**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
        D.C. 20549**
 
 **FORM
        10-QSB**
  **x**
                QUARTERLY
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT OF1934
                    FOR THE QUARTERLY PERIOD ENDED**September
                    30, 2007**o
                TRANSITION
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT
                    OF1934 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 November **[15]** , 2007 the issuer had **[__________]**  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
                        InformationItem
                        1.
                    Consolidated
                        Financial Statements
                    2Unaudited
                        Consolidated Balance Sheet - as of September 30, 2007 and
                        March 31,
                        2007
                    2Unaudited
                        Consolidated Statements of Operations for the three months
                        ended September
                        30, 2007 and 2006 and for the period from inception, August
                        19, 1999 to
                        September 30, 2007
                    3Unaudited
                        Consolidated Statement of Changes in Shareholders’ Deficit for the period
                        form inception, August 19, 1999, to September 30, 2007
                    4Unaudited
                        Consolidated Statements of Cash Flows for the three months
                        ended September
                        30, 2007 and 2006 and for the period from inception, August
                        19, 1999, to
                        June 30, 2007
                    5Notes
                        to the Unaudited Consolidated Financial StatementsItem
                        2.
                    Management’s
                        Discussion and Analysis or Plan of Operation
                    6Item
                        3.
                    Controls
                        and Procedures
                    11Part
                        II. Other InformationItem
                        1.
                    Legal
                        ProceedingsItem
                        2.
                    Unregistered
                        Sales of Equity Securities and Use of Proceeds
                    11Item
                        3.
                    Defaults
                        Upon Senior SecuritiesItem
                        4.
                    Submission
                        of Matters to a Vote of Security HoldersItem
                        5.
                    Other
                        InformationItem
                        6.
                    Exhibits
                    11
  
  **Item** **1. FINANCIAL STATEMENTS**
 SKRM
        Interactive, Inc.
 (formerly
        SKREEM ENTERTAINMENT CORPORATION)
 (A
        DEVELOPMENT STAGE COMPANY)
 UNAUDITED
        CONSOLIDATED BALANCE SHEETS
 As
        of
        September 30, 2007 and March 31, 2007
  September
                  30,2007
              
              March
                  31,
                2007ASSETSCurrent
                  assets:Cash
                  and Cash equivalents
              
              $
              397
              
              $
              1,781Due
                  from affiliate
              
              
              14,123
              
              
              -Note
                  receivable, net of impairment allowance of $0 and $10,710
              
              
              -
              
              
              400,000Deferred
                  financing costs
              
              
              14,427
              
              
              11,438Total
                  current assets
              
              
              28,947
              
              
              413,219Deferred
                  financing costs, net of amortization of $4,752 and $2,806
              
              
              70,821
              
              
              75,756Total
                  assets
              
              $
              99,768
              
              $
              488,975LIABILITIES
                  AND SHAREHOLDERS' DEFICITCurrent
                  liabilities:Accounts
                  payable and accrued liabilities
              
              $
              145,395
              
              $
              154,410Derivative
                  liabilities
              
              
              1,870,209
              
              
              1,396,245Notes
                  payable - shareholder
              
              
              8,500
              
              
              35,000Due
                  to affiliate
              
              
              -
              
              
              13,078Total
                  current liabilities
              
              
              2,024,104
              
              
              1,598,733Callable
                  secured convertible notes payable net of unamortized discount of
                  $588,720
                  and $592,806
              
              
              11,280
              
              
              7,194Total
                  liabilities
              
              
              2,035,384
              
              
              1,605,927Shareholders'
                  deficit:Preferred
                  shares - $0.001 par value; 1,000,000 authorized, no shares issued
                  or
                  outstanding
              
              
              -
              
              
              -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
              
              
              (9,043,062
              )
              
              (8,224,398
              )Total
                  shareholders' deficit
              
              
              (1,935,616
              )
              
              (1,116,952
              )Total
                  liabilities and shareholders' deficit
              
              $
              99,768
              
              $
              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 Three Months
 Ended
        September 30, 2007 and 2006 and for the Period From Inception, August 19,
        1999,
 to
        September 30, 2007
  Three
                  Months Ended
              
