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UNITED STATES****SECURITIES AND EXCHANGE COMMISSION**Washington, D.C. 20549**

FORM 10-QSB

(Mark One)[ x ] QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly
period ended September 30, 2007

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT

For the transition period from _____________to _____________

Commission file number 333-145195

ORCA INTERNATIONAL LANGUAGE SCHOOLS
INC.(Exact name of small business issuer as specified in its
charter)

|British Columbia                                 | N/A                                 
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     

1685 - 58A Street, Delta BC Canada V4L 1X5(Address of principal executive offices)

604-817-0534(Issuers telephone number)

N/A(Former name, former address and former
fiscal year, if changed since last report)

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

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
[  ]  No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date: 6,271,210
shares of common stock issued and outstanding as of November 29,
2007.

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

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

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- 2 -

PART I - FINANCIAL INFORMATION

|Item 1. | Financial Statements
|------- | --------------------

These financial statements have been prepared by Orca
International Language Schools Inc. (the Company) without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC). Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been omitted in accordance with such SEC rules and
regulations. In the opinion of management, the accompanying statements contain
all adjustments necessary to present fairly the financial position of the
Company as of September 30, 2007, and its results of operations, stockholders
equity, and its cash flows for the three month period and the six month period
ended September 30, 2007 and for the period from inception (November 6, 1997) to
September 30, 2007. The results for these interim periods are not necessarily
indicative of the results for the entire year. The accompanying financial
statements should be read in conjunction with the financial statements and the
notes thereto filed as a part of the Companys registration statement filed on
Form SB-2.

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- 3 -

Orca International Language Schools Inc. (A Development
Stage Company) Balance Sheets (Expressed in US dollars)
(unaudited)

|                                                                                                           |  | September 30, |   |  | March 31, |  
|---------------------------------------------------------------------------------------------------------- |  | ------------- | - |  | --------- | -
|                                                                                                           |  | 2007          |   |  | 2007      |  
|                                                                                                           |  | $             |   |  | $         |  
|                                                                                                           |  |               |   |  |           |  
|ASSETS                                                                                                     |  |               |   |  |           |  
|Current Assets                                                                                             |  |               |   |  |           |  
|Cash                                                                                                       |  | 1,071         |   |  | 14,225    |  
|Prepaid Expenses                                                                                           |  |              |   |  | 2,598     |  
|Total Current Assets                                                                                       |  | 1,071         |   |  | 16,823    |  
|Property and Equipment (Note 3)                                                                            |  | 1,133         |   |  | 1,459     |  
|Total Assets                                                                                               |  | 2,204         |   |  | 18,282    |  
|                                                                                                           |  |               |   |  |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY
      (DEFICIT)                                                       |  |               |   |  |           |  
|Current Liabilities                                                                                        |  |               |   |  |           |  
|Accounts payable                                                                                           |  | 17,005        |   |  | 2,151     |  
|Accrued liabilities (Notes 4
      and 5(c))                                                               |  | 1,629         |   |  | 2,672     |  
|Due to Related Parties (Note 5 (b))                                                                        |  | 5,925         |   |  | 2,203     |  
|Total Liabilities                                                                                          |  | 24,559        |   |  | 7,026     |  
|Commitments and Contingencies (Note 1)                                                                     |  |               |   |  |           |  
|Stockholders Equity (Deficit)                                                                             |  |               |   |  |           |  
|Common Stock, Unlimited shares authorized,
      without par value 6,271,210 shares issued and outstanding |  | 81,072        |   |  | 81,072    |  
|Subscriptions Receivable                                                                                   |  |              |   |  | (1,732    | )
|Common Stock Subscribed (Note 6)                                                                           |  | 4,722         |   |  |          |  
|Donated Capital (Note 5 (a))                                                                               |  | 11,693        |   |  | 7,495     |  
|Accumulated Other Comprehensive Loss                                                                       |  | (1,723        | ) |  | (866      | )
|Deficit Accumulated During the Development Stage                                                           |  | (118,119      | ) |  | (74,713   | )
|Total Stockholders Equity (Deficit)                                                                       |  | (22,355       | ) |  | 11,256    |  
|Total Liabilities and Stockholders Equity (Deficit)                                                       |  | 2,204         |   |  | 18,282    |  

(The accompanying notes are an integral part of these financial
statements)

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- 4 -

Orca International Language Schools Inc. (A Development
Stage Company)Statements of Operations (Expressed in US dollars)
(unaudited)

|                                             |  | Accumulated from       |   |  | For the       |   |  | For the       |  
|-------------------------------------------- |  | ---------------------- | - |  | ------------- | - |  | ------------- | -
|                                             |  | November 6, 1997       |   |  | Three Months  |   |  | Six Months    |  
|                                             |  | (Date of Inception) to |   |  | Ended         |   |  | Ended         |  
|                                             |  | September 30,          |   |  | September 30, |   |  | September 30, |  
|                                             |  | 2007                   |   |  | 2007          |   |  | 2006          |  
|                                             |  | $                      |   |  | $             |   |  | $             |  
|                                             |  |                        |   |  |               |   |  |               |  
|Revenue                                      |  |                       |   |  |              |   |  |              |  
|Expenses                                     |  |                        |   |  |               |   |  |               |  
|Amortization                                 |  | 831                    |   |  | 163           |   |  |              |  
|Automobile                                   |  | 22,571                 |   |  | 2,982         |   |  | 2,241         |  
|General and administrative                   |  | 26,226                 |   |  | 748           |   |  | 4,237         |  
|Management fees                              |  | 11,711                 |   |  | 1,434         |   |  | 796           |  
|Professional fees                            |  | 33,879                 |   |  | 9,302         |   |  |              |  
|Rent                                         |  | 8,894                  |   |  | 716           |   |  | 669           |  
|Travel                                       |  | 14,953                 |   |  | 530           |   |  |              |  
|Total Expenses                               |  | 119,065                |   |  | 15,875        |   |  | 7,943         |  
|Net Loss from Operations                     |  | (119,065               | ) |  | (15,875       | ) |  | (7,943        | )
|Other Income                                 |  |                        |   |  |               |   |  |               |  
|Gain on Disposal of Temporary Investments    |  | 946                    |   |  |              |   |  |              |  
|Net Loss                                     |  | (118,119               | ) |  | (15,875       | ) |  | (7,943        | )
|Other Comprehensive Income (Loss)            |  |                        |   |  |               |   |  |               |  
|Foreign currency translation adjustment      |  | (1,723                 | ) |  | (944          | ) |  | 720           |  
|Comprehensive Loss                           |  | (119,842               | ) |  | (16,819       | ) |  | (7,223        | )
|Net Loss Per Share
       Basic and Diluted |  |                        |   |  |              |   |  |              |  
|Weighted Average Shares Outstanding          |  |                        |   |  | 6,271,000     |   |  | 5,964,000     |  

