**UNITED        STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM        10-Q**

 

*(Mark        One)*

|   | þ | Quarterly report pursuant to Section 13 or 15(d) of the                        Securities Exchange Act of 1934 for the quarterly period ended**March 31, 2008**. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | o | Transition report pursuant to Section 13 or 15(d) of the                        Securities Exchange Act of 1934 for the transition period from -----to                        -------. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Commission file number:**000-29321**

 

**MONTANA MINING CORP.**

(Exact        name of registrant as specified in its charter)

 

 

| **Nevada**

(State or other jurisdiction of

incorporation or organization) | **87-0643635** 

(I.R.S. Employer

Identification No.) |
|-----------------------------------------------------------------------------|-------------------------------------------------------------|

 

 

**1403 East 900 South, Salt Lake City, Utah 84105**

(Address        of principal executive offices) (Zip Code)

 

**(801) 582-9609**

(Registrant’s telephone number, including area code)

 

     **N/A** 

(Former        name, former address and former fiscal year, if changes since last report)

 

Indicate        by check mark whether the registrant: (1) filed all reports required to be filed by Section        13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that        the registrant was required to file such reports), and (2) has been subject to such filing        requirements for the past 90 days: YesþNoo.

 

Indicate        by check mark whether the registrant is a large accelerated filer, an accelerated filer, a        non-accelerated filer, or a smaller reporting company as defined by Rule 12b-2 of the        Exchange Act:

| Large accelerated filero | Accelerated filero | Non-accelerated fileroSmaller reporting companyþ |
|--------------------------|--------------------|--------------------------------------------------------|

         

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

 

At April        30, 2008, the number of shares outstanding of the registrant's common stock, $0.001 par        value (the only class of voting stock), was 6,312,900.

 

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**TABLE OF CONTENTS**

**               
**PART I. - FINANCIAL                        INFORMATION**
     **ITEM 1.     FINANCIAL                    STATEMENTS**  3   Consolidated Balance Sheets as of March                            31, 2008 (unaudited) and December 31, 2007   4   Unaudited Consolidated Statements of                            Operations for the three month periods ended March 31, 2008 and March                            31, 2007 and the period from inception   5   Unaudited Consolidated Statements of Cash                            Flows for the three month periods ended March 31, 2008 and March 31,                            2007 and the period from inception  6   Notes to Unaudited Consolidated Financial                            Statements  7  **ITEM 2.                               Management's Discussion and Analysis of Financial Condition and Results                            of Operations**  9  **ITEM 3.    Quantitative                    and Qualitative Disclosures about Market Risk**  14  **ITEM 4T.  Controls and                    Procedures**  14                
**PART II. - OTHER                        INFORMATION**
     **ITEM 1.     Legal                    Proceedings**  15  **ITEM 1A.  Risk                    Factors**  15  **ITEM 2.                        Unregistered Sales of Equity Securities and Use of Proceeds**  17  **ITEM 3.     Defaults                    upon Senior Securities**  17  **ITEM 4.                        Submission of Matters to a Vote of Securities Holders**  18  **ITEM 5.     Other                    Information**  18  **ITEM 6.                        Exhibits**  18  **Signatures**  19 **Index to                    Exhibits**  20 **
**            2        **

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**PART I        – FINANCIAL INFORMATION**

 

| **ITEM 1.** | **FINANCIAL STATEMENTS** |
|-------------|--------------------------|

 

As used        herein, the terms “Company,” “we,” “our,”        “us,” “it,” and “its” refer to Montana Mining Corp., a        Nevada corporation, unless otherwise indicated. In the opinion of management, the        accompanying unaudited financial statements included in this Form 10-Q reflect all        adjustments (consisting only of normal recurring accruals) necessary for a fair        presentation of the results of operations for the periods presented. The results of        operations for the periods presented are not necessarily indicative of the results to be        expected for the full year.

 

 

 

 

 

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| MONTANA MINING CORP.                                                              |
|-----------------------------------------------------------------------------------|
| (A Development Stage Company)                                                     |
| CONSOLIDATED BALANCE SHEETS                                                       |
|                                                                              |   |   |   |   |
|                                                                              |   |   |   |   |
|                                                                              |   | March 31, |   | December 31, |
|                                                                              |   | 2008 |   | 2007 |
| ASSETS                                                                            |   | (Unaudited) |   | (Audited) |
|                                                                              |   |   |   |   |
| Current assets:                                                                   |   |   |   |   |
|  

Cash                                                                      | $ | 51 |   | 318 |
|                                                                              |   |   |   |   |
| Total current assets                                                              |   | 51 |   | 318 |
|                                                                              |   |   |   |   |
| Franchise agreement                                                               |   | 25,000 |   | - |
|                                                                              |   |   |   |   |
| Total assets                                                                      | $ | 25,051 |   | 318 |
|                                                                              |   |   |   |   |
|                                                                              |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                             |   |   |   |   |
|                                                                              |   |   |   |   |
| Current liabilities:                                                              |   |   |   |   |
|  

Accounts payable                                                          | $ | 4,169 |   | 3,873 |
| Related party interest payable                                                    |   | 5,542 |   | 4,210 |
| Related party payables                                                            |   | 88,924 |   | 55,155 |
|                                                                              |   |   |   |   |
| Total current liabilities                                                         |   | 98,635 |   | 63,238 |
|                                                                              |   |   |   |   |
| Commitments                                                                       |   |   |   |   |
|                                                                              |   |   |   |   |
| Stockholders' deficit:                                                            |   |   |   |   |
|  

