United States Securities and Exchange Commission Washington, D.C. 20549  Form 10-Q  [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended June 30, 2009.  or  [  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT  For the transition period from __________ to __________.  Commission file number 000-53378  SHIMODA MARKETING, INC. (Name of small business issuer in its charter)  Florida (State or other jurisdiction of incorporation or organization)  59-2747731 (I.R.S. Employer Identification No.)  116 West McLeroy Blvd., Saginaw, Texas  76179 (Address of principal executive offices and Zip Code)  Registrants telephone number, including area code:(817) 546-1681  Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  (x) Yes (__) No  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):  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 (__) No (x) The number of shares of the issuers common stock, par value $.01 per share, outstanding as of August 12, 2009 was 10,020,000.


Link to Table of Contents    TABLE OF CONTENTS   PagePart I.  Financial Information3Item 1.  Financial Statements.3Balance Sheets for the periods ending
June 30, 2009 (unaudited) and December 31, 2008 (audited).3Statements of Operations for the 6 month
periods ending June 30, 2009 and 2008 (unaudited).4Statements of Cash Flows for the 6 month periods
ending June 30, 2009 and 2008 (unaudited).5Notes to Financial Statements6Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations.10Item 3.  Quantitative and Qualitative Disclosures About Market Risk.15Item 4.  Controls and Procedures.15Item 4T.  Controls and Procedures.15Part II.  Other Information16Item 1.  Legal Proceedings.16Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.16Item 3.  Defaults Upon Senior Securities.16Item 4.  Submission of Matters to a Vote of Security Holders.16Item 5.  Other Information.16Item 6.  Exhibits16Signatures18                           2


Link to Table of Contents   Part I.  Financial Information Item 1. Financial Statements SHIMODA MARKETING, INC.
Balance Sheet
As of June 30, 2009 (Unaudited) and December 31, 2008 (Audited)As ofAs ofJune 30, 2009December 31, 2008(Unaudited)(Audited)ASSETSCurrent Assets:Cash & Cash Equivalents$207,169$173,440Accounts Receivable37,08034,492Total Current Assets244,249207,932Fixed Assets:Machinery & Equipment122,603122,603Accumulated Depreciation-113,204-110,940Total Fixed Assets9,39911,663TOTAL ASSETS$253,648$219,595LIABILITIES & STOCKHOLDERS' EQUITYLiabilities:Current Liabilities:Accounts Payable$4,500$6,899Accrued Payroll15,2110Income Taxes Payable3,5852,225Deferred Tax Liability - Current4,0863,454Payroll Taxes Payable1,08356Pension Plan Payable2,0004,500Total Current Liabilities30,46517,134Long Term Liabilities:Deferred Tax Liability - Long-Term201201Due to Affiliate - NOTE D110,001110,001Shareholder Loans - NOTE C48,21543,874Total Long Term Liabilities158,417154,076Total Liabilities188,882171,210Stockholders' Equity:Common Stock, $0.01 par value, 75,000,000 sharesauthorized, 10,020,000 shares issued & outstanding100,200100,200Paid in Capital88,69788,697Retained Earnings-124,131-140,512Total Stockholders' Equity64,76648,385TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$253,648$219,595 See accompanying notes and accountants report.  3  Link to Table of Contents    SHIMODA MARKETING, INC.
Statement of Operations
For the Three Months and Six Months Ended June 30, 2009 and 2008
(Unaudited)3 months ended3 months ended6 months ended6 months endedJune 30, 2009June 30, 2008June 30, 2009June 30, 2008(Unaudited)(Unaudited)(Unaudited)(Unaudited)Income:Consulting Income$92,823$136,525$202,581$272,22592,823136,525202,581272,225Cost of Sales - NOTE ELabor28,45035,63759,71271,040Overhead7,5368,63314,75815,83435,98644,27074,47086,874Gross Profit56,83792,255128,111185,351Operating Expenses:Bank Service Charges19430351129Benefits Expense1,0061,5451,7902,536Depreciation Expense1,1321,9002,2643,800Contract Labor - NOTE D1,68815,75011,81330,797Contributions00050Dues and Subscriptions159153210204Insurance1,9831,7068,2288,178Licenses and Permits00086Miscellaneous/Administrative1,6349941,6341,549Office Supplies1,0181,8821,0633,101Officer Salary5,0007,50010,00015,000Outside Services - NOTE D8,1008,10016,20016,200Professional Fees5,4239,6836,52320,349Rent - NOTE H7,0886,18714,17512,375Taxes5337641,0381,379Telephone2,2862,4614,6334,750Travel and Entertainment19,32018,26527,59128,94256,56476,920107,513149,425Income From Operations27315,33520,59835,926Provision for Income Taxes - NOTE B(604)2,2994,2179,391Net Income$877$13,036$16,381$26,535Earnings (loss) per common share:Net income (loss) per share$0.01$0.01$0.01$0.01  See accompanying notes and accountants report.  4  Link to Table of Contents    SHIMODA MARKETING, INC.
