**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        DC 20549**
  **FORM
        10-Q**
 (MARK
                    ONE)**x**
                **QUARTERLY
                    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                    OF
                    1934****For
                    the quarterly period ended October 31,
                    2006****OR****o**
                **TRANSITION
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT****For
                    the transition period from  ______________ to
                    ______________**
  Commission
          file number **:** **000-29475**
 **RUDY
        45**
 (Exact
        name of registrant as specified in its chapter)
 
 **NEVADA**
              **88-0491630**(State
                  or other jurisdictionof
                  incorporation)
              (IRS
                  EmployerIdentification
                  No.)
    **2633
                  Lincoln Boulevard, Suite 117,****Santa
                  Monica, CA**
              **90405-4656**(Address
                  of principal executive offices)
              (Zip
                  Code)
  **(310)
          452-3206**
 (Issuer’s
          telephone number)
 Indicate
        by check whether the Registrant (1) has filed all reports required to be
        filed
        by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
        (or
        for such shorter period that the registrant was required to file such reports),
        and (2) has been subject to such filing requirements for the past 90 days.
        Yes x No o




Indicate
                by check mark whether the Registrant is an accelerated filer (as
                defined
                in Rule 12b-2 of the Exchange Act).   Yes  o 
No
x




Indicate
                by check mark whether the Registrant is a shell company (as defined
                in
                Rule 12b-2 of the Exchange Act).    
                Yes  o 
No
x




The
        number of shares outstanding of the registrant's common stock, par value $0.001
        per share, as of November 25, 2005: 59,975 shares.


**Table
          of Contents**







**TABLE
      OF CONTENTS**




Page




PART
                  I
              FINANCIAL
                  INFORMATION
  Item
                  1
              Financial
                  Statements
              1
  Item
                    2
              Management’s
                    Discussion and Analysis of FinancialCondition
                    and Results of Operations
              2
  Item
                  3
              Quantitative
                  and Qualitative Disclosures about Market
                  Risk
              5
  Item
                  4
              Controls
                  and Procedures
              6
  PART
                  II
              OTHER
                  INFORMATION
  Item
                  1
              Legal
                  Proceedings
              7
  Item
                  2
              Unregistered
                  Sales of Equity Securities and Use of
                  Proceeds
              7
  Item
                  3
              Defaults
                  upon Senior Securities
              7
  Item
                  4
              Submission
                  of Matters to a Vote of Security
                  Holders
              7
  Item
                  5
              Other
                  Information
              7
  Item
                  6
              Exhibits
              8


i






**Table
          of Contents**


**PART
        I: FINANCIAL INFORMATION**
  **ITEM1:
        FINANCIAL STATEMENTS**
   **INDEX
        TO FINANCIAL STATEMENTS**
   Page
  Condensed
                  Balance Sheets as of October 31, 2006 and
                  2005
              F-1
  Condensed
                  Statements of Operations for the three months
                  ended October 31, 2006 and 2005
              F-2
  Condensed
                  Statements of Cash Flows for the six months ended
                  October 31, 2006 and 2005
              F-3
  Notes
                  to Condensed Financial Statements
              F-4




1
 **Table
          of Contents**


RUDY
                  45CONDENSED
                  BALANCE SHEETS(UNAUDITED)October
                  31, 2006
              
              October
                  31, 2005ASSETSCurrent
                  assets:Cash
              
              $
              -
              
              $
              12,175Total
                  current assets
              
              
              -
              
              
              12,175Property
                  and equipment, net
              
              
              7,184
              
              
              6,725Total
                  assets
              
              $
              7,184
              
              $
              18,900LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  liabilities:Accounts
                  payable and accrued liabilities
              
              $
              110,444
              
              $
              100Notes
                  Payable
              
              
              9,456
              
              
              0Total
                  current liabilities
              
              
              119,900
              
              
              100Commitments
                  and contingenciesStockholders'
                  equity:Preferred
                  stock, $0.001 par value,25,000,000
                  shares authorized at October 31, 2006,none
                  issued or outstanding
              
              
              -
              
              
              -50,000,000
                  shares authorized at October 31, 2006,none
                  issued or outstanding
              
              
              -
              
              
              -Common
                  stock, $0.001 par value,500,000,000
                  authorized, 16,229 shares *issued
                  and outstanding at October 31, 2006
              
              
              -
              
              
              -950,000,000
                  shares authorized, 59,974 shares*issued
                  and outstanding at October 31, 2006
              
              
              63
              
              
              60Additional
                  paid-in capital, net
              
              
              3,504,554
              
              
              3,456,782Stock
                  subscription receivable
              
              
              -
              
              
              95,773Accumulated
                  deficit
              
              
              (3,391,901
              )
              
              (3,533,815
              )Total
                  stockholders' equity
              
              
              (112,716
              )
              
              18,800Total
                  liabilities and stockholders' equity
              
              $
              7,184
              
              $
              18,900
 See
          accompanying notes to the financial statements




F-1
 **Table
          of Contents**






RUDY
                  45CONDENSED
                  STATEMENTS OF OPERATIONS(UNAUDITED)
  Three
                  Months
              
              Three
                  MonthsEnded
              
              EndedOctober
                  31,
              
              October
                  31,2006
              
              2005Net
                  sales
              
              $
              --
              
              $
              --Cost
                  of good sold
              
              
              --Gross
                  profit
              
              
              --
              
              
              --Selling,
                  general and administrative expenses
              
              
              119,900
              
              
              125,580Operating
                  loss
              
              
              (119,900
              )
              
              (125,580
              )Other
                  (expense) income:Loss
                  from continuing operations before income taxes
              
              
              (119,900
              )
              
              (125,580
              )Income
                  tax provision
              
              
              --
              
              
              (125,580
              )Net
                  loss
              
              $
              (119,900
              )
              $
              (125,580
              )Income
                  (loss) per common share:Basic
              
              $
              (2.25
              )
              $
              (2.50
              )Diluted
              
              $
              (2.25
              )
              $
              (2.50
              )Weighted
                  average common shares outstanding:Basic
              
              
              53,467
              
              
              50,214Diluted
              
              
              53,467
              
              
              50,214


See
        accompanying notes to the financial statements




F-2
 **Table
          of Contents**




RUDY
                  45CONDENSED
                  STATEMENTS OF CASH FLOWS(UNAUDITED)Six
                  Months Ended
              
              Six
                  Months EndedOctober
                  31,
              
              October
                  31,2006
              
              2005CASH
                  FLOW FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (119,900
              )
              $
              (125,580
              )Adjustments
                  to reconcile net loss to netcash
                  used in operating activities:Depreciation
                  and amortization
              
              
              354
              
              
              354Issuance
                  of common stock for services
              
              
              0
              
              
              5,550Changes
                  in operating assets and liabilities:Other
                  assets
              
              
              
              
              
              -Accounts
                  payable and accrued liabilities
              
              
              
              
              
              (18,500
              )Due
                  to related party
              
              
              110,444
              
              
              -Net
                  cash used in operating activities
              
              
              (9,102.00
              )
              
              (138,176
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Purchase
                  of property and equipment
              
              
              (354
              )
              