Preferred stock, $.001 par value, 5,000,000                        shares |   |   |   |   |
| authorized, no shares issued and outstanding                                      |   | - |   | - |
| Common stock, $.001 par value, 500,000,000                        authorized      |   |   |   |   |
| and 6,312,900 shares issued and outstanding                                       |   | 6,313 |   | 6,313 |
| Additional paid-in capital                                                        |   | 103,069 |   | 103,069 |
| Deficit accumulated during the development stage                                  |   | (182,966) |   | (172,302) |
|                                                                              |   |   |   |   |
| Total stockholders’ deficit                                                 |   | (73,584) |   | (62,920) |
|                                                                              |   |   |   |   |
| Total liabilities and stockholders’ deficit                                 | $ | 25,051 |   | 318 |

 

The        accompanying notes are an integral part of these financial statements

 

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| MONTANA MINING CORP.                                                   |
|------------------------------------------------------------------------|
| (A Development Stage Company)                                          |
| UNAUDITED CONSOLIDATED STATEMENTS OF                        OPERATIONS |
|                                                                   |   |   |   |   |   |   |
|                                                                   |   |   |   |   |   |   |
|                                                                   |   | Three Months Ended |   |   |
|                                                                   |   | March 31, |   | Cumulative |
|                                                                   |   | 2008 |   | 2007 |   | Amounts |
|                                                                   |   |   |   |   |   |   |
| Revenue                                                                | $ | - |   | - |   | - |
|                                                                   |   |   |   |   |   |   |
| General and administrative costs                                       |   | 9,331 |   | 7,643 |   | 177,423 |
|                                                                   |   |   |   |   |   |   |
| Loss from operations                                                   |   | (9,331) |   | (7,643) |   | (177,423) |
|                                                                   |   |   |   |   |   |   |
| Interest expense                                                       |   | 1,333 |   | 616 |   | 5,543 |
|                                                                   |   |   |   |   |   |   |
| Loss before income taxes                                               |   | (10,664) |   | (8,259) |   | (182,966) |
|                                                                   |   |   |   |   |   |   |
| Provision for income taxes                                             |   | - |   | - |   | - |
|                                                                   |   |   |   |   |   |   |
| Net loss                                                               | $ | (10,664) |   | (8,259) |   | (182,966) |
|                                                                   |   |   |   |   |   |   |
|                                                                   |   |   |   |   |   |   |
| Loss per common share - basic and diluted                              | $ | - |   | - |   |   |
|                                                                   |   |   |   |   |   |   |
| Weighted average common shares -                                       |   |   |   |   |   |   |
| basic and diluted                                                      |   | 6,312,900 |   | 6,312,900 |   |   |

 

The        accompanying notes are an integral part of these financial statements

 

 

 

 

 

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| MONTANA MINING CORP.                                                   |
|------------------------------------------------------------------------|
| (A Development Stage Company)                                          |
| UNAUDITED CONSOLIDATED STATEMENTS OF CASH                        FLOWS |
|                                                                   |   |   |   |   |   |   |
|                                                                   |   |   |   |   |   |   |
|                                                                   |   | Three Months Ended |   |   |
|                                                                   |   | March 31, |   | Cumulative |
|                                                                   |   | 2008 |   | 2007 |   | Amounts |
| Cash flows from operating activities:                                  |   |   |   |   |   |   |
| Net loss                                                               | $ | (10,664) |   | (8,259) |   | (182,966) |
| Adjustments to reconcile net loss to net cash                          |   |   |   |   |   |   |
| used in operating activities:                                          |   |   |   |   |   |   |
| Stock compensation expense                                             |   | - |   | - |   | 5,007 |
| Increase in:                                                           |   |   |   |   |   |   |
| Accounts payable                                                       |   | 296 |   | 4,337 |   | 4,169 |
| Related party interest payable                                         |   | 1,332 |   | - |   | 5,542 |
|                                                                   |   |   |   |   |   |   |
| Net cash used in operating activities                                  |   | (9,036) |   | (3,922) |   | (168,248) |
|                                                                   |   |   |   |   |   |   |
|                                                                   |   |   |   |   |   |   |
| Cash flows from investing activities:                                  |   |   |   |   |   |   |
| Purchase of franchise agreement                                        |   | (25,000) |   | - |   | (25,000) |
|                                                                   |   |   |   |   |   |   |
| Net cash used in investing activities                                  |   | (25,000) |   | - |   | (25,000) |
|  

                                                          |   |   |   |   |   |   |
| Cash flows from financing activities:                                  |   |   |   |   |   |   |
| Increase in related party payable                                      |   | 33,769 |   | 1,616 |   | 88,924 |
| Decrease in stock subscription receivable                              |   | - |   | - |   | 465 |
| Issuance of common stock                                               |   | - |   | - |   | 103,910 |
|                                                                   |   |   |   |   |   |   |
| Net cash provided by financing activities                              |   | 33,769 |   | 1,616 |   | 193,299 |
|                                                                   |   |   |   |   |   |   |
|                                                                   |   |   |   |   |   |   |
| Net increase (decrease) in cash                                        |   | (267) |   | (2,306) |   | 51 |
|  

                                                          |   |   |   |   |   |   |
| Cash, beginning of period                                              |   | 318 |   | 5,407 |   | - |
|                                                                   |   |   |   |   |   |   |
| Cash, end of period                                                    | $ | 51 |   | 3,101 |   | 51 |

         

The        accompanying notes are an integral part of these financial statements

         

 

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MONTANA MINING CORP.

