---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2008

or

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

For the transition period from ______________ **to:**______________

Commission File Number: 000-53490

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

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

Suite 909  6081 No. 3 Road, Richmond, Vancouver, BC
Canada V6Y 2B2(Address of principal executive offices) (Zip
code)

604-304-3315(Registrants telephone number,
including area code)

1685 - 58A Street, Delta BC Canada V4L
1X5(Former name, former address and former fiscal 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. Yes [X] 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).

Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date:
5,071,210 common shares issued and outstanding as of February 16,
2009.

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- 2 -

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

These financial statements have been prepared by Orca International
  Language Schools, Inc. (the Company) without audit, pursuant
  to the rules and regulations of the Securities and Exchange Commission (SEC).
  Our financial statements are stated in United States dollars and certain information
  and footnote disclosures normally included in financial statements prepared
  in accordance with generally accepted accounting principles have been omitted
  in accordance with such SEC rules and regulations. In the opinion of management,
  the accompanying statements contain all adjustments necessary to present fairly
  the financial position of the Company as of December 31, 2008, and its results
  of operations, stockholders equity, and its cash flows for the nine month
  period ended December 31, 2008 and for the period from inception (November 6,
  1997) to December 31, 2008. The results for these interim periods are not necessarily
  indicative of the results for the entire year. The accompanying financial statements
  should be read in conjunction with the financial statements and the notes thereto
  filed as a part of the Companys annual report on Form 10-KSB filed on
  July 14, 2008.

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Table of Contents

|Balance Sheets                    | F-1
|--------------------------------- | ---
|                                  |    
|Statements of Operations          | F-2
|                                  |    
|Statements of Cash Flows          | F-3
|                                  |    
|Notes to the Financial Statements | F-4

---

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

|                                                                   |  | December 31, |   |  | March 31, |  
|------------------------------------------------------------------ |  | ------------ | - |  | --------- | -
|                                                                   |  | 2008         |   |  | 2008      |  
|                                                                   |  | $            |   |  | $         |  
|                                                                   |  | (Unaudited)  |   |  |           |  
|ASSETS                                                             |  |              |   |  |           |  
|Current Assets                                                     |  |              |   |  |           |  
|Cash                                                               |  | 108,804      |   |  | 3,592     |  
|Current assets of discontinued operations (Note 8)                 |  | 757          |   |  | 857       |  
|Total Current Assets                                               |  | 109,561      |   |  | 4,449     |  
|Property and
      Equipment (Note 3)                              |  | 274          |   |  | 857       |  
|Total Assets                                                       |  | 109,835      |   |  | 5,306     |  
|                                                                   |  |              |   |  |           |  
|LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)               |  |              |   |  |           |  
|Current Liabilities                                                |  |              |   |  |           |  
|Accounts
      payable                                             |  | 82           |   |  | 7,964     |  
|Accrued liabilities (Note
      4)                                 |  | -            |   |  | 5,620     |  
|Due to
      related parties (Note 5(c))                           |  | 42,566       |   |  | 11,326    |  
|Notes Payable (Note 6)                                             |  | -            |   |  | 35,071    |  
|Total Liabilities                                                  |  | 42,648       |   |  | 59,981    |  
|                                                                   |  |              |   |  |           |  
|Shareholders' Equity (Deficit)                                     |  |              |   |  |           |  
|Common Stock, Unlimited shares authorized, without par
      value |  |              |   |  |           |  
|5,071,210 shares issued and outstanding                            |  | 198,857      |   |  | 81,072    |  
|Common Stock Subscribed (Note 7(c))                                |  | -            |   |  | 4,722     |  
|Donated Capital (Note 5(a))                                        |  | 71,435       |   |  | 16,208    |  
|Accumulated Other Comprehensive Income                             |  | 8,594        |   |  | 441       |  
|Deficit Accumulated During the Development Stage                   |  | (211,698     | ) |  | (157,118  | )
|Total
      Stockholders' Equity (Deficit )                        |  | 67,188       |   |  | (54,675   | )
|Total Liabilities and Stockholders' Equity (Deficit)               |  | 109,835      |   |  | 5,306     |  

