**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20429





FORM
      10-KSB





x  ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT
      OF
      1934





For
      the
      fiscal year ended December 31, 2007.





Commission
      file number: 333-141521





City
      Language Exchange, Inc.


(Exact
      name of small business issuer as specified in its charter)





Delaware
            20-5433090(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                employer
              identification
                no.)6021
                Roxton Road
              Halifax,
                Nova Scotia, Canada,
            B3H
                1H4(Address
                of principal executive
                offices)
            (Zip
                Code)





Issuer’s
      telephone number (904) 478-5065





Securities
      registered pursuant to Section 12(b) of the Exchange Act:





Title of Each Class
            Name of Exchange on Which
              RegisteredCommon
                stock, par value $0.000001 per share
            None





Securities
      to be registered under Section 12(g) of the Exchange Act: None





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o





Check
      whether the issuer (1) filed all reports required to be filed by section 13
      or
      15(d) of the Securities Exchange Act during the past 12 months (or for such
      shorter period that the registrant was required to file such reports), and
      (2)
      has been subject to such filing requirements for the past 90 days. x Yes o  No





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




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




Issuer's
      revenues for its most recent fiscal year: $4,940.




The
      aggregate market value of the voting stock held by non-affiliates as of March
      5,
      2008, was approximately $18,000. The value is based on the sales price of the
      common stock purchase in the private placement during 2007. There have been
      so
      sales of the common stock since the initial purchase by the non-affiliates
      in
      the private placement. For purposes of this computation only, all executive
      officers, directors, and beneficial owners of more than 10% of the outstanding
      Common Stock, are assumed to be affiliates.









The
      number of shares outstanding of the issuer's Common Stock on March 5, 2008
      was
      7,180,000.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





None





Transitional
      Small Business Disclosure Format (Check one): o Yes x  No









**City
      Language Exchange, Inc** .


**FORM
      10-KSB**


**TABLE
      OF CONTENTS**


Page
                  No.**PART
                  I**Item
                  1.
              Description
                  of Business
              1Item
                  2.
              Description
                  of Property
              4Item
                  3.
              Legal
                  Proceedings
              4Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              4**PART
                  II**Item
                  5.
              Market
                  for Common Equity and Related Stockholder Matters and
                  Small Business Issuer Purchases of Equity
                  Securities
              5Item
                  6.
              Management’s
                  Discussion and Analysis or
                  Plan of Operation
              6Item
                  7.
              Financial
                  Statements
              10Item
                  8.
              Changes
                  in and Disagreements With Accountants on Accounting
                  and Financial Disclosure
              16Item
                  8A.
              Controls
                  and Procedures
              17Item
                  8B.
              Other
                  Information
              18**PART
                  III**Item
                  9.
              Directors,
                  Executive Officers, Promoters, Control Persons and Corporate Governance;
                  Compliance with Section 16(a) of the Exchange Act
              19Item
                  10.
              Executive
                  Compensation
              20Item
                  11.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters.
              21Item
                  12.
              Certain
                  Relationships and Related Transactions
              22Item
                  13.
              Exhibits
              22Item
                  14.
              Principal
                  Accountant Fees and Services
              23Signatures
              
              24




i




**PART
      I**





**ITEM
      1.**  **DESCRIPTION
      OF BUSINESS**





Overview





City
      Language Exchange, Inc. was incorporated in Delaware on August 28, 2006.





City
      Language Exchange’s address is 6021 Roxton Road, Halifax, Nova Scotia, B3H 1H4,
      and its telephone number is (902) 478-5065. We have a website at
      www.SanFranciscoLanguageExchange.com. Nothing on this website is part of this
      prospectus.




Business





City
      Language Exchange was formed to develop a business to provide people with an
      affordable form of language instruction. We match two native speakers of
      different languages - living in the same city - to routinely teach each other.
      This service will be offered separately in various cities.





For
      example, John is a native English-speaker living in San Francisco. He is
      interested in learning Japanese. Tomo is a native Japanese-speaker who is also
      living in San Francisco. He wants to improve his English. Once matched by us,
      they are able to teach each other and learn for free as a mutually beneficial
      arrangement.





Since
      inception, we have been developing our business as follows:





·
            A
                business plan and rough projections of financial statements were
                created
                based on that business plan and optimistic, pessimistic, and expected
                levels of performance·
            Bank
                accounts for the company were created once the company was
                incorporated·
            A
                programmer was hired to consult on and construct the website in tandem
                with the owner, through which all of the business’ services are
                provided·
            A
                public relations freelancer was hired to consult on and execute a
                marketing/PR plan, in tandem with the
                owner





·
            The
                owner, programmer, and another consultant created the database through
                which registrants are stored, contacted, and matched and began online
                advertising·
            The
                owner set up an online payment system for credit
                cards





·
            Incoming
                registrants are presently matched while marketing efforts are being
                launched and will be ongoing





We
      currently have over 3,100 registrants interested in matches and are focused
      on
      increasing that number primarily through on line marketing. In 2007, we
      generated $4,940 in revenues. We expanded our services from simply operating
      in
      San Francisco to include New York, Los Angeles, and Seattle in April, 2007
      and
      initially received a positive response to our service, particularly in New
      York.
      We created an automated matching program to save administrator hours in managing
      the larger number of registrants we expected to receive through the new cities.





Recently,
      however, we have had a falling-off in new registrations, leading to less matches
      and therefore less revenue. The causes seem to be twofold and related. First,
      once the most enthusiastic persons searching for language exchanges register,
      it
      can take additional time or new methods of advertising to bring in more
      participants. Second, when participant registration and matching drops off,
      so
      does the enthusiasm of the registrants, participants, referrers, and
      administrators. We have considered that this trend may be seasonal, in that
      people are less willing to venture out to meet a stranger for a language
      exchange in the cold and during the school term for students, than in the
      summer, when time is more available for most. We are hoping that continued
      administrator dedication and warming weather will lead to a rebound in
      revenues.