(A        Development Stage Company)

NOTES        TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March        31, 2008

 

Note 1        – Basis of Presentation

 

The        accompanying unaudited consolidated condensed financial statements have been prepared by        management in accordance with the instructions in Form 10-Q and, therefore, do not include        all information and footnotes required by generally accepted accounting principles and        should, therefore, be read in conjunction with the Company’s Form 10-K for the year        ended December 31, 2007, filed with the Securities and Exchange Commission. These        statements do include all normal recurring adjustments which the Company believes necessary        for a fair presentation of the statements. The interim operations are not necessarily        indicative of the results to be expected for the full year ended December 31,        2008.

 

Note 2        – Additional Footnotes Included By Reference

 

Except as        indicated in the following Notes, there have been no other material changes in the        information disclosed in the notes to the financial statements included in the        Company’s Form 10-K for the year ended December 31, 2007, filed with the Securities        and Exchange Commission. Therefore, those footnotes are included herein by        reference.

 

Note 3        – Going Concern

 

As of March        31, 2008, the Company’s revenue generating activities are not in place, and the        Company has incurred losses since inception. These factors raise substantial doubt about        the Company’s ability to continue as a going concern.

 

The Company        is currently in the process of building on a suitable business opportunity pursuant to the        execution of a franchise agreement. Should the Company be unable to establish a business        concentrated on the franchise agreement it will resume the process of identifying a        suitable business opportunity either by acquisition or merger. Management believes that        both the terms of the franchise agreement and alternatively the identification of a        suitable business opportunity will require additional funds through debt and/or equity        financing. However, there can be no assurance that management will be successful in        establishing a business concentrated on the franchise agreement or that it will be        successful in identifying a suitable business opportunity or that funds to suit either of        these endeavors will be available to the Company.

 

 

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MONTANA MINING CORP.

(A        Development Stage Company)

NOTES        TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March        31, 2008

 

Note 4        – Related Party Payables

 

Related        party payables consist of the following:

 

|   | March 31, | December 31, |
|--------|-----------|--------------|

|   | 2008 | 2007 |
|--------|------|------|

|   | (Unaudited) | (Audited) |
|--------|-------------|-----------|

|   | Short-term notes payable to shareholders of                        the |
|--------|------------------------------------------------------------------------|

|   | Company. The notes include interest at 10%, |
|--------|---------------------------------------------|

|   | are due on demand, and unsecured. Accrued |
|--------|-------------------------------------------|

|   | interest at March 31, 2008 was $5,542. | $ | 73,455 | 44,955 |
|--------|----------------------------------------|---|--------|--------|

 

|   | Payable to an officer and shareholder of the |
|--------|----------------------------------------------|

|   | Company for consulting services. The payable |
|--------|----------------------------------------------|

|   | is non-interest bearing, due on demand, and |
|--------|---------------------------------------------|

|   | unsecured. | 13,000 | 10,000 |
|--------|------------|--------|--------|

 

|   | Payable to a company owned by an officer and |
|--------|----------------------------------------------|

|   | shareholder of the Company. The payable is |
|--------|--------------------------------------------|

|   | non-interest bearing, due on demand, and |
|--------|------------------------------------------|

|   | unsecured. | 2,269 | - |
|--------|------------|-------|---|

 

|   | Short-term note payable to an officer and |
|--------|-------------------------------------------|

|   | shareholder of the Company. The note is |
|--------|-----------------------------------------|

|   | non-interest bearing, due on demand, and |
|--------|------------------------------------------|

|   | unsecured. | 200 | 200 |
|--------|------------|-----|-----|

 

|   | $ | 88,924 | 55,155 |
|--------|---|--------|--------|

 

 

Note 5        – Franchise Agreement

 

In February        2008, the Company formed Fitness USA, Inc. (“Fitness USA”) as a wholly owned        subsidiary for the purpose of entering into a new line of business. On March 7, 2008 the        Company, through Fitness USA, entered into an LA Boxing Franchise Agreement (the        “Agreement”) with LA Boxing Franchise Corporation (“LA Boxing”) to        acquire an exclusive franchise to open an LA Boxing gym in the Beverly Hills/Brentwood area        of Los Angeles, California.

 

LA Boxing        has developed a membership fitness system for its franchisees that consists of unique        boxing and kickboxing training regimens. The proprietary system features membership        software and accounting programs, boxing equipment, operations manuals, sales manuals,        training and instruction programs that are provided to franchisees as part of a turn-key        approach focused on the success of each business.

 

The        Agreement grants Fitness USA the exclusive right to operate one LA Boxing gym in exchange        for an initial franchise fee of $25,000, a monthly royalty fee of 6% on gross revenues and        a monthly advertising contribution equal to 2% of monthly gross revenues. Fitness USA is        also required to spend a minimum of $5,000 per month on local advertising        when the franchised location has opened for business. Operations related to Fitness USA        have not yet commenced.

