U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM
10-Q





x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
quarterly period ended: March 31, 2009





 ̈ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934





Commission
file number: 000-52900





VINYL PRODUCTS, INC.(Exact
      name of registrant as specified in its
charter)





Nevada
                  
                  26-0295367(State
      or other jurisdiction of incorporation or organization)
                  
                  (I.R.S.
      Employer  Identification
No.)





2210 South Ritchey Street, Santa Ana, California
      92705(Address
      of principal executive
offices)





(714) 210-8888(Registrant's
      telephone number)





(Former name, former address and formerfiscal
      year, if changed since last
report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. x  Yes    ̈  No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).


 ̈ Yes   ̈ No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). xYes  oNo





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. ̈  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:  At May 14, 2009 there were
22,863,200 shares of common stock outstanding.





PART
I — FINANCIAL INFORMATION





Item
1. Financial Statements.





PageConsolidated
      Balance Sheet as of  March 31, 2009 (Unaudited) and December 31,
      2008 (audited)
                F-1Consolidated
      Statement of Operations for the three months ended March 31, 2009 and 2008
      (unaudited)
                F-2Consolidated
      Statement of Stockholders Deficit
                F-3Consolidated  Statement
      of Cash Flows  for the three months ended March 31, 2009and
      2008 (unaudited).
                F-4Notes
      to Financial Statements (Unaudited)
                F-5




2




VINYL
PRODUCTS, INC. (fka RED OAK CONCEPTS, INC.)
 CONSOLIDATED
BALANCE SHEET—UNAUDITED
 
 
 As
      ofMarch 31, 2009
                                  
                                  
                                  December 31, 2008ASSETSCURRENT
      ASSETS:Cash
      and Cash Equivalents
                                  
                                  $
                                  110,624
                                  
                                  
                                  $
                                  114,901Accounts
      Receivable
                                  
                                  
                                  42,508
                                  
                                  
                                  
                                  57,575Stock
      Receivable
                                  
                                  
                                  -
                                  
                                  
                                  
                                  5,000Inventory
                                  
                                  
                                  105,822
                                  
                                  
                                  
                                  156,865Prepaid
      Expenses
                                  
                                  
                                  55,461
                                  
                                  
                                  
                                  47,451Total
      Current Assets
                                  
                                  
                                  314,415
                                  
                                  
                                  
                                  381,792PROPERTY
      AND EQUIPMENT:Property
      and Equipment
                                  
                                  
                                  429,254
                                  
                                  
                                  
                                  429,255Less
      Accumulated Depreciation
                                  
                                  
                                  160,683
                                  
                                  
                                  
                                  148,084Net
      Property and Equipment
                                  
                                  
                                  268,571
                                  
                                  
                                  
                                  281,171OTHER
      ASSETS:Security
      Deposits
                                  
                                  
                                  8,690
                                  
                                  
                                  
                                  8,690Total
      Other Assets
                                  
                                  
                                  8,690
                                  
                                  
                                  
                                  8,690TOTAL
      ASSETS
                                  
                                  $
                                  591,676
                                  
                                  
                                  $
                                  671,653LIABILITIES
      AND SHAREHOLDERS' EQUITYCURRENT
      LIABILITIES:Current
      Portion of Long-Term Liabilities
                                  
                                  $
                                  16,200
                                  
                                  
                                  $
                                  18,646Bank
      Line of Credit
                                  
                                  
                                  51,266
                                  
                                  
                                  
                                  -Accounts
      Payable and Accruals
                                  
                                  
                                  240,038
                                  
                                  
                                  
                                  255,401Customer
      Deposits
                                  
                                  
                                  156,635
                                  
                                  
                                  
                                  161,658Income
      Taxes Payable
                                  
                                  
                                  200
                                  
                                  
                                  
                                  -Total
      Current Liabilities
                                  
                                  
                                  464,339
                                  
                                  
                                  
                                  435,705LONG-TERM
      LIABILITIES:Vehicle
      and Installment Purchase Contracts
                                  
                                  
                                  44,879
                                  
                                  
                                  
                                  48,824Less
      Current Portion Shown Above
                                  
                                  
                                  16,200
                                  
                                  
                                  
                                  18,646Net
      Long-Term Liabilities
                                  
                                  
                                  28,679
                                  
                                  
                                  
                                  30,178Total
      Liabilities
                                  
                                  
                                  493,018
                                  
                                  
                                  
                                  465,883SHAREHOLDERS'
      EQUITY:Preferred
      Stock ($.0.0001 par value; 10,000,000 shares authorized; no shares issued
      and outstanding at March 31, 2009 and December 31, 2008)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Common
      Stock ($0.0001 par value; 100,000,00 shares authorized; 22,859,000 shares
      issued and outstanding at March 31, 2009 and December 31,
      2008)
                                  
                                  
                                  2,286
                                  
                                  
                                  
                                  2,286Paid
      in Capital
                                  
                                  
                                  92,914
                                  
                                  
                                  
                                  90,814Retained
      Earnings
                                  
                                  
                                  3,458
                                  
                                  
                                  
                                  112,670Total
      Shareholders' Equity
                                  
                                  
                                  98,658
                                  
                                  
                                  
                                  205,770TOTAL
      LIABILITIES AND SHAREHOLDERS' EQUITY
                                  
                                  $
                                  591,676
                                  
                                  
                                  $
                                  671,653
 
 The
accompanying unaudited notes are an integral part of these unaudited financial
statements.
  F-1
 
 VINYL
PRODUCTS, INC. (f/k/a RED OAK CONCEPTS, INC.)
 CONSOLIDATED
STATEMENTS OF OPERATIONS—UNAUDITED
 
 
 For
      the Three Months EndedMarch 31, 2009
                  
                  
                  March 31, 2008Income
                  
                  $
                  684,508
                  
                  
                  $
                  881,679Cost
      of Goods Sold:Labor
                  
                  
                  137,980
                  
                  
                  
                  188,077Materials
                  
                  
                  157,817
                  
                  
                  
                  290,743Other
                  
                  
                  7,291
                  
                  
                  
                  6,838Total
      Cost of Goods Sold
                  
                  
                  303,088
                  
                  
                  
                  485,658Gross
      Profit
                  
                  
                  381,420
                  
                  
                  
                  396,021Expenses:Advertising
      and Marketing
                  
                  
                  34,740
                  
                  
                  