              Inception
                  toSeptember
                  30,
              
              September
                  30,
              
              September
                  30,2007
              
              2006
              
              2007ExpensesGeneral
                  and administrative
              
              $
              325,629
              
              
              -
              
              $
              1,247,863Impairment
                  of note receivable
              
              
              -
              
              
              -
              
              
              10,701Total
                  expenses
              
              
              325,629
              
              
              -
              
              
              1,258,564Loss
                  from operations
              
              
              (325,629
              )
              
              -
              
              
              (1,258,564
              )Other
                  income (expense)Interest
                  income
              
              
              -
              
              
              -
              
              
              10,701Interest
                  expense
              
              
              (19,071
              )
              
              -
              
              
              (45,268
              )Change
                  in fair value of derivatives
              
              
              (473,964
              )
              
              -
              
              
              (1,270,209
              )Total
                  other income/(expense)
              
              
              (493,035
              )
              
              -
              
              
              (1,304,776
              )Loss
                  from continuing operations
              
              
              (818,664
              )
              
              -
              
              
              (2,563,340
              )Discontinued
                  operationsLoss
                  from operations of subsidiary
              
              
              -
              
              
              (433,538
              )
              
              (6,778,804
              )Gain
                  on disposal of subsidiary
              
              
              -
              
              
              -
              
              
              299,082Loss
                  from discontinued operations
              
              
              -
              
              
              (433,538
              )
              
              (6,479,722
              )Net
                  loss
              
              $
              (818,664
              )
              $
              (433,538
              )
              $
              (9,043,062
              )Weighted
                  Average Shares Outstanding - basic and diluted
              
              
              26,548,292
              
              
              24,612,455Basic
                  and diluted loss per shareContinuing
                  Operations
              
              $
              (0.03
              )
              $
              -Discontinued
                  Operations
              
              $
              -
              
              $
              (0.02
              )Net
                  Loss
              
              $
              (0.03
              )
              $
              (0.02
              )
 
 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 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 Inception, August 19,1999
                
                
                -
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -Issuance
                    of common stock
                
                
                20,000
                
                
                20
                
                
                -
                
                
                -
                
                
                20Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (84,021
                )
                
                (84,021
                )Balance
                    at December 31, 1999
                
                
                20,000
                
                
                20
                
                
                -
                
                
                (84,021
                )
                
                (84,001
                )Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (230,879
                )
                
                (230,879
                )Balance
                    at December 31, 2000
                
                
                20,000
                
                
                20
                
                
                -
                
                
                (314,900
                )
                
                (314,880
                )Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (494,816
                )
                
                (494,816
                )Balance
                    at December 31, 2001
                
                
                20,000
                
                
                20
                
                
                -
                
                
                (809,716
                )
                
                (809,696
                )Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (384,590
                )
                
                (384,590
                )Balance
                    at December 31, 2002
                
                
                20,000
                
                
                20
                
                
                -
                
                
                (1,194,306
                )
                
                (1,194,286
                )Reclassification
                    of debt to equity
                
                
                43,000
                
                
                43
                
                
                1,581,940
                
                
                -
                
                
                1,581,983Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (736,364
                )
                
                (736,364
                )Balance
                    at December 31, 2003
                
                
                63,000
                
                
                63
                
                
                1,581,940
                
                
                (1,930,670
                )
                
                (348,667
                )Effect
                    of issuance of common stock and recapitalization in a reverse
                    acquisition
                    transaction
                
                
                25,943,925
                
                
                25,944
                
                
                (25,944
                )
                
                -
                
                
                -Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (205,994
                )
                
                (205,994
                )Balance
                    at March 31, 2004
                
                
                26,006,925
                
                
                26,007
                
                
                1,555,996
                
                
                (2,136,664
                )
                
                (554,661
                )Proceeds
                    from issuance of common stock
                
                
                603,856
                
                
                604
                
                
                301,324
                
                
                -
                
                
                301,928Cancellation
                    of shares
                
                
                (3,502,925
                )
                
                (3,503
                )
                