 

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| **ITEM 2.** | **MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL                        CONDITION AND RESULTS OF OPERATIONS** |
|-------------|------------------------------------------------------------------------------------------------------------------------|

         

This*Management’s Discussion and Analysis of Financial Condition        and**Results of Operations*and other        parts of this quarterly report contain forward-looking statements that involve risks and        uncertainties. Forward-looking statements can also be identified by words such as        “anticipates,” “expects,” “believes,”        “plans,” “predicts,” and similar terms. Forward-looking statements        are not guarantees of future performance and our actual results may differ significantly        from the results discussed in the forward-looking statements. Factors that might cause such        differences include but are not limited to those discussed in the subsection        entitled*Forward-Looking Statements and Factors That May Affect        Future Results and Financial Condition*below. The following        discussion should be read in conjunction with our financial statements and notes thereto        included in this report. Our fiscal year end is December 31. All information presented        herein is based on the three month period ended March 31, 2008.

 

**Discussion and Analysis**

 

On February        5, 2008, the Company formed a wholly owned subsidiary, Fitness USA, Inc. to enter into a LA        Boxing Franchise Agreement (“Agreement”) with LA Boxing Franchise Corporation        (“LA Boxing”) in order to become an LA Boxing franchisee. The Agreement grants        us the exclusive right to operate one LA Boxing location in the Beverly Hills/Brentwood        area of Los Angeles, California in exchange for an initial franchise fee of $25,000, a        monthly royalty fee of six (6%) percent and a monthly advertising contribution of two        percent (2%) of monthly gross revenues. We are also required to spend a minimum of $5,000        per month on local advertising once the location is established. The Company has paid the        initial franchise fee but is currently seeking the requisite financing to open an LA Boxing        franchise.

 

LA Boxing        has developed a membership fitness system for franchisees that consists of unique boxing        and kickboxing training regimens. LA Boxing’s proprietary system features membership        software and accounting programs, boxing equipment, operations manuals, sales manuals,        training, and instruction programs that are provided to franchisees as part of a turn-key        approach focused on the success of each business.

 

The        Company’s plan of operation for the coming year is to actively pursue the development        of our initial LA Boxing franchise and, upon those results, expand our operations to        additional franchises within the United States and abroad.

 

If we are        unable to pursue our business plan with respect to our LA Boxing franchise due to financial        constraints, we will attempt to identify and acquire an alternative business opportunity.        In this event, we will not limit our options to any particular industry, but will evaluate        each opportunity on its merits. We have not yet entered into any other agreements, nor do        we have any commitment or understanding to enter into or become engaged in any other        transactions, as of the date of this filing.

 

The        Company’s plan of operation will require a minimum of $250,000 in funding over the        next 12 months, which funding is not currently available.  

 

**Results of Operations**

 

During the        three month period ended March 31, 2008, the Company’s operations consisted of (i)        satisfying continuous public disclosure requirements, (ii) seeking to identify prospective        business opportunities, (iii) performing due diligence with respect to LA Boxing, and (iv)        entering into the Agreement with LA Boxing.

 

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The Company        has been funded since inception from equity placements and by major shareholders in the        form of loans. All of the capital raised to date has been allocated for the Agreement and        general and administrative costs as well as interest expenses.

 

***Net        Loss***

 

For the        period from December 7, 1999, to March 31, 2008, the Company recorded an operating loss of        $182,966. The Company’s operating loss is primarily attributed to the Agreement and        general and administrative expenses which include incorporation costs, offering costs,        accounting costs, and costs associated with the preparation of disclosure documentation in        connection with registration pursuant to the Exchange Act of 1934, as amended. General and        administrative expenses also include mining exploration expenses incurred by consultants,        the costs associated with test results, costs directly related to our exploration program,        and option expenses. We did not generate any revenue during this period.

 

***Capital Expenditures***

 

The Company        expended no amounts on capital expenditures for the period from December 7, 1999, to March        31, 2008.

         

***Income Tax Expense (Benefit)***

         

The Company        has a prospective income tax benefit resulting from a net operating loss carryforward and        start up costs that will offset any future operating profit.

 

***Impact of Inflation***

         

The Company        believes that inflation has had a negligible effect on operations over the past three        years.

 

***Liquidity and Capital Resources***

 

The Company        had current and total assets of $51 as of March 31, 2008, consisting solely of cash on        hand. Net stockholders' deficit in the Company was $73,584 at March 31, 2008. The Company        is in the development stage and, since inception, has experienced significant changes in        liquidity, capital resources, and stockholders’ deficit.

 

Cash flow        used in operating activities was $168,248 for the period from December 7, 1999, to March        31, 2008. Cash was used on accounting, administration, consulting, and exploration        expenses.

 

Cash flow        provided from financing activities was $193,299 for the period from December 7, 1999, to        March 31, 2008. Financing activities have consisted of sales of the Company’s common        stock as well as related and non-related party loans.

 

Cash flow        used in investing activities was $25,000 for the period from December 7, 1999, to March 31,        2008. Cash was used on the initial franchise fee required by the Agreement with LA        Boxing.

 

 

 

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The        Company’s current assets are insufficient to conduct its plan of operation over the        next twelve (12) months. We will have to seek debt or equity financing to fund the opening        of our LA Boxing franchise location and corporate operations. The Company has no current        commitments or arrangements with respect to, or immediate sources of funding. Further, no        assurances can be given that a funding is available. The Company’s shareholders are        the most likely source of new funding in the form of loans or equity placements though none        have made any commitment for future investment and the Company has no agreement formal or        otherwise. The Company’s inability to obtain funding will have a material adverse        affect on its plan of operation.

 

The Company        has no current plans for the purchase or sale of any plant or equipment other than that        equipment necessary to the opening of an LA Boxing gym location.

