UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





FORM
      10-KSB





X
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                ACT OF
                1934




For
      the
      fiscal year ended December 31, 2007





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





Commission
      File Number: 333-70526




Mac
        Filmworks, Inc.
 (Exact
                  name of small business issuer as specified in its
                  charter)


Delaware
              
              74-2820999(State
                  or other jurisdiction of
              
              (IRS
                  Employer Identification No.)incorporation
                  or organization)
 
 3
                  Riverway, Suite 1800, Houston, Texas
              
              77056(Address
                  of principal executive offices)
              
              (Zip
                  Code)
 
 Registrant's
      telephone number, including area code: (281) 748-3277





Securities
      registered pursuant to Section 12(b) of the Act: None




Securities
      registered pursuant to Section 12(g) of the Act: Common Stock




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 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
xNo o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B in this form, and no disclosure will be contained, to the best
      of
      registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. o





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





The
      Registrant generated $60,176 in revenues from discontinued operations, which
      amount is embedded in
      the Company’s overall net loss of $609,726 from
      discontinued
      operations for the twelve months ended December 31, 2007.





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates of the registrant, based on the closing price of the common
      stock
      on the OTC Electronic Bulletin Board on March 25,
      2008, was $385,524.





The
      Registrant’s common stock outstanding as of March 25, 2008, was 24,535,632
      shares.





Documents
      incorporated by reference: None.





Transitional
      Small Business Disclosure Format (Check One): Yes oNo x













Mac
      Filmworks, Inc.


INDEX





Page
                No.Part
                I
            Item
                1.
            Description
                of Business
            3Item
                2.
            Description
                of Property
            4Item
                3.
            Legal
                Proceedings
            4Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            4Part
                II
            Item
                5.
            Market
                for Registrant's Common Equity and Related Stockholder
                Matters
            5Item
                6.
            Management's
                Discussion and Analysis
            6Item
                7.
            Financial
                Statements
            8Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting
                and Financial Disclosure
            17Item
                8A.
            Controls
                and Procedures
            17Item
                8B.
            Other
                Information
            18Part
                III
            Item
                9.
            Directors,
                Executive Officers, Promoters and Control
                Persons; Compliancewith
                Section 16(a) of the Exchange Act
            19Item
                10.
            Executive
                Compensation
            20Item
                11.
            Security
                Ownership of Certain Beneficial Owners
                andManagement
                and Related Stockholder
                Matters
            20Item
                12.
            Certain
                Relationships and Related
                Transactions
            21Item
                13.
            Exhibits
            22Item
                14.
            Principal
                Accountant Fees and Services
            22




2
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          of Contents


FORWARD-LOOKING
      STATEMENTS





This
      Annual Report of Mac Filmworks, Inc. (“Mac Filmworks” or the “Company”) contains
      forward-looking statements.  These statements relate to future events
      or future financial performance and involve known and unknown risks,
      uncertainties and other factors that may cause the Company’s or its industry’s
      actual results, levels of activity, performance or achievements to be materially
      different from any future results, levels of activity, performance or
      achievements expressed or implied by the forward-looking
      statements.





In
      some cases, you can identify
      forward-looking statements by terminology such as “may,” “will,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential,” or the negative of these terms or other comparable
      terminology.  These statements are only predictions.  Actual
      events or results may differ materially.





Although
      the Company believes that the
      expectations reflected in the forward-looking statements are reasonable, the
      Company cannot guarantee future results, levels of activity, performance or
      achievements.  Moreover, neither the Company nor any other person
      assumes responsibility for the accuracy and completeness of these
      forward-looking statements.  The Company is under no duty to update
      any of the forward-looking statements after the date of this report to conform
      its prior statements to actual results.








PART
      I








ITEM
      1.                            
DESCRIPTION OF BUSINESS





Business
      Strategy





The
      Company has ceased all business
      operations and intends to remain a dormant company while it seeks potential
      business opportunities.  The Company does not currently have any plans
      or arrangements to acquire any new specific business or company.  The
      Company recognizes that as a result of its limited financial, managerial and
      other resources, the number of suitable potential businesses that may be
      available to it will be extremely limited.  The Company’s principal
      business objective will be to seek long-term growth potential in the business
      if
      which it participates rather than immediate short-term earnings.  In
      seeking to obtain its business objectives, the Company will not restrict its
      search to any particular industry.  Rather, the Company may
      investigate businesses of essentially any kind or nature.  The
      Company’s discretion is unrestricted, and the Company may participate in any
      business whatsoever that may meet the business objectives discussed
      herein.  It is emphasized that such business objectives are extremely
      general and are not intended to be restrictive upon the discretion of the
      Company.





The
      Company will not restrict its search to any specific industry, but may acquire
      an entity that is (i) in its preliminary or development stage or (ii) a going
      concern.  At this time, it is impossible to determine the needs of the
      business in which the Company may seek to participate, and whether such business
      may require additional capital or may be seeking other advantages that the
      Company may offer.  In other instances, possible business endeavors
      may involve the acquisition of a company that does not need additional equity,
      but, rather, seeks to establish a public trading market for its
      securities.  At the current time, the Company has not chosen the
      particular area of business in which it proposes to engage.





Employees





The
      Company currently has one sole officer and director and he is not being paid
      any
      salary.






3
 Table
          of Contents


Organizational
      History and Background





We
      are a
      development stage company with a limited operating history organized as a
      Delaware corporation in September 1997.  In September 2007, the
      Company issued 3,846,154 shares of its common stock to John Thomas Bridge and Opportunity
      Fund,
      LLP (“John Thomas”) in exchange for $100,000.  In October 2007,
      the Company (i) sold substantially all of the assets of the Company to Jim
      McCullough, the Company's then chief executive officer, and issued 8,300,205
      shares of the Company’s common stock to McCullough in exchange for McCullough
      forgiving $405,673 in debt owed to him and his affiliates by the Company, (ii)
      accepted the resignation of Jim McCullough and Richard Mann as members of the
      Company's board of directors, (iii) elected Dwayne Deslatte to serve as the
      Company's sole director, (iv) accepted the resignation of Jim McCullough as
      its
      president, and (v) appointed Dwayne Deslatte to serve as the Company's sole
      executive officer.  Upon completion of the sale of all of the
      Company’s assets, the Company ceased all business operations and began seeking
      potential acquisition opportunities.  As of the date hereof, the
      Company has not entered into any acquisition arrangements.





In
      October 2007, Jim McCullough sold
      11,100,205 of his shares of Mac Filmworks to John Thomas in exchange for
      $200,000. These shares, plus the 3,846,154 shares purchased from the Company
      by
      John Thomas, resulted in John Thomas acquiring approximately 62% ownership
      of
      Mac Filmworks.








ITEM
      2.                           
DESCRIPTION OF PROPERTY





The
      Company’s current principal office of 200 square feet on a rent-free basis is
      located at 3 Riverway, Suite 1800, Houston, Texas 77056.








ITEM
      3.                           
LEGAL PROCEEDINGS





None.








ITEM
      4.                           
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





In
      October 2007, the Company’s stockholders owning 6,577,416 shares, or 56% of the
      then outstanding shares of common stock, took the following action by written
      consent: (i) approved the sale of substantially all of the assets of the
      Company; (ii) approved the sale and issuance of 3,846,154 shares of the
      Company’s common stock to John Thomas at a purchase price of $0.026 per share;
      and (iii) elected Dwayne Deslatte to serve as the Company’s sole
      director.