              (1,056
              )Net
                  cash used in investing activities
              
              
              (0
              )
              
              (1,056
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from issuance of common stock, net
              
              
              0
              
              
              28,750Proceeds
                  from notes payable
              
              
              9,456
              
              
              95,773Net
                  cash provided by financing activities
              
              
              9,456
              
              
              124,523Net
                  increase (decrease) in cash and cash equivalents
              
              
              (0
              )
              
              (14,709
              )Cash
                  at beginning of period
              
              
              (0
              )
              
              26,884Cash
                  at end of period
              
              $
              -
              
              $
              12,175


Please
          see the notes to the financial statements for information on non-cash investing
          and financing activities.
   See
          accompanying notes to the financial statements




F-3
 **Table
          of Contents**




**RUDY
          45**
 **NOTES
          TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 **For
          the three months ended October 31, 2006 and 2005**
   **1.
          ORGANIZATION AND BASIS OF PRESENTATION**
  ***Organization***
  Malahat
          Energy Corporation ("Malahat") is a Nevada corporation that was formed
          on July
          26, 1994. Malahat operated a development stage enterprise and was engaged
          in the
          development of BioFuel systems to convert organic waste material into an
          economical, synthesized fuel gas for energy consumption. Malahat completed
          a
          reverse merger with a publicly traded "Shell" company (see below) in May
          2001
          and was quoted on the Over the Counter Bulletin Board under the symbol
          "MAHT".
  On
          August
          30, 2004, Malahat’s board of directors approved a plan of reorganization (the
“Malahat Reorg”) pursuant to which the Company transferred substantially all of
          its assets and liabilities, except for liabilities of approximately $70,000,
          to
          its wholly owned subsidiary, Malahat Services Corporation (“MSC”). In connection
          with the plan of reorganization, all of MSC outstanding stock was distributed
          to
          the Malahat’s existing stockholders. See note 3 for more
          information.
  On
          August
          30, 2004 and in connection with a stock purchase agreement, shareholders
          owning
          10,581,875 shares of common stock (7,278 common shares giving effect to
          the
          reverse stock split described below), which represented 66% of the outstanding
          stock agreed to sell their shares to new investors for $85,000 in cash.
          In
          connection with the foregoing, the officers and directors of Malahat resigned
          on
          August 30, 2004 and representatives of the new investors assumed those
          positions.
  On
          December 22, 2004, it was approved by the stockholders to amend Article
          I, Name
          of Company; Malahat changed its name to PHC Holdings, and elected to become
          a
          Business Development Company or “BDC” under the Investment Company Act of 1940,
          as amended (the “1940 Act"). As of July 31, 2005, the Company traded on the
          "pink sheets" under the name PHC Holdings and under the symbol "PHCD."
          Also, it
          was approved by the shareholders to amend Article IV, Authorized Capital
          Stock;
          increasing its authorized common stock to 500,000,000 shares, each with
          a par
          value of $0.001 per share; and increasing its authorized preferred stock
          to
          25,000,000 shares, each with a par value of $0.001 per share, with the
          rights,
          preferences, privileges and restrictions granted to or imposed upon the
          preferred stock to be determined by the board of directors.
  On
          August
          10, 2005, it was approved by stockholders to amend Article IV, Authorized
          Capital Stock, of the Articles of Incorporation, increasing the total authorized
          common stock to 950,000,000 shares, each with a par value of $0.001 per
          share
          (“Common Stock”) and 50,000,000 shares of Preferred Stock each with a par value
          of $0.001, (“Preferred Stock”). The rights, preferences, privileges and
          restrictions granted to or imposed upon the Preferred Stock will be determined
          by the Board of Directors.
  On
          September 12, 2005, the board of directors received authorization from
          the
          stockholders to amend the articles of incorporation for Article 1, Name
          of
          Company; changing the company’s name from PHC Holdings to Rudy 45 (the
“Company”); and to implement a 1450:1 reverse stock split of the Company’s
          common stock effective September 26, 2005. The Company’s shareholders record
          reflects on such date 86,963,207 issued and outstanding shares before the
          reverse stock split and 59,975 after the reverse stock split. The Company
          now
          trades under the symbol “RDYF.”
  ***Nature
          of Business***
  Subsequent
          to the name change and electing to be a BDC, the Company will be continuously
          seeking operating private profitable entities in which to invest in and
          offer
          management skills. A BDC is defined and regulated by the Investment Company
          Act
          of 1940 ("1940 Act"). A BDC must be organized in the United States for
          the
          purpose of investing in or lending to primarily private companies and making
          managerial assistance available to them. A BDC may use capital provided
          by
          public shareholders and from other sources to invest in long-term, private
          investments in businesses. A BDC provides shareholders the ability to retain
          the
          liquidity of a publicly traded stock, while sharing in the possible benefits,
          if
          any, of investing in primarily privately owned companies.
  The
          Company is authorized to issue up to $5,000,000 in value of securities
          without
          registration of said securities under the Securities Act of 1933; in reliance
          on
          the exemption provided by Rule 602(a) of Regulation E under the 33 Act.
          Through
          January 31, 2006, the Company has raised net proceeds of approximately
          $602,000
          against this limit.
  F-4
 **Table
                of Contents**
 