 

The Company        has no current plans to make any changes in the number of employees other than those        employees necessary to the opening of an LA Boxing gym location which opening can in no way        be assured.

 

***Off        Balance Sheet Arrangements***

 

As of March        31, 2008, we have no significant off-balance sheet arrangements that have or are reasonably        likely to have a current or future effect on our financial condition, changes in financial        condition, revenues or expenses, results of operations, liquidity, capital expenditures, or        capital resources that is material to stockholders.

 

***Critical Accounting Policies***

 

In Note 1        to the audited financial statements for the years ended December 31, 2007 and 2006,        included in our Form 10-K, the Company discusses those accounting policies that are        considered to be significant in determining the results of operations and its financial        position. The Company believes that the accounting principles utilized by it conform to        accounting principles generally accepted in the United States.

 

The        preparation of financial statements requires Company management to make significant        estimates and judgments that affect the reported amounts of assets, liabilities, revenues        and expenses. By their nature, these judgments are subject to an inherent degree of        uncertainty. On an on-going basis, the Company evaluates estimates. The Company bases its        estimates on historical experience and other facts and circumstances that are believed to        be reasonable, and the results form the basis for making judgments about the carrying value        of assets and liabilities. The actual results may differ from these estimates under        different assumptions or conditions.

 

***Going        Concern***

 

The        Company’s auditors have expressed an opinion as to the Company’s ability to        continue as a going concern as a result of an accumulated deficit of $172,302 as of        December 31, 2007, which deficit increased to $182,966 as of March 31, 2008. The        Company’s ability to continue as a going concern is subject to the ability of the        Company to realize a profit and /or obtain funding from outside sources. Management’s        plan to address the Company’s ability to continue as a going concern includes: (i)        obtaining funding from private placement sources; (ii) obtaining additional funding from        the sale of the Company’s securities; (iii) establishing revenues establishing an LA        Boxing gym location; and (iv) obtaining loans and grants from financial        institutions where possible. Although management believes that it will be able to obtain        the necessary funding to allow the Company to remain a going concern through the methods        discussed above, there can be no assurances that such methods will prove        successful.

 

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***Forward Looking Statements and Factors That May Affect Future Results        and Financial Condition***

 

The        statements contained in the section titled*Management’s        Discussion and Analysis of Financial Condition and**Results of        Operations*and elsewhere in this current report, with the        exception of historical facts, are forward looking statements. Forward looking statements        reflect our current expectations and beliefs regarding our future results of operations,        performance, and achievements. These statements are subject to risks and uncertainties and        are based upon assumptions and beliefs that may or may not materialize. These statements        include, but are not limited to, statements concerning:

 

|   | **•** | our anticipated financial performance and business                        plan; |
|--------|------------|---------------------------------------------------------------------------------|

|   | **•** | the sufficiency of existing capital resources; |
|--------|------------|------------------------------------------------|

|   | **•** | our ability to raise additional capital to fund cash                        requirements for future operations; |
|--------|------------|-----------------------------------------------------------------------------------------------------------------|

|   | **•** | uncertainties related to the Company’s future business                        prospects; |
|--------|------------|------------------------------------------------------------------------------------------------|

|   | **•** | our ability to generate revenues from future                        operations; |
|--------|------------|---------------------------------------------------------------------------------|

|   | **•** | the volatility of the stock market and; |
|--------|------------|-----------------------------------------|

|   | **•** | general economic conditions. |
|--------|------------|------------------------------|

 

We wish to        caution readers that our operating results are subject to various risks and uncertainties        that could cause our actual results to differ materially from those discussed or        anticipated, including the factors set forth in the section entitled*Risk Factors*included elsewhere in this report.        We also wish to advise readers not to place any undue reliance on the forward looking        statements contained in this report, which reflect our beliefs and expectations only as of        the date of this report. We assume no obligation to update or revise these forward looking        statements to reflect new events or circumstances or any changes in our beliefs or        expectations, other than as required by law.

 

***Stock-Based Compensation***

 

On January        1, 2006, we adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment, which        addresses the accounting for stock-based payment transactions in which an enterprise        receives employee services in exchange for (a) equity instruments of the enterprise or (b)        liabilities that are based on the fair value of the enterprise’s equity instruments        or that may be settled by the issuance of such equity instruments. In January 2005, the        Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107,        which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R        eliminates the ability to account for stock-based compensation transactions using the        intrinsic value method under Accounting Principles Board (APB) Opinion No. 25, Accounting        for Stock Issued to Employees, and instead generally requires that such transactions be        accounted for using a fair-value-based method. We use the Black-Scholes-Merton        (“BSM”) option-pricing model to determine the fair-value of stock-based awards        under SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS No.        123, Accounting for Stock-Based Compensation. We have elected the modified prospective        transition method as permitted by SFAS No. 123R and accordingly prior periods have not been        restated to reflect the impact of SFAS No. 123R. The modified prospective transition method        requires that stock-based compensation expense be recorded for all new and unvested stock        options, restricted stock, restricted stock units, and employee stock purchase plan shares        that are ultimately expected to vest as the requisite service is rendered beginning on        January 1, 2006, the first day of our fiscal year 2006. Stock-based compensation expense        for awards granted prior to January 1, 2006 is based on the grant date fair-value as        determined under the pro forma provisions of SFAS No. 123.

