      consisting of 190,000,000 shares of Common Stock and 10,000,000 shares of
      preferred stock. Based on the approval of the Company’s shareholders, on
      September 15, 2007, the Company filed a Certificate of Amendment to the
      Company’s Certificate of Incorporation for the purpose of affecting the increase
      in the number of authorized shares of the Company’s capital stock.





Sector
      10
      Services seeks to become a leading provider of pre-deployed emergency life
      response equipment across a number of major metropolitan areas located in the
      United States. The core focus of Sector 10 Services’ operations is developing
      and marketing first response solutions, utilizing two lines of patented
      products, Mobile Response Units (“MRU”) and Stationary Response Units (“SRU”).
      Sector 10 Services intends to position its product offerings to market and
      address the city-centric emergency needs of larger metropolitan areas with
      the
      Pericles LogiX System. The Pericles LogiX System is a structured and integrated
      emergency solution designed to pre-deploy emergency and disaster response
      equipment in multi-story residential and commercial buildings. Sector 10
      Services is the exclusive provider of the Pericles LogiX System in the United
      States. Sector 10 Services also offers the SRU and MRU product lines, which
      are
      designed to provide emergency safety services in large metropolitan areas.
      Sector 10 Services has completed development and production of the initial
      MRU
      product, has commenced test marketing and sales of the units.





**Going
      Concern Qualification**





The
      notes
      to the Company’s consolidated financial statements disclose that the limited
      cash flow of the Company has been absorbed in operating activities and the
      Company has incurred net losses since inception, and the Company has a working
      capital deficiency. In the event that funding from internal sources or from
      public or private financing is insufficient to fund the Company’s business, the
      Company will have to substantially cut back its level of spending, which could
      substantially curtail the Company’s operations. These factors raise substantial
      doubt about the Company’s ability to continue as a going concern. The Company’s
      going concern uncertainty may affect its ability to raise additional capital,
      and may also affect its relationships with suppliers and customers. Investors
      should carefully examine the Company’s financial statements.





**Results
      of Operations**





Six
      Months Ended September 30, 2007 as Compared to the Six Months Ended September
      30, 2006





*General
      and Administrative Expenses*





General
      and administrative expenses were $412,696 for the six months ended September
      30,
      2007. These expenses are made up in large part by compensation expense to a
      major shareholder of $329,158, accounting fees of $56,519, consulting and
      professional fees of $23,245 and other expenses of $3,774.





General
      and administrative expenses were $257,975 for the six months ended September
      30,
      2006 which were mainly attributed to salaries, professional fees and delivery
      expenses.





*Interest
      Expense*





Interest
      expense for the six months ended September 30, 2007 was $26,093. Interest
      expense for the six months ended September 31, 2007 was comprised of $7,022
      of
      amortization of deferred financing costs, $19,071 relating to the convertible
      notes payable and $0 relating to a notes payable to a major shareholder.




10




The
      Company’s interest expense for the six months ended September 30, 2006 was
      $48,760.




*Change
      in Fair Value of Derivatives*





The
      change in fair value of the Company’s derivative instruments for the six months
      ended September 30, 2007 was a loss of $7,037,877. The loss was comprised of
      (a)
      the fair value of the Company’s single compound embedded derivatives within the
      Convertible Notes increased in value by $88,035, and (b) the fair value of
      the
      Warrants increased by $6,949,842. The Warrants increased in value primarily
      due
      to a change in one of the assumptions within the valuation model. The Company’s
      management felt it was necessary to consider a possible reset of the exercise
      price of the Warrants due to a small possibility of the Company issuing new
      debt
      with additional equity or derivative instruments.





The
      change in fair value of the Company’s derivatives for the six months ended
      September 30, 2006 was $0. The Company did not have any embedded or freestanding
      derivatives during this period. The Company’s discontinued operations also did
      not have any embedded or freestanding derivatives during this same
      period.





*Discontinued
      Operations*





The
      discontinued operations are for the Company’s wholly-owned subsidiary SKREEM
      Entertainment Corporation (“SKREEM”). SKREEM’s core business was to find and
      manage artists in the music industry. SKREEM was spun-off on February 5, 2007
      into its own separate and distinct company. SKREEM’s activity generated a net
      loss of $763,605 for the six months ended September 30, 2006.