                  38,187Selling,
      General and Administrative
                  
                  
                  85,653
                  
                  
                  
                  94,922Payroll
                  
                  
                  252,146
                  
                  
                  
                  314,201Professional
      Fees
                  
                  
                  83,869
                  
                  
                  
                  28,141Rent
                  
                  
                  26,070
                  
                  
                  
                  25,580Total
      Expenses
                  
                  
                  482,478
                  
                  
                  
                  501,031Net
      Operating Income
                  
                  
                  (101,058
                  )
                  
                  
                  (105,010
                  )Other
      Income (Expense):Interest
      Income
                  
                  
                  257
                  
                  
                  
                  1,583Interest
      Expense
                  
                  
                  (8,211
                  )
                  
                  
                  (6,431
                  )Total
      Other Income (Expense)
                  
                  
                  (7,954
                  )
                  
                  
                  (4,848
                  )Income
      Before Income Taxes
                  
                  
                  (109,012
                  )
                  
                  
                  (109,858
                  )Income
      Taxes
                  
                  
                  (200
                  )
                  
                  
                  (200
                  )Net
      Income
                  
                  $
                  (109,212
                  )
                  
                  $
                  (110,058
                  )Earnings
      per share:Basic
                  
                  $
                  (0.00
                  )
                  
                  $
                  (0.00
                  )Diluted
                  
                  $
                  (0.00
                  )
                  
                  $
                  (0.00
                  )Weighted
      average shares outstanding - basic
                  
                  
                  22,861,753
                  
                  
                  
                  22,800,000Weighted
      average shares outstanding - diluted
                  
                  
                  22,946,320
                  
                  
                  
                  22,800,000
  The
accompanying unaudited notes are an integral part of these unaudited financial
statements.
  F-2
 
 VINYL
PRODUCTS, INC. (f/k/a RED OAK CONCEPTS, INC.)
 CONSOLIDATED
STATEMENT OF SHAREHOLDERS' DEFICIT—UNAUDITED
 
 
 Preferred Stock
                  
                  
                  Common Stock
                  
                  
                  Paid-In
                  
                  
                  RetainedShares
                  
                  
                  Stock
                  
                  
                  Shares
                  
                  
                  Stock
                  
                  
                  Capital
                  
                  
                  EarningsBalances,
      December 31, 2008
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  22,859,000
                  
                  
                  $
                  2,286
                  
                  
                  $
                  90,814
                  
                  
                  $
                  112,670Issuance
      of Common Stock
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  4,200
                  
                  
                  
                  -
                  
                  
                  
                  2,100
                  
                  
                  
                  -Net
      Income/(Loss) for the Period
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (109,212
                  )Balances,
      March 31, 2009
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  22,863,200
                  
                  
                  $
                  2,286
                  
                  
                  $
                  92,914
                  
                  
                  $
                  3,458
 
 The
accompanying unaudited notes are an integral part of these unaudited financial
statements.
  F-3
  VINYL
PRODUCTS, INC. (f/k/a RED OAKS CONCEPTS, INC.)
 CONSOLIDATED
STATEMENTS OF CASH FLOWS—UNAUDITED
 
 
 For
      the three months endedMarch 31, 2009
                        
                        
                        March 31, 2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      Income/(Loss)
                        
                        $
                        (109,212
                        )
                        
                        $
                        (110,058
                        )Adjustments
      to Reconcile Net Income to Net Cash Provided by
Operations:Depreciation
                        
                        
                        12,600
                        
                        
                        
                        10,029Changes
      in Assets and Liabilities:Decrease
      (Increase) in Accounts Receivable
                        
                        
                        15,067
                        
                        
                        
                        5,882Decrease
      (Increase) in Inventory
                        
                        
                        51,042
                        
                        
                        
                        (18,833
                        )Decrease
      (Increase) in Prepaid Expenses
                        
                        
                        (8,009
                        )
                        
                        
                        14,757Increase
      in Accounts Payable and Accrued Expenses
                        
                        
                        (3,784
                        )
                        
                        
                        55,491Decrease
      in Customer Deposits
                        
                        
                        (5,023
                        )
                        
                        
                        42,314Increase
      (Decrease) in Credit Card Balances
                        
                        
                        (11,579
                        )
                        
                        
                        (22,985
                        )Increase
      (Decrease) in Income Taxes Payable
                        
                        
                        200
                        
                        
                        
                        (9,532
                        )Net
      Cash Provided (Used) by Operating Activities
                        
                        
                        (58,698
                        )
                        
                        
                        (32,935
                        )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of Fixed Assets
                        
                        
                        -
                        
                        
                        
                        (1,796
                        )Net
      Cash Provided (Used) by Investing Activities
                        
                        
                        -
                        
                        
                        
                        (1,796
                        )CASH
      FLOWS FROM FINANCING ACTIVITIESIssuance
      of Common Stock
                        
                        
                        2,100
                        
                        
                        
                        2,100Collection
      of Stock Receivable
                        
                        
                        5,000Proceeds
      from Line of Credit Borrowings
                        
                        
                        51,266
                        
                        
                        
                        -Vehicle
      Loan Proceeds, net of Principal Payments
                        
                        
                        (3,944
                        )
                        
                        
                        (5,286
                        )Increase
      (Decrease) in Note Payable to Shareholder
                        
                        
                        -
                        
                        
                        
                        152,000Dividends
                        
                        
                        -
                        
                        
                        
                        (120,000
                        )Net
      Cash Provided by (Used in) Financing Activities
                        
                        
                        54,422
                        
                        
                        
                        28,814NET
      CASH INCREASE FOR THE PERIOD
                        
                        
                        (4,276
                        )
                        
                        
                        (5,917
                        )Cash
      at Beginning of Period
                        
                        
                        114,900
                        
                        
                        
                        134,252CASH
      AT END OF PERIOD
                        
                        $
                        110,624
                        
                        
                        $
                        128,335SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:CASH
      PAID DURING THE PERIOD FOR:INTEREST
                        
                        $
                        8,211
                        
                        
                        $
                        6,431TAXES
                        
                        $
                        -
                        
                        
                        $
                        -
 
 The
accompanying unaudited notes are an integral part of these unaudited financial
statements.
  F-4
 
 VINYL
PRODUCTS, INC.
 Notes
to Unaudited Consolidated Financial Statements
 For
the Three Months Ended March 31, 2009
 
 NOTE A – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Organization–Vinyl Products, Inc. (the
“Company”) was incorporated in the State of Delaware on May 24, 2007 under the
name Red Oak Concepts, Inc. to serve as a vehicle for a business combination
through a merger, capital stock exchange, asset acquisition or other similar
business combination.  The Company filed a registration statement on
Form 10 under the Securities Exchange Act of 1934, as amended, to register its
class of common stock on September 15, 2007 that was effective as of November
14, 2007.  On December 4, 2007, the Company changed its jurisdiction
of domicile by merging with a Nevada corporation titled Red Oak Concepts,
Inc.  On November 21, 2008, the Company changed its name to Vinyl
Products, Inc. in connection with a reverse acquisition transaction with The
Vinyl Fence Company, Inc. (“TVFC”), a California corporation.
 