(The accompanying notes are an integral part of these financial
statements)

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- 5 -

Orca International Language Schools Inc.(A Development
Stage Company)Statements of Cash Flows(Expressed in US
dollars)(unaudited)

|                                                                     |  | For the       |   |  | For the       |  
|-------------------------------------------------------------------- |  | ------------- | - |  | ------------- | -
|                                                                     |  | Six Months    |   |  | Six Months    |  
|                                                                     |  | Ended         |   |  | Ended         |  
|                                                                     |  | September 30, |   |  | September 30, |  
|                                                                     |  | 2007          |   |  | 2006          |  
|                                                                     |  | $             |   |  | $             |  
|                                                                     |  |               |   |  |               |  
|                                                                     |  |               |   |  |               |  
|Operating Activities                                                 |  |               |   |  |               |  
|                                                                     |  |               |   |  |               |  
|Net loss                                                             |  | (43,406       | ) |  | (12,097       | )
|Adjustment to reconcile net loss to net cash
      used in operating |  |               |   |  |               |  
|activities:                                                          |  |               |   |  |               |  
|Amortization                                                         |  | 326           |   |  |              |  
|Donated services                                                     |  | 4,198         |   |  | 1,337         |  
|Changes in operating assets and liabilities:                         |  |               |   |  |               |  
|Prepaid expenses                                                     |  | 3,016         |   |  |              |  
|Accounts payable and accrued
      liabilities                       |  | 13,037        |   |  | 1,597         |  
|Due to related party                                                 |  | 3,367         |   |  | 1,238         |  
|Net Cash Used in
      Operating Activities                          |  | (19,462       | ) |  | (7,925        | )
|Net Cash Used in Investing Activities                                |  |              |   |  |              |  
|                                                                     |  |               |   |  |               |  
|Financing Activities                                                 |  |               |   |  |               |  
|Proceeds from issuance of common
      stock                         |  | 1,732         |   |  |              |  
|Proceeds from common stock
      subscribed                          |  | 4,722         |   |  | 30,103        |  
|Net Cash Provided
      by Financing Activities                      |  | 6,454         |   |  | 30,103        |  
|Effect of exchange rate changes on cash                              |  | (146          | ) |  | 72            |  
|Increase (Decrease) In Cash                                          |  | (13,154       | ) |  | 22,250        |  
|Cash  Beginning of Period                                           |  | 14,225        |   |  | 419           |  
|Cash  End of
      Period                                           |  | 1,071         |   |  | 22,669        |  
|                                                                     |  |               |   |  |               |  
|Supplemental Disclosures                                             |  |               |   |  |               |  
|Interest paid                                                        |  |              |   |  |              |  
|Income taxes paid                                                    |  |              |   |  |              |  

(The accompanying notes are an integral part of these financial
statements)

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- 6 -

Orca International Language Schools Inc.(A Development
Stage Company)Notes to the Financial Statements (Expressed in US
dollars)September 30, 2007 (unaudited)

|1. | Development Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Orca International Language Schools Inc. (the Company)
      was incorporated in British Columbia, Canada on November 6, 1997. The
      Company is a Development Stage Company, as defined by Statement of
      Financial Accounting Standard (SFAS) No. 7 Accounting and Reporting
      by Development Stage Enterprises. The Companys planned principal
      business is the acquisition and development of language education
      businesses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | These financial statements have been prepared on a going
      concern basis, which implies the Company will continue to realize its
      assets and discharge its liabilities in the normal course of business. The
      Company has not generated revenues since inception and has never paid any
      dividends and is unlikely to pay dividends or generate earnings in the
      immediate or foreseeable future. The continuation of the Company as a
      going concern is dependent upon the continued financial support from its
      shareholders, the ability of the Company to obtain necessary equity
      financing to continue operations, and the attainment of profitable
      operations. As at September 30, 2007, the Company has a working capital
      deficiency of $23,488 and accumulated losses of $118,119 since inception.
      These factors raise substantial doubt regarding the Companys ability to
      continue as a going concern. These financial statements do not include any
      adjustments to the recoverability and classification of recorded asset
      amounts and classification of liabilities that might be necessary should
      the Company be unable to continue as a going concern. Refer to Note
    7.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On August 7, 2007, the Company filed an SB-2 Registration
      Statement with the United States Securities and Exchange Commission, which
      was declared effective on September 13, 2007, to register 1,935,000 shares
      of common stock for resale by certain selling stockholders. The Company
      will not receive any proceeds from sale of these securities by the selling
      stockholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|2. | Summary of Significant Accounting
  Policies
|-- | --------------------------------------------

| | a) | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | These financial statements and related notes are
      presented in accordance with accounting principles generally accepted in
      the United States, and are expressed in US dollars. The Companys fiscal
      year-end is March 31.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | b) | Interim Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | The interim unaudited financial statements have been
      prepared in accordance with accounting principles generally accepted in
      the United States for interim financial information and with the
      instructions for Securities and Exchange Commission (SEC) Form 10-QSB.
      They do not include all of the information and footnotes required by
      generally accepted accounting principles for complete financial
      statements. Therefore, these financial statements should be read in
      conjunction with the Companys audited financial statements and notes
      thereto for the year ended March 31, 2007, included in the Companys Form
      42B4 (Prospectus) filed on September 18, 2007 with the SEC.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | The financial statements included herein are unaudited;
      however, they contain all normal recurring accruals and adjustments that,
      in the opinion of management, are necessary to present fairly the
      Companys financial position at September 30, 2007, and the results of its
      operations and cash flows for the three and six months ended September 30,
      2007 and 2006. The results of operations for the three and six months
      ended September 30, 2007 are not necessarily indicative of the results to
      be expected for future quarters or the full
year.                                                                                                                                            

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- 7 -

Orca International Language Schools Inc. (A Development
Stage Company) Notes to the Financial Statements (Expressed in US
dollars) September 30, 2007 (unaudited)

|2. | Summary of Significant Accounting Policies
      (continued)
|-- | ------------------------------------------------------------

| | c) | Use of Estimates
| | -- | ----------------

The preparation of financial
statements in conformity with US generally accepted accounting principles
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. The Company regularly
evaluates estimates and assumptions related to useful life and recoverability of
long-lived assets, donated expenses, and deferred income tax valuation
allowances. The Company bases its estimates and assumptions on current facts,
historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by the Company may differ materially and
adversely from the Companys estimates. To the extent there are material
differences between the estimates and the actual results, future results of
operations will be affected.

| | d) | Basic and Diluted Net Income (Loss) Per
  Share
| | -- | -----------------------------------------------

The Company computes net income (loss)
per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No.
128 requires presentation of both basic and diluted earnings per share (EPS) on
the face of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive. As at September 30, 2007,
there are no dilutive potential common shares.