                3,503
                
                
                -
                
                
                -Net
                    loss
                
                
                -
                
                
                -
                
                
                (1,592,469
                )
                
                (1,592,469
                )Balance
                    at March 31, 2005
                
                
                23,107,856
                
                
                23,108
                
                
                1,860,823
                
                
                (3,729,133
                )
                
                (1,845,202
                )Proceeds
                    from issuance of common stock
                
                
                276,400
                
                
                276
                
                
                276,124
                
                
                -
                
                
                276,400Stock
                    issued for accounts payable
                
                
                50,000
                
                
                50
                
                
                49,950
                
                
                -
                
                
                50,000Stock
                    issued for conversion of debt
                
                
                1,050,000
                
                
                1,050
                
                
                1,048,950
                
                
                -
                
                
                1,050,000Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,376,529
                )
                
                (1,376,529
                )Balance
                    at March 31, 2006
                
                
                24,484,256
                
                
                24,484
                
                
                3,235,847
                
                
                (5,105,662
                )
                
                (1,845,331
                )Proceeds
                    from issuance of common stock
                
                
                24,694
                
                
                25
                
                
                24,670
                
                
                -
                
                
                24,695Stock
                    issued for services
                
                
                1,102,000
                
                
                1,102
                
                
                1,306,500
                
                
                -
                
                
                1,307,602stock
                    issued for debt
                
                
                817,342
                
                
                817
                
                
                1,838,204
                
                
                -
                
                
                1,839,021Stock
                    issued for investment
                
                
                3,000,000
                
                
                3,000
                
                
                4,017,000
                
                
                -
                
                
                4,020,000Stock
                    rescinded relating to investment
                
                
                (2,880,000
                )
                
                (2,880
                )
                
                (3,856,323
                )
                
                -
                
                
                (3,859,203
                )Expenses
                    paid by shareholder
                
                
                -
                
                
                -
                
                
                515,000
                
                
                -
                
                
                515,000Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (3,118,736
                )
                
                (3,118,736
                )Balance
                    at March 31, 2007
                
                
                26,548,292
                
                
                26,548
                
                
                7,080,898
                
                
                (8,224,398
                )
                
                (1,116,952
                )Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (818,664
                )
                
                (818,664
                )Balance
                    at September 30, 2007
                
                
                26,548,292
                
                $
                26,548
                
                $
                7,080,898
                
                $
                (9,043,062
                )
                $
                (1,935,616
                )
 
 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)
 UNAUDITED
        CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months
 Ended
        September 30, 2007 and 2006 and for the Period From Inception, August 19,
        1999,
 to
        September 30, 2007
 Three
                    Months Ended
                
                Inception
                    toSeptember
                    30,
                
                September
                    30,
                
                September
                    30,2007
                
                2006
                
                2007Cash
                    Flows from Operating Activities:Net
                    loss
                
                $
                (818,664
                )
                $
                (433,538
                )
                $
                (9,043,062
                )Loss
                    on discontinued operations
                
                
                -
                
                
                433,538
                
                
                6,479,722Loss
                    from continuing operations
                
                
                (818,664
                )
                
                -
                
                
                (2,563,340
                )Adjustments
                    to reconcile net loss to net cash used in operating
                    activities:Impairment
                    of loan receivable
                
                
                -
                
                
                -
                
                
                10,701Stock
                    issued for services
                
                
                -
                
                
                -
                
                
                692,650Amortization
                    of deferred financing costs
                
                
                1,946
                
                
                -
                
                
                4,752Accretion
                    of discount on convertible notes
                
                
                4,086
                
                
                -
                
                
                11,280Change
                    in fair value of derivatives
                
                
                473,964
                
                
                -
                
                
                1,270,209Changes
                    inAccounts
                    payable and accrued liabilities
                
                
                (9,015
                )
                
                -
                
                
                145,393Due
                    to affiliate
                
                
                (27,201
                )
                
                -
                
                
                (14,123
                )Interest
                    receivable
                
                
                -
                
                
                -
                
                
                (10,701
                )Net
                    cash used in operating activities
                
                
                (374,884
                )
                