Statement of Cash Flows
For the Six Months Ended June 30, 2009 and 2008
(Unaudited)6 months ended6 months endedJune 30, 2009June 30, 2008(Unaudited)(Unaudited)OPERATING ACTIVITIESNet Income$16,381$26,535Adjustments to reconcile Net Incometo net cash provided by operations:Depreciation Expense2,2643,800(Increase) Decrease in:Accounts Receivable(2,588)2,914Increase (Decrease) in:Accrued Expenses11,33915,486Income Taxes Payable1,3606,732Deferred Tax Liability632(141)Net cash provided (used) by Operating Activities29,38855,326INVESTING ACTIVITIESAcquisition of Fixed Assets0(1,945)Net cash provided (used) by Investing Activities0(1,945)FINANCING ACTIVITIESAffiliate Loans00Shareholder Loans4,3414,341Net cash provided (used) by Financing Activities4,3414,341Net increase in cash and cash equivalents33,72957,722Cash and cash equivalents at beginning of period173,440141,019Cash and cash equivalents at end of period$207,169$198,741    See accompanying notes and accountants report.  5  Link to Table of Contents SHIMODA MARKETING, INC. Notes to Financial Statements June 30, 2009 and June 30, 2008 (Unaudited)    NOTE A  ORGANIZATION AND NATURE OF BUSINESS The Company was incorporated December 16, 1986 in the State of Florida.  On September 13, 2004 the Company amended its Articles of Incorporation changing the par value of its stock and its total authorized shares of common stock.  The Company manages a full service source for sales, marketing, promotion, and distribution management for its customers automotive repair needs.   NOTE B  SIGNIFICANT ACCOUNTING POLICIES Basis for Presentation In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the three and six month periods ended June 30, 2009 and June 30, 2008 ; (b) the financial position at June 30, 2008, and (c) cash flows for the six month periods ended June 30, 2009 and June 30, 2008, have been made.  The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require 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. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.  The financial statement and notes are presented as permitted by Form 10-QSB. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principals generally accepted in the United States of America have been omitted. The accompanying unaudited financial statements should be read in conjunction with the financial statements for the years ended December 31, 2008 and 2007 and notes thereto in the Companys annual report on Form 10-KSB for the year ended December 31, 2008, filed with the Securities and Exchange Commission. Operating results for the three and six months ended June 30, 2009 and June 30, 2008 are not necessarily indicative of the results that may be expected for the entire year.  Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term securities with a maturity of nine months or less to be cash equivalents.  Fixed Assets Property and equipment are stated at cost.  Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the assets.  Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized.  Expenditures for maintenance and repairs are charged to expense as incurred.  Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the corporation to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates. Interim Adjustments These interim financial statements include all adjustments which in the opinion of management are necessary in order to make the financial statements not misleading.  Revenue Recognition The Company generates revenue through consulting and distribution setup services in the automotive industry.  There were no equipment sales during the three months ended June 30, 2009 and 2008.  Duties include adding / deleting distributors, establishing pricing tiers for tier distribution channels, analyzing distribution performance, aiding in collections, providing clients with competitive research, managing industry trade shows, and preparing strategic monthly reports.  The Company provides these services and bills for them on a monthly basis as they are completed.   6  Link to Table of Contents SHIMODA MARKETING, INC. Notes to Financial Statements June 30, 2009 and June 30, 2008 (Unaudited)   NOTE B  SIGNIFICANT ACCOUNTING POLICIES  (Continued) Revenue Recognition (continued)  The Company bills and is compensated on, both, a step-ladder commission basis and contract fee basis.  Pursuant to SEC Topic 13: Revenue Recognition, the Company recognizes its consulting and related other revenues when its monthly services are completed and billed pursuant to arrangements the Company has in place with its customers. Concentration of Credit Risk 46% of the Companys revenue, $93,811.00, was derived from its individual largest customer, Forward Lift, for the six months ended June 30, 2009. 61% of the Companys revenue, $166,509.00, was derived from its individual largest customer, Forward Lift, for the six months ended June 30, 2008.  The Companys President was previously the president of Forward Lift.  The Company generally collects all of its outstanding trade receivables within a sixty (60) day period.  At June 30, 2009, all receivables outstanding as of the prior December 31, 2008 year end had been collected.  The Company had no outstanding receivables from Forward Lift of as of June 30, 2009 and June 30, 2008, respectively.  