UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





(Mark
One)





x
              Annual
      Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of
      1934





For the
Fiscal Year Ended December 31, 2008





 ̈
              Transition
      Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of
      1934





For the
transition period from _______________ to _______________





Commission
File Number:   000-51688





Rocky
Mountain Fudge Company, Inc.


(Exact
name of registrant as specified in its charter)





Nevada
              16-1734022(State
      or other jurisdiction of
              (I.R.S.
      Employerincorporation
      or organization)
              Identification
      No.)





4596
Russell Street, Salt Lake City, Utah 84117


(Address
of principal executive offices)   (Zip Code)





Registrant's
telephone number, including area code:   (801) 230-1870





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


None





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


Common Stock, $0.001 par
value





Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. Yes  ̈No
x





Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act. Yes  ̈No
x





Indicate by check mark whether the
registrant:  (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934during 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 xNo
 ̈





Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not 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-K or any amendment to this Form 10-K.  ̈





Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.





Large
      accelerated filer
                   ̈
                  
                  Accelerated
      filer
                   ̈Non-accelerated
      filer
                   ̈
                  
                  Smaller
      reporting company
                  x(Do
      not check if a smaller reporting company)





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 aggregate market value of the
voting stock held by non-affiliates of the registrant based on the closing sales
price, or the average bid and asked price on such stock, as of June 30, 2008,
the last business day of the registrant’s most recently completed second
quarter, was $675,000.  Shares of the registrant’s common stock held
by each executive officer and director and by each entity or person that, to the
registrant’s knowledge, owned 10% or more of registrant’s outstanding common
stock as of June 30, 2008 have been excluded in that such persons may be deemed
to be affiliates of the registrant.  This determination of affiliate
status is not necessarily a conclusive determination for other
purposes.





The number of shares of the
registrant’s common stock outstanding as of March 10, 2009 was
2,250,000.





DOCUMENTS
INCORPORATED BY REFERENCE





A
description of "Documents Incorporated by Reference" is contained in Part IV,
Item 15.





ROCKY
MOUNTAIN FUDGE COMPANY, INC.





TABLE
OF CONTENTS





PagePART  IItem
      1.
                          Business
                          
                          
                          3Item
      1A.
                          Risk
      Factors
                          
                          
                          5Item
      1B.
                          Unresolved
      Staff Comments
                          
                          
                          5Item
      2.
                          Properties
                          
                          
                          5Item
      3.
                          Legal
      Proceedings
                          
                          
                          5Item
      4.
                          Submission
      of Matter to a Vote of Security Holders
                          
                          
                          5PART  IIItem
      5.
                          Market
      for Registrant’s Common Equity, Related Stockholder Matters and
      Issuer  Purchases of Equity Securities
                          
                          
                          5Item
      6.
                          Selected
      Financial Data
                          
                          
                          7Item
      7.
                          Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                          
                          
                          7Item
      7A.
                          Quantitative
      and Qualitative Disclosures About Market Risk
                          
                          
                          11Item
      8.
                          Financial
      Statements and Supplementary Data
                          
                          
                          11Item
      9.
                          Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                          
                          
                          11Item
      9A(T).
                          Controls
      and Procedures
                          
                          
                          11Item
      9B
                          Other
      Information
                          
                          
                          12PART  IIIItem
      10.
                          Directors,
      Executive Officers and Corporate Governance
                          
                          
                          12Item
      11.
                          Executive
      Compensation
                          
                          
                          13Item
      12.
                          Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                          
                          
                          14Item
      13.
                          Certain
      Relationships and Related Transactions and Director
      Independence
                          
                          
                          14Item
      14.
                          Principal
      Accounting Fees and Services
                          
                          
                          14PART  IVItem
      15.
                          Exhibits,
      Financial Statement Schedules.
                          
                          
                          16Signatures
                          
                          
                          32




__________________________





As used
in this report, unless otherwise indicate, “we”, “us”, “our”, “Rocky Mountain
Fudge” and the “company” refer to Rocky Mountain Fudge Company,
Inc.





PART
I





Item
1.  Business.





Rocky Mountain Fudge Company, Inc. was
created in 1990 primarily to engage in the business of manufacturing and
retailing fudge candy.  In December 1998, we completed an initial
public offering of 50,000 shares of its common stock for the offering price of
$1.00 per share. As a result of this offering, we realized gross proceeds of
$50,000.  Subsequently in 2005, we effected a forward stock split of
our issued and outstanding shares of common stock on a five shares for one share
basis.  In January 2008, we effected a reverse stock split of our
outstanding shares on a one share for five shares basis.  As a result
of these actions, we currently have outstanding 2,250,000 shares of common
stock.





Since inception, we have manufactured
and marketed candy products on a seasonal basis. Our principal product is fudge
candy, which is produced and sold to retail consumers in northern Utah and
surrounding areas. We also produce a brittle candy. All of our products are made
using proprietary recipes contributed by one of our
co-founders.  Historically, we have used various facilities to produce
our candy products and sold products through retail booths that the company
would rent at various locations, such as established crafts boutiques, festivals
and fairs.   Management estimates that approximately 90% of our
historically revenues have been realized during the Thanksgiving and Christmas
periods.





In 2005, we began preparing sales and
promotional literature and price lists and commenced development of an Internet
website to ultimately be used for the promotion and sale of its
products.  It was management’s intent that the website would
eventually become our primary marketing focus.  Management intends to
focus marketing efforts to the Internet and other advertising that will enhance
mail orders.  We will continue selling products at local retail
outlets and in booths located at special events, fairs and
festivals.  However, management believes the most potential for our
business will be the Internet.





During 2007 and 2008, our decreased
sales were primarily attributed to management being unable to locate an adequate
permanent location from which to produce our candy products.  If we
are unable to increase revenues, the board of directors may consider the
possibility of locating a new or additional business venture. As of the date
hereof, we have not formulated any definite plans nor identified any potential
business to consider. Also, there can be no assurance that we will enter into
any future transaction, or that any such transaction will be successful.
Accordingly, we currently intend to continue to develop our current candy
business.





Products





All of our candy products have been
developed by recipes contributed by our co-founder, Vallerie
Moulton.  Presently, we offer fudge candy in the following varieties:
Plain, Walnut, Almond, Rocky Road, Caramel Swirl and Virginia
Cream.  We also offer brittle candy in the following varieties:
Peanut, Pecan and Cashew.  We will continue to use temporary
production facilities until such time as our business warrants expansion into
permanent facilities and necessary funds are available.  If current
available funds are not sufficient to continue production, it may be necessary
for us to seek funds from our directors or principal stockholders or from
outside financing.  We intend to continue to rent a facility with
adequate space and equipment to handle anticipated production needs, without
having to incur significant expense and capital expenditures.  We also
intend to package products in the same facility as they are
produced.





Distribution





Historically, we have sold our products
by way of rented booths at various special functions, fairs and other events,
concentrating sales during the Thanksgiving and Christmas
seasons.  Most sales have been made in face-to-face transactions at
one of our retail booths.  During 2007 and 2008, we intended to
concentrate on mail order and Internet sales.  However, these
endeavors were not successful we have began to explore possible alternative
strategies. Our Internet address is www.greatestfudgeonearth.com.





Our fudge and other candies are
generally sold in pre-packaged, 1⁄2 pound plastic containers or wrapped in
airtight packages.  In addition, our fudge is available in slices that
are cut in the size or weight that the customer orders. We sell our fudge at a
price of $13.00 per pound and brittle candy for $14.00 per pound, which price
includes sales tax for mail orders.  We typically add a flat $7.70
shipping and handling fee to each order. Management believes that our candy is
priced competitively compared to other candy makers that charge between $8.50 to
$23.00 per pound for their products. Also, unlike some competitors, we do not
anticipate adjusting prices during holidays.


-3-





We intend to continue and expand
marketing and distribution efforts only if management determines to remain in
the candy business.  Thus, any possible future expansion would be
dependent on the availability of adequate funds.





New
Products





We do not presently have any new
products in development.





Competition





The candy and snack food industry is
highly competitive and dominated by large national and international concerns,
such as Nabisco, Hershey Foods and Nestle.  There are literally
hundreds of competitors existing in the candy market at any given
time.  Due to this large and very fragmented market, in addition to
our status as a development stage company, management believes our competitive
position in its industry to be extremely small. Even if we are successful in our
future business plans, this will remain the case. There can be no assurance that
we will be able to compete successfully in this industry.





