UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2008



[

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




For the transition period from __________ to __________



Commission File Number000-52790



PMI Construction Group

(Exact name of registrant as specified in its charter)



Nevada

              95-4465933


(State or other jurisdiction of

              (IRS Employer Identification No.)


incorporation or organization)



2522 Alice Drive, West Jordan, Utah

              84088


(Address of principal executive offices)

              (Zip Code)




(801) 718-7732

(Registrants telephone number, including area code)



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 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.

Yesx

              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 definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.



Large Accelerated filero

              Accelerated filero


Non-accelerated filero(Do not check if a smaller reporting company)

              Smaller reporting companyx




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

Yesx

              No o




Indicate the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date.

17,309,709 shares of $0.001 par value common stock on May 12, 2008






Part I - FINANCIAL INFORMATION



Item 1. Financial Statements

PMI Construction Group

FINANCIAL STATEMENTS

(UNAUDITED)

March 31, 2008



The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.  However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made.  These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company.



2









PMI Construction Group(A Development Stage Enterprise)Balance SheetsMarch 31,

              

              

              

              December 31,2008

              

              

              

              2007(unaudited)Assets:Current Assets:Cash in bank

              $

              5,946

              

              

              $

              13,722Total Assets

              $

              5,946

              

              

              $

              13,722Liabilities and Stockholders' Deficit:Current Liabilities:Accounts payable

              $

              1,550

              

              

              $

              1,475Notes and accrued interest payable to related parties

              

              37,633

              

              

              

              38,205Total Current Liabilities

              

              39,183

              

              

              

              39,680Stockholders' DeficitConvertible preferred stock, $.001 par value, 5,000,000shares authorized, 633 shares issued and outstanding

              

              1

              

              

              

              1Common stock, $.001 par value, 95,000,000 sharesauthorized, 17,300,709 shares issued and outstandingat March 31, 2008 (unaudited) and 15,692,549 sharesissued and outstanding at December 31, 2007

              

              17,301

              

              

              

              15,693Retained Deficit

              

              (5,064

              )

              

              

              (5,064

              )Deficit accumulated during the development stage

              

              (45,475

              )

              

              

              (36,588

              )Total Stockholders' Deficit

              

              (33,237

              )

              

              

              (25,958

              )Total Liabilities and Stockholders' Deficit

              $

              5,946

              

              

              $

              13,722The accompanying notes are an integral part of these financial statements.








3









PMI Construction Group(A Development Stage Enterprise)Statements of OperationsFor the periodfrom the dateof developmentstage inceptionFor the Three Months Ended

              

              

              

              (February 17,March 31,

              

              

              

              2004) Through2008

              

              

              

              2007

              

              

              

              March 31, 2008(unaudited)

              

              

              

              (unaudited)

              

              

              

              (unaudited)Revenue

              $

              -

              

              

              $

              -

              

              

              $

              -Expense:General and administrativeexpenses

              

              (7,850

              )

              

              

              (918

              )

              

              

              (41,391

              )Interest expense

              

              (1,037

              )

              

              

              (204

              )

              

              

              (4,084

              )Total Expenses

              

              (8,887

              )

              

              

              (1,122

              )

              

              

              (45,475

              )Net Loss

              $

              (8,887

              )

              

              $

              (1,122

              )

              

              $

              (45,475

              )Net loss per common share

              $

              (0.00

              )

              

              $

              (0.00

              )Net loss per fully dilutedcommon share

              $

              (0.00

              )

              

              $

              (0.00

              )Weighted average number ofcommon shares outstanding

              

              16,228,813

              

              

              

              15,692,549Weighted average number offully diluted common sharesoutstanding

              

              17,301,553

              

              

              

              15,692,549The accompanying notes are an integral part of these financial statements.








4









PMI Construction Group(A Development Stage Enterprise)Statements of Stockholders' DeficitDeficitaccumulatedduring thePreferred Stock

              

              Common Stock

              

              Retained

              

              developmentShares

              

              Amount

              

              Shares

              

              Amount

              

              Deficit

              

              stageBalance February 17, 2004

              633

              

              $        1

              

              4,178,629

              

              $    4,179

              

              $           (5,064)

              

              $                      -Loss from operations for theperiod ended December 31, 2004

              -

              

              -

              

              -

              

              -

              

              -

              

              (2,031)Balance, December 31, 2004

              633

              

              1

              

              4,178,629

              

              4,179

              

              (5,064)

              

              (2,031)Loss from operations for theyear ended December 31, 2005

              -

              