(The accompanying notes are an integral part of these financial
statements) F-1

---

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

|                                              |  | Accumulated from |   |  |              |   |  |              |   |  |              |   |  |              |  
|--------------------------------------------- |  | ---------------- | - |  | ------------ | - |  | ------------ | - |  | ------------ | - |  | ------------ | -
|                                              |  | November 6, 1997 |   |  | For the      |   |  | For the      |  
|                                              |  | (Date of         |   |  | Three months |   |  | Nine months  |  
|                                              |  | Inception) to    |   |  | Ended        |   |  | Ended        |  
|                                              |  | December 31,     |   |  | December 31, |   |  | December 31, |   |  | December 31, |   |  | December 31, |  
|                                              |  | 2008             |   |  | 2008         |   |  | 2007         |   |  | 2008         |   |  | 2007         |  
|                                              |  | $                |   |  | $            |   |  | $            |   |  | $            |   |  | $            |  
|Revenue                                       |  | -                |   |  | -            |   |  | -            |   |  | -            |   |  | -            |  
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Expenses:                                     |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Amortization                                  |  | 1,710            |   |  | 148          |   |  | 216          |   |  | 502          |   |  | 542          |  
|Automobile                                    |  | 684              |   |  | -            |   |  | -            |   |  | 684          |   |  | -            |  
|General and administrative                    |  | 35,682           |   |  | 1,322        |   |  | 2,804        |   |  | 4,240        |   |  | 4,475        |  
|Interest                                      |  | 2,122            |   |  | 14           |   |  | -            |   |  | 1,012        |   |  | -            |  
|Management fees (Note 5(a))                   |  | 17,478           |   |  | -            |   |  | 1,518        |   |  | 2,757        |   |  | 4,317        |  
|Professional
      fees                       |  | 100,908          |   |  | 12,151       |   |  | 12,181       |   |  | 47,998       |   |  | 43,314       |  
|Rent (Note 6(a))                              |  | 13,845           |   |  | 1,983        |   |  | 759          |   |  | 3,446        |   |  | 2,158        |  
|Travel                                        |  | 478              |   |  | -            |   |  | -            |   |  | 478          |   |  | -            |  
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Total Expenses                                |  | (172,907         | ) |  | 15,618       |   |  | 17,478       |   |  | 61,117       |   |  | 54,806       |  
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Net Loss from Continuing Operations           |  | (172,907         | ) |  | (15,618      | ) |  | (17,478      | ) |  | (61,117      | ) |  | (54,806      | )
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Other Income                                  |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Forgiveness of debt                           |  | 7,351            |   |  | -            |   |  | -            |   |  | 7,351        |   |  | -            |  
|Gain on disposal
      of temporary           |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|investments                                   |  | 946              |   |  | -            |   |  | -            |   |  | -            |   |  | -            |  
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Net Loss before Discontinued Operations       |  | (164,610         | ) |  | (15,618      | ) |  | (17,478      | ) |  | (53,766      | ) |  | (54,806      | )
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Discontinued
      Operations (Note 8)        |  | (47,087          | ) |  | -            |   |  | (7,904       | ) |  | (814         | ) |  | (13,982      | )
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Net Loss                                      |  | (211,697         | ) |  | (15,618      | ) |  | (25,382      | ) |  | (54,580      | ) |  | (68,788      | )
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Other Comprehensive Income (Loss)             |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Foreign currency
      translation adjustment |  | 8,594            |   |  | 6,968        |   |  | 105          |   |  | 8,152        |   |  | (752         | )
|Comprehensive Loss                            |  | (203,103         | ) |  | (8,650       | ) |  | (25,277      | ) |  | (46,428      | ) |  | (69,540      | )
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Net Loss Per Share
      - Basic and Diluted  |  |                  |   |  | -            |   |  | -            |   |  | (0.01        | ) |  | (0.01        | )
|                                              |  |                  |   |  |              |   |  |              |   |  |              |   |  |              |  
|Weighted Average
      Shares Outstanding     |  |                  |   |  | 5,071,000    |   |  | 6,271,000    |   |  | 5,106,000    |   |  | 6,271,000    |  

(The accompanying notes are an integral part of these financial
statements) F-2

---

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

|                                                  |  | Accumulated from       |   |  | For the      |   |  | For the      |  
|------------------------------------------------- |  | ---------------------- | - |  | ------------ | - |  | ------------ | -
|                                                  |  | November 6, 1997       |   |  | Nine months  |   |  | Nine months  |  
|                                                  |  | (Date of Inception) to |   |  | Ended        |   |  | Ended        |  
|                                                  |  | December 31,           |   |  | December 31, |   |  | December 31, |  
|                                                  |  | 2008                   |   |  | 2008         |   |  | 2007         |  
|                                                  |  | $                      |   |  | $            |   |  | $            |  
|                                                  |  |                        |   |  |              |   |  |              |  
|Operating Activities                              |  |                        |   |  |              |   |  |              |  
|                                                  |  |                        |   |  |              |   |  |              |  
|Net Loss                                          |  | (211,697               | ) |  | (54,580      | ) |  | (68,788      | )
|                                                  |  |                        |   |  |              |   |  |              |  
|Adjustments to reconcile net loss                 |  |                        |   |  |              |   |  |              |  
|to net cash used in operating activities:         |  |                        |   |  |              |   |  |              |  
|Amortization                                      |  | 1,711                  |   |  | 502          |   |  | 542          |  
|Donated services                                  |  | 68,252                 |   |  | 52,044       |   |  | 6,475        |  
|Forgiveness of
      debt                         |  | (7,351                 | ) |  | (7,351       | ) |  | -            |  
|Gain on sale of temporary
      investment        |  | (946                   | ) |  | -            |   |  | -            |  
|                                                  |  |                        |   |  |              |   |  |              |  
|Changes in operating assets and liabilities       |  |                        |   |  |              |   |  |              |  
|Prepaid expenses                                  |  | (1,329                 | ) |  |              |   |  | 3,026        |  
|Accounts receivable                               |  | (816                   | ) |  | (35          | ) |  | (341         | )
|Accounts payable
      and accrued liabilities    |  | 1,608                  |   |  | (11,365      | ) |  | 8,462        |  
|Due to related parties                            |  | 12,647                 |   |  | -            |   |  | 9,238        |  
|Net Cash Used in Operating Activities             |  | (137,921               | ) |  | (20,785      | ) |  | (41,387      | )
|                                                  |  |                        |   |  |              |   |  |              |  
|Investing Activities                              |  |                        |   |  |              |   |  |              |  
|Purchase of temporary
      investments           |  | (1,785                 | ) |  | -            |   |  | -            |  
|Proceeds from
      sale of temporary investments |  | 2,795                  |   |  | -            |   |  | -            |  
|Purchase of property and equipment                |  | (1,957                 | ) |  | -            |   |  | -            |  
|Net Cash Provided Used in Investing Activities    |  | (947                   | ) |  | -            |   |  | -            |  
|                                                  |  |                        |   |  |              |   |  |              |  
|Financing Activities                              |  |                        |   |  |              |   |  |              |  
|Proceeds from (repayment of)
      notes payable  |  | 12,083                 |   |  | (22,988      | ) |  | 25,220       |  
|Advances from
      related parties               |  | 33,021                 |   |  | 33,021       |   |  | 1,732        |  
|Proceeds from common stock subscribed             |  | 203,579                |   |  | 117,785      |   |  | 4,722        |  
|Net Cash Flows Provided by Financing Activities   |  | 248,683                |   |  | 127,818      |   |  | 31,674       |  
|Effect of exchange
      rate changes on cash     |  | (1,011                 | ) |  | (1,821       | ) |  | (235         | )
|Increase (Decrease) In Cash                       |  | 108,804                |   |  | 105,212      |   |  | (9,948       | )
|Cash - Beginning
      of period                  |  | -                      |   |  | 3,592        |   |  | 14,225       |  
|Cash - End of period                              |  | 108,804                |   |  | 108,804      |   |  | 4,277        |  
|                                                  |  |                        |   |  |              |   |  |              |  
|Supplemental Disclosures                          |  |                        |   |  |              |   |  |              |  
|Interest paid                                     |  | 458                    |   |  | 458          |   |  | -            |  
|Income taxes paid                                 |  | -                      |   |  | -            |   |  | -            |  