                -
                
                
                (453,179
                )Cash
                    Flows from Investing ActivitiesInvestment
                    in note receivable
                
                
                -
                
                
                -
                
                
                (400,000
                )Proceeds
                    from note receivable
                
                
                400,000
                
                
                -
                
                
                400,000Net
                    cash provided by investing activities
                
                
                400,000
                
                
                -
                
                
                -Cash
                    Flows from Financing ActivitiesProceeds
                    from issuance of common stock
                
                
                -
                
                
                -
                
                
                24,695Proceeds
                    from notes payable - shareholder
                
                
                8,500
                
                
                -
                
                
                43,500Proceeds
                    from convertible notes payable
                
                
                -
                
                
                -
                
                
                600,000Payments
                    on notes payable - shareholder
                
                
                (35,000
                )
                
                -
                
                
                (35,000
                )Debt
                    issuance costs
                
                
                -
                
                
                -
                
                
                (90,000
                )Net
                    cash provided by financing activities
                
                
                (26,500
                )
                
                -
                
                
                543,195Discontinued
                    operationsDiscontinued
                    operating activities
                
                
                -
                
                
                (139,230
                )
                
                (4,506,211
                )Discontinued
                    investing activities
                
                
                -
                
                
                (373
                )
                
                (187,748
                )Discontinued
                    financing activities
                
                
                -
                
                
                84,695
                
                
                4,604,340Net
                    cash provided by (used in) discontinued operations
                
                
                -
                
                
                (54,908
                )
                
                (89,619
                )Net
                    increase (decrease) in cash and cash equivalents
                
                
                (1,384
                )
                
                (54,908
                )
                
                397Cash
                    and cash equivalentsBeginning
                    of period - continuing operations
                
                
                1,781
                
                
                -
                
                
                -Beginning
                    of period - discontinued operations
                
                
                -
                
                
                62,383
                
                
                -End
                    of period - continuing operations
                
                $
                397
                
                $
                -
                
                $
                397End
                    of period - discontinued operations
                
                $
                -
                
                $
                7,475
                
                $
                -
  The
        accompanying notes are an integral part of these unaudited consolidated
        financial statements
  5
 
 **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
        throughout this Form 10-QSB, 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 our 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.
 
 We
        currently have a Letter of Intent to acquire 75% of the stock of Sector 10
        Services USA, Inc. (“Sector 10”), a Washington corporation, for 50,000,000 newly
        issued shares and 15,000,000 issued and outstanding shares owned by Jeffery
        Martin, a major shareholder.
 
 Sector
        10
        seeks to become the leading provider of pre-deployed emergency life response
        equipment across all major US cities. Sector 10 is the exclusive provider
        of
        Pericles LogiX System in the United States. Sector 10’s core focus is on the
        first response solutions, utilizing two lines of patented products, Mobile
        Response United (“MRU”) and Stationary Response Units (“SRU”).
 
 As
        of
        July 31, 2007, Sector 10 expects to complete its audit within 30 days as
        required by the Letter of Intent and SKRM expects to close the transaction
        in
        November.
 
 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 is on 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
        also offers the SRU and MRU product lines, which are designed to provide
        emergency safety services in large metropolitan areas. Sector 10 has completed
        development and production of the initial MRU product, has commenced test
        marketing and sales of the units.
  **Going
        Concern Qualification**
 
 Our
        notes
        to the consolidated financial statements disclose that the cash flow of the
        Company has been absorbed in operating activities and has incurred net losses
        for the three months, and have a working capital deficiency. In the event
        that
        funding from internal sources or from public or private financing is
        insufficient to fund the business at current levels, we will have to
        substantially cut back our level of spending which could substantially curtail
        our operations. These factors raise substantial doubt about our ability to
        continue as a going concern. Our going concern uncertainty may affect our
        ability to raise additional capital, and may also affect our ability to raise
        additional capital, and may also affect our relationships with suppliers
        and
        customers. Investors should carefully examine our financial
        statements.
 