              -

              

              -

              

              -

              

              -

              

              (2,321)Balance, December 31, 2005

              633

              

              1

              

              4,178,629

              

              4,179

              

              (5,064)

              

              (4,352)Shares issued upon conversion ofnotes and accrued interest at$0.001 per share

              -

              

              -

              

              11,513,920

              

              11,514

              

              -

              

              -Loss from operations for theyear ended December 31, 2006

              -

              

              -

              

              -

              

              -

              

              -

              

              (16,103)Balance, December 31, 2006

              633

              

              1

              

              15,692,549

              

              15,693

              

              (5,064)

              

              (20,455)Loss from operations for theyear ended December 31, 2007

              -

              

              -

              

              -

              

              -

              

              -

              

              (16,133)Balance, December 31, 2007

              633

              

              1

              

              15,692,549

              

              15,693

              

              (5,064)

              

              (36,588)Shares issued upon conversion ofnote and accrued interest at$0.001 per share (unaudited)

              -

              

              -

              

              1,608,160

              

              1,608

              

              -

              

              -Loss from operations for theperiod ended March 31, 2008(unaudited)

              -

              

              -

              

              -

              

              -

              

              -

              

              (8,887)Balance, March 31, 2008 (unaudited)

              633

              

              $        1

              

              17,300,709

              

              $   7,301

              

              $ (5,064)

              

              $        (45,475)The accompanying notes are an integral part of these financial statements.








5









PMI Construction Group(A Development Stage Enterprise)Statements of Cash FlowsFor the periodfrom the dateof developmentstage inceptionFor the Three Months Ended

              

              

              

              (February 17,March 31,

              

              

              

              2004) Through2008

              

              

              

              2007

              

              

              

              March 31, 2008(unaudited)

              

              

              

              (unaudited)

              

              

              

              (unaudited)Operating Activities:Net loss from operations

              $

              (8,887

              )

              

              $

              (1,122

              )

              

              $

              (45,475

              )Adjustments to reconcile netloss to net cash position:Conversion of interestpayable to common stock

              

              23

              

              

              

              -

              

              

              

              312Prepaid expense

              

              -

              

              

              

              565

              

              

              

              -Accounts payable

              

              74

              

              

              

              353

              

              

              

              667Accrued interest payable

              

              1,014

              

              

              

              204

              

              

              

              2,425Net Cash Used for OperatingActivities

              

              (7,776

              )

              

              

              -

              

              

              

              (42,071

              )Financing Activities:Conversion of interest payable tonote payable

              

              -

              

              

              

              -

              

              

              

              1,200Notes payable

              

              -

              

              

              

              -

              

              

              

              46,817Net Cash Provided fromFinancing Activities

              

              -

              

              

              

              -

              

              

              

              48,017Increase (decrease) in cash

              

              (7,776

              )

              

              

              -

              

              

              

              5,946Net cash position at start ofperiod

              

              13,722

              

              

              

              -

              

              

              

              -Net cash position at end of period

              $

              5,946

              

              

              $

              -

              

              

              $

              5,946The accompanying notes are an integral part of these financial statements.






7







PMI Construction Group

(A Development Stage Enterprise)

Notes to Financial Statements

March 31, 2008

(unaudited)



Note 1: Basis of Presentation and Summary of Significant Accounting Policies



Basis of Presentation The accompanying unaudited financial statements of PMI Construction Group (the Company) were prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Management of the Company (Management) believes that the following disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2007 included in the Companys Form 10-KSB report.



These unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the three months ended March 31, 2008, are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.



Organization The Company was incorporated under the laws of the State of Utah on November 11, 1980 as Bullhead Exploration, Inc. On February 19, 1997 the Company changed its name and its corporate domicile was changed to the state of Nevada. The Company was a party to a Settlement and Release Agreement filed in the United States District Court for the District of Utah, Central Division, having an agreed effective date of February 17, 2004, which resulted in a change of control of the Company in August 2004. Since that time the Company has obtained loans and issued its common stock for cash, to finance its endeavors in seeking a new business venture. The Company has not generated any revenue since 2004 and is considered a development stage enterprise as defined in Statement of Financial Accounting Standards (SFAS) No. 7.



GoingConcern The Companys financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated any revenue since entering the development stage in August 2004, and is currently dependent on its sole officer/director to provide its operating capital. Furthermore, the Companys sole officer/director serves in his capacities without compensation and has orally agreed to do so in the future. The Company assumes that these arrangements will continue into the future, but no assurance thereof can be given. A change in these circumstances would have a material adverse effect on the Companys ability to
      continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Use of Estimates These financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and require that Management make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. The use of estimates and assumptions may also affect the reported amounts of expenses. Actual results could differ from those estimates or assumptions.