(The accompanying notes are an integral part of these financial
statements) F-3

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|Orca International Language Schools Inc.
|----------------------------------------
|(A Development Stage Company)           
|Notes to the Financial Statements       
|(Expressed in US dollars)               
|December 31, 2008                       
|(unaudited)                             

|1. | Development Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Orca International Language Schools Inc. (the Company)
      was incorporated in British Columbia, Canada on November 6, 1997. The
      Company is a Development Stage Company, as defined by Statement of
      Financial Accounting Standard (SFAS) No. 7 Accounting and Reporting
      by Development Stage Enterprises. During the third quarter of 2008,
      the Company changed its principal business from the language education
      business to energy investment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | These financial statements have been prepared on a going
      concern basis, which implies the Company will continue to realize its
      assets and discharge its liabilities in the normal course of business. The
      Company has not generated revenues since inception and has never paid any
      dividends and is unlikely to pay dividends or generate earnings in the
      immediate or foreseeable future. The continuation of the Company as a
      going concern is dependent upon the continued financial support from its
      shareholders, the ability of the Company to obtain necessary equity
      financing to continue operations, and the attainment of profitable
      operations. As at December 31, 2008, the Company has a working capital of
      $66,913 and accumulated losses of $211,698 since inception. These factors
      raise substantial doubt regarding the Companys ability to continue as a
      going concern. These financial statements do not include any adjustments
      to the recoverability and classification of recorded asset amounts and
      classification of liabilities that might be necessary should the Company
      be unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Summary of Significant Accounting
  Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | a) | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | These financial statements and related notes are
      presented in accordance with accounting principles generally accepted in
      the United States, and are expressed in US dollars. The Companys fiscal
      year-end is March 31.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | b) | Interim Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The interim unaudited financial statements have been
      prepared in accordance with accounting principles generally accepted in
      the United States for interim financial information and with the
      instructions for Securities and Exchange Commission (SEC) Form 10-Q.
      They do not include all of the information and footnotes required by
      generally accepted accounting principles for complete financial
      statements. Therefore, these financial statements should be read in
      conjunction with the Companys audited financial statements and notes
      thereto for the year ended March 31, 2008, included in the Companys
      Annual Report on Form 10-K filed on July 14, 2008, with the SEC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The financial statements included herein are unaudited;
      however, they contain all normal recurring accruals and adjustments that,
      in the opinion of management, are necessary to present fairly the
      Companys financial position at December 31, 2008, and the results of its
      operations and cash flows for the three and nine months ended December 31,
      2008 and 2007. The results of operations for the three and nine months
      ended December 31, 2008 are not necessarily indicative of the results to
      be expected for future quarter or the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | c) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The preparation of financial statements in conformity
      with United States generally accepted accounting principles requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenues and expenses during the reporting period. The Company
      regularly evaluates estimates and assumptions related to useful life and
      recoverability of long-lived assets, donated expenses, and deferred income
      tax valuation allowances. The Company bases its estimates and assumptions
      on current facts, historical experience and various other factors that it
      believes to be reasonable under the circumstances, the results of which
      form the basis for making judgments about the carrying values of assets
      and liabilities and the accrual of costs and expenses that are not readily
      apparent from other sources. The actual results experienced by the Company
      may differ materially and adversely from the Companys estimates. To the
      extent there are material differences between the estimates and the actual
      results, future results of operations will be
affected.

