**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 October 13, 2006: 82,304,979 shares.






Table
          of Contents




**TABLE
        OF CONTENTS**
 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 April 30, 2006 and
                  2005
              F-1
  Condensed
                  Statements of Operations for the three months
                  ended April 30, 2006 and 2005
              F-2
  Condensed
                  Statements of Cash Flows for the six months ended
                  April 30, 2006 and 2005
              F-3
  Notes
                  to Condensed Financial Statements
              F-4
   
 1
 Table
            of Contents
 
 **RUDY
                    45****CONDENSED
                    BALANCE SHEETS****(UNAUDITED)**April
                    30,
                  2006
                
                April
                    30,
                  2005**ASSETS**Current
                    assets:Cash
                
                $
                -
                
                $
                11,358Total
                    current assets
                
                
                -
                
                
                11,358Property
                    and equipment, net
                
                
                7,184
                
                
                -Total
                    assets
                
                $
                7,184
                
                $
                11,358**LIABILITIES
                    AND STOCKHOLDERS' EQUITY**Current
                    liabilities:Accounts
                    payable and accrued liabilities
                
                $
                110,444
                
                $
                19,434Notes
                    Payable
                
                
                9,456
                
                
                0Total
                    current liabilities
                
                
                119,900
                
                
                19,434Commitments
                    and contingenciesStockholders'
                    equity:Preferred
                    stock, $0.001 par value,25,000,000
                    shares authorized,none
                    issued or outstanding
                
                
                -
                
                
                -50,000,000
                    shares authorized,none
                    issued or outstanding
                
                
                -
                
                
                -Common
                    stock, $0.001 par value,500,000,000
                    authorized, 82,304,979 shares *issued
                    and outstanding
                
                
                63
                
                
                20Additional
                    paid-in capital, net
                
                
                3,504,554
                
                
                2,859,170Stock
                    subscription receivable
                
                
                -
                
                
                -Accumulated
                    deficit
                
                
                (3,391,901
                )
                
                (2,867,266
                )Total
                    stockholders' equity
                
                
                (112,716
                )
                
                (8,076
                )Total
                    liabilities and stockholders' equity
                
                $
                7,184
                
                $
                11,358


See
      accompanying notes to the financial statements




F-1
 Table
          of Contents




RUDY
                  45CONDENSED
                  STATEMENTS OF OPERATIONS(UNAUDITED)Three
                  Months
              
              Three
                  MonthsEnded
                  April 30,
              
              Ended
                  April 30,2006
              
              2005Net
                  sales
              
              $
              -
              
              $
              -Cost
                  of good sold
              
              
              -
              
              
              -Gross
                  profit
              
              
              -
              
              
              -Selling,
                  general and administrative expenses
              
              
              119,900
              
              
              283,374Operating
                  loss
              
              
              (119,900
              )
              
              (283,374
              )Other
                  (expense) incomeLoss
                  from continuing operations before income taxes
              
              
              (119,900
              )
              
              (283,374
              )Income
                  tax provisionNet
                  loss
              
              
              (119,900
              )
              
              (283,374
              )Income
                  (loss) per common share:Basic
              
              $
              (2.25
              )
              $
              (16.77
              )Diluted
              
              $
              (2.25
              )
              $
              (16.77
              )Weighted
                  average common shares outstanding:Basic
              
              
              53,467
              
              
              16,893Diluted
              
              
              53,467
              
              
              16,893


See
        accompanying notes to the financial statements
   F-2
 Table
            of Contents
 **RUDY
                      45****CONDENSED
                      STATEMENTS OF CASH FLOWS****(UNAUDITED)**Nine
                      Months Ended
                  
                  Nine
                      Months EndedApril
                      30,
                  
                  April
                      30,2006
                  
                  2005CASH
                      FLOW FROM OPERATING ACTIVITIES:Net
                      loss
                  
                  $
                  (119,900
                  )
                  $
                  (689,674
                  )Adjustments
                      to reconcile net loss to netcash
                      used in operating activities:Depreciation
                      and amortization
                  
                  
                  354
                  
                  
                  -Issuance
                      of common stock for services
                  
                  
                  0
                  
                  
                  576,055Changes
                      in operating assets and liabilities:Other
                      assets
                  
                  
                  
                  
                  
                  -Accounts
                      payable and accrued liabilities
                  
                  
                  
                  
                  
                  (36,298
                  )Due
                      to related party
                  
                  
                  110,444
                  
                  
                  -Net
                      cash used in operating activities
                  
                  
                  (9,102
                  )
                  
                  (149,917
                  )CASH
                      FLOWS FROM INVESTING ACTIVITIES:Purchase
                      of property and equipment
                  
                  
                  (354
                  )
                  
                  -Net
                      cash used in investing activities
                  
                  
                  (0
                  )
                  
                  -CASH
                      FLOWS FROM FINANCING ACTIVITIES:Proceeds
                      from issuance of common stock, net
                  
                  
                  0
                  
                  
                  161,275Proceeds
                      from notes payable
                  
                  
                  9,456
                  
                  
                  -Net
                      cash provided by financing activities
                  
                  
                  9,456
                  
                  
                  161,275Net
                      increase (decrease) in cash and cash equivalents
                  
                  
                  (0
                  )
                  
                  11,358Cash
                      at beginning of period
                  
                  
                  (0
                  )
                  
                  -Cash
                      at end of period
                  
                  $
                  -
                  
                  $
                  11,358




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 April 30, 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 April 30, 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 April 30, 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 April
        30,
        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 April
        30,
        2006 and 2005, the Company had an accumulated deficit of approximately
        $3,391,901 and $2,867,266; negative working capital of approximately $9,102
        and
        $149,917.
  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 April 30, 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 April 30, 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 April 30, 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 April 30, 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 April 30, 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 April
        30,
        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 April 30, 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 April 30, 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 April 30, 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
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  **RUDY
        45**
 **NOTES
        TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 **For
        the three months ended April 30, 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 April 30, 2006, 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 April 30, 2006, 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 April 30, 2006, 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 April 30, 2006, 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
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 **RUDY
        45**
 **NOTES
        TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**
 **For
        the three and six months ended April 30, 2006 and 2005**
    ***Common
        Stock Subscribed***
  The
        company did not have any subscription receivable as of April 30, 2005 and
        2006.
  **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
        April 30, 2006 and 2005:
  2006
              
              2005Numerator
                  for basic and diluted income (loss)per
                  common share:Net
                  (loss) income attributed to common shareholders
              
              $
              (119,900
              )
              $
              (283,374
              )Denominator
                  for basic and diluted income (loss)per
                  common share:Weighted
                  average number of common shares outstanding
              
              
              53,467
              
              
              16,893Basic
                  and diluted (loss) income per common share
              
              $
              (2.25
              )
              $
              (16.77
              )
  **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 April 30, 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
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            of Contents
  **ITEM
        2: MANAGEMENT’SDISCUSSION 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 April 30, 2005 and
        2006***
  For
        the
        three months ended April 30, 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 April 30, 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 nine months ended April 30, 2006, as compared to a loss per
        share
        of $16.77 for the nine months ended April 30, 2005.
   ***Liquidity
        and Capital Resources***
  *Capital
        Resources*
  At
          April
          30, 2006 and 2005, the Company had negative working capital of $9,100 and
          $149,917.
  *Liquidity*
  During
        the three months ended April 30, 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.
  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."
   3
 Table
            of Contents
  ***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: QUANTITATIVEAND 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: CONTROLSAND 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 April 30, 2006,
        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:OTHER INFORMATION**
  **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.
              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 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
                21, 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 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.