Sources
and Raw Materials and Supplies





The raw materials used in our products
are widely available from distributors and at the retail level. These materials
include butter, sugar, walnuts and other nuts, marshmallows, spices and other
condiments. Management believes that we can readily purchase adequate supplies
from local distributors or from large retail outlets.  Management does
not expect a scarcity of any ingredients to be a concern.





Patents
and Copyrights





We do not presently have any patents,
trademarks, licenses, franchises, concessions or royalty agreements and there
are no plans to secure any such arrangements in the foreseeable
future.





Governmental
Regulations





Our operations and production of candy
are subject to U.S. Department of Agriculture ("USDA") regulations requiring
labeling of ingredients on its candy containers.  Management believes
that we are in compliance with this regulation. Our manufacturing facilities are
also subject to periodic USDA inspections for cleanliness and scales, which are
used for weighing quantities of product at retail, are subject to periodic
testing by the Division of Weights and Measures of the Utah Department of
Agriculture.  With the exception of periodic inspections by the USDA
for cleanliness of facilities, management believes that we do not have to comply
with any specific environmental laws.





Research
and Development





We do not conduct any research and
development in connection with our business operations.





Employees





Currently, we have no full-time
employees, and will add employees only if our current business and operations
warrant such additions. Steven Moulton, our President and a director, devotes
approximately 60 hours per month to the Company's business.





In April 2007, two of our co-founders
and directors resigned.  Ronald Moulton resigned as a director,
President and CEO and Vallerie Moulton as a director and
Secretary.  Following their resignations, we entered into Consulting
Agreements with each of them for a term of three years.  Under the
agreements, Mr. Moulton was to provide consulting services related to the
production and marketing of our products and act as an advisor to management. He
was to be compensated at the rate of $20.00 per hour for his services and
reimbursed for expenses related to his services.  Mrs. Moulton was to
oversee production of products and consult with management in connection with
marketing and strategic planning.  She was to be compensated at the
rate of $20.00 per hour for her services and reimbursed for expenses related to
her services.  Both agreements were subsequently terminated without
any services being provided.


-4-





Presently, we use the services of both
Mr. and Mrs. Moulton on an as-needed basis.  During 2008, their
services were contributed to the company and they did not receive any
compensation.





Except as disclosed above, we have not
entered into any other employment agreement with any officer, director or any
other person and no such agreements are anticipated in the immediate future. It
is intended that our directors will defer any compensation until such time as
business operations provide sufficient cash flow to provide for salaries. As of
the date hereof, no person has accrued any compensation.





Facilities





We currently use the personal residence
of our former President and Secretary as our principal executive offices. These
facilities that are owned by the former President and Secretary are provided at
no charge.  We also maintain a mail delivery location that is rented
on a monthly basis for receiving correspondences and product orders. The address
of this location is 4760 Highland Drive, #353, Salt Lake City Utah
84117.  In the past, we have leased various commercial kitchen
locations for the production of our candy products.  We have been
unable to locate a suitable permanent location for our candy production
activities.





Industry
Segments





No information is presented regarding
industry segments. We are presently engaged in the production and marketing of
candy products and have no current plans to participate in another business or
industry. Reference is made to our financial statements and the statements of
income included in this Form 10-K for a report of our operating history for the
past two fiscal years.





Item
1A.    Risk Factors.





This item is not required for a smaller
reporting company.





Item
1B.    Unresolved Staff Comments.





This item is not required for a smaller
reporting company.





Item
2. Description
of Property.





We do not presently own any
property.





Item
3. Legal
Proceedings.





There are no material pending legal
proceedings to which the company or any subsidiary is a party, or to which any
property is subject and, to the best of our knowledge, no such action against us
is contemplated or threatened.





Item
4. Submission
of Matters to a Vote of Security Holders.





No matters were submitted to a vote of
our securities holders during the fourth quarter of the fiscal year ended
December 31, 2008.





PART
II





Item 5.
              Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity
Securities.





Our common shares are included on the
OTC Bulletin Board under the symbol ”RMFI” (symbol prior to January 21, 2008 was
“RMFD”), although currently there is not an active trading market for the shares
and there can be no assurance that any such market will ever develop or be
maintained.  Set forth in the table below are the quarterly high and
low prices of our common stock as obtained from the OTC Bulletin Board for the
past two fiscal years and adjusted to reflect the one share for five shares
reverse stock split effected in January 2008.


-5-





High
                      
                      
                      Low2007First
      Quarter
                      
                      $
                      13.75
                      
                      
                      $
                      5.25Second
      Quarter
                      
                      
                      5.50
                      
                      
                      
                      2.55Third
      Quarter
                      
                      
                      6.25
                      
                      
                      
                      2.62Fourth
      Quarter
                      
                      
                      8.25
                      
                      
                      
                      5.052008First
      Quarter
                      
                      $
                      5.05
                      
                      
                      $
                      2.00Second
      Quarter
                      
                      
                      1.50
                      
                      
                      
                      1.50Third
      Quarter
                      
                      
                      1.95
                      
                      
                      
                      1.95Fourth
      Quarter
                      
                      
                      1.80
                      
                      
                      
                      1.80





The above over-the-counter market
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual
transactions.  Because of the limited market for our common stock,
investors and prospective investors should not presume that the above quotations
represent the price at which our shares may be purchased or sold.





As of  March 10, 2009, there
were approximately 60 holders of record of our common stock, which figure does
not take into account those shareholders whose certificates are held in the name
of broker-dealers or other nominee accounts.





The ability of individual stockholders
to trade their shares in a particular state may be subject to various rules and
regulations of that state. A number of states require that an issuer's
securities be registered in their state or appropriately exempted from
registration before the securities are permitted to trade in that state.
Presently, we have no plans to register our securities in any particular
state.





Penny
Stock Rule





It is unlikely that our securities will
be listed on any national or regional exchange or The Nasdaq Stock Market in the
foreseeable future.  Therefore our shares most likely are subject to
the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly
referred to as the "penny stock" rule.  Section 15(g) sets
forth certain requirements for broker-dealer transactions in penny stocks and
Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in
Rule 3a51-1 of the Exchange Act.





The SEC generally defines a penny stock
to be any equity security that has a market price less than $5.00 per share,
subject to certain exceptions.  Rule 3a51-1 provides that any equity
security is considered to be a penny stock unless that security is:





●
            registered
      and traded on a national securities exchange meeting specified criteria
      set by the SEC;





●
            authorized
      for quotation on The Nasdaq Stock
Market;





●
            issued
      by a registered investment company;





●
            excluded
      from the definition on the basis of price (at least $5.00 per share) or
      the issuer's net tangible assets;
or





●
            exempted
      from the definition by the SEC.





A broker-dealer who sells penny stocks
to a person other than an established customer or accredited investor is subject
to additional sales practice requirements.  An accredited investor is
generally defined as a person with assets in excess of $1,000,000 or annual
income exceeding $200,000, or $300,000 together with
their spouse.


-6-





For transactions covered by these
rules, a broker-dealer must make a special suitability determination for the
purchase of such securities and must receive the purchaser's written consent to
the transaction prior to the purchase.  Additionally, for any
transaction involving a penny stock, unless exempt, the rules require the
delivery, prior to the first transaction, of a risk disclosure document relating
to the penny stock market.  A broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities.  Finally, a monthly
statement must be sent to the client disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks.  Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in our common stock and may
affect the ability of stockholders to sell their shares.





These requirements may be considered
cumbersome by broker-dealers and could impact the willingness of a particular
broker-dealer to make a market in our shares, or they could affect the value at
which our shares trade. Classification of the shares as penny stocks increases
the risk of an investment in our shares.





Recent
Sales of Unregistered Securities





On April 16, 2007, the board of
directors authorized the issuance of 1,000,000 shares (post-split) of our
authorized, but previously unissued common stock, to Steven D. Moulton, a
director.  The shares were issued in consideration for services
provided to our company, for payments made on behalf of the company and for
$25,000 in cash advanced to the company.  The shares were certificated
and issued to Mr. Moulton on April 19, 2007.  The shares were issued
in a private transaction that is exempt from registration under the Securities
Act of 1933 pursuant to exemption provided by Section 4(2) of that
Act.