In
      November 2007, the Company’s majority shareholder, owning 14,946,359 shares, or
      62% of the then outstanding shares of the common stock approved the amendment
      to
      the Company’s certificate of incorporation to implement a reverse stock split of
      the Company’s common stock at a ratio of not less than 10-for-1 and not greater
      than 30-for-1, with the exact ratio to be set within such range in the
      discretion of the Board of Directors, without further approval or authorization
      of shareholders, provided that the Board of Directors determines to effect
      the
      reverse stock split and such amendment is filed with the Delaware Secretary
      of
      State no later than December 31, 2008.






4
 Table
          of Contents


PART
      II






ITEM
      5.                           
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER
      MATTERS




Market
      Information





Our
      common stock trades
      on the OTC Bulletin Board under the symbol “MFWO.” The market for our common
      stock on the OTC Bulletin Board is limited, sporadic and highly volatile. The
      following table sets forth the approximately high and low closing sales prices
      per share as reported on the OTC Bulletin Board for our common stock for the
      last two fiscal years. Our common stock commenced trading on the OTC Bulletin
      Board on January 24, 2004. The quotations reflect inter-dealer prices, without
      retail markups, markdowns, or commissions and may not represent actual
      transactions.





High
            
            
            LowYear
                2007Quarter
                ended December 31
            
            
            0.03
            
            
            
            0.02Quarter
                ended September 30
            
            
            0.10
            
            
            
            0.03Quarter
                ended June 30
            
            
            0.40
            
            
            
            0.12Quarter
                ended March 31
            
            
            0.25
            
            
            
            --Year
                2006(1)Quarter
                ended December 31
            
            
            --
            
            
            
            --Quarter
                ended September 30
            
            
            --
            
            
            
            --Quarter
                ended June 30
            
            
            --
            
            
            
            --Quarter
                ended March 31
            
            
            --
            
            
            
            --


__________


(1) 
      The Company’s common stock did not trade during this time period.





Equity
      Compensation Plan Information





In
      January 1998, the Board of Directors and majority stockholders adopted a stock
      option plan under which 500,000 shares of common stock have been reserved for
      issuance. As of the date hereof, no options have been granted under the
      plan.





Holders
      of Record





As
      of
      March 25, 2008, we had 192 shareholders of record.





Recent
      Sales of Unregistered Securities





Set
      forth
      below is certain information concerning issuances of common stock that were
      not
      registered under the Securities Act of 1933 (“Securities Act”) that occurred in
      the fourth quarter of fiscal 2007 and to date:





In
      September 2007, the Company issued 3,846,154 shares of its common stock to
John Thomas at a purchase price
      of
      $0.026 per share for an aggregate investment of $100,000.





In
      October 2007, Mac Filmworks completed
      an asset sale transaction whereby Mac Filmworks issued 8,300,205 shares of
      the
      Company’s common stock and transferred substantially all of the Company’s assets
      to Jim McCullough, its then chief executive officer, in exchange for McCullough
      forgiving $405,673 in debt owed by Mac Filmworks to McCullough and his
      affiliates.





In
      February 2008, the Company issued
      100,000 shares of the Company’s Common Stock to Dwayne Deslatte, its sole
      officer and director, for services rendered.  The shares were valued
      at $2,000.






5
 Table
          of Contents


In
      February 2008, the Company issued
      100,000 shares of the Company’s Common Stock to a third party consultant for
      services rendered.  The shares were valued at
      $2,000.





In
      February 2008, the Company sold
      384,615 shares of the Company’s Common Stock to John Thomas at a purchase price
      of $0.026 per share for an aggregate investment of $10,000.





The
      issuances referenced above were consummated pursuant to Section 4(2) of the
      Securities Act and the rules and regulations promulgated thereunder on the
      basis
      that such transactions did not involve a public offering and the offerees were
      sophisticated, accredited investors with access to the kind of information
      that
      registration would provide. The recipients of these securities represented
      their
      intention to acquire the securities for investment only and not with a view
      to
      or for sale in connection with any distribution thereof and appropriate legends
      were affixed to the share certificates and other instruments issued in such
      transactions. No sales commissions were paid.








ITEM
      6.                           
MANAGEMENT'S DISCUSSION AND ANALYSIS





The
      following discussion of our financial condition and results of operations should
      be read in conjunction with the accompanying financial statements and the
      related footnotes thereto.





Overview





Through
      September 2007, the Company was an entertainment company with a business
      strategy to acquire, license, distribute and/or sell classic movies, TV serials
      and other film products. Since our inception, we have operated as a development
      stage company.   In
      September 2007, the Company sold substantially all the assets of the Company
      to
      Jim McCullough, its then chief executive officer.Upon
      completion of the sale of all of the Company’s assets, the Company ceased all
      business operations and began seeking potential acquisition
      opportunities.





Management
      plans to maintain the
      long-term financial viability ofthe Companyby
      seekinganotherentitywith
      whichto consummate an acquisition
      or merger
      agreement. Management believes its plan will provide us with the wherewithal
      to
      continue in existence.As of the date
      hereof, the
      Company has not entered into any acquisition arrangements.





The
      Company’s financial statements have
      been prepared assuming that the Company will continue as a going concern.The Company incurred net loss from operations for the twelve months
      ended
      December 31, 2007, and has negative cash flows from operations for the twelve
      months ended December 31, 2007. These conditions raise substantial doubt as
      to
      the Company’s ability to continue as a going concern.





Critical
      Accounting Policies





The
      Financial Statements and Notes to Financial Statements contain information
      that
      is pertinent to this management's discussion and analysis. The preparation
      of
      financial statements in conformity with accounting principles generally accepted
      in the United States requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of any
      contingent assets and liabilities. Management believes these accounting policies
      involve judgment due to the sensitivity of the methods, assumptions and
      estimates necessary in determining the related asset and liability amounts.
      Management believes it has exercised proper judgment in determining these
      estimates based on the facts and circumstances available to its management
      at
      the time the estimates were made. The significant accounting policies are
      described in the Company's financial statements (See Note 1 in the Notes to
      Financial Statements).





6
 Table
          of Contents


Revenue
      Recognition





We
      have
      ceased operations and do not anticipate generating revenues in the foreseeable
      future.  Historically, we recognized revenue in accordance with
      Statement of Accounting Position 00-2 "Accounting by Producers or Distributors
      of Films." Revenue was recognized from a sale or licensing arrangement of a
      film
      when persuasive evidence of a sale or licensing arrangement with a customer
      exists; the film was complete and, in accordance with the terms of the
      arrangement, had been delivered or was available for immediate and unconditional
      delivery; the license period of the arrangement had begun and the customer
      began
      its exploitation, exhibition or sale; the arrangement fee was fixed or
      determinable; and collection of the arrangement fee was reasonably
      assured.





Income
      Taxes





Mac
      Filmworks recognizes deferred tax assets and liabilities based on differences
      between the financial reporting and tax bases of assets and liabilities using
      the enacted tax rates and laws that are expected to be in effect when the
      differences are expected to be recovered. Mac Filmworks provides a valuation
      allowance for deferred tax assets for which it does not consider realization
      of
      such assets to be more likely than not.





Results
      of Operations





The
      Company generated $60,176 in revenues from discontinued operations, which amount
      is embedded the Company’s overall net loss of $609,726 from discontinued
      operations for fiscal 2007. The Company had net loss from discontinued
      operations in the amount of $691,791 for fiscal 2006. Total operating expenses increased
      from
      zero in 2006 to $21,443 in 2007.  Loss from discontinued operations
      decreased from $691,791 in 2006 to $599,590 in 2007.





In
      fiscal
      2007 and fiscal 2006, the net cash used in discontinued operations was $325,450
      and $365,919, respectively.  Net cash used in investing activities was
      $41,660 in 2007, and net cash provided by investing activities was 175,000
      in
      2006.  Net cash provided by financing activities was $216,240 in 2007
      and $1,253 in 2006.