 **RUDY
          45**
 **NOTES
          TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 **For
          the three months ended October 31, 2006 and 2005**
    ***Basis
          of Presentation***
  The
          interim unaudited condensed financial statements have been prepared pursuant
          to
          rules and regulations of the Securities and Exchange Commission (“SEC”). Certain
          information and note disclosures normally included in annual financial
          statements prepared in accordance with accounting principles generally
          accepted
          in the United States of America (“GAAP”) have been condensed or omitted pursuant
          to those rules and regulations, although the Company believes that the
          disclosures made are adequate to make the information not misleading. The
          unaudited condensed financial statements should, therefore, be read in
          conjunction with the consolidated financial statements and notes thereto
          in the
          Form 10-KSB annual report of the Company for the year ended July 31, 2006.
          In
          the opinion of management, all adjustments (which consist of normal and
          recurring adjustments) considered necessary for a fair presentation have
          been
          included. The results of operations for the three month period ended October
          31,
          2006 are not necessarily indicative of the results that may be expected
          for the
          entire fiscal year.
  The
          accompanying financial statements have been prepared assuming that the
          Company
          continues as a going concern which contemplates the realization of assets
          and
          settlement of liabilities in the normal course of business. Malahat has
          been in
          the development stage since it began operations on July 26, 1994, and did
          not
          generate any revenues from its principal operations and there is no assurance
          of
          any future revenues. As of August 30, 2004 Malahat reorganized with its
          subsidiary (see Note 3) and changed its name to PHC Holdings and subsequently
          to
          Rudy 45. The Company elected to become a BDC on December 22, 2004 and has
          not
          generated any revenues and there is no assurance of any future revenues.
          Further, the Company has limited or no prior history as a BDC. As of October
          31,
          2006 and 2005, the Company had an accumulated deficit of approximately
          $3,391,901 and $3,533,815; negative working capital of approximately $9,100
          and
          $138,000.
  The
          Company will require substantial additional capital for continuing BDC
          administration, compliance requirements and the implementation of the business
          plan as a BDC. There can be no assurance that the Company will be able
          to obtain
          sufficient additional funds when needed, or that such funds, if available,
          will
          be obtainable on terms satisfactory to the Company.
  Failure
          to secure such financing or to raise additional equity capital may result
          in the
          Company depleting its available funds and not being able to pay for its
          obligations.
  These
          circumstances, among others, raise substantial doubt about the Company's
          ability
          to continue as a going concern. The financial statements do not include
          any
          adjustments to reflect the possible future effects on the recoverability
          and
          classification of assets or the amounts and classification of liabilities
          that
          may result from the possible inability of the Company to continue as a
          going
          concern.
  **2.
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
  The
          significant accounting policies presented below are designed to assist
          in
          understanding the Company’s financial statements. Such financial statements and
          accompanying notes are the representation of the Company’s management, who are
          responsible for their integrity and objectivity. These accounting policies
          conform to accounting principles generally accepted in the United States
          of
          America (“GAAP”) in all material respects, and have been consistently applied in
          preparing the accompanying financial statements.
  ***Basis
          of Presentation***
  As
          a
          result of the reorganization and spin-off of our wholly owned subsidiary,
          the
          accompanying financial statements as of October 31, 2006 are not consolidated
          and only include the accounts of Rudy 45.
  ***Risks
          and Uncertainties***
  The
          Company has a limited operating history. The Company has not yet generated
          any
          revenue from its business operations. As a new operating entity, the Company
          faces risks and uncertainties relating to its ability to successfully implement
          its strategy. Among other things, these risks include the ability to develop
          and
          sustain revenue growth; managing expanding operations; competition; attracting,
          retaining and motivating qualified personnel; and maintaining and developing
          new
          strategic relationships. The Company has limited or no prior history as
          a BDC.
          The Company may be subject to the risks associated with an emerging business,
          including the potential risks of business failure.
 F-5
 **Table
                  of Contents**
 **RUDY
          45**
 **NOTES
          TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 **For
          the three months ended October 31, 2006 and 2005**
    ***Use
          of Estimates***
  The
          Company prepares its financial statements in conformity with GAAP, which
          requires management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities, 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. Significant estimates
          made by
          management include, among others, realizability of long-lived assets and
          estimates for the deferred income tax valuation allowance. Actual results
          could
          differ from those estimates.
  ***Fair
          Values of Financial Instruments***
  Statement
          of Financial Accounting Standards ("SFAS") No. 107 "Disclosures about Fair
          Value
          of Financial Instruments" requires disclosure of fair value information
          about
          financial instruments when it is practicable to estimate that value. Management
          believes that the carrying amounts of the Company's financial instruments,
          consisting of cash and accounts payable and accrued liabilities, approximate
          their fair value at October 31, 2006, due to their short-term nature.
  ***Cash
          Equivalents***
  The
          Company considers all highly liquid temporary cash investments with original
          maturities of three months or less to be cash equivalents. The Company
          had no
          cash equivalents at October 31, 2006.
  ***Property
          and Equipment***
  Property
          and equipment are stated at cost, less accumulated depreciation and
          amortization. Depreciation is provided using the straight-line method over
          the
          estimated useful lives of the related assets. Maintenance and repairs are
          expensed as incurred, and betterments are capitalized. Upon the sale or
          retirement of depreciable assets, the accounts are relieved of the related
          costs
          and accumulated depreciation, and any resulting gain or loss is included
          in
          operations.
  ***Long-Lived
          Assets***
  SFAS
          No.
          144, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
          Assets to be Disposed of." SFAS No. 144 addresses financial accounting
          and
          reporting for the impairment or disposal of long-lived assets. SFAS 144
          requires
          that long-lived assets be reviewed for impairment whenever events or changes
          in
          circumstances indicate that their carrying amount may not be recoverable.
          If the
          cost basis of a long-lived asset is greater than the projected future
          undiscounted net cash flows from such asset, an impairment loss is recognized.
          Impairment losses are calculated as the difference between the cost basis
          of an
          asset and its estimated fair value. As of October 31, 2006, no impairment
          indicators were noted.
  ***Revenue
          Recognition***
  As
          a BDC,
          the Company intends to recognize revenues from its portfolio companies
          based on
          investment income, the appreciation or impairment associated with its investment
          in such companies. There were no revenues for the six months ended October
          31,
          2006 and 2005.
  ***Income
          Taxes***
  The
          Company follows SFAS No. 109 ("SFAS 109"), "Accounting for Income Taxes"
          for
          recording the provision for income taxes. Deferred tax assets and liabilities
          are computed based upon the difference between the consolidated financial
          statement and income tax basis of assets and liabilities using the enacted
          marginal tax rate applicable when the related asset or liability is expected
          to
          be realized or settled. Deferred income tax expenses or benefits are based
          on
          the changes in the asset or liability each period. If available evidence
          suggests that it is more likely than not that some portion or all of the
          deferred tax assets will not be realized, a valuation allowance is required
          to
          reduce the deferred tax assets to the amount that is more likely than not
          to be
          realized. Future changes in such valuation allowance are included in the
          provision for income taxes in the period of change.
  F-6
 **Table
                of Contents**
 