Dividends
Policy





We have never declared cash dividends
on our common stock, nor do we anticipate paying any dividends on our common
stock in the foreseeable future.





Item
      6.
            Selected
      Financial Data.





This item is not required for a smaller
reporting company.





Item
      7.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.





The following information should be
read in conjunction with the financial statements and notes thereto appearing
elsewhere in this Form 10-K.





We are considered a development stage
company with limited assets, operations and revenues.  Ongoing
operating expense, including the costs associated with the preparation and
filing of our periodic reports with the SEC, have been paid for by advances from
a stockholder.  It is anticipated that we will require approximately
$15,000 over the next 12 months to fund our operations and to maintain our
corporate viability.  Management believes that necessary funds will
most likely be provided by officers and directors in the immediate future.
However, unless we are able to generate sufficient revenues from sales of our
candy products or obtain significant outside financing, there is substantial
doubt about our ability to continue as a going concern.





Forward
Looking and Cautionary Statements





This report contains forward-looking
statements relating to future events or our future financial
performance.  In some cases, you can identify forward-looking
statements by terminology such as “may,” “will” “should," “expect," "intend,"
"plan," anticipate," "believe," "estimate," "predict," "potential," "continue,"
or similar terms, variations of such terms or the negative of such
terms.  These statements are only predictions and involve known and
unknown risks, uncertainties and other factors.  Although
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment, actual results could differ
materially from those anticipated in such statements.  Except as
required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.





-7-


Results
of Operations





We had $11,485 in revenues for the year
ended December 31, 2008 and $163 in revenues for the year ended December 31,
2007.  This significant increase in revenues was the result
of  receiving a large volume of orders during the Christmas
season.  We incurred operating expenses of $36,682 during the year
ended December 31, 2008, as compared to operating expenses of $34,615 during the
2007 calendar year.  We realized a net loss of $33,876 during the year
ended December 31, 2008, compared to a loss of $36,752 during the year ended
December 31, 2007.  This decreased net loss results primarily from
increased revenues earned during the current year, partially offset by a small
increase in general and administrative expenses during the period.





Liquidity
and Capital Resources





The majority of our expenses incurred
during 2008 were paid by a stockholder. Because we currently have only limited
revenues and cash reserves, we expect to continue to rely on the stockholder to
pay our expenses until such time we realize adequate revenues from the
production and sales of candy products.  There is no assurance that we
will be able to generate adequate revenues in the immediate future to satisfy
our cash needs.





In the opinion of management, inflation
has not and will not have a material effect on our ongoing
operations.





Plan
of Operation





During the next 12
months, we intend to pursue new and permanent production facilities for our
candy manufacturing business.  If we are unable to locate adequate
facilities, we may be forced to curtail our candy business and explore
alternative opportunities. Because we lack immediate necessary funds, it may be
necessary for our officers and directors to either advance funds to the company
or to accrue expenses until such time as we can attain a meaningful level of
production. Management intends to hold expenses to a minimum and to obtain
services on a contingency basis when possible.  Further, our directors
will defer any compensation until such time as business conditions warrant such
payments.





Our immediate plans call for locating
and making operational a new commercial kitchen facility in which to produce our
products.  We intend to rent a facility that has adequate space and
equipment to handle


anticipated
production needs, without having to incur significant expense.  It is
anticipated that the facility will also be able to accommodate the packaging of
products.  We intend to continue selling our products at local retail
outlets and in booths located at special events, fairs and
festivals.





As of December 31, 2008, we had $8,484
in cash.  After paying certain costs and expenses related to
restarting production and the associated professional fees, including the cost
of preparing and filing our requisite reports with the SEC, management estimates
that we will have sufficient funds to operate


for the
next six to twelve months.  If business revenues do not provide enough
funds to continue operations, it may be necessary for us to seek additional
financing.  This would most likely come from current
directors,


although
the directors are under no obligation to provide additional
funding.  There can be no assurance that outside funding will be
available on terms acceptable to the company, or at all.





Management anticipates that any new
kitchen facilities will be rented with equipment adequate to handle anticipated
candy production.  Therefore, it is not expected that we will have to
make any significant capital expenditures for new equipment or other
assets.  If additional equipment does become necessary, we believe
that we will have adequate cash on hand to acquire the equipment.





Currently, we have no full time
employees.  Employees will be added only if the candy business
warrants new employees or a new business enterprise is
found.  Further, we believe that in the event increased business
necessitates additional employees, we will be able to pay the added expenses of
these employees from increased revenues.





Our plan of operations for the next
twelve months will focus on completing development of our Internet website and
building a customer base for our products. This 12 month plan of operations
includes our goals of:





● searching
for adequate kitchen facilities, or in the alternative, seeking a new business
enterprise;





● hiring
additional employees and/or independent contractors if we are successful in
expanding business and adequate funds are available; and


-8-





● attaining
profitability.





To achieve these goals during the next
twelve months, we intend to exploit our Internet website to the extent possible
and create new business by advertising, as funds permit. Management believes
that these plans can be successfully implemented.





Net
Operating Loss





We have accumulated approximately
$119,657 of net operating loss carryforwards as of December 31, 2008. This loss
carry forward may be offset against taxable income and income taxes in future
years and expires in the year 2028. The use of these losses to reduce future
income taxes will depend on the generation of sufficient taxable income prior to
the expiration of the net operating loss carryforwards. In the event of certain
changes in control, there will be an annual limitation on the amount of net
operating loss carryforwards


which can
be used.  No tax benefit has been reported in the financial statements
for the year ended December 31, 2008 because it has been fully offset by a
valuation reserve. The use of future tax benefit is undeterminable at this
time.





Recent
Accounting Pronouncements





In June 2008, the Financial Accounting
Standards Board (“FASB”)
issued FASB Staff Position EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating
Securities,” (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether
instruments granted in share-based payment transactions are participating
securities prior to vesting, and therefore need to be included in the
computation of earnings per share under the two-class method as described in
FASB Statement of Financial Accounting Standards No. 128, “Earnings per
Share.” FSP EITF 03-6-1 is effective for financial statements issued for fiscal
years beginning on or after December 15, 2008 and earlier adoption is
prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe
that FSP EITF 03-6-1 would have material effect on our consolidated financial
positionand
results of operations if adopted.





In May 2008, the FASB issued Statement
of Financial Accounting Standards (“SFAS”) No.
163, “Accounting for Financial
Guarantee Insurance Contracts-and interpretation of FASB Statement No.
60”.  SFAS No. 163 clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition and
measurement of premium revenue and claims liabilities. This statement also
requires expanded disclosures about financial guarantee insurance contracts.
SFAS No. 163 is effective for fiscal years beginning on or after December 15,
2008, and interim periods within those years. SFAS No. 163 has no effect on our
financial position, statements of operations, or cash flows at this
time.





In May 2008, the FASB issued SFAS No.
162, “The Hierarchy of
Generally Accepted Accounting Principles”.  SFAS No. 162 sets
forth the level of authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two categories, the
more authoritative category will prevail. SFAS No. 162 will become effective 60
days after the SEC approves the PCAOB’s amendments to AU Section 411 of the
AICPA Professional Standards. SFAS No. 162 has no effect on our financial
position, statements of operations, or cash flows at this time.





In March 2008, the FASB, issued SFAS
No. 161, “Disclosures about
Derivative Instruments and Hedging Activities — an amendment of FASB Statement
No. 133".  This standard requires companies to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged.  We not yet adopted the
provisions of SFAS No. 161, but does not expect it to have a material impact on
its consolidated financial position, results of operations or cash
flows.




-9-


In December 2007, the SEC issued
Staff Accounting Bulletin (“SAB”) No. 110 regarding the use of a "simplified"
method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of
expected term of "plain vanilla" share options in accordance with SFAS No. 123
(R), Share-Based Payment.  In particular, the staff indicated in SAB
107 that it will accept a company's election to use the simplified method,
regardless of whether the company sufficient information to make more refined
estimates of expected term. At the time SAB 107 was issued, the staff believed
that more detailed external information about employee exercise behavior (e.g.,
employee exercise patterns by industry and/or other categories of companies)
would, over time, become readily available to companies. Therefore, the staff
stated in SAB 107 that it would not expect a company to use the simplified
method for share option grants after December 31, 2007. The staff understands
that such detailed information about employee exercise behavior may not be
widely available by December 31, 2007. Accordingly, the staff will continue to
accept, under certain circumstances, the use of the simplified method beyond
December 31, 2007.  We currently use the simplified method for “plain
vanilla” share options and warrants, and will assess the impact of SAB 110 for
fiscal year 2009. It is not believed that this will have an impact on our
consolidated financial position, results of operations or cash
flows.