Discontinued
      Operations





In
      October 2007, the Company sold its assets to the then chief executive officer
      and entered into a series of transactions that resulted in a change of control
      and a new business direction, as was discussed in the Description of Business
      section of Item I.  The Company’s operations in the film business are
      presented as discontinued operations.   As part of the
      discontinued operations, the Company recognized $60,176 in revenues and a net
      loss from discontinued operations of ($609,726) for the twelve months ended
      December 31, 2007.





Liquidity





As
      of
      December 31, 2007, we had $9,410 in cash, $35,277 in current liabilities, which
      amount primarily constitutes professional fees owed, and a working capital
      deficit of $25867.  In September 2007, our Company ceased distributing
      and selling film products and has generated no revenues since that
      time.  We do not anticipate generating any revenues in the foreseeable
      future.





During
      the next twelve months, our Company's only foreseeable cash requirements will
      relate to maintaining our good standing in the State of Delaware and reporting
      obligations as a publicly-traded company. On February 18, 2008, to assist in
      funding these obligations, the Company sold 384,615 shares of the Company’s
      Common Stock to John Thomas at a purchase price of $0.026 per share for an
      aggregate investment of $10,000.  Our Company does not have any
      additional cash reserves to pay for our administrative expenses for the next
      12
      months. In the event that additional funding is required in order to keep our
      Company in good standing, we will attempt to raise such funding through a
      private placement of our common stock to accredited investors.





Contractual
      Commitments





As
      of
      December 31, 2007, the Company had no contractual commitments.




Off-Balance
        Sheet Arrangements
 
 As
        of
        December 31, 2007, the Company had no off-balance sheet
        arrangements.






7
 Table
          of Contents


ITEM
      7.                           
FINANCIAL STATEMENTS





REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the Board of
      Directors


Mac
      Filmworks, Inc.


(A
      Development Stage
      Company)


3
      Riverway, Suite
      1800


Houston,
      Texas 77056





We
      have audited the accompanying balance
      sheets of Mac Filmworks, Inc. (A Development Stage Company) as of December
      31,
      2007, and the related statements of operations, stockholders' deficit, and
      cash
      flows for each of the years then ended December 31, 2007 and 2006, and for
      the
      period from November 22, 1994 (Inception) through December 31, 2007. These
      financial statements are the responsibility of Company’s management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audits.





We
      conducted our audits in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. The Company
      is not required to have, nor were we engaged to perform, an audit of its
      internal control over financial reporting. Our audit included consideration
      of
      internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the Company’s internal control
      over financial reporting. Accordingly, we express no such opinion. An audit
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the financial statements. An audit also includes assessing the
      accounting principles used and significant estimates made by management, as
      well
      as evaluating the overall financial statement presentation. We believe that
      our
      audits provide a reasonable basis for our opinion.





In
      our opinion, the financial statements
      referred to above present fairly, in all material respects, the financial
      position of Mac Filmworks, Inc. at December 31, 2007, and the results of its
      operations and its cash flows for each of the years ended December 31, 2007
      and
      2006 and the period from November 22, 1994 (Inception) through December 31,
      2007, in conformity with accounting principles generally accepted in the United
      States of America.





The
      accompanying financial statements
      have been prepared assuming that the Company will continue as a going concern.
      As discussed in Note 2 to the financial statements, the Company has incurred
      losses from operations and has negative cash flows from operations which raises
      substantial doubt about its ability to continue as a going concern. Management's
      plans concerning these matters are described in Note 2. The financial statements
      do not include any adjustments that might result from the outcome of this
      uncertainty.





Malone
&
Bailey,
      PC


Houston,
      Texas


www.malone-bailey.com





March
      27, 2008





8
 Table
          of Contents


MAC
      FILMWORKS, INC


(A
      Development Stage Company)


BALANCE
      SHEET


December
      31, 2007




2007AssetsCurrent
                AssetsCash
            
            $
            9,410Total
                Assets
            
            $
            9,410Liabilities
                and Stockholders'
                DeficitCurrent
                LiabilitiesAccounts
                payable
            
            $
            35,277Total
                Current
                Liabilities
            
            
            35,277Contingencies
            
            
            --Stockholders'
                DeficitPreferred
                stock, $.0001 par,
                10,000,000 sharesauthorized,
                no shares issued or
                outstanding
            
            
            --Common
                stock, $.0001 par,
                50,000,000 sharesauthorized,
                23,951,017 shares
                issued and outstanding
            
            
            2,395Paid-in
                capital
            
            
            2,494,399Deficit
                accumulated during the
                development stage
            
            
            (2,522,661)Total
                Stockholders'
                Deficit
            
            
            (25,867)Total
                Liabilities and
                Stockholders' Deficit
            
            $
            9,410




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






9
 Table
          of Contents


MAC
      FILMWORKS, INC


(A
      Development Stage Company)


STATEMENTS
      OF OPERATIONS


Years
      Ended December 31, 2007 and 2006, and Period from


November
      22, 1994 (Inception) to December 31, 2007




Inception
                to2007
            
            2006
            
            2007Revenues
            
            $
            --
            
            $
            --
            
            $
            --Operating
                Expenses
            
            
            21,443
            
            
            --
            
            
            21,443--
            
            
            --
            
            
            --Loss
                from discontinued operations
            
            
            (599,590)
            
            
            (691,791)
            
            
            (2,501,218)Net
                loss
            
            $
            (621,033)
            
            $
            (691,791)
            
            $
            (2,522,661)Basic
                and diluted loss fromcontinuing
                operations per common share
            
            
            n/a
            
            
            n/a
            
            
            n/aBasic
                and diluted loss fromdiscontinued
                operations per common share
            
            $
            (0.04)
            
            $
            (0.06)
            
            
            n/aBasic
                and diluted net lossper
                common share
            
            $
            (0.06)
            
            $
            (0.06)
            
            
            n/aWeighted
                average shares outstanding
            
            
            13,925,620
            
            
            10,804,658






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







10
 Table
          of Contents


MAC
      FILMWORKS,
      INC.


(A
      Development Stage Company)


STATEMENTS
      OF STOCKHOLDERS' EQUITY
      (DEFICIT)


Period
      from November 22, 1994 (Inception) to December 31, 2007





Common
                StockShares
            
            
            Amount
            
            
            Paid-In
              Capital
            
            
            Accumulated
              Deficit
            
            
            TotalsIssuance
                of stock to founders atinception
            
            
            10,000
            
            
            $
            1
            
            
            $
            999
            
            
            $
            --
            
            
            $
            1,000Cancellation
                of stockissued
                to one oforiginal
                founders
            
            
            (1,000
            )
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Issuances
                of common stock in:1997
                to other original founders
            
            
            3,991,000
            
            
            
            399
            
            
            
            (399
            )
            
            
            --
            
            
            
            --1997
                for services
            
            
            150,528
            
            
            
            14
            
            
            
            75,249
            
            
            
            --
            
            
            
            75,2641997
                for film library acquisitions
            
            
            247,680
            
            
            
            25
            
            
            
            123,815
            
            
            
            --
            
            
            
            123,8401997
                in a private offering for cash
            
            
            400,000
            
            
            
            40
            
            
            
            199,960
            
            
            
            --
            
            
            
            200,0001997
                in a private offering for cash
            
            
            37,500
            
            
            
            4
            
            
            
            37,496
            
            
            
            --
            
            
            
            37,5001997
                for services related to theprivate
                offering
            
            
            100,000
            
            
            
            10
            
            
            
            (10
            )
            
            
            --
            
            
            