F-4

---

|Orca International Language Schools Inc.
|----------------------------------------
|(A Development Stage Company)           
|Notes to the Financial Statements       
|(Expressed in US dollars)               
|December 31, 2008                       
|(unaudited)                             

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

| | d) | Basic and Diluted Net Income (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company computes net income (loss) per share in
      accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128
      requires presentation of both basic and diluted earnings per share (EPS)
      on the face of the income statement. Basic EPS is computed by dividing net
      income (loss) available to common shareholders (numerator) by the weighted
      average number of shares outstanding (denominator) during the period.
      Diluted EPS gives effect to all dilutive potential common shares
      outstanding during the period using the treasury stock method and
      convertible preferred stock using the if-converted method. In computing
      diluted EPS, the average stock price for the period is used in determining
      the number of shares assumed to be purchased from the exercise of stock
      options or warrants. Diluted EPS excludes all dilutive potential shares if
      their effect is anti dilutive. As at December 31, 2008, there are no
      dilutive potential common shares.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | e) | Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | SFAS No. 130, Reporting Comprehensive Income,
      establishes standards for the reporting and display of comprehensive loss
      and its components in the financial statements. As at December 31, 2008,
      the Companys only component of comprehensive income consisted of foreign
      currency translation adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | f) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company considers all highly liquid instruments with
      maturity of three months or less at the time of issuance to be cash
      equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | g) | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Property and equipment consists of computer hardware, is
      recorded at cost, and is depreciated on a straight line basis over an
      estimated useful life of three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | h) | Website Development Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company recognizes the costs associated with
      developing a website in accordance with the American Institute of
      Certified Public Accountants (AICPA) Statement of Position (SOP) No.
      98-1, Accounting for the Costs of Computer Software Developed or
      Obtained for Internal Use. The Company also follows the guidance
      pursuant to the Emerging Issues Task Force (EITF) No. 00-2, Accounting
      for Website Development Costs for website development costs incurred.
      The Company capitalizes website development costs that meet the
      capitalization criteria contained in SOP No. 98-1 unless recoverability of
      costs is not assured. To date the Company has charged all website
      development costs to operations.                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | i) | Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | In accordance with SFAS No. 144, Accounting for the
      Impairment or Disposal of Long-Lived Assets, the Company tests
      long-lived assets or asset groups for recoverability when events or
      changes in circumstances indicate that their carrying amount may not be
      recoverable. Circumstances which could trigger a review include, but are
      not limited to: significant decreases in the market price of the asset;
      significant adverse changes in the business climate or legal factors;
      accumulation of costs significantly in excess of the amount originally
      expected for the acquisition or construction of the asset; current period
      cash flow or operating losses combined with a history of losses or a
      forecast of continuing losses associated with the use of the asset; and
      current expectation that the asset will more likely than not be sold or
      disposed significantly before the end of its estimated useful
  life.                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Recoverability is assessed based on the carrying amount
      of the asset and its fair value which is generally determined based on the
      sum of the undiscounted cash flows expected to result from the use and the
      eventual disposal of the asset, as well as specific appraisal in certain
      instances. An impairment loss is recognized when the carrying amount is
      not recoverable and exceeds fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | j) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The fair values of cash, accounts receivable, accounts
      payable, accrued liabilities, amounts due to related parties, and notes
      payable approximate their carrying values due to the immediate or
      short-term maturity of the financial instrument.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-5

---

|Orca International Language Schools Inc.
|----------------------------------------
|(A Development Stage Company)           
|Notes to the Financial Statements       
|(Expressed in US dollars)               
|December 31, 2008                       
|(unaudited)                             