 **RUDY
          45**
 **NOTES
          TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 **For
          the three months ended October 31, 2006 and 2005**
    ***Stock-Based
          Compensation***
  The
          Financial Accounting Standards Board ("FASB") issued SFAS No. 123 ("SFAS
          123"),
“Accounting for Stock-Based Compensation." This standard, if fully adopted,
          changes the method of accounting for employee stock-based compensation
          plans to
          the fair value based method. For stock options and warrants, fair value
          is
          determined using an option pricing model that takes into account the stock
          price
          at the grant date, the exercise price, the expected life of the option
          or
          warrant and the annual rate of quarterly dividends. Compensation expense,
          if
          any, is recognized over the applicable service period, which is usually
          the
          vesting period.
  The
          adoption of the accounting methodology of SFAS 123 is optional and the
          Company
          has elected to continue accounting for stock-based compensation issued
          to
          employees using APB 25; however, pro forma disclosures, as if the Company
          adopted the cost recognition requirements under SFAS 123, are required
          to be
          presented.
  The
            Company has no stock-based compensation plans as of October 31, 2006
            or
            2005.
  ***Basic
          and Diluted Loss per Common Share***
  The
          Company follows SFAS No. 128 ("SFAS 128"), "Earnings per Share." Under
          SFAS 128,
          basic earnings per share is computed by dividing income available to common
          shareholders by the weighted-average number of common shares assumed to
          be
          outstanding during the period of computation. Diluted earnings per share
          is
          computed similar to basic earnings per share except that the denominator
          is
          increased to include the number of additional common shares that would
          have been
          outstanding if the potential common shares had been issued and if the additional
          common shares were dilutive (there were no additional potential common
          shares as
          of October 31, 2006 and 2005, respectively). Pro forma per share data has
          been
          computed using the weighted average number of common shares outstanding
          during
          the periods. Because the Company has incurred net losses, basic and diluted
          losses per share are the same as additional potential common shares would
          be
          anti-dilutive (See Note 5).
  ***Recently
          Issued Accounting Pronouncements***
  In
          December 2004, the FASB issued SFAS No. 123-R, "Share-Based Payment," which
          requires that the compensation costs relating to share-based payment
          transactions (including the cost of all employee stock options) be recognized
          in
          the financial statements. That cost will be measured based on the estimated
          fair
          value of the equity or liability instruments issued. SFAS No. 123-R covers
          a
          wide range of share-based compensation arrangements including share options,
          restricted share plans, performance-based awards, share appreciation rights,
          and
          employee share purchase plans. SFAS No. 123-R replaces SFAS No. 123, and
          supersedes APB Opinion No. 25. The adoption of SFAS 123-R did not have
          a
          material impact on the Company's financial statements.
  In
          December 2004, the FASB issued SFAS No. 153 ("SFAS 153"), "Exchanges of
          Nonmonetary Assets, an Amendment of APB Opinion No. 29, Accounting for
          Nonmonetary Transactions." The amendments made by SFAS 153 are based on
          the
          principle that exchanges of nonmonetary assets should be measured using
          the
          estimated fair value of the assets exchanged. SFAS 153 eliminates the narrow
          exception for nonmonetary exchanges of similar productive assets, and replaces
          it with a broader exception for exchanges of nonmonetary assets that do
          not have
          commercial substance. A nonmonetary exchange has "commercial substance"
          if the
          future cash flows of the entity are expected to change significantly as
          a result
          of the transaction. This pronouncement is effective for nonmonetary exchanges
          in
          fiscal periods beginning after June 15, 2005. The adoption of SFAS 153
          did not
          have a material impact on the Company’s financial statements.
  In
          May
          2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections,”
which replaces APB Opinion No. 20 and FASB Statement No. 3. This pronouncement
          applies to all voluntary changes in accounting principle, and revises the
          requirements for accounting for and reporting a change in accounting principle.
          SFAS No. 154 requires retrospective application to prior periods' financial
          statements of a voluntary change in accounting principle, unless it is
          impracticable to do so. This pronouncement also requires that a change
          in the
          method of depreciation, amortization, or depletion for long-lived, non-financial
          assets be accounted for as a change in accounting estimate that is affected
          by a
          change in accounting principle. SFAS No. 154 retains many provisions of
          APB
          Opinion 20 without change, including those related to reporting a change
          in
          accounting estimate, a change in the reporting entity, and correction of
          an
          error. The pronouncement also carries forward the provisions of SFAS No.
          3 which
          govern reporting accounting changes in interim financial statements. SFAS
          No.
          154 is effective for accounting changes and corrections of errors made
          in fiscal
          years beginning after December 15, 2005. The Statement does not change
          the
          transition provisions of any existing accounting pronouncements, including
          those
          that are in a transition phase as of the effective date of SFAS No. 154.
          The
          adoption of SFAS 154 did not have a material impact on the Company's financial
          statements.
  In
          March
          2006, the Financial Accounting Standards Board issued Statement of Accounting
          Standards No. 156, *Accounting
          for Servicing of Financial Assets* (SFAS 156),
          which amends SFAS 140, *Accounting
          for Transfers and Servicing of Financial Assets and Extinguishments of
          Liabilities* .
          SFAS
          156 permits, but does not require, an entity to choose either the amortization
          method or the fair value measurement method for measuring each class of
          separately recognized servicing assets and servicing liabilities. The provisions
          of SFAS No. 156 are effective for fiscal years beginning after September
          15,
          2006.
 
 In
          June 2006, the Financial Accounting Standards Board issued FASB
          Interpretation No. 48, *Accounting
          for Uncertainty in Income Taxes - an interpretation of FASB Statement
          No. 109* (FIN
          48).
          This interpretation clarifies the accounting for uncertainty in income
          taxes
          recognized in an enterprise's financial statements in accordance with FASB
          Statement No. 109, *Accounting
          for Income Taxes.* FIN
          48
          prescribes a recognition threshold and measurement attribute for the financial
          statement recognition and measurement of a tax position taken or expected
          to be
          taken in a tax return. It also provides guidance on derecognition,
          classification, interest and penalties, accounting in interim periods,
          disclosure, and transition. FIN 48 is effective for fiscal years beginning
          after
          December 15, 2006. The Company does not expect the adoption of FIN 48 to
          have a material effect on its financial statements and related
          disclosures.
 
 The
          Company is reviewing FSP Nos. FAS 115-1 and 124-1, but does not expect
          that the
          adoption of this FSP will have a material effect on its financial statements.
          In
          May 2005, the FASB issued SFAS no. 154, "Accounting Changes and Error
          Corrections ("SFAS No. 154") which replaces APB Opinion No. 20, "Accounting
          Changes" and SFAS No. 3, "Reporting Accounting Changes in Interim Financial
          Statements-An Amendment of ABP Opinion No. 28. SFAS No. 154 provides guidance
          on
          the accounting for and reporting of accounting changes and error corrections.
          Specifically, this statement requires "retrospective application" of the
          direct
          effect for a voluntary change in accounting principle to prior periods'
          financial statements, if it is practical to do so. SFAS No. 154 also strictly
          defines the term "restatement" to mean the correction of an error revising
          previously issued financial statements. SFAS No. 154 is effective for accounting
          changes and corrections of errors made in fiscal years beginning after
          December
          15, 2005 and are required to be adopted by the Company in the first quarter
          of
          fiscal year 2006. Although we will continue to evaluate the application
          of SFAS
          No. 154, management does not anticipate that adoption will have a material
          impact on our results of operations, financial position or cash flows.
 