Income Taxes The components of the provision for income taxes for the six months ended June 30, 2009 are summarized as follows:  Current taxes..3,585.00Deferred taxes632.00Provision for income taxes4,217.00  The items accounting for the difference between income taxes computed at the federal and state statutory rate and the provision for income taxes are as follows:  Income tax at federal rate3,305.0016.05%State tax, net of federal tax effect..280.001.36%Differences relating to cash (tax) v.accrual (book) accounting632.003.06%Book v. tax depreciation0.000.00%Total Provision..4,217.0020.47%  Deferred income taxes reflect the net tax effects of temporary differences between the amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Companys net deferred income taxes are as follows:  Current Deferred Tax Liabilities:Differences relating to cash (tax) v.accrual (book) accounting4,086.00Long-term Deferred Tax Liabilities:Differences - book v. tax depreciation201.00Total Deferred Taxes...4,287.00    The components of the provision for income taxes for the six months ended June 30, 2008 are summarized as follows:  Current taxes..8,901.00Deferred taxes490.00Provision for income taxes...9,391.00  7  Link to Table of Contents SHIMODA MARKETING, INC. Notes to Financial Statements June 30, 2009 and June 30, 2008 (Unaudited)     NOTE B  SIGNIFICANT ACCOUNTING POLICIES  (Continued) Income Taxes (continued)  The items accounting for the difference between income taxes computed at the federal and state statutory rate and the provision for income taxes are as follows:  Income tax at federal rate...7,752.0021.58%State tax, net of federal tax effect..1,148.003.20%Differences relating to cash (tax) v.accrual (book) accounting408.001.14%Book v. tax depreciation83.000.22%Total Provision..9,391.0026.14%   Deferred income taxes reflect the net tax effects of temporary differences between the amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Companys net deferred income taxes are as follows:  Current Deferred Tax Liabilities:Differences relating to cash (tax) v. accrual (book) accounting3,716.00Long-term Deferred Tax Liabilities:Differences - book v. tax depreciation940.00Total Deferred Taxes...4,656.00  Recently Adopted or Issued Accounting Pronouncements There are no new recently issued accounting standards that will have an impact on the financial statements that have not been adopted.  NOTE C  SHAREHOLDER LOANS Shareholder loans consist of amounts advanced to the Company to fund various working capital needs.  These amounts are non-interest bearing and payable on demand subsequent to December 31, 2010.  NOTE D  RELATED PARTY TRANSACTIONS The Company pays an affiliated company, whose sole shareholder is an officer and shareholder in the Company, for a variety of outside administrative support functions.  For the six months ended June 30, 2009 and 2008, fees paid for these services were $21,600 and $21,600, respectively.  The Company has also advanced funds to / from this affiliate which are non-interest bearing.  The Company also pays another affiliated company, whose owner is a director and shareholder in the Company, for administration of corporate accounts.  Fees paid to this company for the six months ended June 30, 2009 and 2008 were $40,374 and $40,374, respectively. NOTE E  COST OF SERVICES The Company recognizes direct materials, appropriate allocations of labor (based on time spent directly on generating revenue, as opposed to selling, general and administrative functions), and allocable related overhead (fringes / benefits related to labor, training, trade shows, and appropriate portions of other overhead costs such as rent, telephone, supplies and delivery related directly to the generation of revenue as opposed to selling, general and administrative functions) as direct costs of sales in arriving at the Companys gross profit.  NOTE F  BENEFIT PLANS The Company maintains a money purchase pension plan and a profit sharing plan that covers its employees.  The benefits are based on years of service and employees compensation.  Two thousand dollars ($2,000) was the estimated funding accrued for the six months ended June 30, 2009 and $3,000 was the estimated funding accrued for the six months ended June 30, 2008, respectively for the money purchase pension plan.  8  Link to Table of Contents SHIMODA MARKETING, INC. Notes to Financial Statements June 30, 2009 and June 30, 2008 (Unaudited)   NOTE G  EARNINGS PER COMMON SHARE Earnings (loss) per common share were calculated based on a net income numerator for each period divided by a denominator of 10,020,000 weighted-average shares of outstanding common stock.  The denominator was calculated based on the following issuances of common stock during the six months ending June 30, 2009 and 2008: January 1, to June 30, 2008  10,020,000 common shares outstanding January 1, to June 30, 2009  10,020,000 common shares outstanding These calculations have been restated to give retroactive effect to the September 30, 2005 100:1 forward stock split along with the October 20, 2008 6:1 forward stock split.  NOTE H  RENT The Company leases its principal business location at 116 W. McElroy Boulevard, Saginaw, Texas on a month-to-month basis from a company that has common owners with the Company.  