 

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Prior to        the adoption of SFAS No 123R, we measured compensation expense for our employee stock-based        compensation plans using the intrinsic value method prescribed by APB Opinion No. 25. We        applied the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting        for Stock-Based Compensation – Transition and Disclosure, as if the fair-value-based        method had been applied in measuring compensation expense. Under APB Opinion No. 25, when        the exercise price of the Company’s employee stock options was equal to the market        price of the underlying stock on the date of the grant, no compensation expense was        recognized.

 

We account        for equity instruments issued in exchange for the receipt of goods or services from other        than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging        Issues Task Force (“EITF”) in Issue No. 96-18. Costs are measured at the        estimated fair market value of the consideration received or the estimated fair value of        the equity instruments issued, whichever is more reliably measurable. The value of equity        instruments issued for consideration other than employee services is determined on the        earliest of a performance commitment or completion of performance by the provider of goods        or services as defined by EITF 96-18.

 

***Recent Accounting Pronouncements***

 

In January        2007, we adopted FIN 48. FIN 48 clarifies the accounting for uncertain taxes        recognized in an enterprise's financial statements in accordance with SFAS No. 109,        "*Accounting for Income Taxes."*FIN 48 prescribes a recognition threshold and measurement of a tax        position taken or expected to be taken in an enterprise's tax return. In addition,        FIN 48 provides guidance on derecognition, classification, interest and penalties,        accounting in interim periods and disclosure related to uncertain income tax        positions.

         

In February        2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and        Financial Liabilities.” SFAS 159 creates a fair value option allowing an entity to        irrevocably elect fair value as the initial and subsequent measurement attribute for        certain financial assets and financial liabilities, with changes in fair value recognized        in earnings as they occur. SFAS 159 also requires an entity to report those financial        assets and financial liabilities measured at fair value in a manner that separates those        reported fair values from the carrying amounts of assets and liabilities measured using        another measurement attribute on the face of the statement of financial position. Lastly,        SFAS 159 requires an entity to provide information that would allow users to understand the        effect on earnings of changes in the fair value on those instruments selected for the fair        value election. SFAS 159 is effective for fiscal years beginning after November 15, 2007        with early adoption permitted. The Company is continuing to evaluate SFAS 159 and to assess        the impact on our results of operations and financial condition if an election is made to        adopt the standard.

 

In December        2007, the FASB issued SFAS No. 160, Non-controlling interests in Consolidated Financial        Statements – An amendment of ARB No. 51. This statement’s objective is to        improve the relevance, comparability, and transparency of the financial information that a        reporting entity provides in its consolidated financial statements by establishing        accounting and reporting standards that require ownership interests in the subsidiaries        held by parties other than the parent be clearly identified. The adoption of SFAS 160 did        not have an impact on the Company’s financial statements.

 

In December 2007, the FASB issued SFAS No. 141 (revised),        Business Combinations. This revision statement’s objective is to improve the        relevance, representational faithfulness, and comparability of the information that a        reporting entity provides in its effects on recognizing identifiable assets and measuring        goodwill. The adoption of SFAS 141 (revised) did not have an impact on the Company’s        financial statements.

 

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| **ITEM 3.** | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET                        RISK** |
|-------------|---------------------------------------------------------------------------------------|

         

Not required.

 

| **ITEM 4T.** | **CONTROLS AND PROCEDURES** |
|--------------|-----------------------------|

 

**Management's Report on Internal Control over Financial        Reporting**

 

The        Company’s management, including our chief executive officer and chief financial        officer, is responsible for establishing and maintaining adequate internal control over our        financial reporting. Internal control over financial reporting is a process designed by, or        under the supervision of, our chief executive and chief financial officers and implemented        by our board of directors, management and other personnel, 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 and includes those policies and procedures that: (i) pertain to the        maintenance of records that, in reasonable detail, accurately and fairly reflect the        transactions and dispositions of our assets; (ii) provide reasonable assurance that        transactions are recorded as necessary to permit preparation of financial statements in        accordance with generally accepted accounting principles, and that our receipts and        expenditures are being made only in accordance with authorizations of our management and        directors; and (iii) provide reasonable assurance regarding prevention or timely        detection of unauthorized acquisition, use or disposition of our assets that could have a        material effect on the financial statements. Because of their inherent limitations,        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 because of changes in conditions, or that the degree of        compliance with the policies or procedures may deteriorate.

 

Under the        supervision and with the participation of our management, including our principal executive        officer and principal financial officer, we conducted an evaluation of the effectiveness of        our internal control over financial reporting based on the framework in*Internal Control* *— Integrated Framework*issued by the        Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation,        our management concluded that our internal control over financial reporting was effective        as of March 31, 2008.

 

**Changes in Internal Controls over Financial Reporting**

 

During the        period ended March 31, 2008, there has been no change in internal control over financial        reporting that has materially affected, or is reasonably likely to materially affect our        internal control over financial reporting.

 

 

 

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**PART        II – OTHER INFORMATION**

 

| **ITEM 1.** | **LEGAL PROCEEDINGS** |
|-------------|-----------------------|

 

None.

 

| **ITEM 1A.** | **RISK FACTORS** |
|--------------|------------------|

 

Our future        operating results are highly uncertain. Before deciding to invest in us or to maintain or        increase your investment, you should carefully consider the risks described below, in        addition to the other information contained in this quarterly report. If any of these risks        actually occur, our business, financial condition or results of operations could be        seriously harmed. In that event, the market price for our common stock could decline and        you may lose all or part of your investment.