| | e) | Comprehensive Loss
| | -- | ------------------

SFAS No. 130, Reporting
Comprehensive Income, establishes standards for the reporting and display
of comprehensive loss and its components in the financial statements. As at
September 30, 2007, the Companys only component of comprehensive income
consisted of foreign currency translation adjustments.

| | f) | Cash and Cash Equivalents
| | -- | -------------------------

The Company considers all highly
liquid instruments with maturity of three months or less at the time of issuance
to be cash equivalents.

| | g) | Property and Equipment
| | -- | ----------------------

Property and equipment consists of
computer hardware, is recorded at cost and is depreciated on a straight line
basis over an estimated useful life of three years.

| | h) | Website Development Costs
| | -- | -------------------------

The Company recognizes the costs
associated with developing a website in accordance with the American Institute
of Certified Public Accountants (AICPA) Statement of Position (SOP) No.
98-1, Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use. The Company also follows the guidance pursuant to the
Emerging Issues Task Force (EITF) No. 00-2, Accounting for Website
Development Costs for website development costs incurred. The Company
capitalizes website development costs that meet the capitalization criteria
contained in SOP No. 98-1 unless recoverability of costs is not assured. To date
the Company has charged all website development costs to operations.

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- 8 -

Orca International Language Schools Inc. (A Development
Stage Company) Notes to the Financial Statements (Expressed in US
dollars) September 30, 2007 (unaudited)

|2. | Summary of Significant Accounting Policies
      (continued)
|-- | ------------------------------------------------------------

| | i) | Long-Lived Assets
| | -- | -----------------

In accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, the
Company tests long-lived assets or asset groups for recoverability when events
or changes in circumstances indicate that their carrying amount may not be
recoverable. Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the acquisition or
construction of the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than
not be sold or disposed significantly before the end of its estimated useful
life.

Recoverability is assessed based on
the carrying amount of the asset and its fair value which is generally
determined based on the sum of the undiscounted cash flows expected to result
from the use and the eventual disposal of the asset, as well as specific
appraisal in certain instances. An impairment loss is recognized when the
carrying amount is not recoverable and exceeds fair value.

| | j) | Financial Instruments
| | -- | ---------------------

The fair values of cash, accounts
payable, accrued liabilities and amounts due to related parties approximate
their carrying values due to the immediate or short-term maturity of the
financial instrument.

| | k) | Income Taxes
| | -- | ------------

Potential benefits of income tax
losses are not recognized in the accounts until realization is more likely than
not. The Company has adopted SFAS No. 109 Accounting for Income Taxes
as of its inception. Pursuant to SFAS No. 109 the Company is required to compute
tax asset benefits for net operating losses carried forward. Potential benefit
of net operating losses have not been recognized in these financial statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward in future years.

| | l) | Foreign Currency Translation
| | -- | ----------------------------

The Companys functional currency is
the Canadian dollar. The financial statements are translated to United States
dollars in accordance with SFAS No. 52 Foreign Currency Translationusing period-end rates of exchange for assets and liabilities, and average
rates of exchange for the year for revenues and expenses. Translation gains
(losses) are recorded in accumulated other comprehensive income (loss) as a
component of stockholders equity (deficit). Gains and losses arising on
translation or settlement of foreign currency denominated transactions or
balances are included in the determination of income. Foreign currency
transactions are primarily undertaken in United States dollars. The Company has
not, to the date of these financial statements, entered into derivative
instruments to offset the impact of foreign currency fluctuations.

| | m) | Stock-based Compensation
| | -- | ------------------------

The Company records stock-based
compensation in accordance with SFAS No. 123R Share Based Payments,
using the fair value method. The Company has not issued any stock options and
has had no unvested share based payments since inception.

| | n) | Recent Accounting Pronouncements
| | -- | --------------------------------

In February 2007, the Financial
Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities  Including an Amendment
of FASB Statement No. 115. This statement permits entities to choose to
measure many financial instruments and certain other items at fair value. Most
of the provisions of SFAS No. 159 apply only to entities that elect the fair
value option. However, the amendment to SFAS No. 115 Accounting for Certain
Investments in Debt and Equity Securities applies to all entities with
available-for-sale and trading securities. 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 a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provision of SFAS No. 157, Fair Value Measurements. The adoption of
this statement is not expected to have a material effect on the Company's
financial statements.

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- 9 -

Orca International Language Schools Inc. (A Development
Stage Company) Notes to the Financial Statements (Expressed in US
dollars) September 30, 2007 (unaudited)

|2. | Summary of Significant Accounting Policies
      (continued)
|-- | ------------------------------------------------------------

| | n) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In September 2006, the SEC issued Staff Accounting
      Bulletin (SAB) No. 108, Considering the Effects of Prior Year
      Misstatements when Quantifying Misstatements in Current Year Financial
      Statements. SAB No. 108 addresses how the effects of prior year
      uncorrected misstatements should be considered when quantifying
      misstatements in current year financial statements. SAB No. 108 requires
      companies to quantify misstatements using a balance sheet and income
      statement approach and to evaluate whether either approach results in
      quantifying an error that is material in light of relevant quantitative
      and qualitative factors. SAB No. 108 is effective for fiscal years ending
      after November 15, 2006. The adoption of SAB No. 108 on April 1, 2006, did
      not have a material effect on the Companys reported financial position or
      results of operations.                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In September 2006, the FASB issued SFAS No. 158,
      Employers Accounting for Defined Benefit Pension and Other
      Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106,
      and 132(R). This statement requires employers to recognize the
      overfunded or underfunded status of a defined benefit postretirement plan
      (other than a multiemployer plan) as an asset or liability in its
      statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a business entity or changes in unrestricted net assets of a
      not-for-profit organization. This statement also requires an employer to
      measure the funded status of a plan as of the date of its year-end
      statement of financial position, with limited exceptions. The provisions
      of SFAS No. 158 are effective for employers with publicly traded equity
      securities as of the end of the fiscal year ending after December 15,
      2006. The adoption of this statement on April 1, 2006, did not have a
      material effect on the Company's future reported financial position or
      results of operations.                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In September 2006, the FASB issued SFAS No. 157, Fair
      Value Measurements. The objective of SFAS No. 157 is to increase
      consistency and comparability in fair value measurements and to expand
      disclosures about fair value measurements. SFAS No. 157 defines fair
      value, establishes a framework for measuring fair value in generally
      accepted accounting principles, and expands disclosures about fair value
      measurements. SFAS No. 157 applies under other accounting pronouncements
      that require or permit fair value measurements and does not require any
      new fair value measurements. The provisions of SFAS No. 157 are effective
      for fair value measurements made in fiscal years beginning after November
      15, 2007. The adoption of this statement is not expected to have a
      material effect on the Company's future reported financial position or
      results of operations.                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In June 2006, the Financial Accounting Standards Board
      (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty
      in Income Taxes, an interpretation of FASB Statements No. 109. FIN 48
      clarifies the accounting for uncertainty in income taxes by prescribing a
      two-step method of first evaluating whether a tax position has met a more
      likely than not recognition threshold and second, measuring that tax
      position to determine the amount of benefit to be recognized in the
      financial statements. FIN 48 provides guidance on the presentation of such
      positions within a classified statement of financial position as well as
      on derecognition, interest and penalties, accounting in interim periods,
      disclosure, and transition. FIN 48 is effective for fiscal years beginning
      after December 15, 2006. The adoption of this statement is not expected to
      have a material effect on the Company's future reported financial position
      or results of operations.                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In March 2006, the FASB issued SFAS No. 156,
      "Accounting for Servicing of Financial Assets, an amendment of FASB
      Statement No. 140, Accounting for Transfers and Servicing of Financial
      Assets and Extinguishments of Liabilities". This statement requires
      all separately recognized servicing assets and servicing liabilities be
      initially measured at fair value, if practicable, and permits for
      subsequent measurement using either fair value measurement with changes in
      fair value reflected in earnings or the amortization and impairment
      requirements of Statement No. 140. The subsequent measurement of
      separately recognized servicing assets and servicing liabilities at fair
      value eliminates the necessity for entities that manage the risks inherent
      in servicing assets and servicing liabilities with derivatives to qualify
      for hedge accounting treatment and eliminates the characterization of
      declines in fair value as impairments or direct write-downs. SFAS No. 156
      is effective for an entity's first fiscal year beginning after September
      15, 2006. The adoption of this statement on April 1, 2007, did not have a
      material effect on the Company's reported financial position or results of
      operations.