 On
November 20, 2008, the Company entered into a Share Exchange Agreement (the
“Exchange Agreement”) with The Vinyl Fence Company, Inc. (“TVFC”), a company
incorporated under the laws of the State of California.  Pursuant to
the terms of the Exchange Agreement, the Company acquired all of the
outstanding capital stock of TVFC from the TVFC shareholders in exchange for
22,100,000 shares of the Company’s common stock.  Because the
acquisition is treated as a reverse acquisition, the financial statements of the
Company have been retroactively adjusted to reflect the acquisition from the
beginning of the reported periods. The stock exchange transaction has been
accounted as a reverse acquisition and recapitalization of the Company whereby
TVFC is deemed to be the accounting acquirer (legal acquiree) and the Company to
be the accounting acquiree (legal acquirer).  The basis of the assets,
liabilities and retained earnings of TVFC has been carried over in the
recapitalization, and earnings per share have been retroactively restated to
reflect the reverse acquisition.
 
 Pursuant
to the Exchange Agreement, on November 21, 2008, the Company filed a Certificate
of Amendment to its Articles of Incorporation with the Secretary of State for
the State of Nevada to change its corporate name to “Vinyl Products, Inc.” to
better reflect its business.
 
 Business
Activity—The
Vinyl Fence Company, Inc. designs, fabricates and installs fencing, patio
covers, gates and railing made of co-extruded vinyl from its location in Santa
Ana, California.  The Company operates in one reportable segment, the
domestic vinyl products industry.
 
 Cash and Cash
Equivalents — The Company considers all highly liquid investments with
original maturities of three months or less to be cash
equivalents.  The Company routinely has deposits at a financial
institution that exceed federal depository insurance
coverage.  Management believes that maintaining the deposits at a
large reputable institution mitigates risks associated with these excess
deposits
 
 Management’s Use of
Estimates—The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period.  Actual results could differ from these
estimates.
  F-5
 
 NOTE A – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
 
 Revenue Recognition —
Customer deposits are recorded as a current liability when
received.  Under California law, the customer has three days in which
to cancel the contract.  Revenues are recognized when the
installations of the products are complete.
 The
related cost of goods sold includes materials, installation labor, and
miscellaneous other costs.
 
 Comprehensive
Income–The
Company adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards (SFAS) No. 130, “Reporting Comprehensive Income”, which
establishes standards for the reporting and display of comprehensive income and
its components in the financial statements.  There were no items of
comprehensive income applicable to the Company during the periods covered in the
financial statements.
 
 Advertising and Marketing
Expense—The
Company expenses all advertising and marketing costs as
incurred.  Advertising and marketing expense was $34,740 in the three
months ended March 31, 2009, and $38,187 in the three months ended March 31,
2008.
 
 Income Taxes—Prior to 2008, the Company
had elected to be taxed as a Subchapter S corporation, and as such the net
income of the Company was passed through to the Company’s two
shareholders.  The Company is now a Subchapter C corporation and is
subject to Federal and State income taxes.  See Note E.
 
 Fair Value of Financial
Instruments—The
carrying value of cash and cash equivalents, accounts receivables, accounts
payable and accrued expenses approximate their fair value based on the
short-term nature of these accounts.  Long-term debt obligations bear
fixed interest rates, and their fair value was estimated using a discounted cash
flow analysis based on the Company’s current incremental borrowing rate for
similar types of borrowing arrangements.  The estimated fair value of
the Company’s long-term debt obligations approximates the fair value at March
31, 2009 and 2008.
 
 Accounts
Receivable—The
Company sells to individual homeowners and homeowner
associations.  Accounts receivable are minimized by requiring a 50%
down payment at the time a sales agreement is signed, and the balance at
completion of installation.  Bad debt losses are recorded as
incurred.  Bad debt expense was $-0- in the three months ended March
31, 2009, and $-0- in the three months ended March 31, 2008.  Accounts
receivable were $42,508 at March 31, 2009.
 
 Inventory—Inventory is stated at the
lower of average cost or market value.  Inventory consists of raw
materials (approximately 80%) and fabricated materials awaiting installation
(approximately 20%).
 
 Impairment of Long-Lived
Assets– Using
the guidance of Statement of Financial Accounting Standards (SFAS) No. 144,
“Accounting for the Impairment
or Disposal of Long-Lived Assets”, the Company reviews the carrying value
of property, plant, and equipment for impairment whenever events and
circumstances indicate that the carrying value of an asset may not be
recoverable from the estimated future cash flows expected to result from its use
and eventual disposition. In cases where undiscounted expected future cash flows
are less than the carrying value, an impairment loss is recognized equal to an
amount by which the carrying value exceeds the fair value of assets. The factors
considered by management in performing this assessment include current operating
results, trends and prospects, the manner in which the property is used, and the
effects of obsolescence, demand, competition, and other economic
factors.
  F-6
 
 Property and
Equipment —Property and equipment are carried at cost, net of accumulated
depreciation.  Depreciation is computed using the straight-line method
over the following estimated useful lives:
 
 Vehicles
                  2 –
      7 yearsFurniture
      and Fixtures
                  7 –
      15 yearsMachinery
      and Equipment
                  5 –
      15 yearsOffice
      and Computer Equipment
                  3 –
      20 yearsSigns
                  7
      years
 
 Leasehold
improvements are classified as property and equipment and are amortized using
the straight-line method over 15 years and 39 years.  When assets are
retired or otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts and any resulting gain or loss is recognized in
operations for the period.  The cost of maintenance and repairs is
charged to operations as incurred.  Significant renewals and
betterments are capitalized.  Depreciation expense was $12,600 in the
three months ended March 31, 2009 and $10,029 in the three months ended March
31, 2008.
 