Net Loss and Fully Diluted Loss per Share of Common Stock The loss per share of common stock is computed by dividing the net loss during the periods presented by the weighted average number of shares outstanding during those same periods. The diluted loss per share of common stock is computed by dividing the net loss during the periods presented by the weighted average number of shares outstanding and the potential number of shares that could be outstanding during the entire period presented as a result of the conversion of preferred stock into common stock and the exercise of an option given to a holder of the Companys promissory note to convert the principal balance and accrued interest into shares of common stock of the Company. During the year ended December 31, 2006, three promissory notes and accrued interest were converted into 11,513,920 shares of common
      stock. During 2008, one promissory note and accrued interest was converted into 1,608,160 shares of common stock. At March 31, 2008, there remain 633 shares of preferred stock that may be converted into 633 shares of common stock and none of the existing notes payable contain provisions to be converted into common stock.



8







PMI Construction Group

(A Development Stage Enterprise)

Notes to Financial Statements (continued)

March 31, 2008

(unaudited)



Note 1: Basis of Presentation and Summary of Significant Accounting Policies (continued)



Income Taxes The Company has no deferred taxes arising from temporary differences between income for financial reporting and for income tax purposes. The Companys utilization of any net operating loss is unlikely as a result of its intended development stage activities.



Recently Enacted Accounting Pronouncements In March 2008, the Financial Accounting Standards Board issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (an amendment to SFAS No. 133). This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and requires enhanced disclosures with respect to derivative and hedging activities. The Company will comply with the disclosure requirements of this statement if it utilizes derivative instruments or engages in hedging activities upon its effectiveness.



Note 2: Quasi-Reorganization



During 2000, the Company sold substantially all of its assets and remained dormant through 2004. Commencing in 2004, the Company began to seek a new business venture and in accordance with SFAS No. 7, became a development stage enterprise. At that time the Company created a new equity account entitled Deficit Accumulated During the Development Stage and the results of its operations have since been recorded in this account. The Companys stockholders approved a quasi-reorganization effective as of January 1, 2004, that provided for a readjustment of its capital accounts and resulted in its retained deficit from prior operations being offset against its paid-in capital account in the amount of $1,928,775. Thus, the paid-in capital account was eliminated and the remaining deficit of $5,064 continues to be reflected as a retained deficit. No other accounts were affected by this readjustment and
      the Companys accounting will be substantially similar to that of a new enterprise.



Note 3: Capital Stock



Convertible Preferred Stock The Company has 633 shares of convertible preferred stock issued and outstanding with the following preferences: a) these shares are convertible into 633 shares of common stock at any time and shall be converted into common stock upon the death of the registered owner; and, b) each preferred share is entitled to twenty votes on any matter voted upon by the common stockholders.



Preferred Stock and Common Stock The Companys Board of Directors is expressly granted the authority to issue without stockholder action, the authorized shares of the Companys preferred and common stock. The Board of Directors may issue shares and determine the powers, preferences, limitations, and relative rights of any class of shares before the issuance thereof.



Note 4: Related Party Transactions



Effective September 1, 2006, a stockholder of the Company paid the Companys accounts payable in the amount of $10,317 and entered into an unsecured note payable with the Company. The terms of the note require repayment on January 31, 2008, bearing interest at 8% per annum. At March 31, 2008, the stockholder has verbally agreed not to pursue the collection of the note and accrued interest in the amount of $1,306.



On April 20, 2007, the Company entered into an unsecured convertible note for $1,500 bearing interest at 8% per annum with a shareholder of the Company who exercised the conversion provision in March 2008. The conversion provision provided that the principal amount and all accrued interest may be converted into shares of the Companys common stock at the rate of one share for each $0.001. As a result, 1,608,160 shares of common stock were issued in March 2008.



During August and December of 2007, the Companys sole officer/director entered into unsecured demand notes with the Company for a total of $25,000 cash and bearing interest at 10% per annum. These notes and accrued interest in the amount of $1,010 remain outstanding at March 31, 2008.



10







Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



Special Note Regarding Forward-Looking Statements



This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Plan of Operations provided below, including information regarding the Companys financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities, and the plans and objectives of management. The statements made as part of the Plan of Operations that are not historical facts are hereby identified as "forward-looking statements."