 

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

 

***We        have a history of significant operating losses and such losses may continue in the        future.***

 

Since our        inception in 1999, our expenses have substantially exceeded our income, resulting in        continuing losses and an accumulated deficit of $172,302 at December 31, 2007 which        increased to $182,966 as of March 31, 2008. The Company has never realized revenue from        operations. Our only expectation of future profitability is dependent on the future results        of operation from our LA Boxing franchise or the acquisition of an alternative revenue        producing business opportunity.

 

***The        Company’s limited financial resources cast severe doubt on our ability to pursue our        business plan or to acquire a profitable business opportunity.***

 

The        Company’s future operation is dependent upon the development of our LA Boxing        franchise or on the acquisition of an alternative profitable business opportunity. We are        finding it difficult to realize the financing needed for opening our LA Boxing franchise        location and cannot be certain that such financing will be forthcoming. Our inability to        finance the opening of our franchise location will prevent us from developing our business        and may act as a deterrent in any future negotiations with alternative acquisition        candidates. Should the Company be unable to develop a profitable business opportunity in        the near term, it will, in all likelihood, be forced to cease operations.

 

***We        are dependent upon a key person, who would be difficult to replace.***

 

Our        continued operation will be largely dependent upon the efforts of Ruairidh Campbell, our        sole officer and director. We do not maintain key-person insurance on Mr. Campbell. Our        future success also will depend in large part upon the Company’s ability to identify,        attract and retain other highly qualified managerial, technical and sales and marketing        personnel. Competition for these individuals is intense. The loss of the services of Mr.        Campbell, the inability to identify, attract or retain qualified personnel in the        future or delays in hiring qualified personnel could make it more difficult        for us to maintain our operations and meet key objectives such as the acquisition of a        suitable business opportunity.

 

 

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**Risks        Related to the Company’s Stock**

 

***The        market for our stock is limited and our stock price may be volatile.***

 

The market        for our common stock has been limited due to low trading volume and the small number of        brokerage firms acting as market makers. Because of the limitations of our market and        volatility of the market price of our stock, investors may face difficulties in selling        shares at attractive prices when they want to. The average daily trading volume for our        stock has varied significantly from week to week and from month to month, and the trading        volume often varies widely from day to day.

 

***We        may incur significant expenses as a result of being quoted on the Over the Counter Bulletin        Board, which may negatively impact our financial performance.***

 

We may        incur significant legal, accounting and other expenses as a result of being listed on the        Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002, as well as related rules        implemented by the Commission has required changes in corporate governance practices of        public companies. We expect that compliance with these laws, rules and regulations,        including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the        following risk factor, may substantially increase our expenses, including our legal and        accounting costs, and make some activities more time-consuming and costly. As a result,        there may be a substantial increase in legal, accounting and certain other expenses in the        future, which would negatively impact our financial performance and could have a material        adverse effect on our results of operations and financial condition.

 

***Our        internal controls over financial reporting may not be considered effective in the future,        which could result in a loss of investor confidence in our financial reports and in turn        have an adverse effect on our stock price.***

 

Pursuant to        Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our        management on our internal controls over financial reporting. Such report must contain,        among other matters, an assessment of the effectiveness of our internal controls over        financial reporting as of the end of the year, including a statement as to whether or not        our internal controls over financial reporting are effective. This assessment must include        disclosure of any material weaknesses in our internal controls over financial reporting        identified by management. If we are unable to continue to assert that our internal controls        are effective, our investors could lose confidence in the accuracy and completeness of our        financial reports, which in turn could cause our stock price to decline.

 

***The        Company does not pay dividends.***

 

The Company        does not pay dividends. We have not paid any dividends since inception and have no        intention of paying any dividends in the foreseeable future. Any future dividends would be        at the discretion of our board of directors and would depend on, among other things, future        earnings, ouroperating and financial condition, our capital        requirements, and general business conditions. Therefore, shareholders should not        expect any type of cash flow from their investment.

 

***The        Company requires immediate capital funding.***

 

The Company        requires financing, either through equity offerings or debt placements, in order to open        our anticipated LA Boxing franchise location and meet working capital requirements. Any new        financing may result in a significant dilution for our current shareholders. Further, our        ability to meet short-term and long-term financial commitments is dependent on the        realization of financing in the immediate future. Unless the Company can meet its financial        obligations it will likely be forced to cease operations.

 

 

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***The        Company’s shareholders may face significant restrictions on their        stock.***

 

The        Company’s stock differs from many stocks in that it is a “penny stock.”        The Commission has adopted a number of rules to regulate “penny stocks”        including, but not limited to, those rules from the Securities Act as follows:

 

|   | 3a51-1 | which defines penny stock as, generally speaking, those                        securities which are not listed on either NASDAQ or a national securities                        exchange and are priced under $5, excluding securities of issuers that have                        net tangible assets greater than $2 million if they have been in operation                        at least three years, greater than $5 million if in operation less than                        three years, or average revenue of at least $6 million for the last three                        years; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-1 | which outlines transactions by broker/dealers which are                        exempt from 15g-2 through 15g-6 as those whose commissions from traders are                        lower than 5% total commissions; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-2 | which details that brokers must disclose risks of penny                        stock on Schedule 15G; |
|--------|-------|-------------------------------------------------------------------------------------------------------|

|   | 15g-3 | which details that broker/dealers must disclose quotes and                        other information relating to the penny stock market; |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-4 | which explains that compensation of broker/dealers must be                        disclosed; |
|--------|-------|----------------------------------------------------------------------------------------------|

|   | 15g-5 | which explains that compensation of persons associated in                        connection with penny stock sales must be disclosed; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-6 | which outlines that broker/dealers must send out monthly                        account statements; and |
|--------|-------|---------------------------------------------------------------------------------------------------------|

|   | 15g-9 | which defines sales practice requirements. |
|--------|-------|--------------------------------------------|