 Recent Accounting
Pronouncements – In February 2007, the FASB issued Statement of Financial
Standards No. 159, “The Fair Value 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.  The objective is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting at fair
value.  The objective is to improve financial reporting by providing
entities with the opportunity to mitigate volatility in reported earnings caused
by measuring related assets and liabilities differently without having to apply
complex hedge accounting provisions.  This Statement is expected to
expand the use of fair value measurement, which is consistent with the Board’s
long-term measurement objectives for accounting for financial instruments, and
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 17, 2007, provided
the entity also elects to apply the provisions of FASB Statement No. 157, “Fair
Value Measurements”.  No entity is permitted to apply the Statement
retrospectively to fiscal years preceding the effective date unless the entity
chooses early adoption.  Early adoption of the standard is not
expected to have a material effect on the Company’s results of operations or its
financial position.
 
 In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations (“SFAS 141R”).  SFAS 141R will significantly change the
accounting for business combinations in a number of areas, including the
treatment of contingent considerations, contingencies, acquisition costs,
IPR&D and restructuring costs.    In additions, under
SFAS 141R, changes in deferred tax asset valuation allowances and acquired
income tax uncertainties in a business combination after the measurement period
will impact income tax expense.  SFAS 141R is effective for fiscal
years beginning after December 15, 2008.  The Company has not yet
determined the impact, if any, of SFAS 141R on its financial
statements.
 
 In
December 2007, the FASB issued SFAS No. 160, “Non Controlling Interests in
Financial Statements, an amendment of ARB No. 51”.  SFAS 160 will
change the accounting and reporting of minority interests, which will be
re-characterized as non-controlling interests (NCI) and classified as a
component of equity.  This new consolidation method will significantly
change the account with minority interest holders.  SFAS 160 is
effective for fiscal years beginning after December 15, 2008.  The
Company has not yet determined the impact, if any, of SFAS 160 on its financial
statements.
  F-7
 
 NOTE B – SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the three months ended March 31, 2009
are summarized as follows:
 
 Cash paid
during the period for interest and income taxes:
 
 Interest
                      
                      $
                      8,211Income
      Taxes
                      
                      $
                      -0-
 
 NOTE C –
COMMITMENTS/LEASES
 
 The
Company leases its 10,000 square foot facility under a non-cancellable lease
arrangement that expires on March 31, 2011, with an option to renew for an
additional two-year period.  The lease is guaranteed by one of the
Company’s shareholders.  Future minimum payments under the current
operating lease are $104,280 in 2009, $104, 280 in 2010, and $26,070 in
2011.
 
 The
Company has an available $100,000 line of credit which it opened in January
2006.  Borrowings under the line of credit were paid off in
2007.  The interest rate is prime plus 3 percentage
points.  In 2009, the Company drew down $52,000 under its line of
credit.
 
 NOTE D — LONG-TERM DEBT
OBLIGATIONS
 
 The
Company acquired four vehicles under installment sales contracts with interest
rates varying from 4.9% to 6.9%.  Future payments under these
agreements are as follows:
 
 2009
                    
                    $
                    13,9852010
                    
                    $
                    18,6472011
                    
                    $
                    12,7392012
                    
                    $
                    3,261
 
 NOTE E – INCOME
TAXES
 
 Prior to
2008, the Company had elected to be taxed as a Subchapter S corporation, and as
such the net income of the Company was passed through to the Company’s two
shareholders.  The Company is now a Subchapter C corporation and is
subject to Federal and State income taxes.
 
 Income
tax expense for the three months ended March 31, 2009 is as
follows:
 
 Federal
                      
                      $
                      -0-California
                      
                      $
                      200
  F-8
 
 NOTE F – NET INCOME PER
COMMON SHARE
 
 The
Company’s reconciliation of the numerators and denominators of the basic and
fully diluted income per share is as follows for the three months ended March
31, 2008 and 2009:
 
 For the Three Months Ended March 31, 2008Income
                          
                          
                          Shares
                          
                          
                          Per-Share(Numerator)
                          
                          
                          (Denominator)
                          
                          
                          AmountNet
      Income (Loss)
                          
                          $
                          (110,058
                          )Basic
      EPSIncome
      available toCommon
      shareholders
                          
                          $
                          (110,058
                          )
                          
                          
                          22,859,000
                          
                          
                          $
                          (.00
                          )(A)Effect
      of Dilutive SecuritiesStock
      Options
                          
                          
                          -0-Diluted
      EPSIncome
      available toCommon
      shareholders
                          
                          $
                          (110,058
                          )
                          
                          
                          22,859,000
                          
                          
                          $
                          (.00
                          )
 
 For the Three Months Ended March 31, 2009Income
                          
                          
                          Shares
                          
                          
                          Per-Share(Numerator)
                          
                          
                          (Denominator)
                          
                          
                          AmountNet
      Income (Loss)
                          
                          $
                          (109,212
                          )Basic
      EPSIncome
      available toCommon
      shareholders
                          
                          $
                          (109,212
                          )
                          
                          
                          22,861,753
                          
                          
                          $
                          (.00
                          )(A)Effect
      of Dilutive SecuritiesStock
      OptionsDiluted
      EPSIncome
      available toCommon
      shareholders
                          
                          $
                          (109,212
                          )
                          
                          
                          22,946,320
                          
                          
                          $
                          (.00
                          )
 
 (A)
              See
      Note A.
 
 NOTE G – EMPLOYEE STOCK
OPTION PLAN
 
 On
September 24, 2008, the Company granted stock options to employees to purchase
133,800 shares of common stock at $.50 a share.  Three employees
subsequently left the Company and their options for 600 shares were
terminated.  The options expire on September 23, 2009.  As
of March 31, 2009, options to purchase 4,200 shares had been
exercised.
  F-9
 
 NOTE H – THEFT
LOSS
 
 In
connection with the preparation of unaudited financial statements for the
quarter ended September 30, 2008, management of TVFC became aware of accounting
irregularities that resulted in being unable account for approximately $200,000
of inventory that TVFC had purchased that was not the subject of corresponding
sales orders.  During the course of TVFC's preliminary investigation
of the matter, management discovered that certain employees were committing
fraud against the company by stealing inventory
and reselling it pursuant to fraudulent sales orders that were never submitted
to the company.  These employees were retaining the sale price of the
inventory and, in some cases, using company employees to fabricate and install
the products on company time using company vehicles.
 