NOTE I  COMPENSATION Michael B. Cranfill, the Companys President, was the Companys sole employee during the six months ended June 30, 2009 and 2008.  The Company has no employment agreement with Mr. Cranfill. Mr. Cranfills compensation for the six months ended June 30, 2009 and 2008 of $20,000 and $30,000, respectively, was determined by the Company, based on current operations.  9  Link to Table of Contents  Note Regarding Forward Looking Statements.  This quarterly report on Form 10-Q of Shimoda Marketing, Inc. for the period ended June 30, 2009 contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby.  To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.  The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the costs and effects of legal proceedings.  You should not rely on forward-looking statements in this quarterly report. This quarterly report contains forward-looking statements that involve risks and uncertainties. We use words such as "anticipates," "believes," "plans," "expects," "future," "intends," and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by Shimoda Marketing, Inc. For example, a few of the uncertainties that could affect the accuracy of forward-looking statements include:  (a) an abrupt economic change resulting in an unexpected downturn in demand; (b) governmental restrictions or excessive taxes on our products; (c) over-abundance of companies supplying computer products and services; (d) economic resources to support the retail promotion of new products and services; (e) expansion plans, access to potential clients, and advances in technology; and (f) lack of working capital that could hinder the promotion and distribution of products and services to a broader based business and retail population.    Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations  The following management's discussion, analysis of financial condition, and results of operations should be read in conjunction with our financial statements and notes thereto contained elsewhere in this annual report.   Our Business  Our business has evolved from consulting and equipment sales to end users in the automotive repair equipment industry to its present status as a national/international sales and marketing representation company for OEM suppliers. This includes consultative selling and servicing of OEMs distributor and end-user customers as well as distribution channel set-up and management.  We believe that SMI has evolved to become known in the industry as a solution provider for Equipment Manufacturers and Suppliers who have product to sell but who require outside expertise to secure and/or expand distribution channels for their products.  Presently our President, Michael B. Cranfill, provides the necessary services to our clients. He has been developing his skills since inception (over twenty-two (22) years) to provide leadership for employees that will be hired when we have the necessary capital.  We intend to establish three (3) account managers by March 2010. Each of the three (3) account managers will be assigned to a specific account:  1. Rotary Lift, a subsidiary of Dover Corporation   10  Link to Table of Contents  a. We currently have an agreement with Rotary Lift, a Division of Dover Industries, Inc.  Rotary Lift is in the business of manufacturing, selling, and servicing hydraulic lifts and related equipment. The agreement calls for us to act as an independent sales and marketing representative to solicit orders for products and services in Rotary Lifts name from targeted accounts located within the United States, Canada, and Mexico.  The orders are to be at prices specified by Rotary Lift and subject to Rotary Lifts then current published terms and conditions of sale.  b. Specifically, the agreement specifies that we will and will cause authorized salespersons to make sales calls, manage sales leads, coordinate bid opportunities, develop action plans, participate in training activities, assist with credit issues, provide other general sales and marketing assistance that may be required, and actively develop and provide to Rotary lift competitive intelligence information.  c. SMI shall earn commissions for all sales of products and services made by Rotary in the targeted territory.  The agreement is to remain in effect until December 31, 2009 with a renewable option.  There is a provision for SMI to cancel this agreement with one hundred twenty (120) days written notice to Rotary.  There is also a provision for Rotary to cancel the agreement with a minimum of thirty (30) days written notice to SMI.  d. The agreement specifies that SMI, and its president, Mr. Cranfill, will not and will cause its employees, including authorized sales persons, not to sell or offer for sale any products or services which are competitive with any of Rotary Lifts products and services during the agreements term and for a period of 180 days thereafter.  2. Chief Automotive Technologies, Inc., a subsidiary of Dover Corporation  a. We currently have an agreement with another division of the Dover Corporation, Chief Automotive Technologies, Inc. (CAT).  CAT is in the business of manufacturing, selling, and servicing collision repair equipment and is engaging Mr. Cranfill as its Vice President of Sales and Distribution representative in North America.  