            --1997
                for public shell purchase
            
            
            1,340,000
            
            
            
            134
            
            
            
            (134
            )
            
            
            --
            
            
            
            --Issuances
                of common stock in:1998
                in a private offering for cash
            
            
            40,000
            
            
            
            4
            
            
            
            29,996
            
            
            
            --
            
            
            
            30,0001998
                in a private offering for cash
            
            
            100,750
            
            
            
            10
            
            
            
            100,740
            
            
            
            --
            
            
            
            100,7501998
                for services
            
            
            320,700
            
            
            
            32
            
            
            
            320,668
            
            
            
            --
            
            
            
            320,700Imputed
                film storage rental costs
            
            
            --
            
            
            
            --
            
            
            
            7,200
            
            
            
            --
            
            
            
            7,200Issuances
                of common stock in:1999
                for services
            
            
            70,000
            
            
            
            7
            
            
            
            52,494
            
            
            
            --
            
            
            
            52,5001999
                in a private offering for cash
            
            
            147,000
            
            
            
            15
            
            
            
            36,035
            
            
            
            --
            
            
            
            36,050Imputed
                film storage rental costs
            
            
            --
            
            
            
            --
            
            
            
            7,200
            
            
            
            --
            
            
            
            7,200Issuance
                of common stockin
                2000 for cash
            
            
            226,880
            
            
            
            23
            
            
            
            56,697
            
            
            
            --
            
            
            
            56,720in
                2000 for services
            
            
            142,500
            
            
            
            14
            
            
            
            35,611
            
            
            
            --
            
            
            
            35,625in
                March for payment of prioryear
                account payable
            
            
            45,000
            
            
            
            5
            
            
            
            20,995
            
            
            
            --
            
            
            
            21,000in
                July for computer equipment
            
            
            26,120
            
            
            
            2
            
            
            
            6,528
            
            
            
            --
            
            
            
            6,530in
                September for public shellpurchase
                price adjustment
            
            
            160,000
            
            
            
            16
            
            
            
            (16
            )
            
            
            --
            
            
            
            --Imputed
                film storage rental costs
            
            
            --
            
            
            
            --
            
            
            
            7,200
            
            
            
            --
            
            
            
            7,200Net
                loss - period from Inceptionthrough
                Dec. 31, 2000
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            (1,612,537
            )
            
            
            (1,612,537
            )Balances,
                December 31, 2000
            
            
            7,554,658
            
            
            $
            755
            
            
            $
            1,118,324
            
            
            $
            (1,612,537
            )
            
            $
            (493,458
            )





(continued
      on next
      page)


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






11
 Table
          of Contents


MAC
      FILMWORKS,
      INC.


(A
      Development Stage Company)


STATEMENT
      OF STOCKHOLDERS' EQUITY (DEFICIT) (Continued)


Period
      from November 22, 1994 (Inception) to December 31, 2007





Common
                StockShares
            
            Amount
            
            Paid-In
              Capital
            
            Accumulated
              Deficit
            
            TotalsBalances,
                December 31, 2000
            
            
            7,554,658
            
            $
            755
            
            $
            1,118,324
            
            $
            (1,612,537
            )
            $
            (493,458
            )Issuance
                of common stock in:2001
                for services
            
            
            1,200,000
            
            
            120
            
            
            119,880
            
            
            --
            
            
            120,0002001
                for cash
            
            
            100,000
            
            
            10
            
            
            9,990
            
            
            --
            
            
            10,0002001
                for payment of accounts payable
            
            
            1,800,000
            
            
            180
            
            
            94,197
            
            
            --
            
            
            94,377Imputed
                film storage rental costs
            
            
            --
            
            
            --
            
            
            7,200
            
            
            --
            
            
            7,200Net
                loss
            
            
            --
            
            
            --
            
            
            --
            
            
            (973,944
            )
            
            (973,944
            )Balances,
                December 31, 2001
            
            
            10,654,658
            
            
            1,065
            
            
            1,349,591
            
            
            (2,586,481
            )
            
            (1,235,825
            )Imputed
                film storage rental costs
            
            
            --
            
            
            --
            
            
            7,200
            
            
            --
            
            
            7,200Contributions
                to capital
            
            
            --
            
            
            --
            
            
            8,940
            
            
            --
            
            
            8,940Net
                loss
            
            
            --
            
            
            --
            
            
            --
            
            
            (151,174
            )
            
            (151,174
            )Balances,
                December 31, 2002
            
            
            10,654,658
            
            
            1,065
            
            
            1,365,731
            
            
            (2,737,655
            )
            
            (1,370,859
            )Imputed
                film storage rental costs
            
            
            --
            
            
            --
            
            
            7,200
            
            
            --
            
            
            7,200Shares
                issued for film purchase
            
            
            100,000
            
            
            10
            
            
            9,990
            
            
            --
            
            
            10,000Net
                loss
            
            
            --
            
            
            --
            
            
            --
            
            
            (167,049
            )
            
            (167,049
            )Balances,
                December 31, 2003
            
            
            10,754,658
            
            
            1,075
            
            
            1,382,921
            
            
            (2,904,704
            )
            
            (1,520,708
            )Imputed
                film storage rental costs
            
            
            --
            
            
            --
            
            
            7,200
            
            
            --
            
            
            7,200Net
                loss
            
            
            --
            
            
            --
            
            
            --
            
            
            (149,032
            )
            
            (149,032
            )Balances,
                December 31, 2004
            
            
            10,754,658
            
            
            1,075
            
            
            1,390,121
            
            
            (3,053,736
            )
            
            (1,622,540
            )Shares
                issued for film purchase
            
            
            100,000
            
            
            10
            
            
            9,990
            
            
            --
            
            
            10,000Shares
                cancelled as part ofsettlement
                of notes payable
            
            
            (50,000
            )
            
            (5
            )
            
            5
            
            
            --
            
            
            --Contributed
                capital
            
            
            --
            
            
            --
            
            
            4,395
            
            
            --
            
            
            4,395Imputed
                film storage rental costs
            
            
            --
            
            
            --
            
            
            7,200
            
            
            --
            
            
            7,200Net
                loss
            
            
            --
            
            
            --
            
            
            --
            
            
            1,843,899
            
            
            1,843,899Balances,
                December 31, 2005
            
            
            10,804,658
            
            
            1,080
            
            
            1,411,711
            
            
            (1,209,837
            )
            
            202,954Imputed
                film storage rental costs
            
            
            --
            
            
            --
            
            
            7,200
            
            
            --
            
            
            7,200Imputed
                interest - related party debt
            
            
            --
            
            
            --
            
            
            18,808
            
            
            --
            
            
            18,808Net
                loss
            
            
            --
            
            
            --
            
            
            --
            
            
            (691,791
            )
            
            (691,791
            )Balances,
                December 31, 2006
            
            
            10,804,658
            
            
            1,080
            
            
            1,437,719
            
            
            (1,901,628
            )
            
            (462,829
            )Shares
                issued for services received
            
            
            1,000,000
            
            
            100
            
            
            149,900
            
            
            
            
            
            150,000Shares
                issued for sale of stock
            
            
            3,846,154
            
            
            385
            
            
            99,615
            
            
            
            
            
            100,000Shares
                issued related to asset sale
            
            
            8,300,205
            
            
            830
            
            
            248,176
            
            
            
            
            
            249,006Deemed
                contribution  by related party
            
            
            
            
            
            
            
            
            530,714
            
            
            
            
            
            530,714Imputed
                film storage rental costs
            
            
            
            
            
            
            
            
            5,400
            
            
            
            
            
            5,400Imputed
                interest – related party debt
            
            
            
            
            
            
            
            
            22,875
            
            
            
            
            
            22,875Net
                loss
            
            
            --
            
            
            --
            
            
            --
            
            
            (621,033
            )
            
            (621,033
            )Balances,
                December 31, 2007
            
            
            23,951,017
            
            $
            2,395
            
            $
            2,494,399
            
            $
            (2,522,661
            )
            $
            (25,867
            )








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




12
 Table
          of Contents


MAC
      FILMWORKS, INC.