 6
  **Results
        of Operations**
 
 Three
        Months Ended September 30, 2007 as Compared to the Three Months Ended September
        30, 2006
 
 *Revenues
        -*
 
 The
        Company’s had no revenues for the three months ended June 30, 2007; however, we
        are actively pursuing opportunities for revenue growth in the near future.
  We
        do not
        have revenue relating to SKRM for the three months ended June 30, 2006. Our
        discontinued operations had revenues of $66,695 which were comprised of revenue
        from licensing agreements and sales of records for this same
        period.
 
 *Operating
        Expenses -*
 
 SKRM
        had
        no operating expenses for the three months ended June 30, 2007 and 2006,
        respectively.
 
 Our
        discontinued operations had operating expenses of $323,105 for the three
        months
        ended June 30, 2006. The operating expenses related to the support of our
        artists touring in Germany and other countries.
 
 *General
        and Administrative Expenses -*
 
 General
        and administrative expenses were $325,629 for the three months ended June
        30,
        2007. These expenses are made up in large part by compensation expense to
        a
        major shareholder of $234,897, accounting fees of $43,873, consulting and
        professional fees of $24,845 and additional expense relating to our 2% penalty
        for the late filing of our registration statement.
 
 General
        and administrative expenses were $0 for the three months ended June 30, 2006.
        Our discontinued operations had general and administrative expenses of $149,352
        which were mainly attributed to salaries, professional fees and delivery
        expenses.
 
 *Interest
        Expense -*
 
 Interest
        expense for the three months ended June 30, 2007 was $19,071. The interest
        expense is comprised of $1,946 of amortization of deferred financing costs,
        $4,086 of accretion of debt discount, $12,939 relating to the convertible
        notes
        payable and $100 relating to a notes payable to a major shareholder.
 
 Interest
        expense for the three months ended June 30, 2006 was $0 for SKRM. Our
        discontinued operations had interest expense of $27,776 which was attributed
        to
        interest due on our notes payable during this period.
 
 *Change
        in Fair Value of Derivatives*
 
 The
        change in fair value of our derivatives for the three months ended June 30,
        2007
        was a loss of $473,964. The loss is comprised of (a) the fair value of our
        single compound embedded derivatives within the convertible notes decreased
        in
        value by $891, and (b) the fair value of our warrants increased by $474,855,
        with a net change of $473,964 for the period. Our warrants increased in value
        due to a change in one of our assumptions within the valuation model. We
        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 our derivatives for the three months ended June 30,
        2006
        was $0. We did not have any embedded or freestanding derivatives during this
        period. Our discontinued operations also did not have any embedded or
        freestanding derivatives during this same period.
 
 *Discontinued
        Operations*
 
 Our
        discontinued operations are only reflected in the three months ended June
        30,
        2006. The discontinued operations for our wholly owned subsidiary SKREEM
        Entertainment Corporation (“SKREEM”) had a net loss of $433,538 for the three
        months ended June 30, 2006. SKREEM’s core business was to find and management
        artist in the music industry. SKREEM was spun-off on February 5, 2007 into
        its
        own separate and distinct company.
 
 7
  **Liquidity
        and Capital Resources**
 
 As
        of
        June 30, 2007, SKRM had cash of $397 and a deficit in working capital of
        $1,995,157 and we believe this is not sufficient to meet our working capital
        requirements for the coming year.
 
 We
        have
        financed our operations almost exclusively through the sale of our common
        shares
        to investors and borrowers. We expect to finance operations through the sale
        of
        equity in the foreseeable future as we receive minimal revenue from our current
        business operations. There is no guarantee that we will be successful in
        arranging financing on acceptable terms.
 
 We
        anticipate that up to $375,000 of additional working capital will be required
        over the next 9 months to meet our budgeted needs for the current fiscal
        year.
        We do not have sufficient cash on hand to meet these anticipated obligations.
 
 We
        do not
        currently have any arrangements for financing and we may not be able to find
        such financing if required. 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 to
        us.
 
 Our
        continuation as a going concern is dependent upon continued financial support
        from our shareholders and other related parties.
 