b. The agreement specifies that Mr. Cranfill will solicit orders for products and services in CATs name at the prices specified by CAT and subject to CATs then current published terms and conditions of sale.  Further, the agreement specifies that Mr. Cranfill will not accept, approve, or execute any order, contract, other document or obligation on behalf of or in the name of CAT without obtaining CATs permission.  c. SMI and Mr. Cranfill will not sell or offer for sale any products or services which are competitive with any of the products and services in the markets CAT serves during the agreements term and for 180 days thereafter.  SMI and Mr. Cranfill may not serve as representative for any other competitor during the term of the agreement, which has been renewed for the period of 2009.  d. Our current agreement expires on December 31, 2009 with annual renewable options.  Compensation for SMIs services is at the rate of $16,666.00 per month.  All expenses are to be paid by SMI except those related to trade show attendance by SMI.  3. National Account Resource Division (NARD) and Cu-bic Space LLC  a. We do not have an agreement in place with NARD but are in negotiations. We do have a sales and operating service acknowledgement established with Cu-bic Space, LLC.  We plan to maximize our services nationally by the third quarter of 2009. We believe it is appropriate for us to have a presence in the major cities so that we can work effectively with local small businesses as well as the large commercial market segment. We plan to raise additional funds through other financing arrangements, such as borrowings. If we are not able to raise additional funds, we will likely not be able to expand our operations.  We will compete with regional suppliers of automotive equipment as well as national manufacturers and distributors. We will also compete with other Internet-based companies and businesses that have developed and are in the process of developing competing websites. We cannot guarantee that other websites or functionally similar services have not been developed or are not in development. Many of these Internet-based competitors have greater financial and other resources, and more experience in research and development, than we have.   11  Link to Table of Contents  Our website is operational.  Our Internet address is www.shimoda.us.  Our website is user-friendly and provides prospective clients with a complete listing of our available services. We plan to redesign our website to allow current and potential clients to ask our account managers introductory questions via e-mail. The Company believes that it cannot accurately estimate the cost of this redevelopment of our website due to our inability to define customer requirements to have our website interactive with distribution channel and home offices enabling order status checks, freight tracking numbers and invoices.  When we are able to more clearly define these needs we will be able to accurately assess the cost of redesigning our website.  We believe that interchange will allow us to tailor our services to each particular client. For those potential clients who have needs that we cannot fulfill, we are building a referral network to further entrench us in our industry. We do not expect to have this redesigned website operational until we secure additional capital. However, as of the date of this prospectus, our website redesign has not moved beyond the mere discussion phase as we currently lack the necessary funds to begin redevelopment of our website. We do believe that the redevelopment can be fully operational within thirty days after securing funds. We will hire an employee who will redesign and maintain our website and provide continual updates to our site with the most current information for our potential clients. Assuming our proposed redesigned website becomes operational, we expect to next focus on expanding the scope of our Internet presence. We hope to achieve such expansion by registering with major search engines with the goal of placing our website at the top of search results. This typically requires pre-funding with certain search engines. We do not currently have adequate financial resources to conduct such registration.   (i) How long can we satisfy our cash requirements and will we need to raise additional funds in the next 12 months?  Our Plan of Operation for the next twelve months is to implement our expansion strategy. We had a net profit of $16,381 for the six months ended June 30, 2009.  