 F-7
 **Table
                  of Contents**
 
 **RUDY
          45**
 **NOTES
          TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 **For
          the three months ended October 31, 2006 and 2005**
   Other
          recent accounting pronouncements issued by the FASB (including its Emerging
          Issues Task Force), the AICPA, and the SEC did not or are not believed
          by
          management to have a material impact on the Company's present or future
          financial statements.
  **3.
          MALAHAT REORGANIZATION**
  On
          August
          30, 2004, Malahat’s board of directors approved a plan of reorganization (the
“Malahat Reorg”) pursuant to which the Company transferred fixed and other
          assets approximating $18,000 and accounts payable and accrued liabilities
          and
          due to related party approximating $175,000 to its wholly owned subsidiary,
          Malahat Services Corporation (“MSC”). In connection with the plan of
          reorganization, all of the MSC outstanding stock was distributed to the
          Malahat’s existing stockholders. The reorganization was accounted using the
          historical carrying amounts of assets and liabilities distributed and reflected
          against paid in capital. The assets and liabilities and results of operations
          of
          the net assets distributed to the former stockholders have been reflected
          in the
          accompanying financial statements as discontinued operations. The net effect
          of
          transferring such assets and liabilities plus accumulated other comprehensive
          income resulted in an increase to additional paid-in capital of approximately
          $182,000.
  Additionally,
          stockholders owning 10,581,875 shares of common stock (7,278 common shares
          giving effect to the reverse stock split described below), which represented
          66%
          of the Company’s outstanding stock agreed to sell their shares to new investors.
          In connection with the foregoing, the officers and directors of Malahat
          resigned
          on August 30, 2004 and representatives of the new investors assumed those
          positions.
  **4.
          NOTES PAYABLE**
  During
          the three months ended October 31, 2006, the Company’s notes payable balance
          remains at for $9,456. This is a notes payable entered into to in pay off
          current debt liabilities.
  During
          the three months ended October 31, 2005, the Company had no notes
          payable.
  **5.
          EQUITY TRANSACTIONS**
  ***Preferred
          Stock***
  The
          Company is authorized effective December 22, 2004 to issue up to 25,000,000
          shares of preferred stock at $0.001 par value, with all rights, preferences,
          privileges and restrictions granted to or imposed upon the preferred stock
          determined by the board of directors. The authorized number of preferred
          shares
          was increased to 50,000,000 on August 10, 2005.
  ***Common
          Stock***
  The
          Company is authorized effective December 22, 2004 to issue up to 500,000,000
          shares of common stock at $0.001 par value. The authorized number of common
          shares was increased to 950,000,000 on August 10, 2005. On September 12,
          2005,
          the Company implemented a 1450:1 reverse stock split. The Company’s records
          reflect on such date 59,975 issued and outstanding common shares before
          the
          reverse stock split and 61,505 common shares after the reverse stock split.
          Accordingly, during the three months ended October 31, 2005, the Company
          issued
          18,719,500 common shares (representing 12,910 shares giving effect to the
          reverse stock split declared September 2005).
  During
          the months ended October 31, 2005, the Company entered into agreements
          pursuant
          to which we sold 11,379 shares of common stock for an aggregate of
          $28,750 ** in
          net
          proceeds.
  During
          the three months ended October 31 2005, the Company issued 1,531 shares
          of
          common stock in exchange for services provided by certain consultants.
          Such
          shares were valued at $5,550 (estimated to be the fair value based on private
          placement sales on or about the issuance date).
 F-8
 **Table
                  of Contents**
 
 **RUDY
          45**
 **NOTES
          TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 **For
          the three and six months ended October 31, 2006 and 2005**
    ***Common
          Stock Subscribed***
  During
          the three months ended October 31, 2005, the Company entered into subscription
          agreements pursuant to which several individuals agreed to purchase 55,552
          shares of common stock for an aggregate of $95,773 ** in
          net
          proceeds.
  During
          the three months ended October 31, 2006, the Board of Directors declined
          the
          issuance of stock subscribed as of October 31, 2005, (see above). The Company
          discussed the Directors action with the investors, with the following results;
          two prior investors applied $63,227 as paid in capital towards prior purchases
          of common stock, the remaining investors agreed to accept notes payable
          for
          $48,000 received by the Company, (see Note 4).
  **6.
          INCOME/LOSS PER COMMON SHARE**
  The
          following is a reconciliation of the numerators and denominators of the
          basic
          and diluted income/loss per common share computations for the six months
          ended
          October 31, 2006 and 2005:
  2006
                
                2005Numerator
                    for basic and diluted income (loss)per
                    common share:Net
                    (loss) income attributed to common shareholders
                
                $
                (119,900
                )
                $
                (125,580
                )Denominator
                    for basic and diluted income (loss)per
                    common share:Weighted
                    average number of common shares outstanding
                
                
                53,467
                
                
                50,214Basic
                    and diluted (loss) income per common share
                
                $
                (2.25
                )
                $
                (2.50
                )
  **7.
          COMMITMENTS AND CONTINGENCIES**
  ***General***
  The
          Company's commitments and contingencies include the usual obligations of
          a BDC
          in the normal course of business. In the opinion of management, these matters
          are not expected to have a material adverse effect on the Company's financial
          position and results of operations.
  ***Regulatory
          Compliance***
  As
          a BDC,
          the Company operates in a highly regulated environment and must comply
          with the
          requirements of the 1940 Act. The Company endeavors to be in compliance
          with the
          requirements of the Act as part of its investment strategy and oversight
          functions. Whereas compliance with such laws and regulations requires
          interpretation, the Company believes it is in compliance with such requirements
          at October 31, 2006. However, no assurances can be given that such requirements
          will not change or that differing interpretations could result in non-compliance
          or that such matters, if they arise, will be insignificant to the Company's
          financial position or results of operations.
  ***Legal***
  Currently,
            the Company is not a party to any pending legal proceedings.
  ***Letter
          of Intent***
  On
          September 23, 2005, the Company entered into a Letter of Intent to acquire
          all
          of the outstanding stock of Rudy International Marketing, Ltd. (“RIM”) in
          exchange for shares of the Company’s restricted common stock. As of January 31,
          2006 the Company is no longer actively pursuing this endeavor.
  F-9
 **Table
                of Contents**
  **ITEM
          2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS**
  ***Forward-Looking
          Statements***
  Historical
          results and trends should not be taken as an indication of future operations.
          Management's statements contained in this report that are not historical
          facts
          are forward-looking statements within the meaning of Section 27A of the
          Securities Act and Section 21E of the Securities Exchange Act of 1934,
          as
          amended (the "Exchange Act"). Actual results may differ materially from
          those
          included in the forward-looking statements. The Company intends such
          forward-looking statements to be covered by the safe-harbor provisions
          for
          forward-looking statements contained in the Private Securities Litigation
          Reform
          Act of 1995, and is including this statement for purposes of complying
          with
          those safe-harbor provisions. Forward-looking statements, which are based
          on
          certain assumptions and describe future plans, strategies and expectations
          of
          the Company, are generally identifiable by use of the words "believe,"
          "expect,"
          "anticipate," "estimate," "project," "prospects," or similar expressions.
          The
          Company’s ability to predict results or the actual effect of future plans or
          strategies is inherently uncertain. Factors which could have a material
          adverse
          affect on the operations and future prospects of the Company on a consolidated
          basis include, but are not limited to: changes in economic conditions generally
          in the United States of America and the other countries in which the Company
          operates, legislative/regulatory changes, the political climate in the
          foreign
          countries in which the Company operates, the availability of capital, interest
          rates, competition, and generally accepted accounting principles. These
          risks
          and uncertainties should be considered in evaluating forward-looking statements
          and undue reliance should not be placed on such statements. Further information
          concerning the Company and its business; including additional factors that
          could
          materially affect the Company's financial results, are included herein
          and in
          the Company's other filings with the Securities and Exchange
          Commission.
  The
          following discussion and analysis should be read in conjunction with the
          financial statements and notes to financial statements included elsewhere
          in
          this quarterly report on Form 10-Q. This report and the financial statements
          and
          notes to financial statements contain forward-looking statements, which
          generally include the plans and objectives of management for future operations,
          including plans and objectives relating to future economic performance
          and our
          current beliefs regarding revenues we might earn if we are successful in
          implementing our business strategies. The Company does not undertake to
          update,
          revise or correct any forward-looking statements.
  ***Results
          of Operations for the three months ended October 31, 2005 and
          2006***
  For
          the
          three months ended October 31, 2006, the Company incurred a net loss of
          approximately $120,000. The Company had no revenues and expended approximately
          $43,000 on consulting and professional fees and approximately $77,000 on
          general
          and administrative expenses. For the six months ended January 31, 2006
          the
          Company incurred a net loss of approximately $140,000. The Company had
          no
          revenues and expended approximately $115,000 on consulting fees and
          approximately $71,000 on general and administrative expenses. The loss
          per
          common share (calculated giving effect to the 1450:1 reverse stock split
          declared September 2005) was $2.25 for the six months ended January 31,
          2007, as
          compared to a loss per share of $2.62 for the six months ended January
          31,
          2006.
   ***Liquidity
          and Capital Resources***
  *Capital
          Resources*
  At
            October 31, 2006 and 2005, the Company had negative working capital of
            $9,100
            and $138,000.
  *Liquidity*
  During
          the three months ended October 31, 2006, there was no net Cash inflows;
          proceeds
          derived from issuances of notes payable. Cash outflows during this period
          was
          principally the result of cash used by continuing operations to fund the
          operating losses of $120,000 of accounts payables.
  2
 **Table
                of Contents**
 