In December 2007, the FASB issued SFAS
No. 160, “Noncontrolling
Interests in Consolidated Financial Statements—an amendment of ARB No.
51".  This statement amends ARB 51 to establish accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in
a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. Before this
statement was issued, limited guidance existed for reporting noncontrolling
interests. As a result, considerable diversity in practice existed. So-called
minority interests were reported in the consolidated statement of financial
position as liabilities or in the mezzanine section between liabilities and
equity. This statement improves comparability by eliminating that diversity.
This statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009,
for entities with calendar year-ends). Earlier adoption is prohibited. The
effective date of this statement is the same as that of the related Statement
141 (revised 2007). We will adopt this Statement beginning March 1, 2009. It is
not believed that this will have an impact on our consolidated financial
position, results of operations or cash flows.





In December 2007, the FASB, issued FAS
No. 141 (revised 2007), “Business
Combinations’.  This Statement replaces FASB Statement No. 141,
Business Combinations”, but retains the fundamental requirements in
Statement 141.  This Statement establishes principles and
requirements for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree; (b) recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain purchase;
and (c) determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity may not
apply it before that date. The effective date of this statement is the same as
that of the related FASB Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements.   We will adopt this statement
beginning March 1, 2009. It is not believed that this will have an impact on our
consolidated financial position, results of operations or cash
flows.





In February 2007, the FASB, issued SFAS
No. 159, “The Fair Value
Option for Financial Assets and Liabilities — Including an Amendment of FASB
Statement No. 115".  This standard permits an entity to choose
to measure many financial instruments and certain other items at fair value.
This option is available to all entities. Most of the provisions in FAS 159 are
elective; however, an amendment to FAS 115 Accounting for Certain Investments in
Debt and Equity Securities applies to all entities with available for sale or
trading securities. Some requirements apply differently to entities that do not
report net income. SFAS No. 159 is effective as of the beginning of an entity’s
first fiscal year that begins after November 15, 2007. Early adoption is
permitted as of the beginning of the previous fiscal year provided that the
entity makes that choice in the first 120 days of that fiscal year and also
elects to apply the provisions of SFAS No. 157 Fair Value
Measurements.   We will adopt SFAS No. 159 beginning March 1, 2008 and
are currently evaluating the potential impact the adoption of this pronouncement
will have on our consolidated financial statements.





In September 2006, the FASB issued SFAS
No. 157, “Fair Value
Measurements”. This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including financial statements for an interim period within that fiscal year. We
will adopt this statement March 1, 2008, and it is not believed that this will
have an impact on our consolidated financial position, results of operations or
cash flows.


-10-


Item
7A.    Quantitative and Qualitative Disclosures About Market
Risk.





This item is not required for a smaller
reporting company.





Item
      8.
            Financial
      Statements and Supplementary Data.





Financial statements for the fiscal
years ended December 31, 2008 and 2007 have been examined to the extent
indicated in their reports by Moore & Associates, Chartered, independent
certified public accountants and have been prepared in accordance with
accounting principles generally accepted in the United States of America and
pursuant to regulations promulgated by the SEC.  The aforementioned
financial statements are included herein under Item 15.





Item
      9.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure.





This Item is not
applicable.





Item
9A(T). Controls
and Procedures.





Evaluation of Disclosures and
Procedures





As of the end of the period covered by
this annual report, our President, acting as both our chief executive officer
and principal accounting officer, carried out an evaluation of the effectiveness
of  “disclosure controls and procedures,” as defined in the Securities
Exchange Act of 1934, Rules 13a-15(e) and 15-d-15(e).  Based upon that
evaluation, it was concluded that as of December 31, 2008, our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act
is:





(i)  recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms; and





(ii)  accumulated
and communicated to management, including our chief executive officer and
principal accounting officer, as appropriate, to allow timely decisions
regarding required disclosure.





Management’s Annual Report on Internal
Control Over Financial Reporting





Management is responsible for
establishing and maintaining adequate internal control over financial reporting
for our company.  Our control system is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. generally
accepted accounting principals.  Our internal control over financial
reporting includes those policies and procedures that :





●
            pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and disposition of our
    assets;





●
            provide
      reasonable assurance that the transactions are recorded as necessary to
      permit preparation of financial statements in accordance with generally
      accepted accounting principles and that receipts and expenditures are
      being made only with proper authorizations of management and directors;
      and





●
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of company assets that could
      have a material effect on the financial
  statements.





All internal control systems, no matter
how well designed, have inherent limitations.  Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.  Because
of the inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting.  However, these inherent limitations
are known features of the financial reporting process.  Therefore, it
is possible to design into the process safeguards to reduce, though not
eliminate, this risk.


-11-





Because of inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements.  Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.





Management, including our President
acting as both chief executive officer and principal accounting officer,
assessed the effectiveness of our internal control over financial reporting as
of December 31, 2008.  In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal
Control Over Financial Reporting – Guidance for Smaller Public
Companies.  Based on our assessment and those criteria,
management concluded that during the period covered by this report, our internal
control and procedures over financial reporting was effective as of December 31,
2008.





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





Changes in Internal Control over
Financial Reporting





During the period covered by this
report, there was no significant change in our internal controls over financial
reporting or in other factors that materially affected, or is reasonably likely
to materially affect, our internal controls over financial
reporting.





Item
      9B.
            Other
      Information.





Not applicable.


PART
III





Item
      10.
            Directors,
      Executive Officers and Corporate
Governance.





Our executive officers and directors
are as follows:





Name
                
                Age
                
                PositionSteven
      D. Moulton
                
                
                47
                
                President,
      Secretary / Treasurer and DirectorJacob
      Colby
                
                
                21
                
                DirectorClaudia
      Moulton
                
                
                46
                
                Director


___________________________





All directors hold office until the
next annual meeting of stockholders and until their successors have been duly
elected and qualified.  There are no agreements with respect to the
election of directors.  We have not compensated directors for service
on the board of directors or any committee thereof, but directors are entitled
to be reimbursed for expenses incurred for attendance at meetings of the board
and any committee of the board.  However, directors may defer their
expenses and/or take payment in shares of our common stock.  As of the
date hereof, no director has accrued any expenses or
compensation.  Officers are appointed annually by the board and each
executive officer serves at the discretion of the board. We do not have any
standing committees.





No director, officer, affiliate or
promoter has, within the past five years, filed any bankruptcy petition, been
convicted in or been the subject of any pending criminal proceedings, or is any
such person the subject or any order, judgment, or decree involving the
violation of any state or federal securities laws.





Our current directors have other
employment and sources of income and will routinely devote only such time to our
business as deemed necessary.  It is estimated that our President will
devote approximately 20 to 60 hours per month to corporate
activities.


-12-


Currently, there is no arrangement,
agreement or understanding between management and non-management stockholders
under which non-management stockholders may directly or indirectly participate
in or influence the management of our affairs. Present management openly accepts
and appreciates any input or suggestions from stockholders.  However,
the board of directors is elected by the stockholders and the stockholders have
the ultimate say in who represents them on the board. There are no agreements or
understandings for any officer or director to resign at the request of another
person and no current offer or director is acting on behalf of, or will act at
the direction of any other person.