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

| | k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Potential benefits of income tax losses are not
      recognized in the accounts until realization is more likely than not. The
      Company has adopted SFAS No. 109 Accounting for Income Taxes as
      of its inception. Pursuant to SFAS No. 109 the Company is required to
      compute tax asset benefits for net operating losses carried forward.
      Potential benefit of net operating losses have not been recognized in
      these financial statements because the Company cannot be assured it is
      more likely than not it will utilize the net operating losses carried
      forward in future years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | l) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | The Companys functional currency is the Canadian dollar.
      The financial statements are translated to United States dollars in
      accordance with SFAS No. 52 Foreign Currency Translationusing
      period-end rates of exchange for assets and liabilities, and average rates
      of exchange for the year for revenues and expenses. Translation gains
      (losses) are recorded in accumulated other comprehensive income (loss) as
      a component of stockholders equity (deficit). Gains and losses arising on
      translation or settlement of foreign currency denominated transactions or
      balances are included in the determination of income. Foreign currency
      transactions are primarily undertaken in United States dollars. The
      Company has not, to the date of these financial statements, entered into
      derivative instruments to offset the impact of foreign currency
      fluctuations.                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | m) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | The Company records stock-based compensation in
      accordance with SFAS No. 123R Share Based Payments, using the
      fair value method. The Company has not issued any stock options and has
      had no unvested share based payments since inception.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | n) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In May 2008, the Financial Accounting Standards Board
      (FASB) issued SFAS No. 163, Accounting for Financial Guarantee
      Insurance Contracts  An interpretation of FASB Statement No. 60.
      SFAS 163 requires that an insurance enterprise recognize a claim liability
      prior to an event of default when there is evidence that credit
      deterioration has occurred in an insured financial obligation. It also
      clarifies how Statement 60 applies to financial guarantee insurance
      contracts, including the recognition and measurement to be used to account
      for premium revenue and claim liabilities, and requires expanded
      disclosures about financial guarantee insurance contracts. It is effective
      for financial statements issued for fiscal years beginning after December
      15, 2008, except for some disclosures about the insurance enterprises
      risk-management activities. SFAS 163 requires that disclosures about the
      risk-management activities of the insurance enterprise be effective for
      the first period beginning after issuance. Except for those disclosures,
      earlier application is not permitted. The adoption of this statement is
      not expected to have a material effect on the Companys financial
      statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In May 2008, the FASB issued SFAS No. 162, The
      Hierarchy of Generally Accepted Accounting Principles. SFAS 162
      identifies the sources of accounting principles and the framework for
      selecting the principles to be used in the preparation of financial
      statements of nongovernmental entities that are presented in conformity
      with generally accepted accounting principles in the United States. It is
      effective 60 days following the SECs approval of the Public Company
      Accounting Oversight Board amendments to AU Section 411, The Meaning
      of Present Fairly in Conformity With Generally Accepted Accounting
      Principles. The adoption of this statement is not expected to have a
      material effect on the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In March 2008, the FASB issued SFAS No. 161,
      Disclosures about Derivative Instruments and Hedging Activities  an
      amendment to FASB Statement No. 133. SFAS No. 161 is intended to
      improve financial standards for derivative instruments and hedging
      activities by requiring enhanced disclosures to enable investors to better
      understand their effects on an entity's financial position, financial
      performance, and cash flows. Entities are required to provide enhanced
      disclosures about: (a) how and why an entity uses derivative instruments;
      (b) how derivative instruments and related hedged items are accounted for
      under Statement 133 and its related interpretations; and (c) how
      derivative instruments and related hedged items affect an entitys
      financial position, financial performance, and cash flows. It is effective
      for financial statements issued for fiscal years beginning after November
      15, 2008, with early adoption encouraged. The adoption of this statement
      is not expected to have a material effect on the Companys financial
      statements.                                                                                                                                                              

F-6

---

|Orca International Language Schools Inc.
|----------------------------------------
|(A Development Stage Company)           
|Notes to the Financial Statements       
|(Expressed in US dollars)               
|December 31, 2008                       
|(unaudited)                             

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

| | n) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In December 2007, the FASB issued SFAS No. 141R,
      Business Combinations. This statement replaces SFAS 141 and
      defines the acquirer in a business combination as the entity that obtains
      control of one or more businesses in a business combination and
      establishes the acquisition date as the date that the acquirer achieves
      control. SFAS 141R requires an acquirer to recognize the assets acquired,
      the liabilities assumed, and any noncontrolling interest in the acquiree
      at the acquisition date, measured at their fair values as of that date.
      SFAS 141R also requires the acquirer to recognize contingent consideration
      at the acquisition date, measured at its fair value at that date. This
      statement is effective for fiscal years, and interim periods within those
      fiscal years, beginning on or after December 15, 2008. Earlier adoption is
      prohibited. The adoption of this statement is not expected to have a
      material effect on the Company's financial statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In December 2007, the FASB issued SFAS No. 160,
      Noncontrolling Interests in Consolidated Financial Statements
      Liabilities an Amendment of ARB No. 51. This statement amends ARB 51
      to establish accounting and reporting standards for the Noncontrolling
      interest in a subsidiary and for the deconsolidation of a subsidiary. This
      statement is effective for fiscal years, and interim periods within those
      fiscal years, beginning on or after December 15, 2008. Earlier adoption is
      prohibited. The adoption of this statement is not expected to have a
      material effect on the Company's financial
statements.                                                                                                                                                                                                                                                                                                                                                                                                    

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

| |                    |  |       |  |  |              |  |  | December 31, |  |  | March 31,    | 
| | ------------------ |  | ----- |  |  | ------------ |  |  | ------------ |  |  | ------------ | 
| |                    |  |       |  |  |              |  |  | 2008         |  |  | 2008         | 
| |                    |  |       |  |  | Accumulated  |  |  | Net Carrying |  |  | Net Carrying | 
| |                    |  | Cost  |  |  | Amortization |  |  | Value        |  |  | Value        | 
| |                    |  | $     |  |  | $            |  |  | $            |  |  | $            | 
| |                    |  |       |  |  |              |  |  |              |  |  |              | 
| | Computer equipment |  | 2,126 |  |  | 1,852        |  |  | 274          |  |  | 857          | 

|4. | Accrued Liabilities                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                
|   | Accrued liabilities as at December 31, 2008, consist of
      $nil (March 31, 2008 - $1,110) of accrued interest and $nil (March 31,
      2008 - $4,510) of professional fees.
|   |                                                                                                                                                                                
|5. | Related Party
Transactions                                                                                                                                                     

| | a) | From October 1, 2008, the Company paid monthly rent fee
      of CDN$750 to KBM Management Services Ltd. Until September 30, 2008, the
      former President of the Company provided donated office premises to the
      Company valued at CDN$250 per month. During the nine month period ended
      December 31, 2008, donated rent of $1,378 (2007 - $2,158) was charged to
      operations. During the nine month period ended December 31, 2008, the
      Company also recognized $2,757 (2007-$4,317) for donated management
      services at CDN$500 per month provided by the former President of the
      Company until September 30, 2008.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | b) | As at December 31, 2008, amounts owing to the former
      President of the Company of $43,313 were donated to the Company and
      recorded as donated capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | c) | During the nine month period ended December 31, 2008, the
      significant shareholder, SGB C &C Investment Ltd. loaned the Company
      $42,566 (CDN$51,846) for expenses to be incurred by the Company. The
      amount is non-interest bearing, unsecured, and due on
  demand.                                                                                                                                                                                                                                                                                                                                                                      