Since the        Company’s securities constitute a “penny stock” within the meaning of the        rules, the rules would apply to us and our securities. Because these rules provide        regulatory burdens upon broker-dealers, they may affect the ability of shareholders to sell        their securities in any market that may develop; the rules themselves may limit the market        for penny stocks. Additionally, the market among dealers may not be active. Investors in        penny stock often are unable to sell stock back to the dealer that sold them the stock. The        mark-ups or commissions charged by the broker-dealers may be greater than any profit a        seller may make. Because of large dealer spreads, investors may be unable to sell the stock        immediately back to the dealer at the same price the dealer sold the stock to the investor.        In some cases, the stock may fall quickly in value. Investors may be unable to reap any        profit from any sale of the stock, if they can sell it at all. Shareholders should be aware        that, according to Commission Release No. 34-29093 dated April 17, 1991, the market        for penny stocks has suffered from patterns of fraud and abuse. These patterns        include:

 

|   | **•** | control of the market for the security by one or a few                        broker-dealers that are often related to the promoter or issuer; |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | manipulation of prices through prearranged matching of                        purchases and sales and false and misleading press releases; |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | “boiler room” practices involving high pressure                        sales tactics and unrealistic price projections by inexperienced sales                        persons; |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | excessive and undisclosed bid-ask differentials and markups                        by selling broker-dealers; and |
|--------|------------|-------------------------------------------------------------------------------------------------------------------|

|   | **•** | the wholesale dumping of the same securities by promoters                        and broker-dealers after prices have been manipulated to a desired level,                        along with the inevitable collapse of those prices with consequent investor                        losses. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

         

         

| **ITEM 2.** | **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF                        PROCEEDS** |
|-------------|----------------------------------------------------------------------------------------|

 

None.

 

| **ITEM 3.** | **DEFAULTS ON SENIOR SECURITIES** |
|-------------|-----------------------------------|

 

None.

 

         

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| **ITEM 4.** | **SUBMISSION OF MATTERS TO A VOTE OF SECURITY                        HOLDERS** |
|-------------|--------------------------------------------------------------------------------|

 

None.

 

| **ITEM 5.** | **OTHER INFORMATION** |
|-------------|-----------------------|

 

None.

 

| **ITEM 6.** | **EXHIBITS** |
|-------------|--------------|

 

Exhibits        required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits        on page 20 of this Form 10-Q, and are incorporated herein by this reference.

 

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**SIGNATURES**

 

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

 

|   | ***Montana Mining Corp.*** |
|--------|----------------------------|

         

         

|   | /s/ Ruairidh Campbell | April 30, 2008 |
|--------|-----------------------|----------------|

|   | Ruairidh Campbell |
|--------|-------------------|

Chief Executive Officer, Chief Financial Officer, Principal Accounting        Officer, and Director

         

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**EXHIBITS**

         

| ***Exhibit*** | ***Description*** |
|---------------|-------------------|

         

| 3(i)(a)* | Articles of Incorporation of the Company, formerly known as                        Aswan Investments, Inc. (incorporated herein by reference from Exhibit No.                        3(i) of the Company’s Form 10-SB as filed with the Commission on                        February 3, 2000). |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 3(i)(b)* | Amendment to Articles of Incorporation filed with the State                        of Nevada on August 5, 2002 (incorporated herein by reference from Exhibit                        No. 3(i)(b) of the Company’s Form 8-K as filed with the Commission on                        August 15, 2002). |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 3(i)(c)* | Amendment to Articles of Incorporation filed with the State                        of Nevada on October 12, 2004 (incorporated herein by reference from                        Exhibit No. 3(i)(c) of the Company’s Form 10-QSB as filed with the                        Commission on November 8, 2004). |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 3(ii)* | By-laws of the Company adopted on December 10, 1999 formerly                        known as Aswan Investments, Inc. (incorporated herein by reference from                        Exhibit No. 3(i) of the Company's Form 10-SB as filed with the Commission                        on February 3, 2000). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 10* | LA Boxing Franchise Agreement dated March 7, 2008                        (incorporated herein by reference from Exhibit No. 10 of the Company's Form                        8-K as filed with the Commission on March 21, 2008). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 14* | Code of Ethics adopted April 14, 2004 (incorporated herein                        by reference herein by reference to the Company’s Form 10-KSB/A filed                        with the Commission on April 16, 2004). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 21* | Subsidiaries of the Company (incorporated herein by                        reference herein by reference to the Company’s Form 10-K filed with                        the Commission on April 11, 2008). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 31 | Certification of the Chief Executive                        Officer and Chief Financial Officer pursuant to Rule 13a-14 of the                        Securities and Exchange Act of 1934, as amended, as adopted pursuant to                        Section 302 of the Sarbanes-Oxley Act of 2002. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

| 32 | Certification of the Chief Executive                        Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as                        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                        2002. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

|   | * | Incorporated by reference from previous filings of the                        Company. |
|--------|---|----------------------------------------------------------------------------------------|

 

 

         

 

 

 

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