The business experience of the
directors listed above during the past five years is as follows:





Steven D.
Moulton became a director and Vice President of the company in January
1990 and became President and Secretary in April 2007.  From August
1999 to March 2004, he served as Secretary/Treasurer and a director of Draco,
Inc. and from September 2000 to the present, he has been Secretary/Treasurer of
Jump' Jax, Inc., a subsidiary of Draco that was spun out to stockholders in
December 2004 and was engaged in the childhood entertainment business of leasing
inflatable balloon bounce houses in Southern Utah.  Mr. Moulton
graduated from Olympus High School in Salt Lake City, Utah in
1980.  From 1984 to 1990, he served as a director and executive
officer of several publicly-held development stage companies including Safron,
Inc. (director and Vice President); Sagitta Ventures (director and President);
Jasmine Investments (director and President); Java, Inc. (Secretary/Treasurer
and director); and Onyx Holdings Corporation (director and President). From 1991
to 1994, Mr. Moulton was a director and President of Omni International
Corporation, which is currently known as "Beachport Entertainment
Corporation."  From 1987 until 1991 he was President and director of
Icon Systems, Inc. and served as Secretary/Treasurer of the same company until
his resignation on December 24, 1998. From 1995 to July 1996, he served as
director and Vice President of Wasatch International Corporation, formerly Java,
Inc. From February 1996 until November, 1999 he served as the President and
director of InsiderStreet.com, formerly Sierra Holding Group, Inc. Also since
1998, Mr. Moulton has managed his personal real estate properties through Excel
Properties, LLC.





Jacob
Colby, age 21, graduated from Olympus High School in Salt Lake City,
Utah, in 2005.  Mr. Colby worked for Excel Properties in Salt Lake
City doing property management from June of 2005 until January 2006. He also
worked at Hartvigsen School in Salt Lake City from January 2006 to June
2006.  Mr. Colby spent two years in Switzerland doing Ecclesiastical
work and is currently enrolled as a student at Salt Lake Community
College.  Mr. Colby is the stepson of the company’s President, Steven
D. Moulton, and is Claudia Moulton’s son.





Claudia
Moulton, age 46. Graduated from Highland High School in Salt Lake City,
Utah, in 1980.  She received a B.S. in Elementary Education from the
University of Utah in 1987. Ms. Moulton was employed by Granite School District
in Salt Lake City as an Elementary Teacher from 1987 to 1999. In 1999, she left
her teaching position and has been a homemaker since that time.  Ms.
Moulton is the wife of our President, Steven D. Moulton.





Compliance
With Section 16(a) of the Exchange Act





Section 16(a) of the Exchange Act
requires our directors and executive officers, and persons who own more than 10%
of our common stock, to file with the SEC initial reports of ownership and
reports of changes in ownership of our common stock and other equity
securities.  Based on a review of filings made with the SEC, we
believe that the requisite reports have been filed during the fiscal year
2008.





Code
of Ethics





We currently do not have a code of
ethics.  During the current fiscal year, we do intend to adopt a code
of ethics that applies to our principal executive officer, principal financial
officer, principal accounting officer or controller or persons performing
similar functions.





Item
11.     Executive Compensation.





We have not had a bonus, profit
sharing, or deferred compensation plan for the benefit of employees, officers or
directors.  We have not paid any salaries or other compensation to
officers, directors or employees for the years ended December 31, 2008
and 2007.  We expect that directors will defer any compensation
until such time as we realize sufficient revenues to pay such
compensation.  As of the date hereof, no person has accrued any
compensation.


-13-





On April 16, 2007, following the
resignations of Ronald Moulton as a director, President and CEO, and of Vallerie
Moulton as a director and Secretary, we entered into Consulting Agreements with
each person for a term of three years each. Under the agreements, Mr. Moulton
was to provide consulting services related to the production and marketing of
our products and act as an advisor to our management. He was to be compensated
at the rate of $20.00 per hour for his services and be reimbursed for expenses
related to his services. Mrs. Moulton was to oversee production of products
and consult with management in connection with marketing and strategic planning.
She was to be compensated at the rate of $20.00 per hour for her services and be
reimbursed for expenses related to her services. Both agreements were
subsequently terminated without any services being
provided.  Presently, we use the services of both Mr. and Mrs. Moulton
on an as-needed basis.  During 2008, their services were contributed
to the company and they did not receive any compensation.





Except as disclosed above, we have not
entered into any other employment agreement with any officer, director or any
other person and no such agreements are anticipated in the immediate future. It
is intended that directors will defer any compensation until such time as
business operations provide sufficient cash flow to provide for salaries. As of
the date hereof, no person has accrued any compensation.





Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.





The following table sets forth
information, to the best of our knowledge, as of March 10, 2009, with respect to
each person known by us to own beneficially more than 5% of the outstanding
common stock, each director and all directors and officers as a
group.





Name
      and Address
                                
                                Amount and Nature of
                                
                                
                                Percentof Beneficial Owner
                                
                                Beneficial Ownership
                                
                                
                                of Class(1)Directors and OfficersSteven
      Moulton *
                                
                                
                                1,200,000
                                
                                
                                
                                53.3
                                %4706
      South Highland Drive, # 353Salt
      Lake City, Utah 841175% StockholdersRonald
      Moulton
                                
                                
                                200,000
                                
                                
                                
                                8.9
                                %4706
      South Highland Drive, # 353Salt
      Lake City, Utah 84117Vallerie
      Moulton
                                
                                
                                400,000
                                
                                
                                
                                17.8
                                %4706
      South Highland Drive, # 353Salt
      Lake City, Utah 84117All
      directors and officers as
                                
                                
                                1,200,000
                                
                                
                                
                                53.3
                                %a
      group (3 persons)





*
              Director
      and/or executive officerNote:
              Unless
      otherwise indicated, we have been advised that each person above has sole
      voting power over the shares indicated
above.





(1)           Based
upon 2,250,000 shares of common stock outstanding on March 10,
2009.




Item
13.     Certain Relationships and Related Transactions,
and Director Independence.





There have been no material
transactions during the past two fiscal years between our company and any
officer, director, nominee for election as director, or any stockholder owning
greater than five percent (5%) of our outstanding shares, nor any member of the
above referenced individuals' immediate families.





None of our directors are deemed to be
independent directors.  We do not have a compensation, audit or
nominating committee, rather those functions are carried out by the board as a
whole.





Item
      14.
            Principal
      Accounting Fees and Services.





We do not have an audit committee and
as a result our entire board of directors performs the duties of an audit
committee.  Our board of directors will approve in advance the scope
and cost of the engagement of an auditor before the auditor renders audit and
non-audit services. As a result, we do not rely on pre-approval policies and
procedures.


-14-





We do not have an audit committee and
as a result our entire board of directors performs the duties of an audit
committee.  Our board of directors will approve in advance the scope
and cost of the engagement of an auditor before the auditor renders audit and
non-audit services. As a result, we do not rely on pre-approval policies and
procedures.





Audit Fees





The aggregate fees billed by our
independent auditors, Moore & Associates, Chartered, for professional
services rendered for the audit of our annual financial statements included in
our annual reports for the years ended December 31, 2008 and 2007 were $5,500,
and $4,500, respectively.





Audit Related Fees





For the year ended December 31, 2008
and 2007, there were no fees billed for assurance and related services by Moore
& Associates, Chartered relating to the performance of the audit of our
financial statements which are not reported under the caption "Audit Fees"
above.





Tax Fees





For the years ended December 31, 2008
and 2007, no fees were billed by Moore & Associates, Chartered for tax
compliance, tax advice and tax planning.





We do not use Moore & Associates,
Chartered for financial information system design and implementation. These
services, which include designing or implementing a system that aggregates
source data underlying the financial statements or generates information that is
significant to our financial statements, are provided internally or by other
service providers. We do not engage Moore & Associates, Chartered to provide
compliance outsourcing services.





The board of directors has considered
the nature and amount of fees billed by Moore & Associates, Chartered and
believes that the provision of services for activities unrelated to the audit is
compatible with maintaining Moore & Associates, Chartered's
independence.


-15-


PART  1V





Item
15.     Exhibits, Financial Statement
Schedules





(a)
            Exhibits





Exhibit No.
            
            Exhibit Name3.1*
            
            Certificate
      of Incorporation3.2*
            
            By-Laws4.1*
            
            Instrument
      defining rights of stockholders (See Exhibit No. 3.1, Certificate of
      Incorporation)10.1**
            
            Consulting
      Agreement with Ronald Moulton10.2**
            
            Consulting
      Agreement with Vallerie Moulton22.1
      *
            
            Subsidiaries31.1
            
            Certification
      of C.E.O. and Principal Accounting Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
            
            Certification
      of C.E.O. and Principal Accounting Officer Pursuant to 18 U.S.C. Section
      1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002





*
              Previously
      filed as an Exhibit to the Form 10-SB filed December 19,
    2005.