Three
      Months Ended September 30, 2007 as Compared to the Three Months Ended September
      30, 2006





*General
      and Administrative Expenses*





General
      and administrative expenses were $87,067 for the three months ended September
      30, 2007. These expenses were made up in large part by accounting fees of
      $56,519, consulting and professional fees of $23,245 and other expenses of
      $7,303.





General
      and administrative expenses were $108,624 for the three months ended September
      30, 2006.





*Interest
      Expense*





Interest
      expense for the three months ended September 30, 2007 was $7,022, comprised
      principally of amortization of deferred financing costs.





Interest
      expense for the three months ended September 30, 2006 was $20,985, relating
      to
      notes payable to a major shareholder.





*Change
      in Fair Value of Derivatives*





The
      change in fair value of the Company’s derivatives for the three months ended
      September 30, 2007 was a loss of $6,563,913. The loss was comprised of (a)
      the
      fair value of our single compound embedded derivatives within the Convertible
      Notes increased in value by $88,926, and (b) the fair value of our Warrants
      increased by $6,474,987. Our Warrants increased in value primarily due to a
      change in one of management’s assumptions within the valuation model. The
      Company’s management felt it was necessary to consider a possible reset of the
      exercise price of the Warrants due to a small possibility of the Company issuing
      new debt with additional equity or derivative instruments.




11





The
      change in fair value of the Company’s derivatives for the three months ended
      September 30, 2006 was $0. The Company did not have any embedded or freestanding
      derivatives during this period. The Company’s discontinued operations also did
      not have any embedded or freestanding derivatives during this same
      period.





*Discontinued
      Operations*





The
      discontinued operations are for the Company’s wholly-owned subsidiary SKREEM
      Entertainment Corporation (“SKREEM”). SKREEM’s core business was to find and
      manage artists in the music industry. SKREEM was spun-off on February 5, 2007
      into its own separate and distinct company. SKREEM’s activity generated a net
      loss of $507,194 for the three months ended September 30, 2006.





**Liquidity
      and Capital Resources**





As
      of
      September 30, 2007, the Company had cash of $429 and a deficit in working
      capital of $8,593,618. This amount is not sufficient to meet the Company’s
      working capital requirements for the balance of the fiscal year ending March
      31,
      2008 or for any future period.





The
      Company has financed its operations almost exclusively through the sale of
      Common Stock. The Company does not presently have the means to generate revenues
      from it operations. As a result, the Company will be required to finance its
      operations through the sale of equity or the incurrence of debt. There can
      be no
      assurance that the Company will be successful in arranging financing or, that
      if
      the Company is able to arrange financing, the terms of such financing will
      be
      reasonable or acceptable to the Company’s Board of Directors.





The
      Company anticipates that up to $375,000 of additional working capital will
      be
      required over the remainder of the Company’s fiscal year ending March 31, 2008
      to meet the Company’s budgeted needs. The Company does not have sufficient cash
      on hand to meet these anticipated obligations.





The
      Company does not currently have any arrangements for financing and there is
      no
      indication that the Company will be able to find financing necessary to continue
      its operations. Obtaining additional financing would be subject to a number
      of
      factors, including investor sentiment. Market factors may make the timing,
      amount, terms or conditions of additional financing unavailable.





The
      Company’s continuation as a going concern is dependent upon continued financial
      support from the Company’s shareholders and other related parties.





*Total
      Assets*





The
      Company had $92,778 in total assets as of September 30, 2007. As of September
      30, 2007, the Company’s total assets consisted of (a) $429 in cash, (b) $14,123
      due from an affiliate and (c) $78,226 of deferred financing costs.




*Total
      Liabilities*





The
      Company had $8,686,396 in total liabilities as of September 30, 2007. As of
      September 30, 2007, the Company’s total liabilities consisted of (a) $221,194 of
      accounts payable and accrued liabilities, (b) $8,434,122 of derivative
      liabilities, (c) $19,800 in notes payable to an affiliate, and (d) a net balance
      of $11,280 on the Convertible Notes, with the Convertible Notes having a
      notional balance of $600,000 and $588,720 of discount to the debt still
      remaining to be accreted.





*Operating
      Activities*





Cash
      used
      in operations for the six months ended September 30, 2007 was ($386,152).
      Operating activities were affected by non-cash expenses of $7,037,877 for the
      change in fair value of the derivative liabilities and $13,054 of amortized
      deferred financing costs and accreted discounts on the Convertible Notes.
      Operating activities were also affected by the change in accounts payable and
      accrued liabilities of $66,784 and the change in the amount due to an affiliate
      by ($27,201).