 During
          the three months ended October 31, 2005, net cash decreased. Cash inflows
          of
          approximately $12,175 were from financing activities. Cash outflows during
          this
          period was principally the result of cash used by continuing operations
          to fund
          the operating losses of approximately $260,000, (net of depreciation and
          issuance of common stock for services), and $53,000 of accounts payable
          increases. Cash outflows from investing activities consisted of approximately
          $1,900 used to purchase property and equipment.
 
 We
          have
          limited or no prior history as a BDC. Further, we will require substantial
          additional funding for continuing BDC administration, compliance requirements
          and the implementation of the business plan as a BDC. There can be no assurance
          that the Company will be able to obtain sufficient additional funds when
          needed,
          or that such funds, if available, will be obtainable on terms satisfactory
          to
          the Company. These conditions, among others, raise substantial doubt about
          the
          Company's ability to continue as a going concern. The accompanying financial
          statements do not include any adjustments relating to the recoverability
          and
          classification of asset carrying amounts or the amount and classification
          of
          liabilities that might result the Company be unable to continue as a going
          concern.
  The
          Company intends to invest in companies that focus on providing marketing
          and
          promotional services. We will seek to leverage the combined talents of
          our
          experienced management team to invest in those companies and to enhance
          shareholder value.
  A
          business development company is defined and regulated by the Investment
          Company
          Act of 1940 (“1940 Act”). A business development company must be organized in
          the United States for the purpose of investing in or lending to primarily
          private companies and making managerial assistance available to them. A
          business
          development company may use capital provided by public shareholders and
          from
          other sources to invest in long-term, private investments in businesses.
          A
          business development company provides shareholders the ability to retain
          the
          liquidity of a publicly traded stock, while sharing in the possible benefits,
          if
          any, of investing in primarily privately owned companies.
  The
          Company is authorized to issue up to $5,000,000 in value of securities
          without
          registration of said securities under the Securities Act of 1933; in reliance
          on
          the exemption provided by Rule 602(a) of Regulation E under the 33 Act.
          Through
          January 31, 2007, the Company has raised approximately $602,000 proceeds
          against
          this limit.
  Failure
          to secure additional financing or to raise additional equity capital may
          result
          in the Company depleting its available funds and not be able to pay its
          obligations. These circumstances, among others, raise substantial doubt
          about
          the Company’s ability to continue as a going concern. The accompanying
          consolidated financial statements do not include any adjustments to reflect
          the
          possible future effects on the recoverability and classification of assets
          or
          the amounts and classification of liabilities that may result from the
          possible
          inability of the Company to continue as a going concern.
  We
          currently anticipate that our cash requirements will be approximately $300,000
          for the remainder of this fiscal year. There are no capital expenditures
          planned
          for the remainder of this fiscal year.
  ***Critical
          Accounting Policies***
  *Valuation
          of Investments*
  We
          will
          determine the value of each investment in our portfolio on a quarterly
          basis,
          and changes in value result in unrealized gains or losses being recognized.
          At
          January 31, 2007, we have no portfolio investments; consequently, our total
          assets did not include portfolio investments recorded at fair value. Value,
          as
          defined in Section 2(a)(41) of the Investment Company Act of 1940, is (i)
          the
          market price for those securities for which a market quotation is readily
          available and (ii) for all other securities and assets, fair value is as
          determined in good faith by the board of directors. Since there is typically
          no
          readily ascertainable market value for the investments in our portfolio,
          we
          expect to value substantially all of our portfolio investments at fair
          value as
          determined in good faith by the board of directors pursuant to a valuation
          policy and a consistently applied valuation process. Because of the inherent
          uncertainty of determining the fair value of investments that do not have
          a
          readily ascertainable market value, the fair value of our investments determined
          in good faith by the board of directors may differ significantly from the
          values
          that would have been used had a ready market existed for the investments,
          and
          the differences could be material.
  3
 **Table
                of Contents**
  There
          is
          no single standard for determining fair value in good faith. As a result,
          determining fair value requires that judgment be applied to the specific
          facts
          and circumstances of each portfolio investment while employing a consistently
          applied valuation process for the types of investments we make. Unlike
          banks, we
          are not permitted to provide a general reserve for anticipated loan losses.
          Instead, we are required to specifically value each individual investment
          on a
          quarterly basis. We will record unrealized depreciation on investments
          when we
          believe that an investment has become impaired, including where collection
          of a
          loan or realization of an equity security is doubtful, or when the enterprise
          value of the company does not currently support the cost of our debt or
          equity
          investment. Conversely, we will record unrealized appreciation if we believe
          that the underlying portfolio company has appreciated in value and, therefore,
          our equity security has also appreciated in value. Changes in fair value
          are
          recorded in the statements of operations as "Gain / Loss on investments
          in
          portfolio companies."
  ***Securities
          Issued for Services***
  For
          the
          six months ended January 31, 2006 we issued 1,531 common shares in payment
          of
          services, to reduce our obligation and to avoid using our cash resources. 
Such shares were valued at $5,550 (estimated to be the fair value based
          on
          private placement sales on or about the issuance date). These shares were
          issued
          as restricted shares of the Company.
  ***Recently
          Issued Accounting Pronouncements***
  In
          December 2004, the FASB issued SFAS No. 123-R, "Share-Based Payment," which
          requires that the compensation costs relating to share-based payment
          transactions (including the cost of all employee stock options) be recognized
          in
          the financial statements. That cost will be measured based on the estimated
          fair
          value of the equity or liability instruments issued. SFAS No. 123-R covers
          a
          wide range of share-based compensation arrangements including share options,
          restricted share plans, performance-based awards, share appreciation rights,
          and
          employee share purchase plans. SFAS No. 123-R replaces SFAS No. 123, and
          supersedes APB Opinion No. 25. Small Business Issuers are required to apply
          SFAS
          No. 123-R in the first annual reporting period that begins after December
          15,
          2005. The adoption of SFAS 123-R is not expected to have a material impact
          on
          the Company's financial statements.
  In
          December 2004, the FASB issued SFAS No. 153 ("SFAS 153"), "Exchanges of
          No
          monetary Assets, an Amendment of APB Opinion No. 29, Accounting for Nonmonetary
          Transactions." The amendments made by SFAS 153 are based on the principle
          that
          exchanges of nonmonetary assets should be measured using the estimated
          fair
          value of the assets exchanged. SFAS 153 eliminates the narrow exception
          for
          nonmonetary exchanges of similar productive assets, and replaces it with
          a
          broader exception for exchanges of nonmonetary assets that do not have
          commercial substance. A nonmonetary exchange has "commercial substance"
          if the
          future cash flows of the entity are expected to change significantly as
          a result
          of the transaction. This pronouncement is effective for nonmonetary exchanges
          in
          fiscal periods beginning after June 15, 2005. The adoption of SFAS 153
          did not
          have a material impact on the Company’s financial statements.
  In
          May
          2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections,”
which replaces APB Opinion No. 20 and FASB Statement No. 3. This pronouncement
          applies to all voluntary changes in accounting principle, and revises the
          requirements for accounting for and reporting a change in accounting principle.
          SFAS No. 154 requires retrospective application to prior periods' financial
          statements of a voluntary change in accounting principle, unless it is
          impracticable to do so. This pronouncement also requires that a change
          in the
          method of depreciation, amortization, or depletion for long-lived, non-financial
          assets be accounted for as a change in accounting estimate that is affected
          by a
          change in accounting principle. SFAS No. 154 retains many provisions of
          APB
          Opinion 20 without change, including those related to reporting a change
          in
          accounting estimate, a change in the reporting entity, and correction of
          an
          error. The pronouncement also carries forward the provisions of SFAS No.
          3 which
          govern reporting accounting changes in interim financial statements. SFAS
          No.
          154 is effective for accounting changes and corrections of errors made
          in fiscal
          years beginning after December 15, 2005. The Statement does not change
          the
          transition provisions of any existing accounting pronouncements, including
          those
          that are in a transition phase as of the effective date of SFAS No. 154.
          The
          adoption of SFAS No. 154 did not have a material impact on the Company's
          financial statements.
 