STATEMENTS
      OF CASH FLOWS


(A
      Development Stage Company)


Years
      Ended December 31, 2007 and 2006, and Period from


November
      22, 1994 (Inception) to December 31, 2007





Inception
                toDecember 31,2007
            
            
            2006
            
            
            2007Cash
                Flows From Operating ActivitiesNet
                loss
            
            $
            (621,033
            )
            
            $
            (691,791
            )
            
            $
            (2,522,661
            )Net
                loss from discontinued operations
            
            
            621,033
            
            
            
            691,791
            
            
            
            2,522,661Net
                loss from continuing operations
            
            
            -
            
            
            
            -
            
            
            
            -Net
                Cash Used In Discontinued Operations from Operating
                Activities
            
            
            (325,450
            )
            
            
            (365,919
            )
            
            
            (1,859,437
            )Cash
                Flows From Investing ActivitiesNet
                Cash Provided by (Used In) DiscontinuedOperations
                from Investing Activities
            
            
            (41,660
            )
            
            
            175,000
            
            
            
            1,124,465Cash
                Flows From Financing ActivitiesProceeds
                from sales of common stock
            
            
            100,000
            
            
            
            -
            
            
            
            100,000Net
                cash provided by continuing operations
            
            
            100,000
            
            
            
            -
            
            
            
            100,000Net
                cash provided by discontinued operations
            
            
            116,240
            
            
            
            1,253
            
            
            
            644,382Net
                Cash Provided By Financing Activities
            
            
            216,240
            
            
            
            1,253
            
            
            
            744,382Net
                change in cash
            
            
            (150,870
            )
            
            
            (189,666
            )
            
            
            9,410Cash
                at beginning of period
            
            
            160,280
            
            
            
            349,946
            
            
            
            -Cash
                at end of period
            
            $
            9,410
            
            
            $
            160,280
            
            
            $
            9,410Supplemental
                Cash Flow Disclosures:Interest
                paid
            
            $
            -
            
            
            $
            -
            
            
            $
            -Income
                taxes paid
            
            
            -
            
            
            
            -
            
            
            
            -Non-cash
                operating and financing activities:Forgiveness
                of debt
            
            
            405,673
            
            
            
            -
            
            
            
            -Forgiveness
                of accrued salary
            
            
            444,609
            
            
            
            -
            
            
            
            -Shares
                issued related to asset sale
            
            
            249,006
            
            
            
            -
            
            
            
            -Net
                assets sold as part of asset sale
            
            
            70,562
            
            
            
            -
            
            
            
            -Deemed
                capital contribution by related party
            
            
            530,714
            
            
            
            -
            
            
            
            -








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






13
 Table
          of Contents


MACFILMWORKS,
      INC.


(A
      Development Stage
      Company)


NOTES
      TO FINANCIAL
      STATEMENTS








NOTE
      1 -
      NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Through
      September 2007, Mac Filmworks was an entertainment company engaged
      inacquiring, licensing, distributing, and selling classic movies, TV
      serials and other film products.  In September 2007, Mac Filmworks
      sold
      substantially all the assets of the Company to Jim McCullough, its chief
      executive officer.  At that time, the Company ceasedall
      operations and has had no operations since that time.





Reclassifications


Certain
      prior year amounts have been reclassified to conform with thecurrent year
      presentation.





Discontinued
      Operations


Mac
      Filmworks presents the results of operations, financial position and cash flows
      of operations that have been sold as discontinued operations.





Use
      of Estimates


The
      preparation of consolidated financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and disclosure of contingent assets and liabilities
      at
      the date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from those
      estimates.





Cash


For
      purposes of the statement of cash flows, Mac Filmworks considers all highly
      liquid investments purchased with an original maturity of three months or less
      to be cash equivalents.  There were no cash equivalents as of December
      31, 2007.





Income
      taxes


Mac
      Filmworks recognizes deferred tax assets and liabilities based on differences
      between the financial reporting and tax bases of assets and liabilities using
      the enacted tax rates and laws that are expected to be in effect when the
      differences are expected to be recovered. Mac Filmworks provides a valuation
      allowance for deferred tax assets for which it does not consider realization
      of
      such assets to be more likely than not.





In
      June 2006, the Financial Accounting Standards Board (FASB) issued FASB
      Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an
      interpretation of FASB Statement No. 109” (FIN 48). This Interpretation
      provides guidance on recognition, classification and disclosure concerning
      uncertain tax liabilities. The evaluation of a tax position requires recognition
      of a tax benefit if it is more likely than not it will be sustained upon
      examination. Mac Filmworks adopted this Interpretation effective January 1,
      2007. The adoption did not have a material impact on our consolidated financial
      statements.





Basic
      and diluted net income (loss) per share


The
      basic
      net income (loss) per common share is computed by dividing the net income (loss)
      by the weighted average number of common shares outstanding. Diluted net income
      (loss) per common share is computed by dividing the net income (loss) adjusted
      on an "as if converted" basis, by the weighted average number of common shares
      outstanding plus potential dilutive securities. For the years ended December
      31,
      2007 and 2006, there were no potential dilutive securities.






14
 Table
          of Contents


Revenue
      Recognition


We
      have
      ceased operations and do not anticipate generating revenues in the foreseeable
      future.  Historically, we recognized revenue in accordance with
      Statement of Accounting Position 00-2 "Accounting by Producers or Distributors
      of Films." Revenue was recognized from a sale or licensing arrangement of a
      film
      when persuasive evidence of a sale or licensing arrangement with a customer
      exists; the film was complete and, in accordance with the terms of the
      arrangement, had been delivered or was available for immediate and unconditional
      delivery; the license period of the arrangement had begun and the customer
      began
      its exploitation, exhibition or sale; the arrangement fee was fixed or
      determinable; and collection of the arrangement fee was reasonably
      assured.





Share-Based
      Compensation


On
      January 1, 2006, Mac Filmworks
      adopted SFAS No. 123 (R), “Share-Based Payment.” SFAS 123(R) replaced SFAS No.
      123 and supersedes APB Opinion No. 25. SFAS 123(R) requires all share-based
      payments to employees, including grants of employee stock options, to be
      recognized in the financial statements based on their fair values. The pro
      forma
      disclosures previously permitted under SFAS 123 are no longer an alternative
      to
      financial statement recognition. Mac Filmworks adopted SFAS 123(R) using the
      modified prospective method which requires the application of the accounting
      standard as of January 1, 2006. The consolidated financial statements as of
      and
      for the years ended December 31, 2007 and 2006 reflect the impact of adopting
      SFAS 123(R). In accordance with the modified prospective method, the
      consolidated financial statements for prior periods have not been restated
      to
      reflect, and do not include, the impact of SFAS 123(R). Since Mac Filmworks
      has
      not granted options during the year ended December 31, 2007 or during any period
      prior to January 1, 2006, the adoption of SFAS 123(R) had no
      impact.





Newly
      Issued Accounting Pronouncements


Mac
      Filmworks does not expect theadoptionof
      recentlyissued accounting pronouncements to have a significant impact on its
      results of operations, financial position, or cash flow.