12




*Investing
      Activities*





Cash
      from
      investing activities for the six months ended September 30, 2007 was $400,000.
      The Company received payment from Weaver Interactive, Inc. for a note receivable
      in the amount of $400,000 in April of 2007.





*Financing
      Activities*





Cash
      used
      in financing activities for the six months ended September 30, 2007 was $15,200.
      The Company’s financing activities for this period consisted of (a) payments
      made by a shareholder on a notes payable of $35,000 and (b) proceeds from a
      new
      notes payable of $19,800.





**Risks
      Related to the Company’s Business and Operations**




*Investing
      in the Common Stock involves a high degree of risk. You should carefully
      consider the risks described below, and all of the other information set forth
      in this report before deciding to invest in shares of Common Stock. In addition
      to historical information, the information in this report contains
      forward-looking statements about the Company’s future business and performance.
      The Company’s actual operating results and financial performance may be
      different from what the Company’s management expects as of the date of this
      report. The risks described in this report represent the risks that management
      has identified and determined to be material to the Company. Additional risks
      and uncertainties not currently known to the Company’s management, or that the
      Company’s management currently deems to be immaterial, may also materially harm
      the Company’s business operations and financial condition.*





***Going
      Concern Qualification***





The
      Company has generated limited cash flow, has incurred net losses since inception
      and has a working capital deficiency. The Company does not have the means to
      generate revenues sufficient to cover anticipated expenses. Existing funding
      from internal sources or from public or private financing is insufficient to
      fund the Company’s business. If the Company is unable to quickly generate
      capital from operating activities or from external sources, the Company will
      have to substantially curtail its operations and will likely need to suspend
      its
      operations entirely. These factors raise substantial doubt about the Company’s
      ability to continue as a going concern. The Company’s going concern uncertainty
      will likely affect its ability to raise additional capital, and may also affect
      its relationships with suppliers and prospective customers. Investors should
      carefully examine the Company’s financial statements.





***The
      Company has not generated revenues and has not executed any contracts for the
      sale of the Company’s products.***





The
      Company has not generated any revenues. Based on the consummation of the Sector
      10 Transaction, the Company has changed its business operations. The Company
      intends to negotiate contracts that may generate revenues; however, none of
      those contracts has been executed, and the Company can provide no assurance
      that
      any such contracts will ever be executed. There can be no assurance that the
      Company will generate any revenues. If the Company does not generate revenues
      in
      the near term, the Company will have to substantially curtail its operations
      and
      will likely need to suspend its operations entirely.





***The
      Company intends to use outside sources to fulfill contract obligations and
      has
      limited control over the provider’s ability to meet the Company
      obligations.***





The
      Company will be required to engage third-party suppliers to manufacture the
      products the Company proposes to sell. The Company has no control over such
      third-party suppliers. If any or all of those third-party suppliers fails to
      supply sufficient products on a timely basis to meet the terms of any contract,
      the Company would be unable to perform its obligations to its customers, if
      any.
      If the Company is successful in negotiating and executing contracts for the
      sale
      of its products and if a third-party supplier fails to perform its obligations
      under its arrangement with the Company, the Company’s financial condition and
      results of operation would be materially and adversely affected.




13





***The
      directors, executive officers and principal shareholders of the Company have
      effective control of the Company, preventing non-affiliate shareholders from
      significantly influencing the Company’s direction and
      future.***





The
      Company’s directors, officers, and principal shareholders and their affiliates
      control in excess of 80% **** of the
      outstanding shares of Common Stock and are expected to continue to control
      a
      majority of the Common Stock following any financing transactions projected
      for
      the foreseeable future. These directors, officers and affiliates effectively
      control all matters requiring approval by the Company’s shareholders, including
      any determination with respect to the acquisition or disposition of assets,
      future issuances of securities, declarations of dividends and the election
      of
      directors. This concentration of ownership may also delay, defer, or prevent
      a
      change in control and otherwise prevent stockholders other than management’s
      affiliates from influencing the Company’s direction and future.