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- 10 -

Orca International Language Schools Inc.(A Development
Stage Company) Notes to the Financial Statements(Expressed in US
dollars) September 30, 2007(unaudited)

|2. | Summary of Significant Accounting Policies
      (continued)
|-- | ------------------------------------------------------------

| | n) | Recent Accounting Pronouncements
  (continued)
| | -- | ----------------------------------------------

In February 2006, the FASB issued SFAS
No. 155, "Accounting for Certain Hybrid Financial Instruments-an amendment of
FASB Statements No. 133 and 140", to simplify and make more consistent the
accounting for certain financial instruments. SFAS No. 155 amends SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", to permit
fair value re-measurement for any hybrid financial instrument with an embedded
derivative that otherwise would require bifurcation, provided that the whole
instrument is accounted for on a fair value basis. SFAS No. 155 amends SFAS No.
140, "Accounting for the Impairment or Disposal of Long-Lived Assets", to
allow a qualifying special-purpose entity to hold a derivative financial
instrument that pertains to a beneficial interest other than another derivative
financial instrument. SFAS No. 155 applies to all financial instruments acquired
or issued after the beginning of an entity's first fiscal year that begins after
September 15, 2006, with earlier application allowed. The adoption of this
statement on April 1, 2007, did not have a material effect on the Company's
reported financial position or results of operations.

|3. | Property and Equipment
|-- | ----------------------

| |                          | Cost $ | Accumulated Amortization $ | September 30, 2007 Net Carrying
      Value $ | March 31, 2007 Net Carrying Value
      $
| | ------------------------ | ------ | -------------------------- | --------------------------------------------- | -----------------------------------------
| |                          |        |                            |                                               |                                          
| | Computer
      equipment | 1,964  | 831                        | 1,133                                         | 1,459                                    

|4. | Accrued Liabilities
|-- | -------------------

Accrued liabilities of $1,629 at
September 30, 2007 (March 31, 2007 - $2,672) consist of professional fees.

|5. | Related Party
Transactions
|-- | --------------------------

| | a) | The President provides office premises to the Company
      valued at CDN$250 per month. During the six month period ended September
      30, 2007, donated rent of $1,399 (2006 - $1,337) was charged to
      operations. During the six month period ended September 30, 2007, the
      Company recognized $2,799 (2006 - $nil) for management services at CDN$500
      per month provided by the President of the Company.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | b) | As at September 30, 2007, the Company owes $5,925 (March
      31, 2007 - $2,203) to the President of the Company. The amount owing is
      unsecured, non-interest bearing and is due on demand.                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | c) | The Company recorded $2,799 (2006 - $1,590) of management
      fees for the six month period ended September 30, 2007. This amount is
      included in accrued liabilities at September 30,
2007.                                                                                                                                                                                                                              

|6. | Common Stock
|-- | ------------

On May 25, 2007, the Company received
stock subscriptions for 50,000 shares at CDN$0.10 per share for gross proceeds
of $4,722. At September 30, 2007, this amount is recorded in common stock
subscribed.

|7. | Subsequent Event
|-- | ----------------

Subsequent to September 30, 2007, the
Company received $5,000 from the President of the Company and $10,000 from a
company controlled by the President of the Company of unsecured loans bearing
interest of 10%.

---

- 11 -

Item 2. Managements Discussion and Analysis or Plan of
Operation.

FORWARD-LOOKING STATEMENTS

This quarterly 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, intends 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, including the risks in the
section entitled Risk Factors on pages 6 to 10, 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.

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. The safe harbor for forward-looking statements
provided in the Private Securities Litigation Reform Act of 1995 does not apply
to this quarterly report.

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars and all references to
"common shares" refer to the common shares in our capital stock.

Our unaudited financial statements are stated in United States
dollars and are prepared in accordance with United States generally accepted
accounting principles.

As used in this quarterly report, the terms "we", "us", "our",
and "Orca" mean Orca International Language Schools Inc., unless the context
clearly requires otherwise.

Introduction

Our goal is to provide management services to schools in the
international education industry, based on the principles of: improving their
administrative, operational, marketing, sales and human resources functions;
building links with other schools worldwide to foster student exchange; and
repositioning the schools to concentrate their curriculum on preparing students
for one of the three major English proficiency tests. These tests include the
TOEIC (Test of English for International Communication), the TESFL (Test of
English as a Foreign Language), and the ESOL (English as a Second Language to
Overseas Learners).

We are currently in the process of searching for schools as
clients. There is no guarantee that we will be successful in finding any such
schools. If we are unable to find a suitable school, or if the cost of servicing
a school is greater than the revenue we receive, our business may fail and
investors could lose their entire investment.

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report, dated June 21, 2007, on our
audited financial statements for the year ended March 31, 2007 our independent
auditors included an explanatory paragraph regarding concerns about our ability
to continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.

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- 12 -

Corporate History

We were incorporated in the province of British Columbia,
Canada under the name Slocan Valley Minerals Ltd. on November 6, 1997 with an
authorized share capital of 10,000,000 common shares without par value.
Following our incorporation we were not actively engaged in any business
activities. On June 1, 2004 we increased our authorized share capital from
10,000,000 common shares without par value to an unlimited number of common
shares without par value. On June 11, 2004 we changed our name to Orca
International Language Schools Inc. by filing a Certificate of Name Change with
Ministry of Finance Corporate and Personal Property Registries.