1





Our
      testing is currently focused on the best methods to bring in additional
      registrants, focusing on foreign language speakers, by creating translations
      of
      the site and advertising in other languages, to match the number of existing
      registrants who are primarily English speakers. Online marketing has proven
      to
      be the most effective means of bringing in registrants, based on surveys asking
      where registrants heard about our business.


We
      are
      also working to create more online publicity and advertising for the business
      as
      well as to improve the website’s “searchability” in all languages by
      page-ranking, signifying that when a consumer searches on Google for language
      instruction in San Francisco, the business’ website would come up higher on the
      list of potential websites.





Service





Our
      service operates as follows:





·
            A
                prospective customer registers on City Language Exchange’s website by
                submitting a web form;·
            The
                registrant’s data is gathered and stored electronically into our
                database;





·
            The
                registrant is matched with another registrant of opposite linguistic
                ability and similar aspirations;·
            Both
                registrants are informed they have been selected for a match and
                are sent
                electronic invoices for the payment of their matching
                fee;





·
            Once
                both matching fees have been collected, both registrants are sent
                their
                new language exchange partner’s contact
                information.





Pricing





As
      City
      Language Exchange is designed to allow access to affordable language study
      to
      anyone, we plan to keep matching fee prices at a standard, one-time fee of
      $30.
      Similar services such as private tuition often charge a similar fee as an hourly
      rate. Because matching one pair is relatively inexpensive, we believe this
      low
      price will allow maximum public interest, maximum participation and maximum
      profit.





Target
      Market





Although
      the potential language exchange market is broad and diverse, we have broken
      down
      our target market into two primary groups:





·
            Native
                English-speakers·
            Non-English-speakers.





Group
      1
      are native English-speakers and are interested in learning or improving upon
      another language. We believe they will generally be between the ages of 16
      and
      65 and internationally minded. We anticipate that they usually have either
      specific linguistic goals or wish to take up language a hobby.





Group
      2
      comprises of native speakers of languages other than English. We believe they
      are generally between the ages of 18 and 65 and were most likely born in another
      country, living in America either temporarily or as an immigrant. We believe
      their linguistic goals generally range from adapting to a new society to
      employment or academic prospects.





Although
      City Language Exchange will match non-English-speakers interested in learning
      a
      language that is not English, this will not be one of our primary
      markets.




2





Marketing:





We
      have
      four separate marketing programs:





*Promote
      Online Searchability* - As
      City Language Exchange’s potential customers’ main source of information about
      the corporation and its services will be our website, it is of the utmost
      importance that the website ranks highly on Internet search engines such as
      Google.com and Yahoo.com. Our online searchability has been increasing slowly
      but steadily as anticipated. Google searches, which are used 80% of the time
      by
      the American internet community, assign a search ranking based on a number
      of
      factors that allegedly include relevance, connectedness, and longevity of the
      site being searched. The ranking determines whether the page searched will
      appear first on the list of relevant pages or 500th. Our Google ranking using
      a
      few set searches has moved up consistently. We also purchased Google Adwords,
      which prove to be worth their cost in bringing in registrants.





*Independent
      Publications* - We
      have abandoned the campaign using Independent Publications as very few
      registrants indicated that they heard about our services through this media.
      It
      would seem that online advertisements are most effective in obtaining online
      visits.





*Public
      Relations* - While
      press kits were also sent to localized media with limited success, we again
      found that we were getting very few visitors from these advertising methods
      and
      discontinued them. As our registration page forces each new user to indicate
      where they heard about our service we are fortunate to have very accurate data
      in this respect, which enables us to abandon ineffective campaigns.





*Participant
      Referrals -* We
      have
      enacted a participant referral program, where participants receive a promotional
      gift in exchange for referring another paying customer. Participant referrals
      have emerged as a source of new clients. Honest and diligent customer service
      seems to be our best tool for continuing to gain from this method of
      advertising.





Competition:





The
      industry of language instruction products is highly competitive. Many of our
      competitors have substantially greater financial, marketing, personnel and
      other
      resources than we do. Competitors include traditional language instruction
      services as well as competitors on the internet. If additional competitors
      enter
      the field, our market share may fail to increase or may decrease.





Competitors
      include those language-learning methods that involve human interaction such
      as
      private language schools, university language programs, private tutors; and
      those that don’t such as language self-study textbooks, language-learning
      software, online language-learning websites. Our advantage over the former
      is
      price, and our advantage over the latter is effectiveness.





We
      also
      face competition from worldwide language exchange matching sites. Currently
      the
      most well known of these websites include: Peerme.com, Zuiop.com,
      Expatriates.com and MyLanguageExchange.com. All of these sites will allow a
      registrant to be matched for little or no cost. These sites, however, use very
      little advertising and do not hold a database of the registrants’ information,
      thus displaying the registrant’s contact information to the site’s viewers.
      These sites are also all international sites, thus spreading their customer
      base
      thin across the globe. Therefore, our advantages over these companies involve
      advertising, security, and local-focus.




3




Employees





We
      currently have no other employees other than Mr. White. In his capacity as
      our
      President, Mr. White currently devotes approximately 20% of his time to our
      business and anticipates that after the next 12 months he will increase his
      commitment to spending approximately 50% of his time working on our business.





Government
      F and Regulation





As
      an
      internet-based company, City Language Exchange, Inc. is subject to privacy
      regulations. City Language Exchange, Inc. is not aware of any other governmental
      regulations as to which it is subject.