 In
          March
          2006, the Financial Accounting Standards Board issued Statement of Accounting
          Standards No. 156, *Accounting
          for Servicing of Financial Assets* (SFAS 156),
          which amends SFAS 140, *Accounting
          for Transfers and Servicing of Financial Assets and Extinguishments of
          Liabilities* .
          SFAS
          156 permits, but does not require, an entity to choose either the amortization
          method or the fair value measurement method for measuring each class of
          separately recognized servicing assets and servicing liabilities. The provisions
          of SFAS No. 156 are effective for fiscal years beginning after September
          15,
          2006.
 
 In
          June 2006, the Financial Accounting Standards Board issued FASB
          Interpretation No. 48, *Accounting
          for Uncertainty in Income Taxes - an interpretation of FASB Statement
          No. 109* (FIN
          48).
          This interpretation clarifies the accounting for uncertainty in income
          taxes
          recognized in an enterprise's financial statements in accordance with FASB
          Statement No. 109, *Accounting
          for Income Taxes.* FIN
          48
          prescribes a recognition threshold and measurement attribute for the financial
          statement recognition and measurement of a tax position taken or expected
          to be
          taken in a tax return. It also provides guidance on derecognition,
          classification, interest and penalties, accounting in interim periods,
          disclosure, and transition. FIN 48 is effective for fiscal years beginning
          after
          December 15, 2006. The Company does not expect the adoption of FIN 48 to
          have a material effect on its financial statements and related
          disclosures.
 
 The
          Company is reviewing FSP Nos. FAS 115-1 and 124-1, but does not expect
          that the
          adoption of this FSP will have a material effect on its financial statements.
          In
          May 2005, the FASB issued SFAS no. 154, "Accounting Changes and Error
          Corrections ("SFAS No. 154") which replaces APB Opinion No. 20, "Accounting
          Changes" and SFAS No. 3, "Reporting Accounting Changes in Interim Financial
          Statements-An Amendment of ABP Opinion No. 28. SFAS No. 154 provides guidance
          on
          the accounting for and reporting of accounting changes and error corrections.
          Specifically, this statement requires "retrospective application" of the
          direct
          effect for a voluntary change in accounting principle to prior periods'
          financial statements, if it is practical to do so. SFAS No. 154 also strictly
          defines the term "restatement" to mean the correction of an error revising
          previously issued financial statements. SFAS No. 154 is effective for accounting
          changes and corrections of errors made in fiscal years beginning after
          December
          15, 2005 and are required to be adopted by the Company in the first quarter
          of
          fiscal year 2006. Although we will continue to evaluate the application
          of SFAS
          No. 154, management does not anticipate that adoption will have a material
          impact on our results of operations, financial position or cash flows.
 
 Other
          recent accounting pronouncements issued by the FASB (including its Emerging
          Issues Task Force), the AICPA, and the SEC did not or are not believed
          by
          management to have a material impact on the Company's present or future
          consolidated financial statements.
  4
 **Table
                of Contents**
  **ITEM
          3: QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET
          RISK**
  The
          Company’s business activities contain elements of risk. Company management
          considers the principal types of risk to be valuations of investments in
          portfolio companies and fluctuations in interest rates. We consider the
          management of risk essential to conducting our business. Accordingly, our
          risk
          management systems and procedures are designed to identify and analyze
          our
          risks, to set appropriate policies and limits and to continually monitor
          these
          risks and limits by means of reliable administrative and information systems
          and
          other policies and programs.
  As
          a BDC,
          we plan to invest in liquid securities including debt and equity securities
          of
          primarily private companies. Our investments are generally subject to
          restrictions on resale and generally have no established trading market.
          Our
          policy is to value our investments at fair value. There is no single standard
          for determining fair value in good faith. As a result, determining fair
          value
          requires that judgment be applied to the specific facts and circumstances
          of
          each portfolio investment while employing a consistently applied valuation
          process for each type of investment.
  The
          board
          of directors determines fair value to be the amount for which an investment
          could be exchanged in an orderly disposition over a reasonable period of
          time
          between willing parties other than in a forced or liquidation sale. The
          Company’s valuation policy considers the fact that no ready market exists for
          substantially all of the securities in which the Company invests. The Company's
          valuation policy is intended to provide a consistent basis for determining
          the
          fair value of the portfolio. The Company will record unrealized depreciation
          on
          investments when the Company believes that an equity security is doubtful
          or
          when the enterprise value of the company does not currently support the
          cost of
          the Company’s debt or equity investment. Conversely, the Company will record
          unrealized appreciation if it determines that the underlying portfolio
          company
          has appreciated in value and, therefore, the Company's equity security
          has also
          appreciated in value. The values of any investments in public securities
          are
          determined using quoted market prices discounted for restrictions on resale.
          Without a readily ascertainable market value and because of the inherent
          uncertainty of valuation, the fair value of the Company's investments in
          its
          portfolio companies, determined in good faith by the board of directors,
          may
          differ significantly from the values that would have been used had a ready
          market existed for the investments and the differences could be
          material.
  In
          addition, the illiquidity of the Company's existing investments may adversely
          affect its ability to dispose of debt and equity securities at times when
          it may
          be otherwise advantageous for the Company to liquidate such investments.
          In
          addition, if the Company was forced to immediately liquidate some or all
          of the
          investments in the portfolio companies, the proceeds of such liquidation
          may be
          significantly less than the current value of such investments.
  Because
          the Company may borrow money to make investments, the Company's net investment
          income before net realized and unrealized gains or losses, or net investment
          income, is dependent upon the difference between the rates at which the
          Company
          borrows funds and the rate at which the Company invests these funds. As
          a
          result, there can be no assurance that a significant change in market interest
          rates will not have a material adverse effect on the Company's net investment
          income. In periods of rising interest rates, the Company's cost of funds
          would
          increase, which would reduce the Company's net investment income. The Company
          may use a combination of long-term and short-term borrowings and equity
          capital
          to finance its investing activities.
  5
 **Table
                of Contents**
  