Our principal executive office is located at 1685 58A Street,
Delta, British Columbia, Canada V4L 1X5. Our telephone number is (604)
817-0534.

Recent Corporate Developments

In the second fiscal quarter, our company completed the
following corporate developments:

- On September 13, 2007, our SB-2 was declared effective by the SEC. We
  filed our prospectus on September 18, 2007.

Plan of Operation

The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly report. The following discussion contains forward-looking statements
that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include those discussed below and
elsewhere in this quarterly report, particularly in the section entitled Risk
Factors.

Overview

The growing worldwide acceptance of the use of English as the
international language of business, combined with increasing incomes in the
developing world, has resulted in explosive growth in the international language
industry. The number of students who enroll in language schools, usually with
the financial assistance of their parents, to improve their English proficiency
has increased dramatically within the last decade.

Indicative of the growth of the industry is the increase of the
number of students who have taken one of the three major English proficiency
tests. These tests include the TOEIC (Test of English for International
Communication), the TESFL (Test of English as a Foreign Language), and the ESOL
(English as a Second Language to Overseas Learners). Although these English
proficiency exams differ in content and application, essentially between
academic and business use, they are vital for students who wish to either be
either accepted into another educational institution or to obtain employment
where English skills are required.

Within Canada, as well as other host countries, such as the
United States, Great Britain and Australia, the international language school
industry is highly fragmented and the quality of service offered by schools
varies considerably. As a result, students are demanding improved service from
schools and are becoming increasingly discerning when choosing a language school
to attend.

Our goal is to provide management services to schools in the
international education industry (hereafter clients or schools) based on the
principles of: improving their administrative, operational, marketing, sales and
human resources functions; building links with other schools worldwide to foster
student exchange; and repositioning the schools to concentrate their curriculum
on preparing students for one of the three major English proficiency tests.

We are currently in the process of searching for a school as
the initial client. There is no guarantee that we will be successful in finding
any such school. If we are unable to find a suitable school, or if the cost of
servicing the school is greater than we have budgeted for our business may fail
and investors could lose their entire investment.

---

- 13 -

Estimated Expenses For The Next 12 Month Period

We estimate our operating expenses and working capital
requirements for the next 12 month period to be as follows:

Amortization
    $
    1,956.00Automobile
    
    35,784.00General and administrative
    
    8,976.00Management fees
    
    17,208.00Professional fees
    
    111,624.00Rent
    
    8,592.00Travel
    
    6,360.00Total
      Expenses
    $
    190,500.00


Becoming and Operating as a Public Company

We filed a registration statement on August 7, 2007. This
registration statement is our first step toward becoming a public company. Now
that the registration statement has become effective, we are subject to the
reporting requirements of Section 15(d) of the Exchange Act, and will be
required to file disclosure documents with the Securities and Exchange
Commission. We expect to incur on-going legal expenses to comply with our
reporting responsibilities as public company under the Exchange Act, as amended.
We estimate our legal, audit and accounting expenses for the next 12-month
period to be approximately $20,000.

We intend to qualify our shares for quotation on the National
Association of Securities Dealers Inc.s Over-the-Counter Bulletin Board
following the declaration of effectiveness of this prospectus. In order to do
this, we must find a market maker who will file a Form 15c-211 that will allow
him to make a market in our shares of common stock. However, at the date hereof,
we are not aware that any market maker has any such intention. We cannot provide
our investors with any assurance that our common stock will be traded on the
Over-the-Counter Bulletin Board or, if traded, that a public market will
materialize. If we do find a market maker and our common stock begins to trade
on the Over-the-Counter Bulletin Board, then we will be a public company.

Cash Requirements

For the next 12 months we plan to commence providing services
to schools and become a public company listed on the Over-the-Counter Bulletin
Board. These endeavors will cost approximately $20,000. As of September 30, 2007
we had a working capital deficit of $(23,488). We have no income from
operations. We will require additional funds to implement our plans. These funds
may be raised through equity financing, debt financing, or other sources, which
may result in the dilution in the equity ownership of our shares. We will also
need more funds if the costs of acquiring an international language school are
greater than we have budgeted for. We will also require additional financing to
sustain our business operations if we are not successful in earning revenues. We
currently do not have any arrangements for further financing and we may not be
able to obtain financing when required. Our future is dependent upon our ability
to obtain financing.

As at September 30, 2007 we had $24,559 in current liabilities.
Our financial statements report a net loss of $118,119 for the period from
November 6, 1997 (date of inception) to September 30, 2007. Our net loss is
primarily due to accounting, legal, travel expenses and management fees.

We have suffered recurring losses from operations. The
continuation of our business is dependent upon obtaining further financing, the
capturing of schools as clients, commencing our business and achieving a
profitable level of operations. The issuance of additional equity securities by
us could result in a significant dilution in the equity interests of our current
shareholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

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- 14 -

Results Of Operations

Second Quarter and Six Month Summary

|                      | Second Quarter Ended September 30 |            | Six Months Ended September 30
|--------------------- | --------------------------------- | ---------- | -----------------------------
|                      |                                   |            | Percentage                   
|                      |                                   |            | Increase /                   
|                      | 2007                              | 2006       | (Decrease)                   
|Revenue               | -                                 | -          | 0.00%                        
|Operating Expenses    | 15,875.00                         | 7,943.00   | 99.86%                       
|Interest and Dividend |                                   |            |                              
|Income                | -                                 | -          | 0.00%                        
|Net Loss              | (15,875.00)                       | (7,943.00) | 99.86%                       

Revenue

During the quarter ended September 30, 2007 we did not generate
any revenues.

Expenses

Our operating expenses for the quarters ended September 30,
2007 and September 30, 2006 are outlined in the table below:

|                  | Second Quarter Ended September 30 |       | Six Months Ended September 30
|----------------- | --------------------------------- | ----- | -----------------------------
|                  |                                   |       | Percentage                   
|                  |                                   |       | Increase /                   
|                  | 2007                              | 2006  | (Decrease)                   
|Amortization      | 163                               | 0     | 100.00%                      
|Automobile        | 2,982                             | 2,241 | 33.07%                       
|General and       |                                   |       |                              
|administrative    | 748                               | 4,237 | -82.35%                      
|Management fees   | 1,434                             | 796   | 80.15%                       
|Professional fees | 9,302                             | 0     | 100.00%                      
|Rent              | 716                               | 669   | 7.03%                        
|Travel            | 530                               | 0     | 100.00%                      
|Total Expenses    | 15,875                            | 7,943 | 99.86%                       

Operating expenses for the six months ended September 30, 2007
increased by 258.82% as compared to the comparative period in 2006 primarily as
a result of our filing of the registration statement on Form SB-2 and our
company becoming a publicly reporting company.