**ITEM
      2.**  **DESCRIPTION
      OF PROPERTY**





We
      currently occupy space in the residence of our president at 6021 Roxton Road,
      Halifax, Nova Scotia, Canada,  B3H 1H4.
      No rent is charged.





We
      do not
      intend to renovate, improve, or develop properties. We are not subject to
      competitive conditions for property and currently have no property to insure.
      We
      have no policy with respect to investments in real estate or interests in real
      estate and no policy with respect to investments in real estate mortgages.
      Further, we have no policy with respect to investments in securities of or
      interests in persons primarily engaged in real estate activities.





**ITEM
      3.**  **LEGAL
      PROCEEDINGS**





None





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





None




4




**PART
      II**





**ITEM
      5.**  **MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**





Common
      Stock





We
      are
      authorized to issue 1,000,000,000 shares of common stock at a par value of
      $0.000001 per share. As of March 5, 2008, there were 7,189,000 shares of common
      stock issued and outstanding held by 34 shareholders of record.





Market
      Information





There
      is
      no established public trading market for our securities and a regular trading
      market may not develop, or if developed, may not be sustained. We have no plans,
      proposals, arrangements, or understandings with any person with regard to the
      development of a trading market in any of our securities. Our securities are
      currently qualified for quotation on the OTCBB under the symbol CLGX but are
      unpriced and have not traded.





OTC
      Bulletin Board Qualification for Quotation





To
      have
      our shares of common stock on the OTC Bulletin Board, a market maker must file
      an application on our behalf in order to make a market for our common stock.
      We
      have been issued a trading symbol CLGX but no trading has yet
      commenced.





Dividends





Holders
      of common stock are entitled to receive ratably such dividends, if any, as
      may
      be declared by the Board of Directors out of funds legally available. We have
      not paid any dividends since our inception, and we presently anticipate that
      all
      earnings, if any, will be retained for development of our business. There are
      no
      restrictions in our Articles of Incorporation or Bylaws that prevent us from
      declaring dividends. Any future disposition of dividends will be at the
      discretion of our Board of Directors and will depend upon, among other things,
      our future earnings, operating and financial condition, capital requirements,
      and other factors.





Preferred
      Stock





The
      Company is authorized to issue 20,000,000 shares of preferred stock in series
      as
      fixed by the Directors with a par value of $0.000001 per share. As of the date
      of this Annual Report, there are no preferred shares outstanding.





Preferred
      stock may be issued in series with preferences and designations as the Board
      of
      Directors may from time to time determine. The board may, without shareholders
      approval, issue preferred stock with voting, dividend, liquidation and
      conversion rights that could dilute the voting strength of our common
      shareholders and may assist management in impeding an unfriendly takeover or
      attempted changes in control. There are no restrictions on our ability to
      repurchase or reclaim our preferred shares while there is any arrearage in
      the
      payment of dividends on our preferred stock.





Securities
      Authorized for Issuance under Equity Compensation Plans





We
      do not
      have any compensation plans or arrangement under which equity securities are
      authorized for issuance.




5





Recent
      Sales of Unregistered Securities





There
      have been no sales of unregistered securities within the last three years which
      would be required to be disclosed pursuant to Item 701 of Regulation S-B, except
      as follows: One Hundred Eighty Nine Thousand (189,000) shares of common stock
      of
      City Language Exchange, Inc. were offered and sold in a private placement to
      accredited investors at a price per share equal to $18,900 that closed on
      February 1, 2007. The total offering price for the shares was $0.10. The private
      placement was exempt from registration under Section 4(2) of the Securities
      Act.
      In the offering, no general solicitation was made by City Language Exchange,
      Inc. or any person acting on City Language Exchange Inc.’s behalf; the
      securities were sold subject to transfer restrictions, and the certificates
      for
      the shares contained an appropriate legend stating that such securities have
      not
      been registered under the Securities Act and may not be offered or sold absent
      registration or an exemption therefrom. There were no underwriting discounts
      or
      commissions.





Purchases
      of Equity Securities





No
      purchases of our own equity securities, either as a part of a publicly announced
      plan or otherwise, were made during any month in 2007.





**ITEM
      6.**  **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**





SPECIAL
      INFORMATION REGARDING FORWARD LOOKING STATEMENTS





Some
      of
      the statements in this Form 10K-SB are “forward-looking statements.” These
      forward-looking statements involve certain known and unknown risks,
      uncertainties and other factors which may cause our actual results, performance
      or achievements to be materially different from any future results, performance
      or achievements expressed or implied by these forward-looking statements. These
      factors include, among others, the factors set forth above under “Risk Factors.”
The words “believe,” “expect,” “anticipate,” “intend,” “plan,” and similar
      expressions identify forward-looking statements. We caution you not to place
      undue reliance on these forward-looking statements. We undertake no obligation
      to update and revise any forward-looking statements or to publicly announce
      the
      result of any revisions to any of the forward-looking statements in this
      document to reflect any future or developments.





The
      following discussion should be read in conjunction with our financial statements
      and the notes thereto which appear elsewhere in this report. The results shown
      herein are not necessarily indicative of the results to be expected in any
      future periods. This discussion contains forward-looking statements based on
      current expectations, which involve uncertainties. Actual results and the timing
      of events could differ materially from the forward-looking statements as a
      result of a number of factors.





Overview





In
      the
      online world, the Internet is increasingly being used as a tool to bring
      together people in real space and time. Email is used to coordinate meetings,
      and fast-growing sites such as Craigslist.com, Facebook.com, and Lavalife.com
      bring individuals together who otherwise would not meet. In the real world,
      we
      are experiencing the ‘global village phenomenon’; Americans are becoming more
      aware of other places and cultures and people from more places and cultures
      are
      coming to America. These two factors make possible an online business uniquely
      designed to bring people together who are interested in learning about each
      other’s language and culture. This business is City Language Exchange, Inc.




