UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the quarter ended March 31, 2011
 
 o   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the transition period from _____ to _____
 
 Commission File Number: 333-144943
 
 WATCHTOWER, INC.
 (Exact name of small business issuer as specified in its charter)
 
 Nevada

98-0523909(State of incorporation)

(IRS Employer ID Number)
 
 100 Henry Street, Brooklyn, New York 11201
 (Address of principal executive offices)
 
 (718) 624-5000
 (Issuer's telephone number)
 
 (Former name, former address and former fiscal year, if changed since last report)
 
 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xNo o
 
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o              No x
 
 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large accelerated filer    o

Accelerated filer                       oNon-accelerated filer      o

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 x No o
 
 The number of shares of the issuer’s common stock issued and outstanding as of May 10, 2011 was 12,400,000 shares.
 
 
 
 TABLE OF CONTENTS
 
 PagePART IItem 1. Financial Statements
1Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
8Item 3. Quantitative and Qualitative Disclosures About Market Risk
12Item 4T. Controls and Procedures
12PART IIItem 1. Legal Proceedings
13Item IA. Risk Factors
13Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
13Item 3. Defaults Upon Senior Securities
13Item 4. Removed and Reserved
13Item 5. Other Information
13Item 6. Exhibits
13
 
 
 
 
 
 PART I
 FINANCIAL INFORMATION
 
 Item 1.    Financial Statements.
  WATCHTOWER, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED BALANCE SHEET
 
 ASSETSMarch 31, 2011


December 31, 2010(Unaudited)Current Assets:Cash and Cash Equivalents

$
7,630


$
1,138Total Current Assets


7,630



1,138Total Assets

$
7,630


$
1,138LIABILITIES AND STOCKHOLDERS’ DEFICIENCYCurrent Liabilities:Accrued Expenses

$
9,469


$
2,274Accrued Interest - Related Party


2,312



1,785Loans Payable - Related Party


49,474



39,474Total Current Liabilities


61,255



43,533Commitments and ContingenciesStockholders’ Deficiency:Preferred Stock, $.0001 par value; 5,000,000 sharesauthorized, none issued and outstanding


-



-Common Stock,  $.0001 par value; 500,000,000 sharesauthorized, 12,400,000 shares issued and outstanding


1,240



1,240Additional Paid-In Capital


54,560



54,560Deficit Accumulated During the Development Stage


(109,425
)


(98,195
)Total Stockholders’ Deficiency


(53,625
)


(42,395
)Total Liabilities and Stockholders’ Deficiency

$
7,630


$
1,138
  The accompanying notes are an integral part of these financial statements.
  -1-
 
 WATCHTOWER, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED STATEMENT OF OPERATIONS
 (Unaudited)
  For the PeriodFor the Quarter Ended


February 20, 2007March 31,


(Inception) to2011


2010


March 31, 2011Net Revenues

$
-


$
-


$
-Costs and Expenses:Professional Fees


7,823



6,398



87,100Consulting Fees


-



-



14,500General and Administrative Expenses


2,879



954



32,261Start Up Costs


-



-



1,103Total Costs and Expenses


10,702



7,352



134,964Operating Loss


(10,702
)


(7,352
)


(134,964
)Other Income (Expense):Interest Expense


(528
)


(240
)


(4,097
)Extinguishment of Debt


-



-



29,636Total Other Income (Expense)


(528
)


(240
)


25,539Net Loss

$
(11,230
)

$
(7,592
)

$
(109,425
)Basic and Diluted Loss Per Share

$
(0.00
)

$
(0.00
)Weighted Average Common SharesOutstanding


12,400,000



12,400,000
  The accompanying notes are an integral part of these financial statements.
 