NOTE
      2 -
      GOING CONCERN





The
      accompanying financial statements have been prepared assuming that Mac Filmworks
      will continue as a going concern. Mac Filmworks incurred net loss from
      operations for the twelve months ended December 31, 2007, and has negative
      cash
      flows from operations for the twelve months ended December 31, 2007. These
      conditions raise substantial doubt as to Mac Filmworks ability to continue
      as a
      going concern. The financial statements do not include any adjustments that
      might be necessary if Mac Filmworks is unable to continue as a going
      concern.




NOTE
      3 -
      COMMON STOCK AND STOCK PAYABLE





On
      April
      13, 2007, Mac Filmworks issued 1,000,000 shares valued at $150,000 for
      consulting services.





On
      September 28, 2007, Mac Filmworks issued 3,846,154 shares of common stock to
      a
      third party at a price of $0.026 per share for $100,000 cash.





On
      October 30, 2007, Mac Filmworks completed an asset sale transaction whereby
      Mac
      Filmworks issued 8,300,205 shares with a fair value of $249,006 of the Company’s
      common stock and transferred substantially all of the Company’s assets to Jim
      McCullough, its chief executive officer, in exchange for McCullough forgiving
      $405,673 in debt owed by Mac Filmworks to McCullough and his affiliates (see
      Note 4 below).  Mac Filmworks obtained a financial analysis by an
      independent third party to determine the number of shares to issue McCullough
      in
      the transaction.





15
 Table
          of Contents


NOTE
      4 -
      DISCONTINUED OPERATIONS





During
      the year ended December 31, 2007, Mac Filmworks sold the operations of Mac
      Filmworks to the then majority shareholder as well as enter into a series of
      transactions that would result in a change of control and a new business
      direction. The operations of Mac Filmworks film business have been presented
      as
      discontinued operations.  As part of the discontinued operations, Mac
      Filmworks recognized $60,176 in revenues and a net loss from discontinued
      operations of ($609,726) for the twelve months ended December 31,
      2007.





·
            On
                October 1, 2007, the chief executive officer of Mac Filmworks forgave
                $444,609 of accrued salary owed to him by Mac
                Filmworks.





·
            On
                October 1, 2007, a related party forgave a $10,000 debt owed by Mac
                Filmworks.·
            On
                October 4, 2007, Mac Filmworks issued 3,846,154 shares of common
                stock to
                a third party investor (“investor”) for at a price of $.026 per share for
                $100,000 cash (see Note 3 above).





·
            On
                October 30, 2007, Mac Filmworks completed an asset sale transaction
                whereby Mac Filmworks issued 8,300,205 shares of the Company’s common
                stock and transferred substantially all of the Company’s
                assets  net of accounts payable to Jim McCullough, its chief
                executive officer, in exchange for McCullough forgiving $405,673
                in debt
                owed by Mac Filmworks to McCullough and his
                affiliates.





·
            On
                October 30, 2007, Jim McCullough and Richard Mann resigned as members
                of
                the Mac Filmworks board of directors. Jim McCullough also resigned
                as
                Chief Executive Officer and Chief Financial Officer of Mac Filmworks.
                Concurrently, Dwayne Deslatte was appointed to serve as President
                and sole
                director of Mac Filmworks.





·
            On
                October 30, 2007, Jim McCullough sold 11,100,205 personally owned
                shares
                of Mac Filmworks to the investor for $200,000. These shares plus
                the
                3,846,154 shares previously purchased by the investor gave the investor
                approximately 62% ownership of Mac Filmworks resulting in a change
                in
                control.





NOTE
      5- STOCK OPTION PLANS





Mac
      Filmworks adopted its 1998 Incentive
      Stock Option Plan to provide incentive stock options within the meaning of
      that
      term under Internal Revenue Code Section 422. Such share options would be issued
      to current officers and employees at prices at or above current stock fair
      market value. 500,000 shares were reserved for issuance under the plan. Asof December 31,
      2007, no options had been
      granted.





NOTE
      6 - INCOME
      TAXES




At
      December 31, 2007, deferred tax
      assets consisted of the following:




2007Deferred
                tax assets:NOL
                carry forward
            
            $
            448,000Less:
                valuation allowance
            
            
            (448,000
            )Net
                deferred taxes
            
            $
            --





Mac
      Filmworks had a net operating loss carryforward of approximately $1,280,568
      at
      December31, 2007. The NOL will
      expire in 2027.





16
 Table
          of Contents


NOTE  7
–
RELATED
      PARTY
      TRANSACTIONS





Several
      shareholders loaned Mac
      Filmworks money to fund ongoing operations and paid expenses on behalf of Mac
      Filmworks. From time to time, Mac Filmworks has paid these shareholders back
      by
      paying expenses on their behalf. In 2007 and 2006, expenses of $116,241 and
      $1,881 were paid for Mac Filmworks, respectively.   During the
      same period, Mac Filmworks paid $0 and $1,135 for these related parties. Until
      September 2007, the loan amounts were due on demand and
      unsecured.  Interest was being imputed at a rate of 7% through
      September 2007.  On October 1, 2007, all loans had been forgiven by
      the shareholders (see Note 4 above).




NOTE
      8 – SUBSEQUENT
      EVENTS





On
      February 7, 2008, the Company issued
      100,000 shares of the Company’s Common Stock to Dwayne Deslatte, its sole
      officer and director, for services rendered.  The shares were valued
      at $2,000.





On
      February 7, 2008, the Company issued
      100,000 shares of the Company’s Common Stock to a third party consultant for
      services rendered.The
      shares were valued at $2,000.





On
      February 18, 2008, the Company
      sold 384,615 shares of the Company’s Common Stock to John Thomas Bridge and
      Opportunity Fund, LLP, its majority shareholder, at a purchase price of $0.026
      per share for an aggregate investment of $10,000.





ITEM
                8.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                AND FINANCIAL DISCLOSURE





Not
      Applicable.





ITEM
      8A.                           
CONTROLS AND PROCEDURES





Evaluation
      of Disclosure Controls and Procedures





Disclosure
      controls and procedures include, without limitation, controls and procedures
      designed to ensure that information required to be disclosed by an issuer in
      the
      reports that it files or submits under the Securities Exchange Act of 1934,
      as
      amended (the "Act") is accumulated and communicated to the issuer's management,
      including its principal executive and principal financial officers, or persons
      performing similar functions, as appropriate to allow timely decisions regarding
      required disclosure. It should be noted that the design of any system of
      controls is based in part upon certain assumptions about the likelihood of
      future events, and there can be no assurance that any design will succeed in
      achieving its stated goals under all potential future conditions, regardless
      of
      how remote.  As of the end of the period covered by this Annual
      Report, we carried out an evaluation, under the supervision and with the
      participation of our President, also serving as our Chief Financial Officer,
      of
      the effectiveness of the design and operation of our disclosure controls and
      procedures.  Based on this evaluation, our President has concluded
      that the Company’s disclosure controls and procedures are not effective because
      of the identification of a material weakness in our internal control over
      financial reporting which is identified below, which we view as an integral
      part
      of our disclosure controls and procedures.





Changes
      in Internal Controls over Financial Reporting





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






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Management’s
      Annual Report on Internal Control Over Financial Reporting





Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting, as such term is defined in
      Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control
      system was designed to provide reasonable assurance regarding the reliability
      of
      financial reporting and the preparation of financial statements for external
      purposes, in accordance with generally accepted accounting principles. Because
      of inherent limitations, a system of internal control over financial reporting
      may not prevent or detect misstatements. Also, projections of any evaluation
      of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate due to change in conditions, or that the degree of compliance with
      the policies or procedures may deteriorate.