6




City
      Language Exchange, Inc. or CLE sets up a website in each city it enters and
      uses that website to connect individuals interested in exchanging languages.
      There are other websites that offer similar services online, but these fail
      where CLE will succeed for one of three reasons: 1 - These sites do not collect
      any money for their matching services and therefore do not have the ability
      to
      market themselves, and users have not paid for the service and therefore have
      no
      vested interest in showing up for their match and do not know that the other
      party will show up, 2 - These sites are nation- or world-wide, making finding
      a
      language exchange partner in your area unlikely and difficult, 3 - These sites
      offer online matching for online conversation and teaching, which puts barriers
      to communication between two people for whom it will already be somewhat
      difficult to communicate given the language barrier.





CLE
      has
      attempted to mitigate business development risks by creating the business while
      the language exchange niche remains unfilled, using a freelance programmer
      and a
      freelance public relations agent to create and market an attractive website,
      and
      scheduling the president’s time according to the needs of the business.





Plan
      of Operation





We
      currently have over 3,100 registrants interested in matches and are focused
      on
      increasing that number primarily through on line marketing. In 2007, we
      generated $4,940 in revenues. We expanded our services from simply operating
      in
      San Francisco to include New York, Los Angeles, and Seattle in September, 2007
      and initially received a positive response to our service, particularly in
      New
      York. We created an automated matching program to save administrator hours
      in
      managing the larger number of registrants we expected to receive through the
      new
      cities.





Recently,
      however, we have had a falling-off in new registrations, leading to less matches
      and therefore less revenue. The causes seem to be twofold and related. First,
      once the most enthusiastic persons searching for language exchanges register,
      it
      can take additional time or new methods of advertising to bring in more
      participants. Second, when participant registration and matching drops off,
      so
      does the enthusiasm of the registrants, participants, referrers, and
      administrators. We have considered that this trend may be seasonal, in that
      people are less willing to venture out to meet a stranger for a language
      exchange in the cold and during the school term for students, than in the
      summer, when time is more available for most. We are hoping that continued
      administrator dedication and warming weather will lead to a rebound in
      revenues.





As
      the
      business and its effective marketing is based entirely online, there is
      relatively little effort required to replicate the site for a new city. While
      we
      are currently capable of expanding to new cities rapidly, we wish to continue
      learning from our business and increasing the effectiveness of our service
      to
      ensure customer satisfaction and corresponding word of mouth marketing. We
      feel
      that the continued success of the business model will depend upon ensuring
      we
      can service each city we expand to, before increasing the managerial load.
      We
      added three cities (New York, Los Angeles, and Seattle) in September of 2007.
      New York and Los Angeles have added substantial target population to our market.
      While our target market has been increasing, we are finding that establishing
      ourselves in new cities takes some time to work out what areas are most
      conducive for matching and what online marketing is most effective to reach
      potential registrants in each city. The nature of networking and business sites
      in cities is such that while major players such as *ebay* or *facebook* have a
      presence in every city, other social networking and exchange websites are more
      popular in one city than another. Therefore it takes some time to discover
      what
      sites the population of each city is visiting and setup advertising on these
      sites.




7




Analysis
      of Financial Condition & Results of Operation





We
      are a
      development stage company and have revenues of $2,410 for the three months
      ended
      December 31, 2007 and $4,940 for the year ended December 31, 2007 and for
      the period from inception (August 28, 2006) through December 31,
      2006.




There
      were $13,566 of general and administrative expenses for the three month period
      ended December 31, 2007. There were $55,412 of general and administrative
      expenses for the year ended December 31, 2007 and $8,340 for the period from
      inception through December 31, 2006. Contract labor and commissions comprise
      16%
      and professional expenses comprise 71% of the general and administrative
      expenses from inception through December 31, 2007.





We
      paid
      $1,795 to a Director for the three months ended December 31, 2007 for work
      in
      developing the Company.




Depreciation
      expense was $139 for the three months ended December 31, 2007 and $559 for
      the
      year ended December 31, 2007. Depreciation expense was $74 from the period
      of
      inception through December 31, 2006. This expense will be a constant amount
      until more equipment is purchased.





Total
      expenses were $15,395 for the three months ended December 31, 2007 and $57,660
      for the year ended December 31, 2007. Total expenses were $8,414 for the period
      from inception through December 31, 2006.





Total
      net
      loss was $12,985 for the three months ended December 31, 2007 and $52,721 for
      the year ended December 31, 2007. Total net loss was $8,414 for the period
      from
      inception through December 31, 2006.




We
      anticipate our primary expense, advertising expense, to rise as we continue
      to
      reach more translation clients through the internet, newspaper advertisements
      and other means of advertising.




Liquidity
      and Capital Resources




Since
      we
      are a development stage company, CLE has been dependent on its majority owner
      to
      provide cash resources to fund its operations. As of December 31, 2007, CLE’s
      accumulated deficit was $61,135.




We
      have
      provided for our cash requirements to date through financing provided by our
      president, who contributed $38,626 in capital as of December 31, 2007. We also
      raised $18,900 from a private placement of our securities in the first quarter
      of 2007.





Until
      financing described below has been received, all our costs, which we will incur
      irrespective of our business development activities, including bank service
      fees
      and those costs associated with SEC requirements associated with going and
      staying public, estimated to be less than $25,000 annually, will be funded
      as a
      loan from management, to the extent that funds are available to do so.
      Management is not obligated to provide these or any other funds.




We
      will
      need to secure a minimum of $10,000 in funds to finance our business in the
      next
      12 months, in addition to the funds which will be used to stay public, these
      funds will be used for business development and sales and marketing. However,
      in
      order to become profitable, we may still need to secure additional debt or
      equity funding. We hope to be able to raise additional funds from an offering
      of
      our stock in the future. However, this offering may not occur, or if it occurs,
      may not raise the required funding. We do not have any plans or specific
      agreements for new sources of funding, except for the anticipated loans from
      management as described above, or any planned material acquisitions.




