**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 January 31,
                    2007****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)
  **(210)
          344-2700**
 (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








**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**




**ITEM
      1: FINANCIAL STATEMENTS**






**INDEX
      TO FINANCIAL STATEMENTS**






Page




Condensed
                Balance Sheets as of January 31, 2007 and 2006
            F-1




Condensed
                Statements of Operations for the three and six months ended January
                31,
                2007 and 2006
            F-2




Condensed
                Statements of Cash Flows for the six months ended January 31, 2007
                and
                2006
            F-3




Notes
                to Condensed Financial Statements
            F-4












































































































**Table
          of Contents**








RUDY
                  45CONDENSED
                  BALANCE SHEETS(UNAUDITED)January
                  31, 2007
              
              January
                  31, 2006ASSETSCurrent
                  assets:Cash
              
              $
              -
              
              $
              -Total
                  current assets
              
              
              -
              
              
              -Property
                  and equipment, net
              
              
              7,184
              
              
              7,538Total
                  assets
              
              $
              7,184
              
              $
              7,538LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  liabilities:Accounts
                  payable and accrued liabilities
              
              $
              110,444
              
              $
              71,962Notes
                  Payable
              
              
              9,456
              
              
              104,700Total
                  current liabilities
              
              
              119,900
              
              
              176,662Commitments
                  and contingenciesStockholders'
                  equity:Preferred
                  stock, $0.001 par value,25,000,000
                  shares authorized at January 31, 2005,none
                  issued or outstanding
              
              
              -
              
              
              -50,000,000
                  shares authorized at January 31, 2006,none
                  issued or outstanding
              
              
              -
              
              
              -Common
                  stock, $0.001 par value,500,000,000
                  authorized,issued
                  and outstanding at January 31, 2005
              
              
              
              
              
              -950,000,000
                  shares authorized,issued
                  and outstanding at January 31, 2006
              
              
              63
              
              
              63Additional
                  paid-in capital, net
              
              
              3,504,554
              
              
              3,504,554Stock
                  subscription receivable
              
              
              -
              
              
              -Accumulated
                  deficit
              
              
              (3,391,901
              )
              
              (3,673,741
              )Total
                  stockholders' equity
              
              
              (112,716
              )
              
              (
                  169,124
              )Total
                  liabilities and stockholders' equity
              
              $
              7,184
              
              $
              7,538






See
      accompanying notes to the financial statements




F-1
 **Table
          of Contents**




RUDY
                    45CONDENSED
                    STATEMENTS OF OPERATIONS(UNAUDITED)Three
                    Months
                
                Three
                    Months
                
                Six
                    Months
                
                Six
                    MonthsEnded
                    January 31,
                
                Ended
                    January 31,
                
                Ended
                    January 31,
                
                Ended
                    January 31,2007
                
                2006
                
                2007
                
                2006Net
                    sales
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -Cost
                    of good sold
                
                
                -
                
                
                -
                
                
                -
                
                
                -Gross
                    profit
                
                
                -
                
                
                -
                
                
                -
                
                
                -Selling,
                    general and administrative expenses
                
                
                119,900
                
                
                139,925
                
                
                119,900
                
                
                265,504Operating
                    loss
                
                
                (119,900
                )
                
                (139,925
                )
                
                (119,900
                )
                
                (265,504
                )Other
                    (expense) incomeLoss
                    from continuing operations before income taxes
                
                
                (119,900
                )
                
                (139,925
                )
                
                (119,900
                )
                
                (265,504
                )Income
                    tax provisionNet
                    loss
                
                
                (119,900
                )
                
                (139,925
                )
                
                (119,900
                )
                
                (265,504
                )Income
                    (loss) per common share:Basic
                
                $
                (2.25
                )
                $
                (2.62
                )
                $
                (2.25
                )
                $
                (4.97
                )Diluted
                
                $
                (2.25
                )
                $
                (2.62
                )
                $
                (2.25
                )
                $
                (4.97
                )Weighted
                    average common shares outstanding:Basic
                
                
                53,467
                
                
                53,467
                
                
                53,467
                
                
                53,467Diluted
                
                
                53,467
                
                
                53,467
                
                
                53,467
                
                
                53,467








See
      accompanying notes to the financial statements




F-2
 **Table
          of Contents**




RUDY
                  45CONDENSED
                  STATEMENTS OF CASH FLOWS(UNAUDITED)Six
                  Months Ended
              
              Six
                  Months EndedJanuary
                  31,
              
              January
                  31,2006
              
              2006CASH
                  FLOW FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (119,900
              )
              $
              (265,504
              )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
              
              
              
              
              
              53,361Due
                  to related party
              
              
              110,444
              
              
              -Net
                  cash used in operating activities
              
              
              (9,102.00
              )
              
              (206,239
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Purchase
                  of property and equipment
              
              
              (354
              )
              