Our
      management conducted an evaluation of the effectiveness of our internal control
      over financial reporting using the criteria set forth by the Committee of
      Sponsoring Organizations of the Treadway Commission (COSO) in Internal
      Control—Integrated Framework. Based on its evaluation, our management concluded
      that there is a material weakness in our internal control over financial
      reporting. A material weakness is a deficiency, or a combination of control
      deficiencies, in internal control over financial reporting such that there
      is a
      reasonable possibility that a material misstatement of the Company’s annual or
      interim financial statements will not be prevented or detected on a timely
      basis.





The
      material weakness relates to the lack of segregation of duties in financial
      reporting, as our financial reporting and all accounting functions are performed
      by an external consultant with no oversight by a professional with accounting
      expertise.  Our President does not possess accounting expertise and
      our company does not have an audit committee.  This weakness is due to
      the company’s lack of working capital to hire additional staff.  To
      remedy this material weakness, we intend to engage another accountant to assist
      with financial reporting as soon as our finances will allow.





This
      annual report does not include an attestation report of the Company’s registered
      public accounting firm regarding internal control over financial
      reporting.  Management’s report was not subject to the attestation by
      the Company’s registered public accounting firm pursuant to temporary rules of
      the SEC that permit the Company to provide only management’s report in this
      annual report.





The
      Company’s management carried out an assessment of the effectiveness of the
      Company’s internal control over financial reporting as of December 31, 2007. The
      Company’s management based its evaluation on criteria set forth in the framework
      in Internal Control—Integrated Framework issued by the Committee of Sponsoring
      Organizations of the Treadway Commission. Based on that assessment, management
      has concluded that the Company’s internal control over financial reporting was
      not effective as of December 31, 2007.





ITEM
      8B.    OTHER
      INFORMATION





Not
      Applicable.






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PART
      III





ITEM
                9.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
                ACT





The
      following table sets for the name, age and position of our sole executive
      officer and director. Set forth below is a description of the business
      experience and background of the person named in the table:


Name
              
              Age
              
              PositionDwayne
                  Deslatte
              
              38
              
              Chairman,
                  President, Chief Executive Officer, Chief Financial Officer, Chief
                  Accounting Officer & Director


Dwayne
        Deslatte.  Mr. Deslatte has served as our sole executive
        officer and director since October 2007.  He has worked as a private
        consultant in business development and project management with private and
        public companies since 2003. From 2004 through 2006, he served as Vice President
        of Business Research and Analysis of SH Celera Capital Corporation. While
        at SH
        Celera, he was involved in due diligence and consulting for client companies.
        In
        2004, Mr. Deslatte served on the Board of Directors of Sportan United
        Industries, which was renamed PharmaFrontiers after a merger with a company
        of
        the same name. He continued as a Director of PharmaFrontiers through its
        merger
        with Opexa Pharmaceuticals, now Opexa Therapeutics (OPXA: NASDAQ). Mr. Deslatte
        is also a Registered Nurse who serves on the staff at St. Joseph’s Hospital in
        Phoenix, Arizona since 2007. He served as a Registered Nurse in general surgery
        with Texas Children's Hospital from 2001 to 2005. From January 2000 until
        April
        2001, he worked in orthopedic nursing at St. Joseph's Hospital. Mr. Deslatte
        received a B.S. in Nursing, cum laude, from Texas Woman's University, a B.A.
        in
        History from Texas A&M University, and an MBA from Texas Woman’s University.
        While at Texas A&M University, Mr. Deslatte served in the Corps of Cadets
        for four years. He is a member of Sigma Theta Tau Honor Society.


Board
      of Directors & Director Compensation





Our
      director holds office until the next annual meeting of shareholders and until
      his successor has been duly elected and qualified. There are no agreements
      with
      respect to the election of directors. We have not compensated our director
      for
      service on the Board of Directors, but he is entitled to be reimbursed for
      expenses incurred for attendance at meetings of the Board.  However,
      due to our lack of funds, our director will defer his expenses and any
      compensation until such time as business warrants such expenses. As of the
      date
      hereof, our director has not accrued any expenses or compensation.





Independence
      of Board & Committees





Mr.
      Deslatte, our sole director is not an independent director as defined by Rule
      10A-3 of the Exchange Act.  The Board has not established any
      committees and, accordingly, the Board serves as the audit, compensation, and
      nomination committee.  The board has determined that it does not have
      a financial expert as defined in Item 407(d)(5) of Regulation S-B.





Compliance
      with Section 16(a) of the Exchange Act





Section
      16(a) of the Exchange Act requires the Company's directors and executive
      officers, and persons who own beneficially more than ten percent (10%) of the
      common stock, to file reports of ownership and changes of ownership with the
      Securities and Exchange Commission. Copies of all filed reports are required
      to
      be furnished to us. Based solely on the reports received and the representations
      of the reporting person, the Company believes that these persons have complied
      with all applicable filing requirements during the fiscal year ended December
      31, 2007, except Mr. Deslatte did not file his Form 3 upon becoming the
      Company’s sole officer and director in October 2007.






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Code
      of Ethics





We
      have
      not yet adopted a code of ethics which applies to the chief executive officer,
      or chief financial and accounting officer or controller, or persons performing
      similar functions due to several factors.  We intend to adopt a
      written code of ethics in fiscal 2008.





ITEM
      10.                           
EXECUTIVE COMPENSATION





The
      following table contains compensation data for our named executive officers
      as
      of December 31, 2007.




Summary
                  Compensation TableName
                  and
                Principal
                Position
              Year
              
              Salary
                And
                  Consulting
                Payments
                ($)
              
              
              Bonus
                ($)
              
              
              Stock
                Awards
                ($)
              
              
              All
                  Other Compensation
                ($)
              
              
              Total
                ($)Jim
                  McCullough (1)
              2007
              
              
              99,682
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              99,6822006
              
              
              84,000
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              84,000Dwayne
                  Deslatte (2)
              2007
              
              
              --
              
              
              
              --
              
              
              
              2,000
              
              
              
              --
              
              
              
              2,0002006
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
              
              
              
              --
 ______________





(1)
            Mr.
                McCullough served as the Company’s president until October
                2007.





(2)
            Mr.
                Deslatte replaced Mr. McCullough as the Company’s president in October
                2007.





Outstanding
      Equity Awards at Year-End





No
      equity
      awards, either in the form of restricted stock grants or options, have been
      issued to the named executive officer during fiscal 2006 or 2007 and no awards
      are outstanding at December 31, 2007.





Employment
      & Consulting Agreements





The
      Company has not entered into any
      employment or consulting agreements.





ITEM
                11.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT AND RELATED STOCKHOLDER
                MATTERS





The
      Company’s common stock outstanding
      as of March 25, 2008, was 24,535,632 shares.The table below
      sets forth, the beneficial ownership of common stock of our directors,our named
      executive
      officer, the holders of five percent or more of our common stock and our
      officers and directors as a group as of March 25, 2008.





Beneficial
      ownership has been determined in accordance with Rule 13d-3 of the Exchange
      Act.  Under this rule, shares may be deemed to be beneficially owned
      by more than one person (if, for example, persons share the power to vote or
      the
      power to dispose of the shares).  In addition, shares are deemed to be
      beneficially owned by a person if the person has the right to acquire shares
      (for example, upon exercise of an option) within 60 days of the date of this
      table.  In computing the percentage ownership of any person, the
      amount of shares includes the amount of shares beneficially owned by the person
      by reason of these acquisition rights.  As a result, the percentage of
      outstanding shares of any person does not necessarily reflect the person’s
      actual voting power.






20
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To
      the
      Company’s knowledge, except as indicated in the footnotes to this table and
      pursuant to applicable community property laws, the persons named in the table
      have sole voting and investment power with respect to all shares of common
      stock
      shown as beneficially owned by them.