 **ITEM
          4: CONTROLS AND PROCEDURES**
  ***Evaluation
          of Controls and Procedures***
  The
          Company’s board of directors and management, including the Chief Executive
          Officer ("CEO") and Chief Financial Officer ("CFO"), evaluated the effectiveness
          of the design and operation of the Company's disclosure controls and procedures,
          as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act as of a
          date (the
          "Evaluation Date"), within 90 days prior to filing the Company's January
          31,
          2007 Form 10-Q. Based upon that evaluation, the Company's board of directors
          and
          management, including the CEO and CFO, concluded that, as of January 31,
          2007,
          the Company's disclosure controls and procedures were not effective in
          alerting
          management on a timely basis to material Company information that would
          be
          required to be included in our periodic filings with the SEC. However,
          the board
          of directors and management have now taken specific steps to correct these
          matters.
  ***Changes
          in Internal Control over Financial Reporting***
  There
          were no significant changes made in the Company's internal controls over
          financial reporting, during the three and six months ended January 31,
          2007,
          that have materially affected, or are reasonably likely to materially affect,
          these internal controls. Thus, no corrective actions, with regard to significant
          deficiencies or material weaknesses, were necessary.
  ***Limitations
          on the Effectiveness of Internal Controls***
  Our
          management does not expect that our disclosure controls and procedures
          or our
          internal control over financial reporting will necessarily prevent all
          fraud and
          material error. An internal control system, no matter how well conceived
          and
          operated, can provide only reasonable, not absolute, assurance that the
          objectives of the control system are met. Further, the design of a control
          system must reflect the fact that there are resource constraints, and the
          benefits of controls must be considered relative to their costs. Because
          of the
          inherent limitations in all control systems, no evaluation of controls
          can
          provide absolute assurance that all control issues and instances of fraud,
          if
          any, within the Company have been detected. These inherent limitations
          include
          the realities that judgments in decision-making can be faulty, and that
          breakdowns can occur because of simple error or mistake. Additionally,
          controls
          can be circumvented by the individual acts of some persons, by collusion
          of two
          or more people, or by management override of the internal control. The
          design of
          any system of controls also 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.
          Over time, control may become inadequate because of changes in conditions,
          or
          the degree of compliance with the policies or procedures may
          deteriorate.
  6
 **Table
                of Contents**
  
  **PART
          II: OTHERINFORMATION**
  **ITEM
          1: LEGALPROCEEDINGS** .
 Currently,
            the Company is not a party to any pending legal proceedings.
  **ITEM
          2: UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF
          PROCEEDS**
 None.
  **ITEM
          3: DEFAULTSUPON SENIOR SECURITIES**
 None.
  **ITEM
          4: SUBMISSIONOF MATTERS TO A VOTE OF SECURITY
          HOLDERS** .
  On
          August
          10, 2005, it was approved by shareholders to amend Article IV, Authorized
          Capital Stock, of the Company’s Articles of Incorporation, increasing the total
          authorized common stock to 950,000,000 shares, each with a par value of
          $0.001
          per share (“Common Stock”) and 50,000,000 shares of Preferred Stock each with a
          par value of $0.001, (“Preferred Stock”). The rights, preferences, privileges
          and restrictions granted to or imposed upon the Preferred Stock will be
          determined by the Board of Directors. This amendment was approved by the
          required vote of shareholders in accordance with the corporation’s law of the
          state of Nevada.
  On
          September 12, 2005, the board of directors received authorization from
          the
          shareholders to amend the articles of incorporation for Article 1, Company
          Name;
          changing the Company’s name to Rudy 45; and to implement a 1450:1 reverse stock
          split of the Company’s common stock effective September 26, 2005. The Company’s
          shareholders record reflects on such date 86,963,207 issued and outstanding
          shares before the reverse stock split and 59,975 after the reverse stock
          split.
  **ITEM
          5: OTHERINFORMATION**
 None


7
 **Table
            of Contents**
  **ITEM
        6 EXHIBITS**
  Exhibit
                    No.
                DescriptionExhibit
                    3.1
                Certificate
                    of Existence with Status in Good Standing of the Registrant,
                    dated
                    December 8, 2004, as an exhibit to Form 10-KSB filed on November
                    15,
                    2005.Exhibit
                    3.2
                Certificate
                    of Amendment to the Articles of Incorporation of the Registrant,
                    dated
                    December 22, 2004, as an exhibit to Form 10-KSB filed on November
                    15,
                    2005.Exhibit
                    3.3
                By-Laws
                    of the Registrant, as an exhibit to Form 10-KSB filed on November
                    15,
                    2005.Exhibit
                    3.4
                Certificate
                    of Existence with Status in Good Standing of the Registrant,
                    dated January
                    20, 2005, as an exhibit to Form 10-KSB filed on November 15,
                    2005.Exhibit
                    3.5
                Amended
                    List of Officers, Directors and Resident Agent of the Registrant,
                    dated
                    March 7, 2005, as an exhibit to Form 10-KSB filed on November
                    15,
                    2005.Exhibit
                    3.6
                Certificate
                    of Amendment to the Articles of Incorporation of the Registrant,
                    dated
                    August 15, 2005, as an exhibit to Form 10-KSB filed on November
                    15,
                    2005.Exhibit
                    3.7
                Certificate
                    of Amendment to the Articles of Incorporation of the Registrant,
                    dated
                    September 14, 2005, as an exhibit to Form 10-KSB filed on November
                    15,
                    2005.Exhibit
                    31.1*
                Certification
                    of Chief Executive Officer and Chief Financial Officer pursuant to
                    Section 302 of the Sarbanes-Oxley Act.Exhibit
                    32.1*
                Certification
                    of Chief Executive Officer and Chief Financial Officer pursuant
                    to Section
                    906 of the Sarbanes-Oxley Act.




-------------------
 *
        Filed
        herewith
  8
 **Table
            of Contents**




**SIGNATURES**
  In
        accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
        this report to be signed on its behalf by the undersigned, thereunto duly
        authorized.




**RUDY
              45**Date: 
              February 20, 2007
            By:
            /s/ David
              ZanardiDavid
                ZanardiChief
                Executive Officer,
              Chief
                Financial Officer and
              Principal
                Accounting Officer






9
 **Table
          of Contents**




EXHIBIT
                  INDEXExhibit
                  31.1
              Certification
                  of Chief Executive Officer and Chief Financial Officer  pursuant
                  to Section 302 of the Sarbanes-Oxley Act.Exhibit
                  32.1
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to Section
                  906 of the Sarbanes-Oxley Act.