 During
the last quarter of 2008, management believed that it had identified most if not
all of the perpetrators of the fraud, and some of the instances in which
inventory was stolen and the jobs to which the inventory was allocated. The
fraud extended not only to the loss of the inventory and man hours for the labor
associated with the jobs at which the inventory was applied, but also some
degree of lost income that TVFC might have recognized if it had completed the
jobs.  However, since the sales prices for these fraudulent jobs were
substantially below TVFC’s normal sales prices, management believes that it
would not have been able to obtain many of these fraudulent sales as company
sales.
 
 Management
has taken what it believes to be appropriate action to address the material
weaknesses in internal control over financial reporting, including terminating
three employees, making other personnel changes, and implementing improved
physical and documentary controls and procedures.  However, management
does not expect that its disclosure controls and procedures or internal control
over financial reporting will prevent all errors or all instances of fraud in
the future.  A control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the control
system’s objectives will be met.  Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their
costs.  Inherent limitations in all control systems include the
realities that judgments in decision-making can be faulty, and that breakdowns
can occur because of simple errors or mistakes.  Controls can also be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the controls.  The design of any
system of controls is based in part upon certain assumptions about the
likelihood of future events, and any design may not succeed in achieving its
stated goals under all potential future conditions.
 
 On
December 5, 2008, one of the terminated employees referred to above filed a
complaint in Superior Court against the company and its
principals.  The complaint alleges (i) unlawful non-payment of wages,
(ii) breach of implied covenant of good faith and fair dealing, (iii) failure to
pay earned wages upon separation, (iv) defamation, and (v) wrongful
discharge.  The employee is seeking compensatory damages, attorneys'
fees, punitive damages and equitable relief but has made no specific monetary
demand for damages.  On January 5, 2009, company counsel filed a
demurrer requesting that the court dismiss most of the claims because they are
deficient as a matter of law.  Concurrently, company counsel filed a
motion to compel arbitration.  On April 28, 2009, the Court granted
the motion to compel arbitration, thereby rendering the demurrer moot and
keeping the employee’s causes of action under the complaint
intact.  The parties are currently in the process of selecting an
arbiter.
 
 Management
believes that the ultimate resolution of this matter will not have a material
adverse effect on the financial statements.
  F-10
 
 NOTE I –
EQUITY
 
 Common
Shares
 
 The
Company is authorized to issue 100,000,000 shares of $.0001 par value common
stock, and as of March 31, 2009, the Company had 22,863,200 shares
outstanding.  During 2008 and 2007, the Company issued the following
shares of common stock:
 
 During
the three months ended March 31, 2009, the Company employees exercised options
for 4,200 shares for cash in the amount of $2,100 ($.50 per share).
 
 Preferred
Shares
 
 The
Company is authorized to issue 10,000,000 shares of $.0001 par value preferred
stock.  As of March 31, 2008, the Company had no preferred shares
outstanding.  During 2009 and 2008, the Company did not issue any
preferred shares of preferred stock.
  F-11




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





You
should read the following discussion and analysis of financial condition and
results of operations, together with our consolidated financial statements and
related notes thereto appearing elsewhere in this report.  In addition
to historical financial information, 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 these differences include those discussed below and elsewhere
in this report, particularly in the section entitled “Risk
Factors.”




General





We market
and install a wide variety of attractive, durable, low-maintenance vinyl
products, including fencing, patio covers, decking, railing and trim categories
from our retail location in Santa Ana, California.  During 2008,
fencing products represented approximately 61% of our gross income (revenue) and
patio covers represented approximately 28% of our gross income.  Our
products are used largely in renovation and remodeling by our customers who
include homeowners and homeowner associations.





We
differentiate our Company from others in the industry on the basis of the manner
in which we market and sell our products and the level of service we offer our
customers.  Given that the purchase of our products represents a
substantial investment in a customer's home, typically their most significant
capital asset, we seek to connect with home owners' intrinsic desire to take the
time to make an informed, value-driven purchasing
decision.  Throughout the sales process, we invest the time and effort
to develop a relationship with a prospect, as opposed to home centers,
specialized retail distributors and independent contractors that typically
employ a hard-sell pitch and seek to make a sale only when a consumer is
prepared to make a purchase.





Our
marketing efforts are designed to capture information about prospective
purchasers of exterior vinyl products early in the buying cycle.  We
maintain contact with them over the course of the decision-making process to
educate and consult with them about vinyl products generally, the purchasing and
installation process and the ownership experience.  We seek to
demonstrate to prospects that purchasing from us represents the best value for
their money in that we provide a worry-free ownership experience that we believe
is not available from other independent retailers, contractors or the national
home improvement chains.





Our business is subject to numerous
substantial risks, including, among others, that we purchase all of our vinyl
products from a single source; our future growth is dependent upon the success
of our planned franchise program and there are numerous risks associated with
such program; the seasonality of our business, which ebbs prior to the year-end
holidays and during the first quarter of each calendar year, corresponding to
the rainy season in California; the availability of disposable income to
homeowners; the availability of consumer credit and general economic
conditions.  These risks and other important factors relating to our
current and proposed business are detailed in our Annual Report on Form 10-K for
the year ended December 31, 2008 that we filed with the Securities and Exchange
Commission on March 31, 2009 (the "2008 10-K").





Summary
Financial Report





Sales for
the first quarter of 2009 were $650,693 a decrease of 30.1% compared to sales of
$930,665 during the first quarter of 2008.  We believe that national
economic conditions affected our financial and operating results during the last
quarter.  Consumer confidence has been down, consumer financing has
been difficult to obtain, and, in our experience, many homeowners have elected
not to use their disposable income to undertake home renovation
projects.  Accordingly, orders for our products were down and sales,
income and profits declined commensurately.  In response, we laid-off
one of our installer crews and reduced certain selling, general and
administrative expenses.