***The
      market for the Company’s stock is thin and subject to manipulation.***





The
      volume of trading in the Common Stock is limited and can be dominated by a
      few
      individuals. The limited volume, if any, can make the price of the Common Stock
      subject to manipulation by one or more shareholders and will significantly
      limit
      the number of shares of Common Stock that one can purchase or sell in a short
      period of time. An investor may find it difficult to dispose of shares of Common
      Stock or obtain a fair price for the Common Stock in the market.





***The
      market price for the Common Stock is volatile and may change dramatically at
      any
      time.***





The
      market price of the Common Stock is highly volatile. The price for the Common
      Stock may change dramatically as the result of announcements of the Company’s
      operating or financial results, the rate of the Company’s expansion, significant
      litigation or other factors or events that would be expected to affect the
      Company’s business or financial condition, results of operations and other
      factors specific to the Company’s business and future prospects. In addition,
      the market price for the Common Stock may be affected by various factors not
      directly related to the Company’s business, including the following:





·
            intentional
                manipulation of the price of the Common Stock by existing or future
                stockholders;·
            short
                selling of the Common Stock or related derivative
                securities;





·
            a
                single acquisition or disposition, or several related acquisitions
                or
                dispositions, of a large number of shares of Common
                Stock;·
            the
                interest, or lack of interest, of the market in the Company’s business
                sector, without regard to the Company’s financial condition or results of
                operations;





·
            the
                adoption of governmental regulations and similar developments in
                the
                United States or abroad that may affect the Company’s ability to offer the
                Company’s products and services or affect the Company’s cost structure;·
            developments
                in the businesses of companies that purchase the Company’s products;
                and





·
            economic
                and other external market factors, such as a general decline in market
                prices due to poor economic indicators or investor
                distrust.




14




***The
      Company’s business may be affected by increased compensation and benefits
      costs.***




The
      Company is currently negotiating various contracts that may generate revenues
      beginning in the quarter ended March 31, 2008. If the Company is able to execute
      any such contracts, of which there can be no assurance, the Company intends
      to
      new personnel to assist in the development and conduct of the Company’s business
      operations. The increased compensation and benefits associated with any new
      hires will impact the net results of the Company.





***The
      Company has not paid dividends and does not anticipate paying dividends in
      the
      future.***





The
      Company has not paid any cash dividends on its common stock to date and does
      not
      anticipate any cash dividends being paid to holders of its common stock in
      the
      foreseeable future. While the Company’s dividend policy will be based on the
      operating results and capital needs of the business, it is anticipated that
      any
      earnings will be retained to finance the Company’s future expansion. As the
      Company has no plans to issue cash dividends in the future, its common stock
      could be less desirable to other investors and as a result, the value of our
      common stock may decline, or fail to reach the valuations of other similarly
      situated companies who have issued cash dividends.





***The
      Common Stock is a “low-priced stock” and subject to regulation that limits or
      restricts the potential market for the stock.***





Shares
      of
      Common Stock should be considered to be “low-priced” or “penny stock,” resulting
      in increased risks to investors and certain requirements being imposed on some
      brokers who execute transactions in the common stock. In general, a low-priced
      stock is an equity security that:





·
            Is
                priced under five dollars;·
            Is
                not traded on a national stock exchange, the Nasdaq Global Market
                or the
                Nasdaq Capital Market;





·
            Is
                issued by a company that has less than $5 million in net tangible
                assets
                (if it has been in business less than three years) or has less than
                $2
                million in net tangible assets (if it has been in business for at
                least
                three years); and·
            Is
                issued by a company that has average revenues of less than $6 million
                for
                the past three years.





The
      Company believes the Common Stock is presently a “penny stock.” At any time that
      the Common Stock qualifies as a penny stock, the following requirements, among
      others, will generally apply:





·
            Certain
                broker-dealers who recommend penny stock to persons other than established
                customers and accredited investors must make a special written suitability
                determination for the purchaser and receive the purchaser’s written
                agreement to a transaction prior to sale.·
            Prior
                to executing any transaction involving a penny stock, certain
                broker-dealers must deliver to certain purchasers a disclosure schedule
                explaining the risks involved in owning penny stock, the broker-dealer’s
                duties to the customer, a toll-free telephone number for inquiries
                about
                the broker-dealer’s disciplinary history and the customer’s rights and
                remedies in case of fraud or abuse in the
                sale.