 *Total
        Assets -*
 
 SKRM
        currently has $99,768 in total assets as of June 30, 2007. Our total assets
        are
        comprised of (a) $397 in cash, (b) $14,123 due from our affiliate and (c)
        $85,248 of deferred financing costs.
  *Total
        Liabilities -*
 
 SKRM
        currently has $2,035,384 in total liabilities as of June 30, 2007. Our total
        liabilities are comprised of (a) $145,395 of accounts payable and accrued
        liabilities, (b) $1,870,209 of derivative liabilities, (c) $8,500 in notes
        payable to an affiliate, and (d) a net balance of $11,280 on our callable
        convertible notes payable, with the callable 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 three months ended June 30, 2007 was $374,884. Operating
        activities were affected by non-cash expenses of $473,964 for the change
        in fair
        value of the derivative liabilities and $6,032 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
        $9,015 and the change in the amount due to an affiliate by $27,201.
 
 Cash
        used
        in operations for the three months ended June 30, 2006 was $0. Cash used
        in
        discontinued operations for this same period was $139,230.
 
 *Investing
        Activities -*
 
 Cash
        from
        our investing activities for the three months ended June 30, 2007 was $400,000.
        We received payment from Weaver Interactive, Inc. for a notes receivable
        in the
        amount of $400,000 in April of 2007.
 
 Cash
        used
        in investing activities for the three months ended June 30, 2006 was $0.
        Our
        discontinued operations used $373 for this same period in investing activities.
 
 8
  *Financing
        Activities -*
 
 Cash
        used
        in financing activities for the three months ended June 30, 2007 was $26,500.
        Our financing activities for this period are comprised of (a) payments made
        by a
        shareholder on a notes payable of $35,000 and (b) proceeds from a new notes
        payable of $8,500.
 
 Cash
        used
        in financing for the three months ended June 30, 2006 was $0. Our discontinued
        operations provided $84,695 in cash for financing activities for this same
        period which was provided by new promissory notes to SKREEM.
 
 **Risks
        Related to our Business and Operations**
  *Investing
        in our 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 our common stock. In
        addition to historical information, the information in this Report contains
        forward-looking statements about our future business and performance. Our
        actual
        operating results and financial performance may be different from what we
        expect
        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 our
        company. Additional risks and uncertainties not currently known to us, or
        that
        we currently deem to be immaterial, may also materially harm our business
        operations and financial condition.*
  We
        have
        not paid any cash dividends on our common stock to date and do not anticipate
        any cash dividends being paid to holders of our common stock in the foreseeable
        future. While our 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 our future expansion. As we have no plans to issue cash
        dividends in the future, our 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
 
 ***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.
 
 ***Our
        directors, executive officers and principal stockholders have effective control
        of the company, preventing non-affiliate stockholders from significantly
        influencing our direction and future.***
 
 Our
        directors, officers, and 5% stockholders and their affiliates control in
        excess
        of **[__** **_]** % **** If
        our
        outstanding shares of common stock and are expected to continue to control
        a
        majority of our outstanding common stock following any financing transactions
        projected for the foreseeable future. These directors, officers and affiliates
        effectively control all matters requiring approval by the stockholders,
        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
        our
        affiliates from influencing our direction and future.
 
 ***There
        is a public market for our stock, but it is thin and subject to manipulation.***
 
 The
        volume of trading in our common stock is limited and can be dominated by
        a few
        individuals. The limited volume, if any, can make the price of our common
        stock
        subject to manipulation by one or more stockholders and will significantly
        limit
        the number of shares that one can purchase or sell in a short period of time.
        An
        investor may find it difficult to dispose of shares of our common stock or
        obtain a fair price for our common stock in the market.
 