3





Notwithstanding
our lackluster financial performance for the most recent quarter as compared to
the corresponding 2008 period, we believe that the accounting controls and
procedures we implemented during the fourth quarter of 2008 have remediated the
material weaknesses in our controls and procedures we discovered in the third
quarter of 2008, as reported in the 2008 10-K.  We base our conclusion
on the significant increase in gross profit as a percentage of revenue in the
first quarter of 2009 over the prior four quarters, which we have determined
demonstrates that we are recognizing revenue on all the raw materials we
purchase.  We continue to fine-tune our disclosure controls as we gain
greater fluency with the details of our public company obligations and develop
the skills and expertise with respect to financial reporting under federal
securities laws. As described below under Item 4(T). Controls and Procedures, we
did not made any material changes to our internal control over financial
reporting during the three months ended March 31, 2009.





Business
Strategy





The
retail outdoor vinyl products is dominated by (i) manufacturers of fencing
products, including all of the product material groups, numbering in the
hundreds, (ii) distributors, including lumber yards and home centers that carry
wood and vinyl fencing and (iii) independent sellers, contractors and installers
of all sizes, such as our Company.    Manufacturers sell
their products to all segments of the downstream supply chain.  Home
centers and lumber yards generally sell products to contractors and
homeowners.  Typically, homebuilders and home centers subcontract the
installation of fencing to contractors.  Most product-specific
retailer and general contractors install or arrange for installation of
products.





In the
retail space in which we operate, retailers that sell and install only fence,
decks and related products and in which marketing and sales are directed to
retail consumers, the market is typified by numerous small companies that seek
to gain market share only in their limited geographic operating
areas.  It is our experience that these entities typically employ
rudimentary marketing and advertising programs and tend to be concerned with
immediate product sales rather than building a business.  We are not
aware of any participant in the exterior vinyl products industry that operates
on a national basis and believe that a significant opportunity exists for us to
develop a national franchise to establish our products and company as a unique
brand.





We
believe that our business model can be replicated throughout the country and
that the fundamental elements of our proprietary sales and marketing technique,
which we believe is sophisticated when compared to our direct competitors, can
be conveyed effectively through written materials and training to motivated
entrepreneurs.  We currently are in discussions with two franchise
consultants.  The consultant we ultimately select will be expected to
assist us in conducting research and developing a franchise program and the
related materials required to execute our program.  We have not yet
established the parameters of our franchise program, including such matters as
franchise sale costs and ongoing fees and royalties, franchise territories or
the advertising and marketing approach we will take either as to sales of
franchises or the marketing campaign for the franchise
organization.





Most
franchises are acquired by franchisees utilizing a combination of personal
investment and third party financing.  In light of current unfavorable
economic conditions marked by tight consumer credit and in which we believe it
would be difficult for potential franchisees to obtain the financing required to
purchase a franchise from us, we have elected to delay the development of our
franchise program.  Management will continue to monitor economic
conditions until credit is more readily available and at that time it expects
that it will engage a franchise consultant and take the steps necessary to
develop a franchise program.  We may require from 6 to 18 months to
develop and implement the program, once we determine to
proceed.


4





As we
await the advent of economic conditions more favorable to the implementation of
our franchising program, management has been exploring the possibility of
launching two or three new retail operations in Southern California over the
next 6 months in which our Company would own a majority of the
interest.  As currently contemplated, the Company would organize
limited liability companies to operate the locations.  The Company
would acquire its interest in these LLC's in consideration of offering the
entity the right to use its name and proprietary sales and marketing
information.  An investor would acquire its interest in the LLC for a
cash payment that would be utilized to pay all of the start-up costs associated
with the location, including the lease, inventory, marketing/advertising and
staff.  The Company would provide specified training and accounting
services to the location for a monthly fee.  The investor would manage
the day-to-day operations of the location as the general manager.  The
initial profits (net income) generated by the business, after establishing a
reserve account, would be used to repay the investor's cash
investment.  Thereafter, profits from operations would be distributed
on the basis of the parties' respective ownership positions in the
business.  Management currently is interviewing candidates to be
partners in the new locations.  Management believes that the Company
could begin recognizing income from the operation of a location approximately 18
months after the date of the investment.   Management views this
as a means not only to grow the Company's business in the short term without
expending significant capital resources or incurring other risks, but also to
provide us with experience incident to managing third party operations that we
believe will be of significant benefit when we commence our franchise
program.





Critical
Accounting Policies and Estimates




Our
financial statements are prepared in accordance with accounting principles
generally accepted in the United States, which require us 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 periods.  Management makes these estimates using the best
information available at the time the estimates are made; however actual results
could differ materially from those estimates (See Note A in the Notes to
Financial Statements).




Revenue
recognition





We record
customer deposits on sales as a current liability when received, and we
recognize revenues when installations of the products are complete.





Accounts
Receivable





We
require a down payment of 50% of the purchase price at the time a sales
agreement is signed and the balance at completion of installation, which
minimizes our accounts receivable.  Bad debt losses have been minimal
(less than .3% of revenue since inception of the Company), and we record them as
they are incurred.





Inventory





Inventory
is stated at the lower of average cost or market value.  Inventory
consists of raw materials (approximately 80%) and fabricated materials awaiting
installation (approximately 20%).


5





Results
of Operations





Comparison
of the Three Months March 31, 2009 and 2008





Sales: “Sales”
represent the sales price of signed installation agreements, and the deposits we
receive at the time of signing are recorded as customer deposits (a current
liability).  Our sales are seasonal and are typically negatively
impacted by weather in the first calendar quarter of every year during the rainy
season in Southern California.





Sales for
the first quarter covered by this report were $650,693 a decrease of 30.1%
compared to sales of $930,665 during the first quarter of the 2008
period.  We believe that such decrease is directly correlated to the
general weakness in the national economy, the fact that homeowners either do not
have the disposable income to allocate to home renovation projects or have
elected not to spend their disposable income on fence or decking projects at
this time and tight consumer credit conditions.





Income: “Income”
represents the sales price of installed jobs.  Income for the first
quarter covered by this report was $684,507, a decrease of 22.5% compared to
sales of $882,678 during the first quarter of the 2008 period.  We
attribute the decline in income to the factors referenced above, under the
heading "Sales."