 -2-
 
 WATCHTOWER, INC..
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
 FOR THE PERIOD FEBRUARY 20, 2007 (INCEPTION) TO MARCH 31, 2011
 
 DeficitAdditional


Accumulated

During theCommon Stock





Paid-In


DevelopmentShares


Amount


Capital


Stage


TotalBalance, February 20, 2007


-


$
-


$
-


$
-


$
-Common Stock Issued to Foundersat $.0001 Per Share


8,000,000



800



-



-



800Common Stock Issued to Private Investorsat $.01 Per Share


3,500,000



350



34,650



-



35,000Common Stock Issued Pursuant to Public Offering at$.05 Per Share, August 25, 2007 Net of Expenses of Offering


900,000



90



19,910



-



20,000Net Loss for the Period


-



-



-



(15,202
)


(15,202
)Balance, December 31, 2007


12,400,000



1,240



54,560



(15,202
)


40,598Net Loss for the Year EndedDecember 31, 2008


-



-



-



(60,174
)


(60,174
)Balance, December 31, 2008


12,400,000



1,240



54,560



(75,376
)


(19,576
)Net Income for the Year EndedDecember 31, 2009


-



-



-



3,951



3,951Balance, December 31, 2009


12,400,000



1,240



54,560



(71,425
)


(15,625
)Net Loss for the Year EndedDecember 31, 2010


-



-



-



(26,770
)


(26,770
)Balance, December 31, 2010


12,400,000



1,240



54,560



(98,195
)


(42,395Net Loss for the Three Months EndedMarch 31, 2010 (Unaudited)


-



-



-



(11,230
)


(11,230
)Balance, March 31, 2010 (Unaudited)


12,400,000


$
1,240


$
54,560


$
(109,425
)

$
(53,625
)
 
 The accompanying notes are an integral part of these financial statements.
 
 -3-
 WATCHTOWER, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED STATEMENT OF CASH FLOWS
 (Unaudited)
 
 For the PeriodFor the Quarter Ended


20-Feb-07March 31,


(Inception) to2011


2010


March 31, 2011Cash Flows from Operating Activities:Net Loss

$
(11,230
)

$
(7,592
)

$
(109,425
)Adjustments to Reconcile Net Loss to NetCash Used in Operating Activities:Extinguishment of Debt


-



-



(29,636
)Changes in Assets and Liabilities:Increase in Accrued Expenses


7,195



5,638



11,255Increase in Accrued Interest - Related Party


527



-



2,312Net Cash Used in Operating Activities


(3,508
)


(1,954
)


(125,494
)Cash Flows from Investing Activities:


-



-



-Cash Flows from Financing Activities:Proceeds from Sale of Common Stock


-



-



80,800Expenses of Public Offering


-



-



(25,000
)Proceeds of Borrowings - Loans Payable


-



-



27,850Proceeds of Borrowings - Loans Payable -Related Party


10,000



-



49,474Net Cash Provided by Financing Activities


10,000



-



133,124Increase (Decrease) in Cash


6,492



(1,954
)


7,630Cash – Beginning of Period


1,138



4,128



-Cash – End of Period

$
7,630


$
2,174


$
7,630Supplemental Disclosures of Cash Flow Information:Interest Paid

$
-


$
-


$
-Income Taxes Paid

$
-


$
-


$
-
 The accompanying notes are an integral part of these financial statements.
 
 -4-
 WATCHTOWER, INC.
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
 NOTE 1 -   Organization and Basis of Presentation
 
 Watchtower, Inc. (“the Company”) was incorporated on February 20, 2007 under the laws of the State of Nevada.
 
 The Company has not yet generated revenues from planned principal operations and is considered a development stage company.  The Company originally intended to market and resell agricultural based bio-diesel fuels.    The Company has since abandoned its business plan and is now seeking an operating company with which to merge or acquire.  Accordingly, the Company is now considered a blank check company.  There is no assurance, however, that the Company will achieve its objectives or goals.
 
 In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein.  These financial statements are condensed and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  These condensed financial statements should be read in conjunction with the Company's December 31, 2010 audited financial statements and notes thereto included in the annual report on Form 10-K as of such date.
 
 Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.
 