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited Financial Statements and accompanying notes.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.  The Company believes there have been no significant changes during the three month periods ended March 31, 2008 and 2007, to the items disclosed as significant accounting policies in management's Notes to the Financial Statements in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2007.



Corporate History



PMI Construction Group, a Nevada corporation, (the Company) terminated its subsidiary operations and has engaged in no business since the termination of its subsidiary operations. During February 2004, a change of control of the Company occurred and since that time the Company has been looking for a business opportunity.  The Company was originally incorporated on November 11, 1980 in the State of Utah under the name Bullhead Exploration, Inc.  On January 31, 1994, Bullhead Exploration, Inc. changed its domicile to Delaware and its name to Intrazone, Inc.  In February 1997, the Company changed its state of domicile to Nevada through the merger of the Company with a wholly owned subsidiary created for the purpose of effectuating a change of domicile and subsequently changed its name to PMI Construction Group.



The Company was originally incorporated to seek investment opportunities in the oil and gas industries.  At inception the Company issued 348,837 shares of its common stock, par value $0.001 per share (the Common Stock) to its officers and directors for cash.  The Company then completed the sale of 1,000,000 shares of its Common Stock for aggregate proceeds of $25,000 pursuant to an intrastate exemption for the sale of securities.



The Company engaged in limited business operations until it acquired P.G. Entertainment, Inc., a California corporation (PGE) through a stock exchange in January 1994.  As part of the acquisition of PGE, the Company consolidated its Common Stock on a one for three basis reducing the then issued and outstanding shares of Common Stock from 1,348,837 to 449,658, after adjustments for the reverse split.  The stockholders of PGE received a total of 1,798,448 post split shares of Common Stock and 105,000 shares of convertible preferred stock in the acquisition.  Approximately 60% of the shares of preferred stock were subsequently converted to shares of Common Stock in October 1995 and except for a nominal number the balance was converted to shares of Common Stock in November of 1999.  PGE was engaged in the entertainment industry with interest in animation, interactive programming, and computer
      imaging and graphics technology.  PGEs operation did not prove profitable and in 1998, the Company ceased the operations of PGE.



In March 1999, the Company acquired Promotora Mexicana de Infraestructura, S.A. de C.V., a Mexican corporation (Promotora) which was in the construction and development of commercial, residential and resort properties in Mexico.  Upon the acquisition of Promotora, the Company reverse split the outstanding shares of Common Stock on a 1 for 2 basis, and changed its name to PMI Construction Group. Its business focus to be the construction industry.  Promotora was originally formed in 1993 by Bernardo Quintana, who served as the Companys president after the acquisition, to engage in the construction industry in Mexico.  In conjunction with the aforementioned acquisition, in April 1999, the Company acquired all of the outstanding common stock of Promotora Mexicana de Inmobiliaria (Inmobiliaria).  Inmobiliaria was also founded by Bernardo Quintana.  Inmobiliaria focuses on real
      estate purchasing, selling, leasing and administrative services.  Inmobiliaria principal revenue was from leasing of real estate. A total of 2,749,525 shares of Common Stock was issued by the Company to acquire these subsidiaries.



11







The operations of Promotora and Inmobiliaria proved to be unprofitable when the economies in Mexico and the United States went into a recession in early 2000.  The Company was forced to sell the subsidiaries back to Bernardo Quintana as part of a plan to close the operations without affecting the status of the Company.  The Company remained dormant for several years thereafter and since 2004 has been looking for new business opportunities.  During this intervening time,  a lawsuit was filed by one of the Companys stockholders as a result of the sale of the subsidiaries back to Mr. Quintana. As part of the settlement of the lawsuit, Mr. Quintana transferred the ownership interest that he retained in the Company to the stockholder.



The Company has had no operations and is currently seeking an acquisition or merger to bring an operating entity into the Company.  In order to finance its search for an operating entity, the Company, in 2004, entered into unsecured Convertible Notes bearing interest at 8% per annum with three parties, one of which was the sole officer and director of the Company and another a stockholder, whereby it received $10,000. The Stockholders of the Company also voted to enter into a quasi-reorganization whereby the paid-in capital account was eliminated against the retained deficit account and thus commencing the Companys development stage activities. During 2006, these three parties exercised the conversion provision of the Convertible Notes and were issued 11,513,920 shares of Common Stock, which included interest. During April of 2007, the Company again entered into unsecured Convertible Notes bearing
      interest at 8% per annum, whereby it received $1,500.  In March 2008, the conversion provision of this Convertible Note and accrued interest was exercised and 1,608,160 shares of Common Stock were issued.