Name
                and Address of Beneficial
                Owner
            
            Number
                of Shares of Common Stock
                Beneficially Owned
            
            
            Percentage
              Of
                ClassBeneficial
                Owners of more than 5%:John
                Thomas Bridge & Opportunity Fund, LLP (1)
            
            
            15,330,974
            
            
            
            62.5
            %Kenneth
                O’Neal (2)
            
            
            1,600,000
            
            
            
            6.7
            %Named
                Executive Officer and Director:Dwayne
                Deslatte (3)
            
            
            100,000
            
            
            
            *All
                directors & executive
                officersas
                a group (1person)
            
            
            100,000
            
            
            
            *


___________________________


*
      Less
      than 1%





(1)
            Mr.
                George Jarkesy exercises voting and dispositive power of the shares
                held
                by John Thomas Bridge & Opportunity Fund LLP.  Mr. Jarkesy’s
                business address is 3 Riverway, Suite 1800, Houston, Texas 77056.





(2)
            Mr.
                O'Neal's business address is 1214 Virginia Drive, Kerrville TX 78028.
                5,000 of these shares are held by Mr. O’Neal’s spouse.





(3)
            Mr.
                Deslatte’s business address is 3 Riverway, Suite 1800, Houston, Texas
                77056.








ITEM
      12.                      
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS








In
      September 2007, the Company issued 3,846,154 shares of its common stock to
John Thomas in exchange for
      $100,000.





In
      October 2007, the Company completed an asset sale transaction whereby it issued
      8,300,205 shares of the Company’s common stock and transferred substantially all
      of the Company’s assets net of accounts payable to Jim McCullough, its then
      chief executive officer, in exchange for McCullough forgiving $405,673 in debt
      owed by the Company to McCullough and his affiliates, as described in the
      paragraph below.





Several
      shareholders loaned the Company
      money to fund ongoing operations and paid expenses on behalf of the Company.
      From time to time, the Company has paid these shareholders back by paying
      expenses on their behalf.  In 2007 and 2006, expenses of $116,241 and
      $1,881 were paid for the Company, respectively.   During the same
      periods, Mac Filmworks paid $0 and $1,135 on behalf of these related
      parties.  Until September 2007, the loan amounts were due on demand
      and unsecured.  Interest was being imputed at a rate of 7% through
      September 2007.  In October 2007, all loans were forgiven by the
      shareholders in connection with the asset sale transaction.





In
      October 2007, the Company’s then chief executive officer forgave $444,609 of
      accrued salary owed to him by the Company.





In
      October 2007, a related party forgave a $10,000 debt owed by Mac
      Filmworks.





21
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ITEM
      13.                      
EXHIBITS





(a)           
      The following exhibits are to be filed as part of this 10-KSB:




EXHIBIT
                  NO.
              
              IDENTIFICATION
                  OF EXHIBIT31.1
              
              Initial
                  Articles of Incorporation (1)31.2
              
              Certificate
                  of Amendment (2)31.3
              
              Amended
                  & Restated Bylaws (3)10.1
              
              1998
                  Stock Option Plan (4)10.2
              
              Asset
                  Purchase Agreement (5)31.1
              
              Certification
                  Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Chief
                  Executive Officer (5)31.2
              
              Certification
                  Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Chief
                  Financial Officer (5)32.1
              
              Certification
                  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of 2002 provided by Chief Executive Officer
(5)32.2
              
              Certification
                  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of 2002 provided by Chief Financial Officer
(5)
 ___________________________


(1)
            Filed
                as an exhibit to the Company’s Registration Statement on Form SB-2 dated
                September 28, 2001 and incorporated by reference
                herein.


(2)
            Filed
                as an exhibit to the Company’s Registration Statement on Form SB-2 dated
                September 28, 2001 and incorporated by reference
                herein.


(3)
            Filed
                as an exhibit to the Company’s Registration Statement on Form SB-2 dated
                September 28, 2001 and incorporated by reference
                herein.


(4)
            Filed
                as an exhibit to the Company’s Registration Statement on Form SB-2 dated
                September 28, 2001 and incorporated by reference
                herein.


(5)
            Filed
                herewith.





ITEM
      14.                           
PRINCIPAL ACCOUNTANT FEES AND SERVICES





Aggregate
      fees for professional services rendered by Malone & Bailey, P.C. ("Malone")
      for the fiscal years ended December 31, 2007 and 2006, were as
      follows:




2007
            
            2006Audit
                fee
            $28,000
            
            $12,000Audit-related
                fees
            $0
            
            $0Tax
                fees
            $0
            
            $0All
                other fees
            $0
            
            $0




Audit
      fees for the fiscal years ended December 31, 2007 and 2006 represent the
      aggregate fees billed for professional services rendered by Malone for the
      audit
      of our annual financial statements and review of financial statements included
      in our quarterly reports on Form 10-Q or services that are normally provided
      in
      connection with statutory and regulatory filings or engagements for those fiscal
      years.






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Audit
      Committee Pre-Approval Policies and Procedures





The
      Board
      of Directors serves as the audit committee of the Company. The Board of
      Directors on an annual basis reviews audit and non-audit services performed
      by
      the independent auditor. All audit and non-audit services are pre-approved
      by
      the Board of Directors, which considers, among other things, the possible effect
      of the performance of such services on the auditors' independence. The Board
      of
      Directors has considered the role of Malone & Bailey, PC in providing
      services to us for the fiscal year ended December 31, 2007 and has concluded
      that such services are compatible with Malone & Bailey's independence as the
      Company's auditors.








SIGNATURES





Pursuant
      to the requirements of Section 13 or 15(d) 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.


MAC
                  FILMWORKS, INC.By:
              /s/
                  DWAYNE
                  DESLATTEDwayne
                  DeslatteChief
                  Executive Officer & Chief Financial OfficerDate:
              March
                31, 2008





23
 Table
            of Contents


EXHIBIT
      INDEX








The
      following exhibits are to be filed as part of this 10-KSB:




EXHIBIT
                  NO.
              
              IDENTIFICATION
                  OF EXHIBIT31.1
              
              Initial
                  Articles of Incorporation (1)31.2
              
              Certificate
                  of Amendment (2)31.3
              
              Amended
                  & Restated Bylaws (3)10.1
              
              1998
                  Stock Option Plan (4)10.2
              
              Asset
                  Purchase Agreement (5)31.1
              
              Certification
                  Pursuant to Section 302 of the
                  Sarbanes-Oxley Act provided by Chief Executive Officer (5)31.2
              
              Certification
                  Pursuant to Section 302 of the
                  Sarbanes-Oxley Act provided by Chief Financial Officer (5)32.1
              
              Certification
                  Pursuant to 18 U.S.C. Section 1350, as
                  Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                  provided
                  by Chief Executive Officer (5)32.2
              
              Certification
                  Pursuant to 18 U.S.C. Section 1350, as
                  Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                  provided
                  by Chief Financial Officer (5)
 ___________________________


(1)
            Filed
                as an exhibit to the Company’s Registration Statement on Form SB-2 dated
                September 28, 2001 and incorporated by reference
                herein.


(2)
            Filed
                as an exhibit to the Company’s Registration Statement on Form SB-2 dated
                September 28, 2001 and incorporated by reference
                herein.


(3)
            Filed
                as an exhibit to the Company’s Registration Statement on Form SB-2 dated
                September 28, 2001 and incorporated by reference
                herein.


(4)
            Filed
                as an exhibit to the Company’s Registration Statement on Form SB-2 dated
                September 28, 2001 and incorporated by reference
                herein.


(5)
            Filed
                herewith.