 The Company is a development stage company and has not commenced planned principal operations.  The Company had no revenues and incurred a net loss of $11,230 for the three months ended March 31, 2011 and a net loss of $109,425 for the period February 20, 2007 (inception) to March 31, 2011.  In addition, the Company has a working capital deficiency and stockholders' deficiency of $53,625 at March 31, 2011.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.
 
 There can be no assurance that sufficient funds will be generated during the next year or thereafter from operations or that funds will be available from external sources such as debt or equity financings or other potential sources.  The lack of additional capital could force the Company to curtail or cease operations and would, therefore, have a material adverse effect on its business.  Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.
 
 The Company is attempting to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof.  There can be no assurances that the Company will be able to raise the additional funds it requires.
 
 The accompanying condensed financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
 
 -5-
 
 WATCHTOWER, INC.
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
 
 NOTE 2 -   Common Stock
 
 In February 2007 the Company issued 8,000,000 shares of common stock to the Founders of the Company for $800.
 
 In April 2007 the Company sold 3,500,000 shares of common stock for $35,000 to private investors.
 
 On August 24, 2007 the Company sold 900,000 shares of common stock pursuant to its public offering for gross proceeds of $45,000.  Expenses of the public offering amounted to $25,000.
  NOTE 3 -   Loans Payable - Related Party
 
 Loans payable to related party at March 31, 2011 bear interest at 5% per annum and are payable on demand.  They consist of advances made by an individual who is the new principal shareholder of the Company (see Note 5).  Interest expense on these loans was $528 and $240 for the periods ended March 31, 2011 and March 31, 2010, respectively.
  NOTE 4 -    Preferred Stock
 
 The Company’s Board of Directors may, without further action by the Company’s stockholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitations of each series.  The holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the common stock.  Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of the common stock.
  NOTE 5 -   Change in Ownership and Management
 
 On April 30, 2009, the principal shareholders of the Company entered into a Stock Purchase Agreement which provided for the sale of 8,000,000 shares of common stock of the Company (the "Purchased Shares") to Sholom Drizin (the "Purchaser").  The consideration paid for the Purchased Shares, which represent 64.52% of the issued and outstanding common stock of the Company, was $50,000.  The Purchaser used his personal funds to purchase the Purchased Shares.
 
 Effective as of April 30, 2009, in connection with the acquisition of the Purchased Shares, (i) Yisroel Guttfreund resigned from his position as officer and director of the Company, (ii) Yechezkel Klohr resigned from his positions as an officer and director of the Company and (iii) the Board of Directors of the Company elected (a) Menachem M. Schneerson as President, Chief Executive Officer and a director of the Company and (b) Shmaya Glick, as Secretary and Treasurer.
   -6-
 
 WATCHTOWER, INC.
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
 
 NOTE 6 -   Extinguishment of Debt
 
 Indebtedness consisting of loans payable in the amount of $27,850 and related accrued interest of $1,786 was forgiven during 2009.
  -7-
 
 Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 As used in this Form 10-Q, references to “Watchtower,” the “Company,” “we,” “our” or “us” refer to Watchtower, Inc. Unless the context otherwise indicates.
 
 Forward-Looking Statements
 
 The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
 
 For a description of such risks and uncertainties refer to our Annual Report Form 10-K, filed with the Securities and Exchange Commission on March 25, 2011. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. 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.
 
 History
 
 Watchtower, Inc. was incorporated on February 20, 2007, in the State of Nevada. The Company was focused on becoming involved in the growing market for renewable and environmentally sustainable energy and intended to market and resell agricultural based bio-diesel fuels. Our goal was to source various available agri-biodiesel fuel products from many producers internationally and offer renewable alternatives to petroleum based fuels in the United States. Due to the state of the economy, the Company has conducted virtually no business other than organizational matters, filing its Registration Statement on Form SB-2, which was declared effective by the Securities and Exchange Commission (the “SEC”) on August 20, 2007 (the “Registration Statement”) and filings of periodic reports with the SEC. The Company has since abandoned its business plan and is now seeking an operating company with which to merge or to acquire.
 