The Company also entered into a $25,000 unsecured line of credit demand note bearing interest at 10% per annum with its officer/director, which amount was drawn down in August and December of 2007. At March 31, 2008, this note and accrued interest in the amount of $1,010 remains outstanding.



Plan of Operations



Overview:



The Company has not received any revenue from operations in each of the last two fiscal years and is considered a development stage enterprise. The Companys current operations have consisted of taking such action as management believes necessary to prepare to seek an acquisition or merger with an operating entity. The Companys sole officer and director, who is a stockholder of the Company, has financed the Company's current operations, which have consisted primarily of maintaining in good standing the Company's corporate status, in fulfilling its filing requirements with the Securities and Exchange Commission, including the audit of its financial statements, and in changing the marketplace of its securities.



The financial statements contained in this interim report have been prepared assuming that the Company will continue as a going concern. The Company is not engaged in any revenue producing activities and has not established any source of revenue other than described herein. These factors raise substantial doubt that the Company will be able to continue as a going concern even though management believes that sufficient funding is available to meet its operating needs during the next twelve months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.Risks associated with the plan of operations:



In its search for a business opportunity, management anticipates that the Company will incur additional costs for legal and accounting fees to locate and complete a merger or acquisition.  As previously discussed, the Company does not have any revenue producing activities whereby it can meet the financial requirements of seeking a business opportunity. As of March 31, 2008, the Company has debts of $39,183 and may further obligate itself as it pursues its plan of operations. There can be no assurance that the Company will receive any benefits from the efforts of management to locate business opportunities.



The Company does not propose to restrict its search for a business opportunity to any particular industry or geographical area and may, therefore, attempt to acquire any business in any industry. The Company has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions, and other factors. Consequently, if and when a business opportunity is selected, such business opportunity may not be in an industry that is following general business trends.



12







The selection of a business opportunity in which to participate is complex and risky. Additionally, the Company has only limited resources and this fact may make it more difficult to find any such opportunities. There can be no assurance that the Company will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to the Company and its stockholders. The Company will select any potential business opportunity based on management's business judgment. The Company may acquire or participate in a business opportunity based on the decision of management that potentially could act without the consent, vote, or approval of the Company's stockholders.



Since its inception, the Company has not generated any revenue and it is unlikely that any revenue will be generated until such time as the Company locates a business opportunity to acquire or with which it can merge. However, the Company is not restricting its search to those business opportunities that have profitable operations. Even though a business opportunity is acquired that has revenues or gross income, there is no assurance that profitable operations or net income will result there from. Consequently, even though the Company may be successful in acquiring a business opportunity, such acquisition does not assume that a profitable business opportunity is being acquired or that stockholders will benefit through an increase in the market price of the Company's Common Stock.



The acquisition of a business opportunity, no matter what form it may take, will almost assuredly result in substantial dilution for the Company's current stockholders. Inasmuch as the Company only has its equity securities (its Common Stock and preferred stock) as a source to provide consideration for the acquisition of a business opportunity, the Company's issuance of a substantial portion of its authorized Common Stock is the most likely method for the Company to consummate an acquisition. The issuance of any shares of the Company's Common Stock will dilute the ownership percentage that current stockholders have in the Company.



The Company does not intend to employ anyone in the future, unless its present business operations were to change.

At the present time, management does not believe it is necessary for the Company to have an administrative office and utilizes the mailing address of the Company's president for business correspondence. The Company intends to reimburse management for any out of pocket costs other than those associated with maintaining the Companys business address.



Liquidity and Capital Resources



As of March 31, 2008, the Company had a negative $33,237 in working capital with assets of $5,946 and liabilities of $39,183.  If the Company cannot find a new business, it will have to seek additional capital either through the sale of its shares of Common Stock or through a loan from its officer, stockholders or others. The Company has only incidental ongoing expenses primarily associated with maintaining its corporate status and professional fees associated with accounting and legal costs.



Management anticipates that the Company will incur more costs including legal and accounting fees to locate and complete a merger or acquisition.  At the present time the Company does not have the assets to meet these financial requirements. Additionally, the Company does not have substantial assets to entice potential business opportunities to enter into transactions with the Company.



It is unlikely that any revenue will be generated until the Company locates a business opportunity that it may acquire or with which it may merge.  Management of the Company will be investigating various business opportunities.  These efforts may result in the Company incurring out of pocket expenses for its management and expenses associated with legal and accounting costs.  There can be no guarantee that the Company will receive any benefits from the efforts of management to locate business opportunities.