8





Because
      of the need for additional funding, the lack of revenues in 2007, and the
      downturn in new registrations, management is currently looking for merger
      candidates.





Our
      independent auditors have indicated in their audit report for the year ended
      December 31, 2007 that there is substantial doubt about our ability to continue
      as a going concern over the next twelve months.




Off-Balance
      Sheet Arrangements




There
      are
      no off-balance sheet arrangements.




9




**ITEM
      7.**  **FINANCIAL
      STATEMENTS**





REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors


City
      Language Exchange, Inc.


(A
      Development Stage Company)


Lexington,
      Kentucky





We
      have
      audited the accompanying balance sheet of City Language Exchange, Inc. as of
      December 31, 2007 and the related statements of operations, stockholders’
deficit, and cash flows for the year ended December 31, 2007 and for the period
      from August 28, 2006 (inception) through December 31, 2006. These financial
      statements are the responsibility of City Language Exchange, Inc. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audits.





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





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of City Language Exchange, Inc. as
      of
      December 31, 2007, and the results of its operations and its cash flows for
      the
      periods described, in conformity with accounting principles generally accepted
      in the United States of America.





The
      accompanying financial statements have been prepared assuming that City Language
      Exchange, Inc. will continue as a going concern. As discussed in Note 3 to
      the
      financial statements, City Language Exchange, Inc. has a working capital
      deficiency, which raises substantial doubt about its ability to continue as
      a
      going concern. Management’s plans regarding those matters also are described in
      Note 3. The financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.








MALONE
      & BAILEY, PC


www.malone-bailey.com


Houston,
      Texas





March
      19,
      2008




10


CITY
      LANGUAGE EXCHANGE, INC.


BALANCE
      SHEET


December
      31, 2007




December
                31,
              2007ASSETSCurrent
                AssetsCash
            
            $
            1,254Total
                Current Assets
            
            
            1,254Equipment,
                net of accumulated depreciation of $633
            
            
            837Total
                Assets
            
            $
            2,091LIABILITIES
                AND STOCKHOLDERS' EQUITYCurrent
                LiabilitiesAccrued
                liabilities
            
            $
            5,700Total
                Current Liabilities
            
            
            5,700Commitments
                and contingencies
            
            
            -Stockholders'
                EquityPreferred
                stock, .000001, 20,000,000 sharesauthorized,
                none issued and outstanding
            
            
            -Common
                stock, $.000001 par value, 1,000,000,000shares
                authorized, 7,189,000 and 7,000,000shares
                issued and outstanding, respectively
            
            
            0Additional
                paid-in capital
            
            
            57,526Deficit
                accumulated during development stage
            
            
            (61,135
            )Total
                Stockholders' Equity
            
            
            (3,609
            )Total
                Liabilities and Stockholders' Equity
            
            $
            2,091





See
      accompanying summary of accounting policies


and
      notes
      to financial statements




11




CITY
      LANGUAGE EXCHANGE, INC.


STATEMENTS
      OPERATIONS


Year
      Ended December 31, 2007, and the


Period
      from August 28, 2006 (Inception) through December 31, 2006





2007
            
            2006REVENUETranslation
                services
            
            $
            4,940
            
            $
            -OPERATING
                EXPENSESGeneral
                & administrative
            
            
            55,412
            
            
            8,340Commissions
            
            
            1,690Depreciation
                expense
            
            
            559
            
            
            74Total
                expenses
            
            
            57,661
            
            
            440Net
                loss
            
            $
            (52,721
            )
            $
            (8,414
            )Net
                loss per share - basicAnd
                diluted
            
            $
            (0.01
            )
            
            (0.00
            )Weighted
                average shareoutstanding
                - basic anddiluted
            
            
            7,189,000
            
            
            7,000,000




See
      accompanying summary of accounting policies


and
      notes
      to financial statements




12


See
      accompanying summary of accounting policies


and
      notes
      to financial statements


CITY
      LANGUAGE EXCHANGE, INC.


STATEMENT
      OF STOCKHOLDERS’ DEFICIT


The
      Period from August 28, 2006 (Inception) Through December 31,
      2007





Common
              Shares
            
            Common
              Stock
                at
              Par
                Value
            
            Additional
              Paid
                In
              Capital
            
            Deficit
                Accumulated
              During
                Development
              Stage
            
            TotalsFounders
                shares issued
            
            
            7,000,000
            
            
            7
            
            $
            -
            
            $
            -
            
            
            7Capital
                contribution
            
            
            -
            
            
            -
            
            
            13,138
            
            
            -
            
            
            13,138Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (8,414
            )
            
            (8,414
            )Balances
                at December 31, 2006
            
            
            7,000,000
            
            
            7
            
            
            13,138
            
            $
            (8,414
            )
            $
            4,731Common
                stock issued
            
            
            189,000
            
            
            
            
            
            18,900
            
            
            
            
            
            18,900Capital
                contribution
            
            
            
            
            
            
            
            
            25,481
            
            
            
            
            
            25,481Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            (52,721
            )
            
            (52,721
            )Balances
                at December 31, 2007
            
            
            7,189,000
            
            
            7
            
            
            57,519
            
            
            (61,135
            )
            
            (3,609
            )




See
      accompanying summary of accounting policies


and
      notes
      to financial statements




13





CITY
      LANGUAGE EXCHANGE, INC.