F-7

---

|Orca International Language Schools Inc.
|----------------------------------------
|(A Development Stage Company)           
|Notes to the Financial Statements       
|(Expressed in US dollars)               
|December 31, 2008                       
|(unaudited)                             

|6. | Notes Payable                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                         
|   | a)                                                                                                                                                                                      
|   |                                                                                                                                                                                         
|   | b)                                                                                                                                                                                      
|   |                                                                                                                                                                                         
|7. | Common Stock                                                                                                                                                                            
|   |                                                                                                                                                                                         
|   | a)                                                                                                                                                                                      
|   |                                                                                                                                                                                         
|   | b)                                                                                                                                                                                      
|   |                                                                                                                                                                                         
|   | c)                                                                                                                                                                                      
|   |                                                                                                                                                                                         
|   | d)                                                                                                                                                                                      
|   |                                                                                                                                                                                         
|   | e)                                                                                                                                                                                      
|   |                                                                                                                                                                                         
|8. | Discontinued Operations                                                                                                                                                                 
|   |                                                                                                                                                                                         
|   | On September 30, 2008, the Company discontinued all
      operations related to the language education business. The results of
      discontinued operations are summarized as
follows:

| |                |  | Accumulated      |   |  |              |   |  |              |  
| | -------------- |  | ---------------- | - |  | ------------ | - |  | ------------ | -
| |                |  | from November 6, |   |  |              |   |  |              |  
| |                |  | 1997 (Date of    |   |  | Nine Months  |   |  | Nine Months  |  
| |                |  | Inception) to    |   |  | Ended        |   |  | Ended        |  
| |                |  | December 31,     |   |  | December 31, |   |  | December 31, |  
| |                |  | 2008             |   |  | 2008         |   |  | 2007         |  
| |                |  | $                |   |  | $            |   |  | $            |  
| |                |  |                  |   |  |              |   |  |              |  
| | Expenses       |  |                  |   |  |              |   |  |              |  
| | Automobile     |  | 25,426           |   |  | 336          |   |  | 7,276        |  
| | Travel         |  | 21,661           |   |  | 478          |   |  | 6,706        |  
| | Total Expenses |  | 47,087           |   |  | 814          |   |  | 13,982       |  
| | Net Loss       |  | (47,087          | ) |  | (814         | ) |  | (13,982      | )

As at December 31, 2008 and 2007, the
results of operations, assets and liabilities of the language education business
have been reported as discontinued operations.

| |                                                 |  | December 31, |  |  | December 31, | 
| | ----------------------------------------------- |  | ------------ |  |  | ------------ | 
| |                                                 |  | 2008         |  |  | 2007         | 
| |                                                 |  | $            |  |  | $            | 
| |                                                 |  |              |  |  |              | 
| | GST receivable                                  |  | 757          |  |  | 857          | 
| | Current assets of
      discontinued operations |  | 757          |  |  | 857          | 

F-8

---

- 3 -

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

This report contains forward-looking statements which relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as may, should,
expects, plans, intends anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in
section 1A entitled Risk Factors on page 7, that may cause our or our
industrys actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

As used in this quarterly report, the terms we, us, our,
and Orca refer to Orca International Language Schools Inc., unless otherwise
indicated.

Overview

Corporate History

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

Current Business

Our goal originally was to provide management services to schools
  in the international education industry based on the principles of: improving
  their administrative, operational, marketing, sales and human resources functions;
  building links with other schools worldwide to foster student exchange; and
  repositioning the schools to concentrate their curriculum on preparing students
  for one of the three major English proficiency tests. We have been searching
  for a school as the initial client but we have not been successful in finding
  any such school. Since we have incurred losses since November 6, 1997, our board
  of directors has decided to explore the possibility of adopting a different
  business plan to protect our shareholders value.

---

- 4 -

Change of Control

On July 24, 2008, pursuant to the terms of a share transfer
agreement dated July 2, 2008 among Stuart Wooldridge, SGB C&C Investment
Ltd. and our company, SGB C&C Investment Ltd. acquired 2,635,000 shares of
our common stock from Mr. Wooldridge. The 2,635,000 shares of our common stock
acquired by SGB C&C Investment Ltd. represented 51.96% of our total issued
and outstanding share capital based on 5,071,210 of common shares issued and
outstanding as of July 24, 2008. Accordingly, we included in our current report
on Form 8-K (filed on August 6, 2008) information on the business of Orca
International Language Schools, Inc. that would be required if we were filing a
general form for registration of securities on Form 10.

On September 9, 2008, we appointed Mr. Xin Li to be a director
of our company. Also on September 9, 2008, Paul Clark, Qiang Benjamin Han and
Sherri Ann Macdonald resigned as directors of our company and Stuart Wooldridge
resigned as our president and secretary. Xin Li will act as our president, CEO,
secretary, and treasurer.