              (1,868
              )Net
                  cash used in investing activities
              
              
              (0
              )
              
              (1,868
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from issuance of common stock, net
              
              
              0
              
              
              76,523Proceeds
                  from notes payable
              
              
              9,456
              
              
              104,700Net
                  cash provided by financing activities
              
              
              9,456
              
              
              181,233Net
                  increase (decrease) in cash and cash equivalents
              
              
              (0
              )
              
              (26,884
              )Cash
                  at beginning of period
              
              
              (0
              )
              
              26,884Cash
                  at end of period
              
              $
              -
              
              $
              -




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 and six months ended January 31, 2007 and 2006**






**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 and six months ended January 31, 2007 and 2006**






***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 January
      31,
      2007 and 2006, the Company had an accumulated deficit of approximately
      $3,392,000 and $3,674,000; negative working capital of approximately $56,408
      and
      $177,000.




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 January 31, 2007 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 and six months ended January 31, 2007 and 2006**






***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 January 31, 2007, 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 January 31, 2007.




***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 December 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 January
      31,
      2007 and 2006.




***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 and six months ended January 31, 2007 and 2006**






***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 January 31, 2007 or
        2006.


***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, 2005 and 2004, 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
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          of Contents**





**RUDY
      45**


**NOTES
      TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**


**For
      the three and six months ended January 31, 2007 and 2006**








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 January 31, 2006, the Company entered into notes payable
      for $48,000 from potential investors which subscribed to stock in October 2005.
      The notes bear interest at 10% per annum and are payable by April, 2006, (see
      Note 5, Common Stock Subscribed).




During
      the three months ended January 31, 2006, the Company entered into notes payable
      for $56,700, bearing interest at 10% per annum and payable by April,
      2006.




**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 January 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 January 31, 2007, 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
      January 31, 2007 and 2006:




2007
            
            2006Numerator
                for basic and diluted income (loss)per
                common share:Net
                (loss) income attributed to common shareholders
            
            $
            (119,900
            )
            $
            (265,505
            )Denominator
                for basic and diluted income (loss)per
                common share:Weighted
                average number of common shares outstanding
            
            
            53,467
            
            
            53,467Basic
                and diluted (loss) income per common share
            
            $
            (2.25
            )
            $
            (4.97
            )






**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 January 31, 2007. 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 January 31, 2007 and
      2006***




For
      the
      three months ended January 31, 2007, 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.




***Results
      of Operations for the six months ended January 31, 2007 and
      2006***




For
      the
      six months ended January 31, 2007, 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 three months ended January 31, 2006 the
      Company incurred a net loss of approximately $266,000. The Company had no
      revenues and expended approximately $195,000 on consulting fees and
      approximately $25,000 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 three months ended January 31, 2007,
      as compared to a loss per share of $4.97 for the three months ended January
      31,
      2006.




***Liquidity
      and Capital Resources***




*Capital
      Resources*




At
        January 31, 2007 and 2006, the Company had negative working capital of $56,507
        and $177,000.




*Liquidity*




During
      the six months ended January 31, 2007, there was no net. Cash inflows of
      approximately $10,000 were from financing activities; proceeds from extension
      of
      the issuance of notes payable. Cash outflows during this period was principally
      the result of cash used by continuing operations to fund the operating losses
      of
      $110,000 of accounts payable increases.





During
      the six months ended January 31, 2006, net cash decreased by approximately
      $27,000. Cash inflows of approximately $181,000 were from financing activities;
      proceeds from the sale of common stock and the issuance of notes payable. 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.





2
 **Table
          of Contents**


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.




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.




3
 **Table
          of Contents**




***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
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          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
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          of Contents**






**PART
      II: OTHER INFORMATION**




**ITEM
      1: LEGAL PROCEEDINGS** .




Currently,
                the Company is not a party to any pending legal
                proceedings.




**ITEM
      2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**




None.




**ITEM
      3: DEFAULTS UPON SENIOR SECURITIES**




None.




**ITEM
      4: SUBMISSION OF 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: OTHER INFORMATION**




None  7
 **Table
            of Contents**




**ITEM
      6: EXHIBITS**




Exhibit
                No.
            Description




Exhibit
                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 pursuant to Section 302 of the Sarbanes-Oxley
                Act.




Exhibit
                31.2*
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act.




Exhibit
                32*
            Certification
                of Chief Executive Officer and Chief Financial Officer pursuant to
                Section
                906 of the Sarbanes-Oxley Act.




-----------------------


*
            Filed
                herewith


8
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          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
              15, 2007
            By:
            /s/ David
              G.
              ZanardiDavid G. ZanardiChief
                Executive Officer,
                Chief
                  Financial Officer and
                  Principal
                    Accounting Officer

















**EXHIBIT
      INDEX**






Exhibit
                31.1
            Certification
                of Chief Executive 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.