STATEMENTS
      OF CASH FLOWS


Year
      Ended December 31, 2007 and the Period From August 28,


2006
      (Inception) through December 31, 2006





December
                31, 2007
            
            Inception
                through December 31, 2006Cash
                Flows From Operating ActivitiesNet
                loss
            
            $
            (52,721
            )
            $
            (8,414
            )Adjustments
                to reconcile net loss to net cash used in operating activities:Depreciation
            
            
            559
            
            
            74Change
                inAccrued expenses
            
            
            3,954
            
            
            1,746Net
                Cash Used In Operating Activities
            
            
            (48,208
            )
            
            (6,594
            )Cash
                Flows From Investing ActivitiesPurchase of equipment
            
            
            -
            
            
            (1,470
            )Cash
                Flows From Financing ActivitiesProceeds
                from sale of common stock
            
            
            18,900
            
            
            -Contributed
                capital by owner
            
            
            25,481
            
            
            13,145Net
                Cash Used in Investing Activities
            
            
            (1,470
            )Net
                Cash Provided by Financing Activities
            
            
            44,381
            
            
            13,145Net
                increase (decrease) in cash
            
            
            (3,827
            )
            
            5,081Cash
                at beginning of period
            
            
            5,081
            
            
            -Cash
                at end of period
            
            $
            1,254
            
            $
            5,081Supplemental
                Information:Interest
                paid
            
            $
            -
            
            $
            -Income
                taxes paid
            
            
            
            
            
            -




See
      accompanying summary of accounting policies


and
      notes
      to financial statements




14




CITY
      LANGUAGE EXCHANGE, INC


NOTES
      TO
      FINANCIAL STATEMENTS





NOTE
      1 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Nature
      of business .
      City
      Language Exchange, Inc (“CLE”) was organized in Delaware on August 8, 2006 as a
      corporation. CLE is authorized to issue 1,000,000,000 shares of .000001 par
      value common stock and 20,000,000 shares of .00001 par value preferred stock.
      CLE is a web based cultural integration service which matches people of
      different cultural backgrounds for effective, efficient and inexpensive language
      exchange meetings. CLE charges a one-time fee for this matching
      service.





Use
      of
      Estimates .
      In
      preparing financial statements, management makes estimates and assumptions
      that
      affect the reported amounts of assets and liabilities in the balance sheet
      and
      revenue and expenses in the statements of operations. Actual results could
      differ from those estimates.





Cash
      and Cash Equivalents .
      For
      purposes of the statement of cash flows, CLE considers all highly liquid
      investments purchased with an original maturity of three months or less to
      be
      cash equivalents. As of December 31, 2007, cash consisted of monies held in
      checking accounts.





Property
      and equipment .
      Property and equipment is valued at cost. Additions are capitalized and
      maintenance and repairs are charged to expense as incurred. Gains and losses
      on
      dispositions of equipment are reflected in operations. Depreciation is provided
      using the straight-line method over the estimated useful lives of the assets,
      which is five years for equipment.





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





Revenue
      recognition .
      The
      Company generates revenue from the sales of their services in accordance with
      Staff Accounting Bulletin 101. The criteria for recognition is as follows:
      (1)
      Persuasive evidence of an arrangement exists; (2) Delivery has occurred or
      services have been rendered; (3) The seller’s price to the buyer is fixed
      or determinable, and (4) Collectibility is reasonably assured.





In
      accordance with the listed criteria, the Company generally recognizes the
      revenue upon matching customers who have signed up for language
      services.





Net
      Loss Per Share Data .
      Basic
      and diluted net loss per common share are presented in conformity with the
      SFAS
      No. 128, “Earnings Per Share”. Diluted net loss per share is the same as basic
      net loss per share as the inclusion of any outstanding options and warrants
      would be anti-dilutive.  Basic net loss per share is computed by dividing
      net loss available to common shareholders (numerator) by the weighted average
      number of common shares outstanding during the year (denominator).  Diluted
      net loss per share is computed using the weighted average number of common
      shares and dilutive potential common shares outstanding during the year. For
      the
      year ended December 31, 2007, CLE had no dilutive potential common shares.





Recently
      issued accounting pronouncements. CLE does not expect the adoption of recently
      issued accounting pronouncements to have a significant impact on CLE’s results
      of operations, financial position or cash flow.




15





**NOTE
      2 - INCOME TAXES**





CLE
      uses
      the asset and liability method, where deferred tax assets and liabilities are
      determined based on the expected future tax consequences of temporary
      differences between the carrying amounts of assets and liabilities for financial
      and income tax reporting purposes. During fiscal 2006, CLE incurred net losses
      and, therefore, has no tax liability. The net deferred tax asset generated
      by
      the loss carry-forward has been fully reserved. The cumulative net operating
      loss carry-forward is approximately $61,000 at December 31, 2007, beginning
      in
      the year 2027.





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


Deferred
                  tax assets
              
              $
              21,350Less:
                  valuation allowance
              
              
              (21,350
              )Net
                  deferred tax asset
              
              $
              -





NOTE
      3 -
      GOING CONCERN





Since
      its
      inception, CLE has incurred losses and has been dependent on its majority owner
      to provide cash resources to fund its operations. As of December 31, 2007,
      CLE’s
      accumulated deficit was $61,135. Management has plans to seek additional capital
      through private placements and public offerings of its common stock. There
      is no
      guarantee that CLE will be able to complete any of the above objectives. These
      factors raise substantial doubt regarding CLE's ability to continue as a going
      concern.





NOTE
      4 -
      COMMON STOCK





CLE
      issued 7,000,000 common founder shares to the chief executive officer of the
      company.





During
      2007, the chief executive officer of the company contributed $25,481 for
      operating expenses. The amount is reflected as contributed capital.





During
      2007, CLE sold 189,000 shares of common stock to a third party for
      $18,900.





NOTE
      4 -
      RELATED PARTY TRANSACTIONS





During
      2007, the president, Jonny White, received commissions of $795.21 and
      compensation of $1,000.00





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





None.