Gross
Profit:  Gross profit decreased from $396,201 for the 2008
period to $381,420 for the 2009 period, a decrease of 3.7%; however, the gross
profit percentage increased from 44.9% in 2008 to 55.7% in 2009.  We
attribute the increase in gross profit directly to the various personnel
adjustments we made when we learned that certain employees who had been
defrauding the Company by stealing materials and reselling and installing them
for their own benefit.  These adjustments included terminating the
employees involved, re-defining the roles of our staff responsible for
fabrication and installation, improving control procedures, restructuring our
work force and increasing the involvement of our accounting manager in inventory
control.  Accordingly, we are no longer paying for raw materials for
which we are not recognizing any revenue.  These issues and our
reaction and remediation efforts are more fully described in our annual report
on Form 10-K for the year ended December 31, 2008.





Expenses:





Advertising
and marketing expense during the first quarter of 2009 was $34,740, a decrease
of $3,447, or 9.0%, from the first quarter of 2008 in which we expended
$38,187.  The decrease represents our ongoing effort to identify and
adjust the proper mix of advertising media to maximize the effectiveness of the
advertising media we select and the return on advertising
investment.





Selling,
general and administrative expenses decreased from $94,922 during the first
quarter of 2008 to $85,652, or 9.8%, during the first quarter
of  2009.  The decrease was due primarily to decreases in
travel, entertainment and related expenses.





Payroll
expenses decreased from $314,201 to $252,146, a decrease of $62,055, or 19.8%,
due primarily to a decrease in officer compensation.





Professional
fees increased from $28,141 during the 2008 period to $83,869 during the
corresponding 2009 period, or 198%.  The increase was due primarily to
increases in information technology consulting of $7,000, legal fees of $32,000,
and auditing fees of $15,000, in the latter two cases for the professional
services rendered in connection with the share exchange we consummated in
November 2008 and the filings made with the SEC as a result
thereof.


6





For the
three years ended December 31, 2008, inflation and changing prices have had
little impact on revenues and net income.  As our sole vinyl supplier
has increased prices, we have been able to increase our prices
correspondingly.





Liquidity
and Capital Resources





Our
current capital requirements are allocated principally among payroll; selling,
general and administrative expenses; rent; and advertising and marketing
expenses.  Historically, we have financed our business with cash flow
from operations and use of a bank line of credit.  We do not
anticipate making any significant capital additions in 2009, other, possibly,
than in connection with the implementation of our proposed franchise
program.





Our growth strategy encompasses opening
new retail locations in Southern California and developing a national franchise
organization.  We do not believe that our plans to open new retail
locations will require the investment of any material amount of capital by our
Company because our partner will contribute all of the capital required to fund
the launch of these operations.  We believe that the additional
expenses we may incur in connection with opening these stores will comprise
supplementary infrastructure items, including purchasing or developing more
robust accounting software so that we can provide the accounting services we
will furnish to the locations and, perhaps, eventually, engaging additional
accounting staff as conditions warrant.





With
respect to our franchise program, until we engage a franchise consultant and
establish the parameters of our organization, we can only estimate the costs
associated with developing the program.  We are advised that the costs
to implement the program and maintain the organization are highly variable and
are a function of numerous factors including the number of jurisdictions in
which franchisees are located and the specific jurisdictions selected, the
geographical location of our franchisees (close in proximity or widely separated
– which will bear on advertising and other costs) , the extent of the
advertising efforts we may employ, and the additional infrastructure we may
require to manage the organization.  The cost to retain a franchise
consultant varies considerably based on the services to be rendered; however,
the cost to retain a quality consultant providing the full range of services
could approach $100,000.  These services may include concept research
and development, the preparation of program's organizational and cost structure,
internal documentation governing the relationship between us and our
franchisees, training materials and the other attendant administrative matters
and functions.  In addition, we will incur fees and expenses in
connection with obtaining franchise licenses as may be required by those
jurisdictions in which we may elect to offer franchises, including the fees of
specialized franchise counsel and application costs.  Further, we
expect to incur attorneys' fees in connection with the preparation of a
franchise offering circular by which we will offer and sell our franchises to
the public.    We expect that ongoing costs will include
advertising costs, marketing staff, accounting staff and general and
administrative expenses.  As we continue researching the development
and implementation of our franchise organization and gain a better understanding
of our initial and long-term goals, we will be better able to estimate the costs
involved.





It has
been and continues to be our intention to fund the development of a franchise
organization internally from capital generated from operations.  We
will seek to develop a program and organization within the constraints of our
cash resources and take a conservative approach, growing as conditions, return
on investment and available capital, among other factors,
warrant.


7





Though we
believe that we have and will have available to us from operating revenue and
our line of credit the capital resources necessary to implement our proposed
franchise program, we may have underestimated the costs required or we may
encounter unanticipated costs and we may suffer delays and difficulties that may
necessitate obtaining cash from outside sources.  Moreover, in view of
the numerous variables attendant to the development of a franchise organization,
we cannot be certain that we will possess sufficient capital to fund fully the
program.  Our existing credit facility, comprising a $100,000 line of
credit (of which $48,000 is unused and available), likely would be insufficient
to fund substantial additional costs that may be associated with the development
of our franchise program.  Once a program has been developed, we
expect that we will allocate significant cash resources to advertising, both to
attract franchisees and to fund advertising of our franchisees' locations, for
which we may require additional capital.  We may not realize profit
from this investment for several years.  In the event we require
capital for any of these purposes, we may seek to secure third-party
financing.  The nature of the financing, debt or equity, will be
dependent upon current market conditions and availability.  We cannot
be certain that such capital will be available to us on favorable or acceptable
terms, if at all.





Outlook





Demand
for our products is dependent on factors such as consumer confidence, reasonably
attainable consumer financing and an economy with relatively high levels of
disposable income. These factors are all currently in poor positions, and
indications are that they will remain that way in the
near-term.  While results of operations for the month of April
revealed an increase in sales, we cannot state with any certainty that there
will be significant improvements in market conditions at this time or that we
will experience an increase in sales in ensuing months or periods, and are
managing our business on that basis.




While we
expect that current business conditions will persist for the remainder of
calendar year 2009, we remain optimistic that our strategy of possibly launching
multiple new locations that are majority-owned by the Company, developing a
national franchise program, and offering a range of quality products combined
with our conservative approach to business will be rewarded over the
longer-term.





Quantitative
and Qualitative Disclosures About Market Risk





We do not
use derivative financial instruments in our investment portfolio and have no
foreign exchange contracts.  Our financial instruments consist of cash
and cash equivalents, trade accounts receivable and accounts
payable.





Recent
Accounting Pronouncements





In
February 2007, the FASB issued Statement of Financial Standards No. 159, “The
Fair Value 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.