·
            In
                connection with the execution of any transaction involving a penny
                stock,
                certain broker-dealers must deliver to certain purchasers the following:





·bid and offer price quotes and volume
                  information;





·the broker-dealer’s compensation for the
                  trade;· the compensation received by certain salespersons for the
                  trade;





· monthly accounts statements;
                  and· A
                  written statement of the customer’s financial situation and investment
                  goals.





***Compliance
      with existing and new regulations of corporate governance and public disclosure
      may result in additional expenses.***





Compliance
      with changing laws, regulations, and standards relating to corporate governance
      and public disclosure, including the Sarbanes-Oxley Act of 2002 and other SEC
      regulations, requires large amounts of management attention and external
      resources. This may result in increased general and administrative expenses
      and
      a diversion of management time and attention from revenue-generating activities
      to compliance activities.




15





**Item
      3.**  **Controls
      and Procedures**





(a)  Based
      on
      the evaluation of the Company’s “disclosure
      controls and procedures” (as defined in the Securities Exchange Act of 1934
      Rules 13a-15(e) or 15d-15(e)) required by paragraph (b) of Rules 13a-15 or
      15d-15, the Company’s principal executive officer and principal financial
      officer concluded that as of September 30, 2007, the Company’s disclosure
      controls and procedures were not effective. Due to transition with management,
      the September 30, 2007 Form 10-QSB was filed without reflecting significant
      adjustments for the revaluation of embedded derivatives and adjustments for
      other expenses, thereby resulting in a need to amend the financial statements
      and various disclosures. This control deficiency resulted in a need to file
      amendments to the Company’s Quarterly Reports on Form 10-QSB for the quarter
      ended September 30, 2007. The Company has hired a new Chief Financial Officer
      who the Company anticipates will commence employment with the Company in March
      2008. The Company intends to design controls and procedures for the financial
      reporting process to mitigate future timing and review issues. These new
      controls are expected to be in place for the fiscal year end March 31, 2008.




(b)  There
      have been no changes in the Company’s internal control over financial reporting
      identified in connection with the evaluation required by paragraph (d) of
      Exchange Act Rules 13a-15 or 15d-15 that occurred during the Company’s last
      fiscal quarter that have materially affected, or are reasonably likely to
      materially affect, the Company’s internal control over financial
      reporting.




**PART
      II - OTHER INFORMATION**





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





On
      September 12, 2007, the Company, Jeffrey Martin, Sector 10 Services, Sector
      10
      Holdings, and the DeAvila Institute the Section 10 Transaction Exchange
      Agreement. The offer and sale of shares of common stock in the Sector 10
      Transaction were effected in reliance upon the exemptions for sales of
      securities not involving a public offering, as set forth in Section 4(2) of
      the
      Securities Act and/or Regulation D promulgated thereunder, based upon the
      following: (a) there was no public offering or general solicitation with respect
      to the Sector 10 Transaction offering; (b) each of Sector 10 Holdings and the
      DeAvila Institute investor was provided with certain disclosure materials and
      all other information requested with respect to the Company; (c) each of Sector
      10 Holdings and the DeAvila Institute acknowledged that all securities being
      purchased were “restricted securities” for purposes of the Securities Act, and
      agreed to transfer such securities only in a transaction registered under the
      Securities Act or exempt from registration under the Securities Act; and (d)
      a
      legend was placed on the certificates representing each such security stating
      that it was restricted and could only be transferred if subsequently registered
      under the Securities Act or transferred in a transaction exempt from
      registration under the Securities Act.




**Item
      6. Exhibits**





See
      the
      Exhibit Index attached hereto following the signature page.




16





**SIGNATURES**





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




SKRM
                Interactive, Inc.Date
                    March 3, 2008
            By:
            /s/
              Pericles DeAvilaPericles
                DeAvila, President




Date
                    March 3, 2008
            By:
            /s/
              Pericles DeAvilaPericles
              DeAvilaChief
                Financial Officer




17




**EXHIBIT
                INDEX**




**Exhibit
                No.**
            
            **Exhibit**
            
            **Incorporated
                by Reference/ Filed Herewith**31.1
            
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Executive
                Officer
            
            Filed
                herewith31.2
            
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Financial
                Officer
            
            Filed
                herewith32.1
            
            Section
                1350 Certification of Chief Executive Officer
            
            Filed
                herewith32.2
            
            Section
                1350 Certification of Chief Financial Officer
            
            Filed
                herewith




18