16





**ITEM
      8A. CONTROLS AND PROCEDURES**




Conclusion
      Regarding the Effectiveness of Disclosure Controls and Procedures




Under
      the
      supervision and with the participation of our management, including our
      principal executive officer, we conducted an evaluation of our disclosure
      controls and procedures, as such term is defined in Rule 13a-15(e) under
      the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of
      the
      end of the period covered by this report. Based on this evaluation, our
      principal executive officer and our principal financial officer concluded that
      our disclosure controls and procedures were effective to provide reasonable
      assurance that information required to be disclosed by us in reports we file
      or
      submit under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in the SEC's rules and forms, and is
      accumulated and communicated to our management, including our principal
      executive officer and principal financial officer, as appropriate to allow
      timely decisions regarding required disclosures.




Management's
      Report on Internal Control Over Financial Reporting




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




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




The
      material weakness relates to the lack of sufficient accounting staff and the
      performance of the principal accounting functions by one officer. Our chief
      executive officer also serves as our chief financial officer. All of our
      financial reporting is carried out by one individual, and we do not have an
      audit committee. Our board of directors consists of one individual, who serves
      as our chief executive officer and chief financial officer. This lack of
      accounting staff results in a lack of segregation of duties and accounting
      technical expertise necessary for an effective system of internal
      control.




In
      order
      to remedy our existing internal control deficiencies, as soon as our finances
      allow, we will hire a Chief Financial Officer who will be sufficiently versed
      in
      public company accounting to implement appropriate procedures for timely and
      accurate disclosures. We will also establish an audit committee and recruit
      members to serve on our board of directors.




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




17




**Changes
      in Internal Control Over Financial Reporting**




There
      were no changes in our internal control over financial reporting during the
      fourth quarter of fiscal 2007 that have materially affected, or are reasonably
      likely to materially affect, our internal control over financial reporting.




**ITEM
      8B.**  **OTHER
      INFORMATION**





None




18




**PART
      III**





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





Directors
      and Executive Officers





Our
      directors and executive officers are as follows:





Jonny
      White, age 25, has been our President and sole Director since inception. He
      is
      currently a PhD student in a distributed learning (distance) program at Fielding
      Graduate University. From 8/2005 to 2/2007, he was a graduate student at Saint
      Mary’s University. From 05/2005 to 08/2005, he was a (full-time) organizational
      psychology consultant for Assessment Strategies, which consults in selection
      procedures for government, business, and universities. From 02/2004 to present
      date, he was a (part-time) contract consultant for FitPro, which consults in
      fitness, organizational health and wellness, special events, and charity events.
      From 09/2004 to present date, he was a (part-time and contract) researcher
      and
      teaching assistant for Saint Mary’s University. From 03/2003 to 09/2003, he was
      Youth Sailing Liaison for Nova Scotia Yachting Association, which promotes
      sailing in the province of Nova Scotia. From 06/2002 to 08/2002, he was Head
      Instructor of Queen’s Quay Yacht Club, which teaches sailing lessons and rents
      boats. In 05/2003 he received an Honors Business Administration degree, with
      distinction from The Richard Ivey School of Business at The University of
      Western Ontario. In 05/2003 he received a Bachelor of Arts in Psychology, with
      distinction from The University of Western Ontario.





Family
      Relationships





There
      are
      no family relationships among our officers and directors.





Significant
      Employees





None





Legal
      Proceedings




No
      officer, director, or persons nominated for such positions, promoter or
      significant employee has been involved in the last five years in any of the
      following:




·
            Any
                bankruptcy petition filed by or against any business of which such
                person
                was a general partner or executive officer either at the time of
                the
                bankruptcy or within two years prior to that time;




·
            Any
                conviction in a criminal proceeding or being subject to a pending
                criminal
                proceeding (excluding traffic violations and other minor offenses);




·
            Being
                subject to any order, judgment, or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring suspending or otherwise limiting
                his
                involvement in any type of business, securities or banking activities;
                and




·
            Being
                found by a court of competent jurisdiction (in a civil action), the
                Commission or the Commodity Futures Trading Commission to have violated
                a
                federal or state securities or commodities law, and the judgment
                has not
                been reversed, suspended, or vacated.




19





Section
      16(a) Beneficial Ownership Reporting Compliance





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's
      directors and executive officers, and persons who beneficially own more than
      10%
      of a registered class of the Company's equity securities, to file reports of
      beneficial ownership and changes in beneficial ownership of the Company's
      securities with the SEC on Forms 3 (Initial Statement of Beneficial Ownership),
      4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual
      Statement of Beneficial Ownership of Securities). Based on our records and
      other
      information, we believe that in 2007 our directors, executive officers and
      shareholders owning 10% or more of the common stock of City Language Exchange,
      Inc. met all applicable SEC filing requirements.





Code
      of Ethics





City
      Language Exchange, Inc. has adopted a Code of Ethics that applies to the
      Company’s principal executive officer, principal financial officer, principal
      accounting officer and any other senior executive officers. Jonny White, the
      President of City Language Exchange, Inc., has executed the Code of Ethics.
      A
      copy of the Code of Ethics is attached as Exhibit 14 to this Annual Report
      on
      Form 10-K.





Changes
      to Nomination Process





There
      were no material changes to the procedures by which shareholders may recommend
      nominees to City Language Exchange Inc.’s board of directors.





Audit
      Committee





City
      Language Exchange, Inc. does not have a separately-designated audit committee.
      The entire board of directors serves as the audit committee of the company.
      City
      Language Exchange, Inc. does not have an “audit committee financial expert” as
      defined in the applicable rules and regulations of the Securities Exchange
      Act
      of 1934, as amended.