Results of Operations

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

We have been searching for a school as the initial client but we have not been
  successful in finding any such school. Since we have incurred losses totaling
  $203,103 since November 6, 1997 and have cash in the amount of $108,804 as at
  December 31, 2008, our board of directors has decided to explore the possibility
  of adopting a different business plan to protect our shareholders’ value.

Revenue

We have earned no revenue since our inception. We are still in
the development stage and do not anticipate earning any revenues until such time
as we can establish an alliance with targeted companies to market or distribute
the results of our research projects.

Expenses

We incurred operating expenses in the amount of $15,618 for the
quarter ended December 31, 2008, compared with expenses of $17,478 for the same
period from the previous year.

We incurred the following operating expenses for the three and
nine month periods ended December 31, 2008:

|                           |   | Three    |  |   | Three    |  |  |            |   |   | Nine     |  |   | Nine     |  |  | Percentage |  
|-------------------------- | - | -------- |  | - | -------- |  |  | ---------- | - | - | -------- |  | - | -------- |  |  | ---------- | -
|                           |   | Months   |  |   | Months   |  |  |            |   |   | Months   |  |   | Months   |  |  | Increase / |  
|                           |   | Ended    |  |   | Ended    |  |  | Percentage |   |   | Ended    |  |   | Ended    |  |  | (Decrease) |  
|                           |   | December |  |   | December |  |  | Increase / |   |   | December |  |   | December |  |  |            |  
|Expenses                   |   | 31, 2008 |  |   | 31, 2007 |  |  | (Decrease) |   |   | 31, 2008 |  |   | 31, 2007 |  |  |            |  
|Amortization               | $ | 148      |  | $ | 216      |  |  | (31.48%    | ) | $ | 502      |  | $ | 542      |  |  | (7.38%     | )
|Automobile                 |   | Nil      |  |   | Nil      |  |  | 0%         |   |   | 684      |  |   | Nil      |  |  | 100%       |  
|General and administrative |   | 1,322    |  |   | 2,804    |  |  | (52.87%    | ) |   | 4,240    |  |   | 4,475    |  |  | (5.27%     | )

---

- 5 -

|                  |       | Three    |  |   | Three    |  |  |            |   |   | Nine     |  |   | Nine     |  |  | Percentage |  
|----------------- | ----- | -------- |  | - | -------- |  |  | ---------- | - | - | -------- |  | - | -------- |  |  | ---------- | -
|                  |       | Months   |  |   | Months   |  |  |            |   |   | Months   |  |   | Months   |  |  | Increase / |  
|                  |       | Ended    |  |   | Ended    |  |  | Percentage |   |   | Ended    |  |   | Ended    |  |  | (Decrease) |  
|                  |       | December |  |   | December |  |  | Increase / |   |   | December |  |   | December |  |  |            |  
|Expenses          |       | 31, 2008 |  |   | 31, 2007 |  |  | (Decrease) |   |   | 31, 2008 |  |   | 31, 2007 |  |  |            |  
|Management fees   |       | Nil      |  |   | 1,518    |  |  | (100%      | ) |   | 2,757    |  |   | 4,317    |  |  | (36.14%    | )
|Professional fees |       | 12,151   |  |   | 12,181   |  |  | (0.25%     | ) |   | 47,998   |  |   | 43,314   |  |  | 10.81%     |  
|Rent              |       | 1,983    |  |   | 759      |  |  | 161.26%    |   |   | 3,446    |  |   | 2,158    |  |  | 59.68%     |  
|Travel            |       | Nil      |  |   | Nil      |  |  | N/A        |   |   | 478      |  |   | Nil      |  |  | 100%       |  
|                  | **$** | 15,618   |  | $ | 17,478   |  |  | (10.64%    | ) | $ | 61,117   |  | $ | 54,806   |  |  | (11.52%    | )

Estimated Expenses for the Next 12 Month Period

We anticipate our operating expenses will increase as we
undertake our plan of operations. The increase will be attributable to the
retention of consultant experts, traveling expenses, and development expenses as
we explore opportunities to adopt a business plan other than the current
business of providing management services to schools in the international
education industry. We anticipate our ongoing operating expenses will also
increase as a result of our ongoing reporting requirements under the Exchange
Act.

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

|Automobile                   | $ | 6,000  | 
|---------------------------- | - | ------ | 
|Office Expenses              |   | 6,000  | 
|Telephone and Communications |   | 2,000  | 
|Travel                       |   | 10,000 | 
|Accounting                   |   | 20,000 | 
|Legal                        |   | 20,000 | 
|Total                        | $ | 64,000 | 

Liquidity and Capital Resources

|                                  |   | December 31, 2008 |  |   | March 31, 2008 |  
|--------------------------------- | - | ----------------- |  | - | -------------- | -
|Current Assets                    | $ | 109,561           |  | $ | 4,449          |  
|Current Liabilities               | $ | 42,648            |  | $ | 59,981         |  
|Working Capital Surplus (Deficit) | $ | 66,913            |  | $ | (55,532        | )

In order to proceed with our plan of operations, as discussed
above, including approximately $64,000 over the next 12 months to pay for our
ongoing general and administrative expenses, we raised CDN$150,000 by way of a
private placement of equity securities in our company. On November 12, 2008, we
entered into a subscription agreement with SGB C&C Investment Ltd. for the
sale of 1,500,000 common shares at a price of CDN$0.10 per share for gross
proceeds of CDN$150,000. Although we have sufficient cash to pay for our ongoing
general and administrative expenses for the next 12 months, we will require
additional financing in order to continue operations, to repay our liabilities
and sustain our plan of operations. There is no assurance that any party will
advance additional funds to us in order to enable us to sustain our plan of
operations or to repay our liabilities.