Liquidity and Capital Resources

Working Capital

|                    |                       |                   | Percentage           
|------------------- | --------------------- | ----------------- | ---------------------
|                    | At September 30, 2007 | At March 31, 2007 | Increase / (Decrease)
|Current Assets      | $ 1,071.00            | $16,823.00        | -93.63%              
|Current Liabilities | $ 24,559.00           | $ 7,026.00        | 249.54%              
|Working Capital     | $(23,488.00)          | $ 9,797.00        | -343.18%             

Cash Flows

|                                            | Six Months Ended   | Six Months Ended  
|------------------------------------------- | ------------------ | ------------------
|                                            | September 30, 2007 | September 30, 2006
|Cash Flows used in Operating Activities     | (19,462)           | (7,925)           
|Cash Flows used in Investing Activities     |                   |                  
|Cash Flows provided by Financing Activities | 6,454              | 30,103            
|Net Increase in Cash During Period          | (13,154)           | 22,250            

We will require additional financing in order to enable us to
proceed with our plan of operations, as discussed above, including approximately
$20,000 over the next 12 months to pay for our ongoing general and
administrative

---

- 15 -

expenses. These expenses include legal, accounting and other
professional fees associated with our being a reporting company under the
Exchange Act. These cash requirements are in excess of our current cash and
working capital resources. Accordingly, we will require additional financing in
order to continue operations and to repay our liabilities. There is no assurance
that any party will advance additional funds to us in order to enable us to
sustain our plan of operations or to repay our liabilities.

We anticipate our operating expenses will increase as we
undertake our plan of operations. The increase will be attributable to the
expansion of our online financial media. We anticipate our ongoing operating
expenses will also increase as a result of our ongoing reporting requirements
under the Exchange Act.

Future Operations

Presently, our revenues are not sufficient to meet operating
and capital expenses and we have incurred operating losses since inception,
which are likely to continue for the foreseeable future. We anticipate that we
will have negative cash flows during the year ended March 31, 2008. We
anticipate the need to raise additional capital to fund operations over the next
12 months. We intend to raise the capital required to satisfy our needs
primarily through the sale of our equity securities or debt. We will attempt to
minimize costs until more cash is available through financing or operating
activities.

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report dated June 21, 2007 on the
annual financial statements for the year ended March 31, 2007, filed in our
registration statement, our independent registered public accounting firm
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern in their audit report.

There is substantial doubt about our ability to continue as a
going concern as the continuation of our business is dependent upon obtaining
further financing, the acquisition of an international language school and
achieving a profitable level of operations.

The issuance of additional equity securities by us could result
in a significant dilution in the equity interests of our current shareholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.

There are no assurances that we will be able to obtain further
funds required for our continued operations. We plan to pursue various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we will be forced to scale down or perhaps even cease the operation of our
business.

Research and Development

We have conducted a comprehensive review of the international
language school industry in Canada and abroad and have undertaken primary
research among students, school owners and other participants in the
international language school industry.

Purchase of Significant Equipment

We do not anticipate that we will expend any significant amount
on equipment for our present or future operations.

Employees

Currently our only employee is Stuart Wooldridge our President,
Secretary and Director. At present we do not anticipate hiring employees in the
near future. However, we may periodically hire independent contractors.

---

- 16 -

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.

Application of Critical Accounting Policies and
Estimates

The preparation of financial statements in accordance with U.S.
generally accepted accounting principles requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of net revenue and
expenses in the reporting period. We regularly evaluate our estimates and
assumptions related to useful life and recoverability of long-lived assets,
donated expenses, and deferred income tax valuation allowances. We base our
estimates and assumptions on current facts, historical experience and various
other factors that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities and the accrual of costs and expenses that are not
readily apparent from other sources. The actual results experienced by us may
differ materially and adversely from our estimates. To the extent there are
material differences between our estimates and the actual results, our future
results of operations will be affected.

We believe the following critical accounting policies require
us to make significant judgments and estimates in the preparation of our
financial statements:

Long-Lived Assets

In accordance with SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, we test long-lived assets or
asset groups for recoverability when events or changes in circumstances indicate
that their carrying amount may not be recoverable. Circumstances which could
trigger a review include, but are not limited to: significant decreases in the
market price of the asset; significant adverse changes in the business climate
or legal factors; accumulation of costs significantly in excess of the amount
originally expected for the acquisition or construction of the asset; current
period cash flow or operating losses combined with a history of losses or a
forecast of continuing losses associated with the use of the asset; and current
expectation that the asset will more likely than not be sold or disposed
significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the
asset and its fair value which is generally determined based on the sum of the
undiscounted cash flows expected to result from the use and the eventual
disposal of the asset, as well as specific appraisal in certain instances. An
impairment loss is recognized when the carrying amount is not recoverable and
exceeds fair value.

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115.
This statement permits entities to choose to measure many financial instruments
and certain other items at fair value. Most of the provisions of SFAS No. 159
apply only to entities that elect the fair value option. However, the amendment
to SFAS No. 115 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available-for-sale and trading
securities. 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 a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provision of SFAS No. 157, Fair
Value Measurements.The adoption of this statement is not expected to have
a material effect on our financial statements.

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- 17 -

In September 2006, the SEC issued Staff Accounting Bulletin
(SAB) No. 108, Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements. SAB No. 108
addresses how the effects of prior year uncorrected misstatements should be
considered when quantifying misstatements in current year financial statements.
SAB No. 108 requires companies to quantify misstatements using a balance sheet
and income statement approach and to evaluate whether either approach results in
quantifying an error that is material in light of relevant quantitative and
qualitative factors. SAB No. 108 is effective for fiscal years ending after
November 15, 2006. The adoption of SAB No. 108 did not have a material effect on
our reported financial position or results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans  an
amendment of FASB Statements No. 87, 88, 106, and 132(R). This statement
requires employers to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This statement also requires an employer to
measure the funded status of a plan as of the date of its year-end statement of
financial position, with limited exceptions. The provisions of SFAS No. 158 are
effective for employers with publicly traded equity securities as of the end of
the fiscal year ending after December 15, 2006. The adoption of this statement
did not have a material effect on our future reported financial position or
results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. The objective of SFAS No. 157 is to increase consistency and
comparability in fair value measurements and to expand disclosures about fair
value measurements. SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. SFAS No. 157 applies under other
accounting pronouncements that require or permit fair value measurements and
does not require any new fair value measurements. The provisions of SFAS No. 157
are effective for fair value measurements made in fiscal years beginning after
November 15, 2007. The adoption of this statement is not expected to have a
material effect on our future reported financial position or results of
operations.

In June 2006, the Financial Accounting Standards Board (FASB)
issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statements No. 109. FIN 48 clarifies the
accounting for uncertainty in income taxes by prescribing a two-step method of
first evaluating whether a tax position has met a more likely than not
recognition threshold and second, measuring that tax position to determine the
amount of benefit to be recognized in the financial statements. FIN 48 provides
guidance on the presentation of such positions within a classified statement of
financial position as well as on derecognition, interest and penalties,
accounting in interim periods, disclosure, and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. The adoption of this
statement is not expected to have a material effect on our future reported
financial position or results of operations.