**ITEM
      10.**  **EXECUTIVE
      COMPENSATION**





Compensation
      Agreements




The
      following table sets forth summary information concerning the compensation
      received for services rendered to us during the fiscal years ended December
      31,
      2007 and 2006 by our sole officer.




20




**Summary
      Compensation Table**





Name
                and Principal Position
            
            Year
            
            Salary
            
            Bonus
            
            Stock
                Awards
            
            Option
                Awards
            
            Non-Equity
                Incentive Plan Compen-sation
            
            Non-qualified
                Deferred Compen-sation Earnings
            
            All
                Other Compen-sation
            
            Total(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)
            
            (f)
            
            (g)
            
            (h)
            
            (i)(1)
            
            (j)Jonny
                White
              President
                and Director
            
            
            2007
              2006
            
            $
              $
            0
              0
            
            $
              $
            0
              0
            
            
            -
              -
            
            
            -
              -
            
            
            0
              0
            
            
            0
              0
            
            $
            1,000
              0
            
            $
              $
            1,000
              0




(1)  Contract
      Labor





Employment
      Agreements




We
      do not
      have an employment agreement with Jonny White or any other officer or
      employee.




Director
      Compensation




We
      do not
      pay our sole director any fees or other compensation for serving as a director.
      We have not granted any stock options or stock awards to our sole
      director.







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





The
      following table sets forth certain information concerning the number of shares
      of our common stock owned beneficially as of December 31, 2007, by: (i) each
      person known by us to be the beneficial owner of more than 5% of our outstanding
      common stock; (ii) each of our directors; (iii) each of our officers; and (iv)
      our executive officers and directors as a group.









Names
                and Address of
              Beneficial
                Owner
            
            Shares
                of Common Stock
              Beneficially
                Owned**Number**
            
            **Percent****Jonny
                White**
            
            
            **7,000,000**
            
            
            **97.37**
            **%****All
                Directors and named Executive Officers as a group****[1
                person]**
            
            
            **7,000,000**
            
            
            **97.37**
            **%**





The
      table
      above is based upon information derived from our stock records. Unless otherwise
      indicated in the footnotes to the table and subject to community property laws
      where applicable, each of the shareholders named in the table has sole or shared
      voting and investment power with respect to the shares indicated as beneficially
      owned. Except as set forth above, applicable percentages are based upon
      7,189,000 shares of common stock outstanding as of December 31, 2007.




21





The
      information presented above regarding beneficial ownership of our voting
      securities has been presented in accordance with the rules of the Securities
      and
      Exchange Commission and is not necessarily indicative of ownership for any
      other
      purpose. Under these rules, a person is deemed to be a “beneficial owner” of a
      security if that person has or shares the power to vote or direct the voting
      of
      the security or the power to dispose or direct the disposition of the security.
      A person is deemed to own beneficially any security as to which such person
      has
      the right to acquire sole or shared voting or investment power within 60 days
      through the conversion or exercise of any convertible security, warrant, option
      or other right. More than one person may be deemed to be a beneficial owner
      of
      the same securities. The percentage of beneficial ownership by any person as
      of
      a particular date is calculated by dividing the number of shares beneficially
      owned by such person, which includes the number of shares as to which such
      person has the right to acquire voting or investment power within 60 days,
      by
      the sum of the number of shares outstanding as of such date plus the number
      of
      shares as to which such person has the right to acquire voting or investment
      power within 60 days. Consequently, the denominator used for calculating such
      percentage may be different for each beneficial owner. Except as otherwise
      indicated below and under applicable community property laws, we believe that
      the beneficial owners of our common stock listed above have sole voting and
      investment power with respect to the shares shown.




We
      are
      unaware of any contract or other arrangement the operation of which may at
      a
      subsequent date result in a change in control of the company.




City
      Language Exchange, Inc. does not have a compensation plan under which equity
      securities are authorized for issuance.




**ITEM
      12.**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS**





Related
      Transactions




None




Director
      Independence




Our
      sole
      director, Jonny White, is not independent under the NASDAQ listing standards
      because he is an executive officer of City Language Exchange, Inc.




**ITEM
      13.**  **EXHIBITS**





The
      following exhibits are filed as part of this Form 10-KSB and this list includes
      the Exhibit Index.




No.
              
              Description(3)
              
              (i)
                  Articles of Incorporation *(ii)
                  Bylaws *(4)
              
              Form
                  of Common Stock Certificate *(14)
              
              Code
                  of Ethics(21)
              
              Subsidiaries
                  of Registrant(23)
              
              Consent
                  of Malone & Bailey, PC




22


(31)
              
              Certification
                  as Adopted Pursuant to Section 302 (a) of the Sarbanes-Oxley Act
                  of 2002(32)
              
              Certification
                  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                  906 of
                  the
                  Sarbanes-Oxley Act of
                  2002




*
      Incorporated herein by reference from City Language Exchange Inc.’s Registration
      Statement on Form SB-2, filed with the Securities and Exchange Commission on
      March 22, 2007.




**ITEM
          14** . **PRINCIPAL
          ACCOUNTANT FEES AND SERVICES**





Audit
      Fees


For
                  fiscal year end December 31, 2007:
              
              $
              20,250For
                  fiscal year end December 31, 2006:
              
              $
              0


City
      Language Exchange, Inc. did not pay any other fees as specified in Item 9(e)
      of
      Schedule 14A.





City
      Language Exchange, Inc. does not have audit committee pre-approval policies
      and
      procedures.




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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.




City
              Language
              Exchange, Inc.Date:
              March ___, 2008
            By:Name:Jonny
              WhiteTitle:President,
                Principal Financial Officer
              and
                Principal Accounting Officer





In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.




Date: ___________
            By:Name:Jonny
                WhiteTitle:Director


24