In addition, we had total current assets of $244,249 as of June 30, 2009. Due to the efforts of our President and his generation of sales and income from consulting services, we have the necessary cash and cash equivalents to satisfy our cash requirements for the next twelve months. Failure to market and promote our services will harm our business and future financial performance. If we are unable to expand our operations within the next twelve months, we will likely fail to increase our revenues. In the event we need additional funds, we cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then we may not be able to expand our operations to the level we believe we are capable. If adequate funds are not available, we believe that our officers and directors will contribute funds to pay for some of our expansion. However, we have not made any arrangements or agreements with our officers and directors regarding such advancement of funds. We do not know whether we will issue stock for the loans or whether we will merely prepare and sign promissory notes. If we are forced to seek funds from our officers or directors, we will negotiate the specific terms and conditions of such loan when made, if ever. None of our officers or directors is obligated to pay for our expenses. Moreover, only one of our officers or directors has specifically agreed to pay our expenses should we need such assistance. Our President, Michael Cranfill, has orally agreed to continue to fund the company when additional funds are necessary. He believes it is in his best interest to continue to do so after developing his business over the past twenty-two (22) years. Accordingly, the Board of Directors does not believe it is necessary to have any contract in writing from Mr. Cranfill regarding this commitment.  For the six months ended June 30, 2009 we had net income from operations after providing for taxes of $16,381 or $0.01 per share. Our $16,381 in net income contributed to the increase in the cash on hand to a total of $207,169 at June 30, 2009.  Our current assets of $244,249 combined with our sales should satisfy our cash requirements for the next twelve months. Our financials, specifically our Statement of Operations, clearly define the type of expenditures we have had to make during the last two complete years.  We do not anticipate any major changes other than expenditures for contract labor and the cost of equipment purchases.  The implementation of our expansion strategy is estimated to take approximately twelve months.  We have begun some expansion activity to gain additional clients. The major parts of the strategy that are being immediately implemented are sales and marketing and office equipment and human resource procurement.  (ii) Summary of product research and development  We are not currently, nor do we anticipate in the future, conducting any research and development activities, other than the development of our proposed website and looking into a possible new industry to target for offering our services. However, we do plan to market ourselves aggressively.  Our lack of research and development is due mainly to the fact that it is the  12  Link to Table of Contents  responsibility of the equipment manufacturers to provide their own research and development. We will provide these manufacturers important market feedback from the voice of the customer.  (a) Marketing Plan  One of the keys to the SMI marketing plan is the firm's excellent reputation in the industry. SMI has had Forward Lift as a client for the past seventeen years. Having managed this premier distribution channel while in the industry the past twenty-two years, relationship selling has been a strategic aspect of the company's success. SMI will capitalize on these relationships to capture clients on a national basis. Participating at key industry trade shows such as NADA (National Automotive Dealers Association), SEMA and AAPEX (Specialty Equipment Manufacturer's Association and Automotive Aftermarket Parts Exposition), and NACE (National Automotive Collision Exposition) will provide SMI national exposure in a brief period (over ten month span). It is estimated that 75% of potential accounts will be attending these industry events.  Management believes that it will spend between $7,000 - $23,000 toward the costs associated with our sales and marketing plan. This is to specifically cover our website development, company brochure, Power Point presentation templates, a capability brochure, and media relations.  We are unable at this time to develop a timeline for the implementation of each of these items due to our lack of feedback from our clients as each of these will be customized to the specific requirements of the national accounts.  Our website, www.shimoda.us, will be transformed into an interactive website providing easy access for federal and state procurement offices, architects and general contractors, and purchasing managers of the targeted large clients SMI will seek. A company brochure detailing our offerings and detailing our national service network will be completed fourth quarter 2009. The cost of our brochure will be linked to our capability brochures featuring our various products and services.  We anticipate that it will cost an estimated $2,000 - $4,000 for our brochures, when monies become available for this effort.  Membership in state Automotive Service Centers (ASC) and the nationally renowned Equipment Tool Institute (ETI) will also be tactical promotions in reducing our time in gaining market awareness on a national level.  Our additional marketing initiatives will include:  · utilizing direct response print advertisements placed primarily in small business, entrepreneurial, and special interest magazines;  · links to industry focused websites;  · affiliated marketing and direct mail; and  · promotion of our services and attracting businesses through our own website.  (b) Sales Strategies  Capability Brochures. We expect to create a capability brochure featuring our family of services and products. This will be a high quality brochure with extensive detail.  Public Relations and Advertising. We plan to implement a campaign to obtain media coverage by publishing persuasive news articles and feature stories that increase the awareness of the business services and further the acceptance of our products, services and technologies as the solution to targeted customer segments.  Coverage of SMI and Mr. Cranfill has begun independently of our efforts with articles being published in trade magazines.  We anticipate no cost to SMI for media coverage.  (c) Other Markets  During our twenty-two (22) years of operations we have fully developed our target markets. Our new account managers will be responsible for more fully developing their geographic markets as well as any potentially new markets.   13  Link to Table of Contents   (iii) Any expected purchase or sale of plant and significant equipment?  We do anticipate purchases of significant equipment other than general office supplies and general office equipment, should we have sufficient funds to purchase such equipment. In the event that we expand our customer base, then we may need to hire additional employees or independent contractors.  We will purchase various vehicle hoists and ancillary equipment for the purpose of training new distributors and key National Account personnel.  The exact cost of the purchases of vehicle hoists and ancillary equipment is unknown at this time.  We believe we will have to spend an estimated $70,000 - $410,000 on equipment purchases.  (iv) Employees  As of June 30, 2009 we had one employee, Michael B. Cranfill and three independent contractors. As our founder and President, Mr. Cranfill currently provides his time as our only employee, paid on an irregular basis. We anticipate that we will not hire any additional employees in the next six months unless we generate significant revenues. From time to time, we anticipate using the services of an outside firm for additional website design and development.  With our growth strategy our objective is to expand our operations by adding staff while increasing our market presence. We anticipate achieving growth by hiring additional staff, installing computers, and launching a professionally designed website to attract new clients. We plan to hire individuals with the following strengths:  - Account Manager: This position requires an individual experienced in marketing to small businesses and developing and implementing ongoing marketing strategies. This position will be a liaison between us and those businesses which traditionally utilize automotive repair equipment.  - Accounting Manager: This individual will perform all daily accounting tasks necessary for the company. This position will interface between our CPA and our auditor as necessary.  - Computer Assistant: This individual will have web design experience, a working knowledge of computer networks, as well as work with an outside web design firm to redesign and maintain our website. We believe that our website will be an important tool to expand our area of operations and client base. Specifically, if we are able to raise sufficient capital to expand our services and service area and our revenue levels justify such action, we plan on hiring three to five additional employees over the next 12 months.  Liquidity and Capital Resources  Our cash and cash equivalents were $207,169 as of June 30, 2009 compared to $173,440 as of December 31, 2008. This increase is due mostly to cost control of our cost of sales during the first six months of 2009 and efficiently managing operating costs.  The cash provided by operating activities during the period ended June 30, 2009 was $29,388 as compared to the cash provided during the period ended June 30, 2008 which was $55,326. Operating expenses decreased by $41,912 during the same period in large part due to the decreased professional fees and contract labor and overall decline of business in the automotive sector.  Results of Operations  June 30, 2009 Compared to 2008  The decline in sales for the period is directly related to our clients position in the hard stricken automotive sector  - where new car sales are down YTD by -35%. At the same time vehicle miles driven in USA have dropped significantly. The results of this environment has been that capital expenditures which we are paid fees have been substantially reduced in 2009.  Actions have been taken to reduced our overhead (-14%) and operating costs (-28%) to offset reductions of income.  The results of these actions will be reflected in later financial reports.   14  Link to Table of Contents  At the same time, a major industry reseller has agreed to enter an agreement with SMI to provide nationwide services in coordinating turnkey installations of a new product launched in the third quarter. Revenue from this agreement is anticipated in September.  Our financial statements contained herein have been prepared on a Generally Accepted Accounting Principles basis. We incurred a net profit after tax for the period ended June 30, 2009, of $16,381 compared to $26,535 for the same period in 2008.  