 We are now considered a blank check company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the “Securities Act”), we also qualify as a “shell company,” because we have no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
 
 Watchtower’s current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into Watchtower. In certain instances, a target company may wish to become a subsidiary of Watchtower or may wish to contribute or sell assets to Watchtower rather than to merge. No assurances can be given that Watchtower will be successful in identifying or negotiating with any target company. Watchtower seeks to provide a method for a foreign or domestic private company to become a reporting or public company whose securities are qualified for trading in the United States secondary markets.
 
 -8-
 
 A business combination with a target company normally will involve the transfer to the target company of the majority of the issued and outstanding common stock of Watchtower, and the substitution by the target company of its own management and board of directors. No assurances can be given that Watchtower will be able to enter into a business combination, or, if Watchtower does enter into such a business combination, no assurances can be given as to the terms of a business combination, or as to the nature of the target company.
 
 On April 30, 2009, Yisroel Guttfreund and Yechezkel Klohr, the principal shareholders, officers and directors of the Company, entered into a Stock Purchase Agreement which provided for the sale of 8,000,000 shares of common stock of the Company (the “Purchased Shares”) to Sholom Drizin (the “Purchaser”). The consideration paid for the Purchased Shares, which represent 64.52% of the issued and outstanding share capital of the Company on a fully-diluted basis, was $50,000. The Purchaser used his personal funds to purchase the Purchased Shares.
 
 Effective as of April 30, 2009, in connection with the acquisition of the Purchased Shares, (i) Yisroel Guttfreund resigned from his positions as officer and director of the Company, (ii) Yechezkel Klohr resigned from his positions as an officer of the Company and resigned as a director of the Company, effective 10 days after the filing of an information statement pursuant to Rule 14f-1, filed May 11, 2009 and (iii) the Board of Directors of the Company elected (a) Menachem M. Schneerson as President, Chief Executive Officer and a director of the Company and (b) Shmaya Glick, as Secretary and Treasurer.
 
 Plan of Operation
 
 General
 
 During the next 12 months, the Company intends to seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, the Company has no plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation. No member of Management or promoter of the Company has had any material discussions with any other company with respect to any acquisition of that company.
 
 The Company will not restrict its search to any specific business, industry or geographical location, and the Company may participate in a business venture of virtually any kind or nature. The discussion of the proposed plan of operation under this caption and throughout this Quarterly Report is purposefully general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities.
 
 Sources of Opportunities
 
 The Company anticipates that business opportunities for possible acquisition will be referred by various sources, including its officers and directors, professional advisors, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.
 
 The Company will seek a potential business opportunity from all known sources, but will rely principally on personal contacts of its officers and directors as well as indirect associations between them and other business and professional people. It is not presently anticipated that the Company will engage professional firms specializing in business acquisitions or reorganizations.
 
 The officers and directors of the Company are currently employed in other positions and will devote only a portion of their time (not more than three hours per week) to the business affairs of the Company, until such time as an acquisition has been determined to be highly favorable, at which time they expect to spend full time in investigating and closing any acquisition for a period of two weeks. In addition, in the face of competing demands for their time, the officers and directors may grant priority to their full-time positions rather than to the Company.
 
 Evaluation of Opportunities
 
 The analysis of new business opportunities will be undertaken by or under the supervision of the officers and directors of the Company. Management intends to concentrate on identifying prospective business opportunities which may be brought to its attention through present associations with management. In analyzing prospective business opportunities, management will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operation, if any; prospects for the future; present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services or trades; name identification; and other relevant factors. Officers and directors of the Company will meet personally with management and key personnel of the firm sponsoring the business opportunity as part of their investigation. To the extent possible, the Company intends to utilize written reports and personal investigation to evaluate the above factors. The Company will not acquire or merge with any company for which audited financial statements cannot be obtained.
 
 -9-
 
 Acquisition of Opportunities
 
 In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. It may also purchase stock or assets of an existing business.  On the consummation of a transaction, it is possible that the present management and shareholders of the Company will not be in control of the Company. In addition, a majority or all  of the Company’s officers and directors may, as part of  the  terms  of the acquisition transaction,  resign and be replaced by new officers and  directors without a vote of the Company's shareholders.
 