**
              Filed
      previously as exhibit to Form 8-K filed April 20,
  2007


-16-





ROCKY
MOUNTAIN FUDGE COMPANY, INC.


(A
Development Stage Company)





FINANCIAL
STATEMENTS





December
31, 2008





CONTENTS





Report
      of Independent Registered Public Accounting Firm
                
                
                19Balance
      Sheets
                
                
                20Statements
      of Operations
                
                
                21Statements
      of Stockholders’ Equity (Deficit)
                
                
                22Statements
      of Cash Flows
                
                
                24Notes
      to the Financial Statements
                
                
                25







MOORE
& ASSOCIATES, CHARTERED


ACCOUNTANTS AND
ADVISORS


PCAOB REGISTERED





REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM





To
the Board of Directors


Rocky
Mountain Fudge Company, Inc.


(A
Development Stage Company)





We have
audited the accompanying consolidated balance sheets of Rocky Mountain Fudge
Company, Inc. (A Development Stage Company) as of December 31, 2008 and 2007,
and the related consolidated statements of operations, stockholders’ equity and
cash flows for the years then ended and from inception on January 4, 1990
through December 31, 2008. These consolidated financial statements are the
responsibility of the Company’s management.  Our responsibility is to
express an opinion on these conoslidated 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 audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  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 audits provide a reasonable basis
for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Rocky Mountain Fudge
Company, Inc. (A Development Stage Company) as of December 31, 2008 and 2007,
and the related consolidated statements of operations, stockholders’ equity and
cash flows for the years then ended and from inception on January 4, 1990
through December 31, 2008, in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 2
to the consolidated financial statements, the Company has not yet established an
ongoing source of revenues sufficient to cover its operating expenses, which
raises substantial doubt about its ability to continue as a going
concern.  Management’s plans concerning these matters are also
described in Note 2.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.





/s/
Moore & Associates, Chartered





Moore
& Associates Chartered


Las
Vegas, Nevada


February
6, 2009





6490 West Desert Inn Rd, Las
Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501


-19-


ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Consolidated
Balance Sheets
 
 December 31,
                        
                        
                        December 31,2008
                        
                        
                        2007ASSETSCURRENT
      ASSETSCash
                        
                        $
                        8,484
                        
                        
                        $
                        6,769Total
      Current Assets
                        
                        
                        8,484
                        
                        
                        
                        6,769TOTAL
      ASSETS
                        
                        $
                        8,484
                        
                        
                        $
                        6,769LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESNote
      payable - related party
                        
                        $
                        2,413
                        
                        
                        $
                        -Accrued
      interest payable - related party
                        
                        
                        228
                        
                        
                        
                        -Total
      Current Liabilities
                        
                        
                        2,641
                        
                        
                        
                        -STOCKHOLDERS'
      EQUITYCommon
      stock; 50,000,000 shares authorized, at $0.001 par value, 2,250,000 shares
      issued and outstanding
                        
                        
                        2,250
                        
                        
                        
                        2,250Additional
      paid-in capital
                        
                        
                        161,200
                        
                        
                        
                        128,250Deficit
      accumulated during the development stage
                        
                        
                        (157,607
                        )
                        
                        
                        (123,731
                        )Total
      Stockholders' Equity
                        
                        
                        5,843
                        
                        
                        
                        6,769TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                        
                        $
                        8,484
                        
                        
                        $
                        6,769
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  -20-
 
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Consolidated
Statements of Operations
 
 From Inceptionon January 4,For the Years Ended
                    
                    
                    1990 throughDecember 31,
                    
                    
                    December 31,2008
                    
                    
                    2007
                    
                    
                    2008REVENUES
                    
                    $
                    11,485
                    
                    
                    $
                    163
                    
                    
                    $
                    157,702COST
      OF SALES
                    
                    
                    8,450
                    
                    
                    
                    1,800
                    
                    
                    
                    58,459GROSS
      PROFIT (LOSS)
                    
                    
                    3,035
                    
                    
                    
                    (1,637
                    )
                    
                    
                    99,243EXPENSESGeneral
      and Administrative
                    
                    
                    36,682
                    
                    
                    
                    34,615
                    
                    
                    
                    259,679Total
      Expenses
                    
                    
                    36,682
                    
                    
                    
                    34,615
                    
                    
                    
                    259,679OPERATING
      LOSS
                    
                    
                    (33,647
                    )
                    
                    
                    (36,252
                    )
                    
                    
                    (160,436
                    )OTHER
      INCOME (EXPENSES)Interest
      income
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    4,437Interest
      expense
                    
                    
                    (229
                    )
                    
                    
                    (500
                    )
                    
                    
                    (1,608
                    )Total
      Other Income (Expenses)
                    
                    
                    (229
                    )
                    
                    
                    (500
                    )
                    
                    
                    2,829LOSS
      BEFORE INCOME TAXES
                    
                    
                    (33,876
                    )
                    
                    
                    (36,752
                    )
                    
                    
                    (157,607
                    )PROVISION
      FOR INCOME TAXES
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -NET
      LOSS
                    
                    $
                    (33,876
                    )
                    
                    $
                    (36,752
                    )
                    
                    $
                    (157,607
                    )BASIC
      LOSS PER SHARE
                    
                    $
                    (0.02
                    )
                    
                    $
                    (0.02
                    )WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING
                    
                    
                    2,250,000
                    
                    
                    
                    1,959,589
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  -21-
 
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Consolidated
Statements of Stockholders' Equity
 
 DeficitAccumulatedAdditional
                      
                      
                      During the
                      
                      
                      TotalCommon Stock
                      
                      
                      Paid-In
                      
                      
                      Development
                      
                      
                      Stockholders'Shares
                      
                      Amount
                      
                      
                      Capital
                      
                      
                      Stage
                      
                      
                      EquityBalance
      at inception of development stage on January 4, 1990
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Common
      stock issued for cash at $0.0002 per share on August 10,
    1990
                      
                      
                      6,000,000
                      
                      
                      
                      6,000
                      
                      
                      
                      (4,800
                      )
                      
                      
                      -
                      
                      
                      
                      1,200Services
      contributed by shareholders
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      2,400
                      
                      
                      
                      -
                      
                      
                      
                      2,400Shares
      cancelled as contributed capital by shareholders
                      
                      
                      (2,500,000
                      )
                      
                      
                      (2,500
                      )
                      
                      
                      2,500
                      
                      
                      
                      -
                      
                      
                      
                      -Common
      stock issued for cash at $0.0002 per share on December 15,
      1998
                      
                      
                      2,500,000
                      
                      
                      
                      2,500
                      
                      
                      
                      (1,900
                      )
                      
                      
                      -
                      
                      
                      
                      600Common
      stock issued for cash at $0.20 per share
                      
                      
                      250,000
                      
                      
                      
                      250
                      
                      
                      
                      49,750
                      
                      
                      
                      -
                      
                      
                      
                      50,000Stock
      offering costs
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (10,000
                      )
                      
                      
                      -
                      
                      
                      
                      (10,000
                      )Net
      loss from inception of development stage through December 31,
      2004
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (44,200
                      )
                      
                      
                      (44,200
                      )Balance,
      December 31, 2004
                      
                      
                      6,250,000
                      
                      
                      $
                      6,250
                      
                      
                      $
                      37,950
                      
                      
                      $
                      (44,200
                      )
                      
                      $
                      -
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  -22-
 
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Consolidated
Statements of Stockholders' Equity
 
 DeficitAccumulatedAdditional
                  
                  
                  During the
                  
                  
                  TotalCommon Stock
                  
                  
                  Paid-In
                  
                  
                  Development
                  
                  
                  Stockholders'Shares
                  
                  
                  Amount
                  
                  
                  Capital
                  
                  
                  Stage
                  
                  
                  EquityBalance,
      December 31, 2004
                  
                  
                  1,250,000
                  
                  
                  $
                  1,250
                  
                  
                  $
                  42,950
                  
                  
                  $
                  (44,200
                  )
                  
                  $
                  -Capital
      contributed by shareholder
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  50,000
                  
                  
                  
                  -
                  
                  
                  
                  50,000Net
      loss for the year ended December 31, 2005
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (19,545
                  )
                  