Our cash flow for the period ended June 30, 2009 showed a net increase in cash of $33,729. Our revenues for the period ended June 30, 2009 were $202,581, as compared to revenues of $272,225 for the same period ended June 30, 2008.  We attribute this decrease to the overall decline of business in the automotive sector.  Critical Accounting Policies  Our discussion and analysis of its financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments.  We have presented our financials to give retroactive effect to changes in our capital structure.   Item 3.  Quantitative and Qualitative Disclosures About Market Risk.  We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.   Item 4.  Controls and Procedures.  Item 4T.  Controls and Procedures.  The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Companys internal control over financial reporting is a process designed under the supervision of the Companys Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Companys financial statements for external purposes in accordance with U.S. generally accepted accounting principles.  During the second quarter of 2009 and through the interim period ending June 30, 2009, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934. Based on this evaluation, management concluded that our disclosure controls and procedures were not effective due to the Companys limited internal resources and lack of ability to have multiple levels of transaction review.  Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.  The Companys management, including its Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  (b) Changes in Internal Controls.  There have been no changes in the Companys internal control over financial reporting during the period ended June 30, 2009 that have materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial reporting.    15  Link to Table of Contents  Part II.  Other Information   Item 1.  Legal Proceedings.  None.   Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.  During the three month period ending June 30, 2009, the Company did not issue any unregistered shares of its common stock.   Item 3.  Defaults Upon Senior Securities  None.   Item 4.  Submission of Matters to a Vote of Security Holders.  None.   Item 5.  Other Information.  None.   Item 6.  Exhibits  Exhibit Number and Description Location Reference  (a) Financial Statements Filed Herewith (b) Exhibits required by Item 601, Regulation SB;  (3.0) Articles of Incorporation  (3.1) Amended Articles of Incorporation filed See Exhibit Key with SB-2 Registration Statement on March 29, 2006  (3.2) Bylaws filed with SB-2 Registration See Exhibit Key Statement on March 29, 2006  (10.0) Material Contracts See Exhibit Key  (10.1) Rotary Lift Agreement See Exhibit Key  (10.2) DACK LLC Agreement See Exhibit Key  (10.3) Chief Automotive Technologies, Inc. Agreement, 2006-2007 See Exhibit Key  (10.4) Chief Automotive Technologies, Inc. Agreement, 2007-2008 See Exhibit Key  (11.0) Statement re:  computation of per share Note G to earnings Financial Stmts.  (14.0) Code of Ethics See Exhibit Key   16  Link to Table of Contents  (31.0) Certificate of Chief Executive Officer Filed herewith and Chief Financial Officer  (32.0) Certification pursuant to 18 U.S.C. § 1350, Filed herewith as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  (99.0) Exhibits  (99.1) Agreement between SMI and Contractor CRMI for 2006 See Exhibit Key  (99.2) Terms of Oral Agreement between Chrysalis Resource Management, Inc. and Shimoda Marketing, Inc. See Exhibit Key  Exhibit Key  3.1 Incorporated by reference herein to the Companys Form SB-2 Registration Statement filed with the Securities and Exchange Commission on March 29, 2006.  3.2 Incorporated by reference herein to the Companys Form SB-2 Registration Statement filed with the Securities and Exchange Commission on March 29, 2006.  10.1 Incorporated by reference herein to the Companys Form SB-2 Registration Statement Amendment filed with the Securities and Exchange Commission on May 25, 2007.  10.2 Incorporated by reference herein to the Companys Form SB-2 Registration Statement Amendment filed with the Securities and Exchange Commission on May 25, 2007.  10.3 Incorporated by reference herein to the Companys Form SB-2 Registration Statement Amendment filed with the Securities and Exchange Commission on May 25, 2007.  10.4 Incorporated by reference herein to the Companys Form SB-2 Registration Statement Amendment filed with the Securities and Exchange Commission on August 27, 2007.  14.0 Incorporated by reference herein to the Companys Form SB-2 Registration Statement filed with the Securities and Exchange Commission on March 29, 2006.  99.1 Incorporated by reference herein to the Companys Form SB-2 Registration Statement filed with the Securities and Exchange Commission on March 29, 2006.  99.2 Incorporated by reference herein to the Companys Form SB-2 Registration Statement Amendment filed with the Securities and Exchange Commission on August 27, 2007.     17  Link to Table of Contents  SIGNATURES  In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.   SHIMODA MARKETING, INC.  Date: August 13, 2009  By:  /s/ Michael B. Cranfill   MICHAEL B. CRANFILL,  Chief Executive Officer  Chief Financial Officer  18