Going Concern

Our financial statements have been prepared on a going concern
basis, which implies we will continue to realize our assets and discharge our
liabilities in the normal course of business. We have not generated revenues
since inception and have never paid any dividends and are unlikely to pay
dividends or generate earnings in the immediate or foreseeable future. The
continuation of our company as a going concern is dependent upon the continued
financial support from our shareholders, the ability of our company to obtain
necessary equity financing to continue operations, and the attainment of
profitable operations. As at September, 2007, we had a working capital deficit
of $23,488 and accumulated losses of $118,119 since inception. These factors
raise substantial doubt regarding our ability to continue as a going concern.
These financial statements do not include any adjustments to the recoverability
and classification of recorded asset amounts and classification of liabilities
that might be necessary should we be unable to continue as a going concern.

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- 18 -

RISK FACTORS

An investment in our common stock involves a number of very
significant risks. You should carefully consider the following risks and
uncertainties in addition to other information in this prospectus in evaluating
our company and its business before purchasing shares of our companys common
stock. Our business, operating results and financial condition could be
seriously harmed due to any of the following risks. You could lose all or part
of your investment due to any of these risks.

Risks Associated with Our Company

We have a limited operating history and if we are not
successful in operating our business, then investors may lose all of their
investment in our company.

We have a limited operating history. Our business is subject to
the risks and expenses encountered by start up companies, such as uncertainties
regarding our level of future revenues and our inability to budget expenses and
manage growth accordingly and our inability to access sources of financing when
required and at rates favorable to us. Our limited operating history and the
highly competitive nature of the business in which we plan to operate will make
it difficult or impossible to predict future results of our operations. If we
are not successful in operating our business, then investors may lose all of
their investment in our company.

We have a history of losses and have a deficit, which raises
substantial doubt about our ability to continue as a going concern.

We have not generated any revenues since our date of inception
and we will continue to incur operating expenses without revenues until we
acquire school(s) as clients, commence our business and finally, achieve a
profitable level of operations. Our net loss since inception to September 30,
2007 was $118,119. We had cash in the amount of $1,071 as of September 30, 2007.
We currently do not have any operations and we have no income. We estimate our
average monthly operating expenses to be at least $2,000 each month. We cannot
provide assurances that we will be able to successfully develop our business.
These circumstances raise substantial doubt about our ability to continue as a
going concern as described in an explanatory paragraph to our independent
auditors report on our audited financial statements, dated June 21, 2007. If we
are unable to continue as a going concern, investors will likely lose all of
their investments in our company.

Our future is dependent upon our ability to obtain financing
and if we do not obtain such financing, we may have to cease our exploration
activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or will
generate positive cash flow in the future. We will require additional financing
in order to proceed beyond the first few months of our plan of operations. We
will require additional financing to sustain our business operations if we are
not successful in earning revenues. We currently do not have any arrangements
for further financing and we may not be able to obtain financing when required.
Our future is dependent upon our ability to obtain financing. If we do not
obtain such financing, our business could fail and investors could lose their
entire investment.

Because we may never earn revenues from our operations, our
business may fail.

We anticipate that we will incur increased operating expenses
without realizing any revenues. We therefore expect to incur significant losses
into the foreseeable future. We recognize that if we are unable to generate
significant revenues from our business, we will not be able to earn profits or
continue operations. There is no history upon which to base any assumption as to
the likelihood that we will prove successful, and we can provide no assurance
that we will generate any revenues or ever achieve profitability. If we are
unsuccessful in addressing these risks, our business will fail and investors may
lose all of their investment in our company.

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Because our directors, executive officers, and principal
shareholders control a large percentage of our common stock, such insiders have
the ability to influence matters affecting our shareholders.

Our directors and executive officers, in the aggregate,
beneficially own 69.36% of the issued and outstanding shares of our common
stock. As a result, they have the ability to influence matters affecting our
shareholders, including the election of our directors, the acquisition or
disposition of our assets, and the future issuance of our shares. Because our
directors, executive officers and principal shareholders control such shares,
investors may find it difficult to replace our management if they disagree with
the way our business is being operated. Because the influence by these insiders
could result in management making decisions that are in the best interest of
those insiders and not in the best interest of the investors, you may lose some
or all of the value of your investment in our common stock.

Our directors and executive officers are engaged in other
business activities and accordingly may not devote sufficient time to our
business affairs, which may affect our ability to conduct operations and
generate revenues.

Our directors and executive officers are involved in other
business activities. Stuart Wooldridge, our President, Secretary and Director
spends approximately 13 hours, or 33%, of his business time on the management of
our company and each of our other directors, Paul Clark, Qiang Benjamin Han and
Sherri Macdonald, spend approximately four hours, or 10%, of their business time
on the management of our company. As a result of their other business endeavors,
they may not be able to devote sufficient time to our business affairs, which
may negatively affect our ability to conduct our ongoing operations and our
ability to generate revenues. In addition, the management of our company may be
periodically interrupted or delayed as a result of their other business
interests.

All of our assets and all of our directors and executive
officers are outside the United States, with the result that it may be difficult
for investors to enforce within the United States any judgments obtained against
us or any of our directors or officers.

All of our assets are located outside the United States and we
do not currently maintain a permanent place of business within the United
States. In addition, all of our directors and executive officers are nationals
and/or residents of countries other than the United States, and all or a
substantial portion of such persons assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against us or our officers or directors,
including judgments predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof. Consequently, you may
be effectively prevented from pursuing remedies under U.S. federal securities
laws against them.

Risks Associated with Our Business

If we are unable to retain a suitable international language
school as a client, or if the cost of servicing the international language
school is more than we are able to afford our business may fail and investors
could lose their entire investment.

We are currently in the process of searching for an
international language school as the initial client. There is no guarantee that
we will be successful in finding any such school. If we are unable to find a
suitable school, or if the cost of servicing a school is greater than we have
budgeted for our business may fail and investors could lose their entire
investment.

The success of our business will depend on our ability able
to hire, train and retain qualified teachers. We may not be able to maintain
consistent teaching quality at our client schools and as a result our brand,
business and operating results may be materially and adversely affected.

We must help our clients attract qualified teachers who have a
strong command of the subject areas to be taught and meet our qualification. We
must also seek to hire teachers who are capable of delivering innovative and
inspirational instruction. There are a limited number of teachers in Canada with
the necessary experience and language proficiency to teach our proposed courses
and we must provide competitive compensation packages to attract and retain
qualified teachers. We must also provide continuous training to our teachers so
that they can stay abreast of changes in student demands, admissions and
assessment tests, admissions standards and other key trends necessary

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to effectively teach their respective courses. We may not be
able to hire, train and retain enough qualified teachers to keep pace with our
anticipated growth while maintaining consistent teaching quality. A shortage of
qualified teachers or decreases in the quality of our instruction, whether
actual or perceived, may have a material and adverse effect on our business.