                  
                  (19,545
                  )Balance,
      December 31, 2005
                  
                  
                  1,250,000
                  
                  
                  
                  1,250
                  
                  
                  
                  92,950
                  
                  
                  
                  (63,745
                  )
                  
                  
                  30,455Services
      contributed by shareholders
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  5,000
                  
                  
                  
                  -
                  
                  
                  
                  5,000Net
      loss for the year ended December 31, 2006
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (23,234
                  )
                  
                  
                  (23,234
                  )Balance,
      December 31, 2006
                  
                  
                  1,250,000
                  
                  
                  
                  1,250
                  
                  
                  
                  97,950
                  
                  
                  
                  (86,979
                  )
                  
                  
                  12,221Common
      shares issued for debt
                  
                  
                  1,000,000
                  
                  
                  
                  1,000
                  
                  
                  
                  25,300
                  
                  
                  
                  -
                  
                  
                  
                  26,300Services
      contributed by shareholders
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  5,000
                  
                  
                  
                  -
                  
                  
                  
                  5,000Net
      loss for the year ended December 31, 2007
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (36,752
                  )
                  
                  
                  (36,752
                  )Balance,
      December 31, 2007
                  
                  
                  2,250,000
                  
                  
                  
                  2,250
                  
                  
                  
                  128,250
                  
                  
                  
                  (123,731
                  )
                  
                  
                  6,769Services
      contributed by shareholders
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  32,950
                  
                  
                  
                  -
                  
                  
                  
                  32,950Net
      loss for the year ended December 31, 2008
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (33,876
                  )
                  
                  
                  (33,876
                  )Balance,
      December 31, 2008
                  
                  
                  2,250,000
                  
                  
                  $
                  2,250
                  
                  
                  $
                  161,200
                  
                  
                  $
                  (157,607
                  )
                  
                  $
                  5,843
 
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  -23-
 
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Consolidated
Statements of Cash Flows
 
 From Inceptionon January 4,For the Years Ended
                  
                  
                  1990 throughDecember 31,
                  
                  
                  December 31,2008
                  
                  2007
                  
                  
                  2008OPERATING
      ACTIVITIESNet
      loss
                  
                  $
                  (33,876
                  )
                  
                  $
                  (36,752
                  )
                  
                  $
                  (157,607
                  )Adjustments
      to reconcile net loss to net used by operating activities:Services
      contributed by officers and shareholders
                  
                  
                  32,950
                  
                  
                  
                  5,000
                  
                  
                  
                  37,950Changes
      in operating assets and liabilitiesIncrease
      in accounts payable and accrued expenses - related party
                  
                  
                  228
                  
                  
                  
                  -
                  
                  
                  
                  228Net
      Cash Used in Operating Activities
                  
                  
                  (698
                  )
                  
                  
                  (31,752
                  )
                  
                  
                  (119,429
                  )INVESTING
      ACTIVITIES
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -FINANCING
      ACTIVITIESContributed
      capital
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  57,400Cash
      received on note payable - related
                  
                  
                  2,413
                  
                  
                  
                  500
                  
                  
                  
                  28,713Sale
      of common stock for cash
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  41,800Net
      Cash Provided by Financing Activities
                  
                  
                  2,413
                  
                  
                  
                  500
                  
                  
                  
                  127,913NET
      DECREASE IN CASH
                  
                  
                  1,715
                  
                  
                  
                  (31,252
                  )
                  
                  
                  8,484CASH
      AT BEGINNING OF PERIOD
                  
                  
                  6,769
                  
                  
                  
                  38,021
                  
                  
                  
                  -CASH
      AT END OF PERIOD
                  
                  $
                  8,484
                  
                  
                  $
                  6,769
                  
                  
                  $
                  8,484SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATIONCASH
      PAID FOR:Interest
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  79Income
      Taxes
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  -24-




ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
 
 NOTE 1
-  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 
 a.
Business and Organization
 
 Rocky
Mountain  Fudge  Company,  Inc. (The Company) was
organized on January  4,  1990,  under the laws of
the State of Utah to engage in the  business  of making
and  selling  fudge  candy (dba Vallerie's Country
Candy,  Inc.) Pursuant to Statement of Financial Accounting Standards
No. 7, "Accounting and Reporting by Development Stage Enterprises," the Company
is classified as a development stage company.  On August 9, 1992, the
Company changed its name to RV&S Enterprises, Inc. On July 28, 1998, the
Company again changed its name to Rock Mountain Fudge Company, Inc. and
commenced sales of candy products over the internet and through direct
sales.
 
 In order
to relocate the domicile of the Company, the  Company created a new
wholly owned  subsidiary in the State of Nevada under
the  name of  Rocky  Mountain
Fudge  Company, Inc.  The Nevada corporation has the same
capitalization as the Company; 50 million shares of common stock, par value
$0.001 per share. The Company and the newly formed Nevada entity then executed
an Agreement and Plan of Merger for the sole purpose of changing the Company's
domicile to Nevada. As a result of the merger transaction, the Utah corporation
was merged with and into the Nevada corporation, with the Nevada entity being
the survivor.  Each Company stockholder was entitled to exchange their
shares of common stock in the Utah entity for the same number of shares in the
Nevada entity, adjusted for the five for one forward stock split.
 Following
the change of domicile, the Company incorporated a new wholly-owned subsidiary
in the State of Utah under the name of Wasatch Candy Company, Inc., d.b.a.
Vallerie's Country Candy, into which the Company transferred certain cash and
assets and through which the Company will operate its candy
business.
 
 The
Company's financial statements are prepared using the accrual method of
accounting.  The Company has elected a December 31
year-end.
 
 b.
Revenue Recognition
 
 Revenues
from the sale of candy products are recognized upon delivery and acceptance by
the customer, and when collectability is reasonably assured.
 
 c. Basic
Loss Per Share
 
 The
computation of basic loss per share of common stock is based on the weighted
average number of shares outstanding during the period.
 
 For
      the Years EndedDecember 31,2008
                        
                        
                        2007Loss
      (numerator)
                        
                        $
                        (33,876
                        )
                        
                        $
                        (36,752
                        )Shares
      (denominator)
                        
                        
                        2,250,000
                        
                        
                        
                        1,959,589Per
      share amount
                        
                        $
                        (0.02
                        )
                        
                        $
                        (0.02
                        )
  -25-
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
 NOTE 1
-  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 d. Use of
Estimates
 
 The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and 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.  Actual results could differ from those
estimates.
 
 e. Income
Taxes
 
 Deferred taxes are provided on a
liability method whereby deferred tax assets are recognized for deductible
temporary differences and operating loss and tax credit carryforwards and
deferred tax liabilities are recognized for taxable temporary
differences.  Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax
bases.  Deferred tax assets are reduced by a
valuation  allowance when, in the opinion of management,  it
is more likely than not that some  portion or all of the deferred tax
assets will to be realized. Deferred tax assets and liabilities are adjusted for
the effects of changes in tax laws and rates on the date of
enactment.
 
 Net
deferred tax assets consist of the following components as of December 31, 2008
and 2007:
 
 2008
                      
                      
                      2007Deferred
      tax assets:NOL
      carryover
                      
                      $
                      46,666
                      
                      
                      $
                      48,255Valuation
      allowance
                      
                      
                      (46,666
                      )
                      
                      
                      (48,255
                      )Net
      deferred tax asset
                      
                      $
                      —
                      
                      
                      $
                      —
 
 The income tax provision differs from
the amount of income tax determined by applying the U.S. federal and state
income tax rates of 39% to pretax income from continuing operations for the
years ended December 31, 2008 and 2007 due to the following:
 
 2008
                      
                      
                      2007Book
      Income
                      
                      $
                      (13,212
                      )
                      
                      $
                      (14,333
                      )Contributed
      services
                      
                      
                      12,851
                      
                      
                      
                      1,950Valuation
      allowance
                      
                      
                      361
                      
                      
                      
                      12,383$
                      -
                      
                      
                      $
                      -
 
 At December 31, 2008, the Company had
net operating loss carryforwards of approximately $119,657 that may be offset
against future taxable income through 2028. No tax benefit has been reported in
the December 31, 2008 financial statements since the potential tax benefit is
offset by a valuation allowance of the same amount.  Due to the change
in ownership provisions of the Tax Reform Act of 1986, net operating loss carry
forwards for Federal income tax reporting purposes are subject to annual
limitations.  Should change in ownership occur, net operating loss
carryforwards may be limited as to use in future years.
  -26-
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
 NOTE 1
-  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 f.
Principles of Consolidation
 
 The accompanying financial statements
include the accounts of Rocky Mountain Fudge Company, Inc. and its wholly owned
subsidiary, Wasatch Candy Company, Inc.  All inter-company
transactions have been eliminated in the consolidation.
 
 g.
Advertising Costs
 
 The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company had not incurred any advertising expense as of December 31, 2008 and
2007.
 
 h.
Inventory
 
 The
Company accounts for inventory of raw materials and finished goods on a cost
basis.  The inventory is maintained on a first in- first out (FIFO)
basis. The Company’s inventory was $-0- as of December 31, 2008 and
2007.
 
 i.
Stock-based Compensation
 
 As of
December 31, 2008, the Company has not issued any share-based payments to its
employees.
 