The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions.  This Statement is expected to expand the use
of fair value measurement, which is consistent with the Board’s long-term
measurement objectives for accounting for financial instruments, and 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 17, 2007, provided the entity
also elects to apply the provisions of FASB Statement No. 157, “Fair Value
Measurements”.  No entity is permitted to apply the Statement
retrospectively to fiscal years preceding the effective date unless the entity
chooses early adoption.  Early adoption of the standard is not
expected to have a material effect on the Company’s results of operations or its
financial position.





In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations (“SFAS 141R”).  SFAS 141R will significantly change the
accounting for business combinations in a number of areas, including the
treatment of contingent considerations, contingencies, acquisition costs,
IPR&D and restructuring costs.    In additions, under
SFAS 141R, changes in deferred tax asset valuation allowances and acquired
income tax uncertainties in a business combination after the measurement period
will impact income tax expense.  SFAS 141R is effective for fiscal
years beginning after December 15, 2008.  The Company has not yet
determined the impact, if any, of SFAS 141R on its financial
statements.





In
December 2007, the FASB issued SFAS No. 160, “Non Controlling Interests in
Financial Statements, an amendment of ARB No. 51”.  SFAS 160 will
change the accounting and reporting of minority interests, which will be
re-characterized as non-controlling interests (NCI) and classified as a
component of equity.  This new consolidation method will significantly
change the account with minority interest holders.  SFAS 160 is
effective for fiscal years beginning after December 15, 2008.  The
Company has not yet determined the impact, if any, of SFAS 160 on its financial
statements.





Cautionary
Statement Relevant to Forward-Looking Information for the Purpose of “Safe
Harbor” Provisions of the Private Securities Litigation Reform Act of
1995




The
Company and its representatives may from time to time make written or oral
forward-looking statements with respect to long-term goals or anticipated
results of the Company, including statements contained in the Company’s filings
with the Securities and Exchange Commission and in its reports to
stockholders.





Statements, including those in this
Quarterly Report on Form 10-Q, which are not historical or current facts, are
“forward-looking statements” made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.  There are certain
important factors that could cause our results to differ materially from those
anticipated by some of the statements made herein.  Investors are
cautioned that all forward-looking statements involve risk and
uncertainty.  Some of the factors that could affect results are the
continued uninterrupted availability of raw materials and the cost thereof, our
ability to develop a successful franchise program, the availability of capital
to us as required to implement our franchise program and other expansion plans,
the sensitivity of our industry to prevailing national economic conditions, the
seasonal nature of the outdoor remodeling industry, the effectiveness of new
product introductions, the amount of sales generated and the profit margins
thereon, competition and general economic conditions.  For further
information regarding these risks and uncertainties, see the “Risk Factors”
section in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2008.




The
Company specifically declines to undertake any obligation to publicly revise any
forward-looking statements that have been made to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.





Item
3. Quantitative and Qualitative Disclosures About Market Risk.





Not applicable.





Item
4(T). Controls and Procedures.





We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in the reports we file under the Securities
Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms, and
that such information is accumulated and communicated to management, including
the principal executive officer (PEO) and principal financial officer (PFO), as
appropriate, to allow timely decisions regarding required
disclosure.  Management necessarily applied its judgment in assessing
the costs and benefits of such controls and procedures, which, by their nature,
can provide only reasonable assurance regarding management’s control
objectives.





As of the
end of the period covered by this quarterly report, we carried out an
evaluation, under the supervision and with the participation of management,
including the PEO along with the PFO, of the effectiveness, design and operation
of our disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)).  The Company’s disclosure
controls and procedures are designed to provide a reasonable level of assurance
of achieving the Company’s disclosure control objectives.  Based upon
the foregoing, the PEO along with the PFO concluded that our disclosure controls
and procedures are effective at providing reasonable assurance that all material
information required to be included in our Exchange Act reports is reported in a
timely manner.  In addition, based on such evaluation, we have
identified no changes in our internal control over financial reporting that
occurred during the most recent fiscal quarter that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.





PART
II — OTHER INFORMATION





Item
1. Legal Proceedings.





On
December 5, 2008, Frank Arias, a former employee of the company filed a
complaint in the  Orange County Superior Court of California against
the company and its principals, Gordon Knott and Garabed
Khatchoyan.  The complaint includes nine allegations, including (i)
unlawful non-payment of wages; (ii) breach of implied covenant of good faith and
fair dealing; (iii) failure to pay earned wages upon separation; (iv) defamation
and (v) wrongful discharge.  The complaint arises from the company's
termination of Mr. Arias on September 30, 2008 on the basis that he purloined
approximately $200,000 of materials from our warehouse.   Mr.
Arias generally is seeking compensatory damages, attorneys' fees, punitive
damages and equitable relief but has made no specific monetary demand for
damages.  On January 5, 2009, company counsel filed a demurrer
requesting that the court dismiss the case against Mr. Knott and Mr. Khatchoyan
and several of Mr. Arias' claims against the company because they are deficient
as a matter of law.  Concurrently, we filed a motion to compel
arbitration as provided under the terms of Mr. Arias's employment.  On
April 28, 2009, the Court granted our motion to compel arbitration, thereby
rendering our demurrer moot and keeping Mr. Arias's ten causes of action under
the complaint intact.  The parties are currently in the process of
selecting an arbiter.





Item
1A. Risk Factors.





Smaller
reporting companies are not required to provide the information required by this
item.





Item
2. Changes in Securities and Small Business Issuer Purchase of Equity
Securities.





(a) During
the three months ended March 31, 2009, the Company issued an aggregate of 4,200
shares of common stock upon the exercise of options to purchase common stock
held by our employees.  The options were exercised at a price of $.50
per share.  We issued the shares in reliance on the exemption from the
registration requirements of the Securities Act of 1933, as amended, afforded by
Section 4(2) thereof.





(b) None.





(c)
None.





Item
3. Defaults Upon Senior Securities.





None.





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





None.





Item
5. Other Information.





None.





Item
6. Exhibits.





Exhibit
                Description31.1
                Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
      respect to the registrant’s Quarterly Report on Form 10-Q for the quarter
      ended March 31, 2009.32.1
                Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of
2002.







SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.





VINYL
      PRODUCTS, INC.Date: May 14,
      2009
                By:
                /s/  Gordon KnottGordon Knott