We will face significant competition and if we fail to
compete effectively, we may lose our market share and our profitability may be
adversely affected.

The international education industry is extremely competitive.
Many of our competitors may have greater resources than we do. Our competitors
may be able to devote greater resources than we can to the development,
promotion and sale of their programs, services and products and respond more
quickly than we can to changes in student needs, testing materials, admissions
standards, market needs or new technologies. We may be required to reduce course
fees or increase spending in response to competition in order to retain or
attract students or pursue new market opportunities. As a result, our revenues
and profitability may decrease. We cannot assure you that we will be able to
compete successfully against current or future competitors. If we are unable to
maintain our competitive position or otherwise respond to competitive pressures
effectively, we may lose our market share and our profitability may be adversely
affected.

Failure to adequately and promptly respond to changes in
testing materials, admissions standards and technologies could cause our
programs, services and products to be less attractive to students.

We plan to differentiate our clients from those of their
competitors by concentrating our curriculum on preparing students for one of the
three major English proficiency exams. These tests include the TOEIC (Test of
English for International Communication), the TESFL (Test of English as a
Foreign Language), and the ESOL (English as a Second Language to Overseas
Learners). These admissions and assessment tests may undergo continuous change,
in terms of the focus of the subjects and questions tested, the format of the
tests and the manner in which the tests are administered. These changes may
require us to continually update and enhance our test preparation materials and
our teaching methods. Any inability to track and respond to these changes in a
timely and cost-effective manner would make our programs, services and products
less attractive to students, which could negatively affect our probability.

Events such as terrorist attacks, geopolitical uncertainty
and international conflicts and elsewhere may discourage students from studying
in Canada and could cause a declines in the student enrollments in international
language schools.

Events such as terrorist attacks, geopolitical uncertainty and
international conflicts, such as those that took place on September 11, 2001,
could have an adverse effect on student enrollment in our client schools. Such
events may discourage students from studying in Canada and may also make it more
difficult for international students to obtain visas to study abroad. These
factors could cause a decline in the student enrollments in international
language schools and could have an adverse effect on our overall business and
results of operations.

Risks Associated with Our Common Stock

There is no active trading market for our common stock and
if a market for our common stock does not develop, our investors will be unable
to sell their shares.

There is currently no active trading market for our common
stock and such a market may not develop or be sustained. We currently plan to
have our common stock quoted on the National Association of Securities Dealers
Inc.s Over-the-Counter Bulletin Board upon the effectiveness of this
registration statement of which this prospectus forms a part. In order to do
this, a market maker must file a Form 15c-211 to allow the market maker to make
a market in our shares of common stock. At the date hereof, we are not aware
that any market maker has any such intention. However, we cannot provide our
investors with any assurance that our common stock will be traded on the
Over-the-Counter Bulletin Board or a listing service or stock exchange, if
traded, that a public market will materialize. Further, the Over-the-Counter
Bulletin Board is not a listing service or exchange, but is instead a dealer
quotation service for subscribing members. If our common stock is not quoted on
the Over-the-Counter Bulletin

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- 21 -

Board or if a public market for our common stock does not
develop, then investors may not be able to resell the shares of our common stock
that they have purchased and may lose all of their investment. If we do
establish a trading market for our common stock, the market price of our common
stock may be significantly affected by factors such as actual or anticipated
fluctuations in our operation results, general market conditions and other
factors. In addition, the stock market has from time to time experienced
significant price and volume fluctuations that have particularly affected the
market prices for the shares of developmental stage companies, which may
materially adversely affect the market price of our common stock.

We do not intend to pay dividends on any investment in the
shares of stock of our company.

We have never paid any cash dividends and currently do not
intend to ever pay any cash dividends. To the extent that we require additional
funding currently not provided for in our financing plan, our funding sources
may prohibit the payment of a dividend. Because we do not intend to declare
dividends, any gain on an investment in our company will need to come through an
increase in the stocks price. This may never happen and investors may lose all
of their investment in our company.

Our common stock is a penny stock. Trading of our stock may
be restricted by the SECs penny stock regulations, which may limit a
shareholders ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.

FINRA sales practice requirements may also limit a
stockholders ability to buy and sell our stock.

In addition to the penny stock rules described above, the
Financial Industry Regulatory Authority (FINRA) has adopted rules that require
that in recommending an investment to a customer, a broker or dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, brokers or dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for brokers or dealers to recommend that their customers buy our
common stock, which may prevent you from reselling your shares and may cause the
price of the shares to decline.

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Item 3. Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we have
carried out an evaluation of the effectiveness of the design and operation of
our company's disclosure controls and procedures as of the end of the period
covered by this quarterly report, being September 30, 2007. This evaluation was
carried out under the supervision and with the participation of our President
(Principal Executive Officer and Principal Financial Officer), Stuart
Wooldridge. Based upon that evaluation, our President concluded that our
disclosure controls and procedures are effective in timely alerting management
to material information relating to us required to be included in our periodic
SEC filings as at the end of the period covered by this report. There have been
no changes in our internal controls or in other factors that could significantly
affect internal controls subsequent to the date we carried out our
evaluation.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SECs rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our President and Chief Financial Officer,
to allow timely decisions regarding required disclosure.

PART II - OTHER INFORMATION

|Item 1. Legal Proceedings.
|--------------------------

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

|Item 2. Unregistered Sales of Equity Securities and Use
      of Proceeds.
|--------------------------------------------------------------------------

None.

|Item 3. Default upon Senior Securities.
|---------------------------------------

None.

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

None.

|Item 5. Other Information.
|--------------------------

We filed a prospectus on September 18, 2007 which covers the
resale by selling shareholders named in the prospectus of up to 1,935,000 shares
of our common stock.

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|Item 6 Exhibits.
|----------------

The following exhibits, required by Item 601 of Regulation S-B,
are being filed as part of this quarterly report, or are incorporated by
reference where indicated:

The following Exhibits are filed with this quarterly report:

|Exhibit |                                                                                                                                         
|------- | ----------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                             
|3.1     | Articles of Incorporation (Incorporated
      by our reference to our registration statement on Form SB-2 filed on August
      7, 2007)
|31.1*   | Certification pursuant
      to Rule 13a-14(a) under the Securities Exchange Act of 1934                                                
|32.1*   | Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002      

* filed herewith

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SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

ORCA INTERNATIONAL LANGUAGE SCHOOLS INC.

By:

*/s/ Stuart Wooldridge*

Stuart Wooldridge 
  President, Secretary and Director
  (Principal Executive Officer, Principal Financial Officer and Principal Accounting
  Officer)
  December 7, 2007

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