 The
Company adopted SFAS No. 123-R effective January 1, 2006 using the
modified prospective method. Under this transition method, stock compensation
expense includes compensation expense for all stock-based compensation awards
granted on or after January 1,2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS No. 123-R.
 
 j. Recent
Accounting Pronouncements
 
 In
June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required
to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our consolidated financial positionand results of
operations if adopted.
 
 In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial
Guarantee Insurance Contracts-and interpretation of FASB Statement No.
60”.SFAS
No. 163 clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement of  premium
revenue and claims liabilities. This statement also requires expanded
disclosures about financial guarantee insurance contracts.
  -27-
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
 NOTE 1
-  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 j. Recent
Accounting Pronouncements (Continued)
 SFAS No.
163 is effective for fiscal years beginning on or after December 15, 2008, and
interim periods within those years. SFAS No. 163 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
 
 In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally
Accepted Accounting Principles”.SFAS No. 162 sets forth
the level of authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two categories, the
more authoritative category will prevail. SFAS No. 162 will become effective 60
days after the SEC approves the PCAOB’s amendments to AU Section 411 of the
AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
 
 In March
2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative
Instruments and Hedging Activities—an amendment of FASB Statement No.
133.This standard requires companies to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. The Company has not yet adopted the
provisions of SFAS No. 161, but does not expect it to have a material impact on
its financial position, results of operations or cash flows.
 
 In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based
Payment.  In particular, the staff indicated in SAB 107 that it
will accept a company's election to use the simplified method, regardless of
whether the company has sufficient information to make more refined estimates of
expected term. At the time SAB 107 was issued, the staff believed that more
detailed external information about employee exercise behavior (e.g., employee
exercise patterns by industry and/or other categories of companies) would, over
time, become readily available to companies. Therefore, the staff stated in SAB
107 that it would not expect a company to use the simplified method for share
option grants after December 31, 2007. The staff understands that such detailed
information about employee exercise behavior may not be widely available by
December 31, 2007. Accordingly, the staff will continue to accept, under certain
circumstances, the use of the simplified method beyond December 31, 2007. The
Company currently uses the simplified method for “plain vanilla” share options
and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is
not believed that this will have an impact on the Company’s financial position,
results of operations or cash flows.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No.
51.  This statement amends ARB 51 to establish accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in
a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated
  -28-
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
 NOTE 1
-  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 j. Recent
Accounting Pronouncements (Continued)
 financial
statements. Before this statement was issued, limited guidance existed for
reporting noncontrolling interests. As a result, considerable diversity in
practice existed. So-called minority interests were reported in the consolidated
statement of financial position as liabilities or in the mezzanine section
between liabilities and equity. This statement improves comparability by
eliminating that diversity. This statement is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier
adoption is prohibited. The effective date of this statement is the same as that
of the related Statement 141 (revised 2007). The Company will adopt this
Statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s financial position, results of operations or cash
flows.
 
 In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations.’This
Statement replaces FASB Statement No. 141, Business Combinations, but
retains the fundamental requirements in Statement 141.  This
Statement establishes principles and requirements for how the acquirer: (a)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; (b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and (c) determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. This statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. An entity may not apply it before that date. The
effective date of this statement is the same as that of the related FASB
Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements.  The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s financial position, results of operations or cash
flows.
 
 In
February 2007, the FASB, issued SFAS No. 159,The Fair Value Option for Financial
Assets and Liabilities—Including an Amendment of FASB Statement No.
115.  This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments
in Debt and Equity Securities applies to all entities with available for
sale or trading securities. Some requirements apply differently to entities that
do not report net income. SFAS No. 159 is effective as of the beginning of an
entities first fiscal year that begins after November 15, 2007. Early adoption
is permitted as of the beginning of the previous fiscal year provided that the
entity makes that choice in the first 120 days of that fiscal year and also
elects to apply the provisions of SFAS No. 157 Fair Value
Measurements.  The Company adopted SFAS No. 159 beginning March
1, 2008. The adoption of this pronouncement did not have an impact on the
Company’s financial position, results of operations or cash flows.
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements  This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any
  -29-
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
 NOTE 1
-  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 j. Recent
Accounting Pronouncements (Continued)
 new fair
value measurements. However, for some entities, the application of this
statement will change current practice. This statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Earlier application is
encouraged, provided that the reporting entity has not yet issued financial
statements for that fiscal year, including financial statements for an interim
period within that fiscal year. The Company adopted this statement March 1,
2008. The adoption of this pronouncement did not have an impact on the Company’s
financial position, results of operations or cash flows.
 
 NOTE 2 -
GOING CONCERN
 
 The Company's financial statements are
prepared using generally accepted accountingprinciples in the United States of
America applicable to a going concern which contemplates the realization of
assets and liquidation of liabilities in the normal course of
business.  The Company has not yet established an ongoing source of
revenues sufficient to cover its operating costs and allow it to continue as a
going concern.  The ability of the Company to continue as a going
concern is dependent on the Company obtaining adequate capital to fund operating
losses until it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations.
 
 In order to continue as a going
concern, the Company will need, among other things, additional capital
resources. Management's plans to obtain such resources for the Company include
(1) obtaining capital from management and significant shareholders sufficient to
meet its minimal operating expenses, and (2) seeking out and completing a merger
with an existing operating company.  However, management cannot
provide any assurances that the Company will be successful in accomplishing any
of its plans.
 
 The ability of the Company to continue
as a going concern is dependent upon its ability tosuccessfully accomplish the
plans described in the preceding paragraph and eventually secure other sources
of financing and attain profitable operations.  The accompanying
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
 
 NOTE 3 –
EQUITY TRANSACTIONS
 
 As of
December 2007, the Board of Directors of the Company voted in favor of a
five-for-one reverse stock split of the Company’s common stock.  The
reverse stock split became effective in February 2008. All references to common
stock presented within these financial statements have been retroactively
restated so as to reflect this reverse stock split as if it had occurred at
Company inception.
  -30-
 ROCKY
MOUNTAIN FUDGE COMPANY, INC.
 (A
Development Stage Company)
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
 NOTE 4 –
RELATED PARTY TRANSACTIONS
 
 During
2008, the Company received a cash advance from an officer and director of
$2,413. The advance accrues interest at 10% per annum, is unsecured and due upon
demand.  The Company owes $228 in accrued interest on the advance at
December 31, 2008.
 
 The
Company’s officers contribute their services without compensation. The Company
has recorded an expense of $32,950 and $5,000 for the services during the years
ended December 31, 2008 and 2007, respectively.


-31-


SIGNATURES





Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





Rocky
      Mountain Fudge Company, Inc.By:
                /S/Steven D.
      MoultonSteven
      D. MoultonPresident
      and C.E.O.Principal
      Financial OfficerPrincipal
      Accounting OfficerDated:
      March 13, 2008





Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





Signature
                          
                          Title
                          
                          Date/S/Steven D.
      Moulton
                          
                          President,
      C.E.O. and director
                          
                          March
      13, 2009Steven
      D. Moulton
                          
                          Principal
      Financial OfficerPrincipal
      Accounting Officer/S/Jacob
      Colby
                          
                          Director
                          
                          March
      13, 2009Jacob
      Colby/S/Claudia.
      Moulton
                          
                          Director
                          
                          March
      13, 2009Claudia
      Moulton


-32-