 It is anticipated that any securities issued in any such reorganization would be issued in reliance on exemptions from registration under applicable Federal and state securities laws. In some circumstances, however, as a negotiated element of this transaction, the Company may agree to register such securities either at the time the transaction is consummated, under certain conditions, or at a specified time thereafter. The issuance of substantial additional securities and their potential sale into any trading market which may develop in the Company's common stock may have a depressive effect on such market. While the actual terms of a transaction to which the Company may be a party cannot be predicted, it may be expected that the parties to the business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so called "tax free" reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the "Code"). In order to obtain tax free treatment under the Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, the shareholders of the Company, including investors in this offering, would retain less than 20% of the issued and outstanding shares of the surviving entity, which could result in significant dilution in the equity of such shareholders.
 
 As part of the Company's investigation, officers and directors of the Company will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of the Company's limited financial resources and management expertise.
 
 The manner in which each Company participates in an opportunity will depend on the nature of the opportunity, the respective needs and desires of the Company and other parties, the management of the opportunity, and the relative negotiating strength of the Company and such other management.
 
 With respect to any mergers or acquisitions, negotiations with target company management will be expected to focus on the percentage of the Company which target company shareholders would acquire in exchange for their shareholdings in the target company. Depending upon, among other things, the target company's assets and liabilities, the Company's shareholders will in all likelihood hold a lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires a target company with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company's then shareholders, including purchasers in this offering.
 
 The Company will not have sufficient funds (unless it is able to raise funds in a private placement) to undertake any significant development, marketing and manufacturing of any products which may be acquired.
 
 Accordingly, following the acquisition of any such product, the Company will, in all likelihood, be required to either seek debt or equity financing or obtain funding from third parties, in exchange for which the Company would probably be required to give up a substantial portion of its interest in any acquired product. There is no assurance that the Company will be able either to obtain additional financing or interest third parties in providing funding for the further development, marketing and manufacturing of any products acquired.
 
 It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity the costs therefore incurred in the related investigation would not be recoverable.
 
 Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in a loss to the Company of the related costs incurred.
 
 Management believes that the Company may be able to benefit from the use of "leverage" in the acquisition of a business opportunity. Leveraging a transaction involves the acquisition of a business through incurring significant indebtedness for a large percentage of the purchase price for that business.
 
 -10-
 
 Through a leveraged transaction, the Company would be required to use less of its available funds for acquiring the business opportunity and, therefore, could commit those funds to the operations of the business opportunity, to acquisition of other business opportunities or to other activities. The borrowing involved in a leveraged transaction would ordinarily be secured by the assets of the business opportunity to be acquired. If the business opportunity acquired is not able to generate sufficient revenues to make payments on the debt incurred by the Company to acquire that business opportunity, the lender would be able to exercise the remedies provided by law or by contract. These leveraging techniques, while reducing the amount of funds that the Company must commit to acquiring a business opportunity, may correspondingly increase the risk of loss to the Company. No assurance can be given as to the terms or the availability of financing for any acquisition by the Company. During periods when interest rates are relatively high, the benefits of leveraging are not as great as during periods of lower interest rates because the investment in the business opportunity held on a leveraged basis will only be profitable if it generates sufficient revenues to cover the related debt and other costs of the financing. Lenders from which the Company may obtain funds for purposes of a leveraged buy-out may impose restrictions on the future borrowing, distribution, and operating policies of the Company. It is not possible at this time to predict the restrictions, if any, which lenders may impose or the impact thereof on the Company.
 
 Results of Operations
 
 The following discussion should be read in conjunction with the condensed financial statements and in conjunction with the Company's Form 10-K filed on March 25, 2011. Results for interim periods may not be indicative of results for the full year.
 
 Results of Operations For the three months ended March 31, 2011 compared to the three months ended March 31, 2010
 
 Revenues
 
 The Company is in its development stage and did not generate any revenues for the three (3) months ended March 31, 2011 and 2010.
 