If and when the Company locates a business opportunity, management of the Company will give consideration to the dollar amount of that entity's profitable operations and the adequacy of its working capital in determining the terms and conditions under which the Company would consummate such an acquisition.  Potential business opportunities, no matter which form they may take, will most likely result in substantial dilution for the Company's stockholders as it has only limited capital and no operations.



13







Results of Operations



For the three months ended March 31, 2008, the Company had a net loss of $8,887, compared to a loss for the three months ended March 31, 2007, of $1,122. The Company anticipates losses to remain at the present level or slightly higher until a business opportunity is found. The Company had no revenue during the three months ended March 31, 2008. The Company does not anticipate any revenue until it locates a new business opportunity.



Off-balance sheet arrangements



The Company does not have any off-balance sheet arrangements and it is not anticipated that the Company will enter into any off-balance sheet arrangements.



Forward-looking Statements



The Private Securities Litigation Reform Act of 1995 (the Act) provides a safe harbor for forward-looking statements made by or on behalf of our Company. Our Company and our representatives may from time to time make written or oral statements that are forward-looking, including statements contained in this Annual Report and other filings with the Securities and Exchange Commission and in reports to our Companys stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Companys control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of managements views and assumptions, as of the time the statements are made, regarding future events and business performance.
      There can be no assurance, however, that managements expectations will necessarily come to pass. Factors that may affect forward- looking statements include a wide range of factors that could materially affect future developments and performance, including the following:



Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions, changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Companys access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally, legal and regulatory developments, such as regulatory actions affecting environmental activities, the imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may lead to increased costs or disruption of operations.



This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.



Item 3.  Quantitative and Qualitative Disclosures About Market Risk.



NA-Smaller Reporting Company



Item 4T.  Controls and Procedures.



Evaluation of Disclosure Controls and Procedures



Our management, with the participation of our President and CFO, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our President and CFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and (ii) accumulated and communicated to our management, including our President and CFO, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all
      control issues and instances of fraud, if any, within a company have been detected.

14







Managements Report on Internal Control over Financial Reporting



Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of the President and CFO, evaluated the effectiveness of our internal control over financial reporting as of March 31, 2008.  Based on this evaluation, our management, with the participation of the President and CFO, concluded that, as of March 31, 2008, our internal control over financial reporting was effective.



Changes in internal control over financial reporting



There have been no changes in internal control over financial reporting.



PART II - OTHER INFORMATION



ITEM 1.  Legal Proceedings



None




ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds



Recent Sales of Unregistered Securities




We have not sold for cash any restricted securities during the three months ended March 31, 2008; however, we did issue 1,608,160 shares of Common Stock to retire a convertible note and accrued interest payable at a conversion rate of $0.001 per share.



Use of Proceeds of Registered Securities



None; not applicable.



Purchases of Equity Securities by Us and Affiliated Purchasers



During the three months ended March 31, 2008, we have not purchased any equity securities nor have any officers or directors of the Company.



ITEM 3.  Defaults Upon Senior Securities



We are not aware of any defaults upon senior securities. We have a $25,000 demand note payable to our officer and director. Demand for payment of this note has not been made and we have received a verbal assurance from our officer and director that such demand will not be forthcoming in the near future.



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



No matters were submitted to a vote of security holders during the quarter ended March 31, 2008.



ITEM 5.  Other Information.



None



15







ITEM 6.  Exhibits



a) Index of Exhibits:



Exhibit Table #

              Title of Document

              Location




3 (i)

              Articles of Incorporation

              Incorporated by reference*


3 (i)

              Amended Articles of Incorporation

              Incorporated by reference*


3 (i)

              Amended Articles of Incorporation

              Incorporated by reference*




3 (ii)

              Bylaws

              Incorporated by reference*




4

              Specimen Stock Certificate

              Incorporated by reference*




11

              Computation of loss per share

              Notes to financial statements




31

              Rule 13a-14(a)/15d-14a(a) Certification  CEO & CFO

              This filing




32

              Section 1350 Certification  CEO & CFO

              This filing




* Incorporated by reference from the Company's registration statement on Form 10-SB filed with the Commission, SEC File No. 000-52790.



SIGNATURES



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



PMI Construction Group, Inc.

(Registrant)



Dated:May 12, 2008

              By:/s/ C. Eugene Gronning


C. Eugene Gronning


Chief Executive Officer


Chief Financial Officer


Director






16