 9
  ***The
        market price for our common stock is volatile and may change dramatically
        at any
        time.***
 
 The
        market price of our common stock, like that of the securities of other
        early-stage companies, is highly volatile. Our stock price may change
        dramatically as the result of announcements of our quarterly results, the
        rate
        of our expansion, significant litigation or other factors or events that
        would
        be expected to affect our business or financial condition, results of operations
        and other factors specific to our business and future prospects. In addition,
        the market price for our common stock may be affected by various factors
        not
        directly related to our business, including the following:
 
 ·
              intentional
                  manipulation of our stock price by existing or future
                  stockholders;
 ·
              short
                  selling of our common stock or related derivative
                  securities;
 ·
              a
                  single acquisition or disposition, or several related acquisitions
                  or
                  dispositions, of a large number of our
                  shares;
 ·
              the
                  interest, or lack of interest, of the market in our business sector,
                  without regard to our financial condition or results of operations;
 ·
              the
                  adoption of governmental regulations and similar developments in
                  the
                  United States or abroad that may affect our ability to offer our
                  products
                  and services or affect our cost structure;
 ·
              developments
                  in the businesses of companies that purchase our products;
                  and
 ·
              economic
                  and other external market factors, such as a general decline in
                  market
                  prices due to poor economic indicators or investor
                  distrust.
 
 ***Our
        business may be affected by increased compenstion and benefits
        costs.***
 
 ***Compliance
        with existing and new regulations of corporate governance and public disclosure
        may result in additional expenses.***
 
 ***We
        are unlikely to pay dividends on our common stock in the foreseeable
        future.***
  We
        have
        never declared or paid dividends on our stock. We currently intend to retain
        all
        available funds and any future earnings for use in the operation and expansion
        of our business. We do not anticipate paying any cash dividends in the
        foreseeable future, and it is unlikely that investors will derive any current
        income from ownership of our stock. This means that your potential for economic
        gain from ownership of our stock depends on appreciation of our stock price
        and
        will only be realized by a sale of the stock at a price higher than your
        purchase price.
 
 ***Our
        common stock is a “low-priced stock” and subject to regulation that limits or
        restricts the potential market for our stock.***
 
 Shares
        of
        our common stock may be deemed to be “low-priced” or “penny stock,” resulting in
        increased risks to our investors and certain requirements being imposed on
        some
        brokers who execute transactions in our 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.
 
 We
        believe that our common stock is presently a “penny stock.” At any time 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:
 o
              bid
                  and offer price quotes and volume
                  information;
 o
              the
                  broker-dealer’s compensation for the
                  trade;
 o
              the
                  compensation received by certain salespersons for the
                  trade;
 o
              monthly
                  accounts statements; and
 o
              a
                  written statement of the customer’s financial situation and investment
                  goals.
 
 10
 
 **Item
        3.**  **Controls
        and Procedures**
 
 (a)  Based
        on the evaluation of our “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 effective in ensuring that information required
        to
        be disclosed by the Company in its reports that it files or submits under
        the
        Securities Exchange Act of 1934 (as amended) is recorded, processed, summarized
        and reported within the time periods specified in the rules and forms of
        the
        SEC.
  (b)  There
        have been no changes in our 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 our last fiscal quarter that
        have
        materially affected, or are reasonably likely to materially affect, our internal
        control over financial reporting.
  **PART
        II - OTHER INFORMATION**
 
 **Item
        2.**  **Unregistered
        Sales of Equity Securities and Use of Proceeds**
 
 **[Insert
        description of Sector 10 transaction]**
 
 The
        offer
        and sale of such shares of our common stock 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) the investor confirmed to us that
        the
        investor was an “accredited investor,” as defined in Rule 501 of Regulation D
        promulgated under the Securities Act and had such background, education and
        experience in financial and business matters as to be able to evaluate the
        merits and risks of an investment in the securities; (b) there was no public
        offering or general solicitation with respect to each offering; (c) the investor
        was provided with certain disclosure materials and all other information
        requested with respect to our company; (d) the investor 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 (e) 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.
 
 11
 
 **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.November
                  19, 2007
              
              By:
                  /s/ Pericles DeAvilaDate
              
              Pericles
                  DeAvila, PresidentNovember
                  19, 2007
              
              By:
                  /s/ Pericles DeAvilaDate
              
              Pericles
                  DeAvila
                Chief
                  Financial Officer
 
 12
  **EXHIBIT
                  INDEX****Exhibit
                  No.**
              
              **Exhibit**
              
              **Incorporated
                  by Reference/ Filed Herewith****[Discuss
                  other exhibits]**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
 
  13