 Total operating expenses
 
 During the three (3) months ended March 31, 2011 and 2010, total operating expenses were $10,702 and $7,352, respectively, which were primarily the result of fees for bookkeeping, professional, and accounting services associated with fulfilling the Company’s SEC reporting requirements. Of the $10,702, $7,823 consisted of professional fees and $2,879 consisted of general and administrative expenses.
 
 Net loss
 
 During the three (3) months ended March 31, 2011 and 2010, the net loss was $11,230 and $7,592, respectively, and the net loss amounts to $109,425 for the period February 20, 2007 (inception) to March 31, 2011.
 
 Liquidity and Capital Resources
 
 Our balance sheet as of March 31, 2011 reflects that the Company has cash in the amount of $7,630.  The Company is a development stage company and does not have any planned operations.
 
 -11-
 
 The focus of Watchtower’s efforts is to acquire or develop an operating business. Despite no active operations at this time, management intends to continue in business and has no intention to liquidate the Company. Watchtower has considered various business alternatives including the possible acquisition of an existing business, but to date has found possible opportunities unsuitable or excessively priced. Watchtower does not contemplate limiting the scope of its search to any particular industry. Management has considered the risk of possible opportunities as well as their potential rewards. Management has invested time evaluating several proposals for possible acquisition or combination; however, none of these opportunities were pursued. Watchtower presently owns no real property and at this time has no intention of acquiring any such property. Watchtower’s primary expected expenses are comprised substantially of professional fees primarily incident to its reporting requirements.
 
 We may have to issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.
 
 Going Concern Consideration
 
 The Company is a development stage company and has no planned operations.  The Company had no revenues and incurred a net loss of $11,230 for the three months ended March 31, 2011 and a net loss of $109,425 for the period from February 20, 2007 (inception) to March 31, 2011.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.
 
 There can be no assurance that sufficient funds will be generated during the next year or thereafter from operations or that funds will be available from external sources such as debt or equity financings or other potential sources.  The lack of additional capital could force the Company to curtail or cease operations and would, therefore, have a material adverse effect on its business.  Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.
 
 Off-Balance Sheet Arrangements
 
 We have no off-balance sheet arrangements.
 
 Item 3.    Quantitative and Qualitative Disclosures About Market Risk.
 
 A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.
 
 Item 4(T).   Controls and Procedures.
 
 Disclosure Controls and Procedures
 
 Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive officer and principal financial and accounting officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.
 
 Changes in Internal Controls over Financial Reporting
 
 There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
 
 -12-
 
 PART II
 OTHER INFORMATION
 
 Item 1.      Legal Proceedings.
 
 There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings. Notwithstanding the foregoing, the Company was named as a defendant in a personal injury lawsuit involving a motor vehicle commenced in District Court, Clark County, Nevada. However, the Company is attempting to have such action dismissed as the date of incident was December 19, 2005 and the Company was formed in 2007. Furthermore, the Company has never owned a motor vehicle and therefore could not be the proper party to this matter.
 
 Item 1A.   Risk Factors
 
 A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.
 
 Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds.
 
 Unregistered Sales of Equity Securities
 
 None.
 
 Purchases of equity securities by the issuer and affiliated purchasers
 
 None.
 
 Use of Proceeds
 
 None
 
 Item 3.      Defaults Upon Senior Securities.
 
 None.
 
 Item 4.      Removed and Reserved.
  Item 5.      Other Information.
 
 None
 
 Item 6.      Exhibits
 
 Exhibit No.

Description31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
 -13-
 
 SIGNATURES
 
 Pursuant to the requirements 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.
 
 WATCHTOWER, INC.Dated: May 13, 2011
By:
/s/Menachem M. SchneersonName: Menachem M. SchneersonTitle:   President, Chief Executive Officer and

Director (Principal Executive Officer)
 
 Dated: May 13, 2011
By:
/s/ Shmaya GlickName: Shmaya GlickTitle:   Treasurer, Secretary and Director

(Principal Financial and Accounting Officer)