We expect to seek additional funds through equity or debt
financing, collaborative or other arrangements with corporate partners, and from
other sources. We may not be able to obtain any additional financing on

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terms acceptable to us, if at all, or we may not raise as much
as we need. If adequate additional funds are not available when required, we
will have to delay, scale-back or eliminate some of our research or development
activities or some other aspects of our operations and our business will be
materially and adversely affected. If we raise additional funds through the sale
of our equity securities, existing shareholders will experience a dilution of
their interest in our company. Obtaining commercial loans or related party
loans, assuming those loans would be available, will increase our liabilities
and future cash commitments.

Off-Balance Sheet Arrangements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Our management evaluated the effectiveness of our disclosure
controls and procedures as of December 31, 2008 as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the
Exchange Act. Our management recognizes that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of
achieving their objectives and management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.
Based on the evaluation of our disclosure controls and procedures as of December
31, 2008, our Principal Executive Officer, who also is our Principal Financial
Officer, concluded that, as of such date, our disclosure controls and procedures
were effective to assure that information required to be declared by us in
reports that we file or submit under the Exchange Act is: (1) recorded,
processed, summarized, and reported within the periods specified in the SECs
rules and forms; and (2) accumulated and communicated to our management,
including our Chief Executive Officer/principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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There was no change in our internal control over financial
reporting during our fiscal quarter ended December 31, 2008 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

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

ITEM 1A. RISK FACTORS

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

Risks Associated with Our Company

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

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

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

We have not generated any revenues since our date of inception
  and we will continue to incur operating expenses without revenues until we acquire
  school(s) as clients, commence our business and finally, achieve a profitable
  level of operations. Our net loss since inception to December 31, 2008 was $211,698.
  We had cash in the amount of $108,804 as of December 31, 2008. We currently
  do not have any operations and we have no income. We estimate our average monthly
  operating expenses to be approximately $5,000 each month. We cannot provide
  assurances that we will be able to successfully develop our business. These
  circumstances raise substantial doubt about our ability to continue as a going
  concern as described in an explanatory paragraph to our independent auditors
  report on our audited financial statements, dated June 10, 2008. If we are unable
  to continue as a going concern, investors will likely lose all of their investments
  in our company.

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

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

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

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

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

Our directors and executive officers, in the aggregate,
beneficially own over 81.50% of the issued and outstanding shares of our common
stock with a principal shareholder beneficially owns 81.50% of the issued and
outstanding shares of our common stock. As a result, they have the ability to
influence matters affecting our shareholders, including the election of our
directors, the acquisition or disposition of our assets, and the future issuance
of our shares. Because our directors, executive officers and principal
shareholders control such shares, investors may find it difficult to replace our
management if they disagree with the way our business is being operated. Because
the influence by these insiders could result in management making decisions that
are in the best interest of those insiders and not in the best interest of the
investors, you may lose some or all of the value of your investment in our
common stock.

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

Our directors and executive officers are involved in other
business activities. Xin Li, our President, Secretary and Director spends
approximately 20 hours, or 50%, of his business time on the management of our
company and our other director, Stuart Wooldridge, spends approximately ten
hours, or 20%, of his business time on the management of our company. As a
result of their other business endeavors, they may not be able to devote
sufficient time to our business affairs, which may negatively affect our ability
to conduct our ongoing operations and our ability to generate revenues. In
addition, the management of our company may be periodically interrupted or
delayed as a result of their other business interests.

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

All of our assets are located outside the United States and we
do not currently maintain a permanent place of business within the United
States. In addition, all of our directors and executive officers are nationals

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and/or residents of countries other than the United States, and
all or a substantial portion of such persons assets are located outside the
United States. As a result, it may be difficult for investors to enforce within
the United States any judgments obtained against us or our officers or
directors, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof. Consequently, you
may be effectively prevented from pursuing remedies under U.S. federal
securities laws against them.

Risks Associated with Our Common Stock

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

There is currently no active trading market for our common
stock and such a market may not develop or be sustained. We engaged a market
maker to file a Form 15c-211 to qualify our shares for quotation on the
Financial Industry Regulatory Authoritys Over-the-Counter Bulletin Board. On
May 6, 2008, our common stock became eligible for quotation on the
Over-the-Counter Bulletin Board under the symbol OALSF. Further, the
Over-the-Counter Bulletin Board is not a listing service or exchange, but is
instead a dealer quotation service for subscribing members. If a public market
for our common stock does not develop, then investors may not be able to resell
the shares of our common stock that they have purchased and may lose all of
their investment. If we do establish a trading market for our common stock, the
market price of our common stock may be significantly affected by factors such
as actual or anticipated fluctuations in our operation results, general market
conditions and other factors. In addition, the stock market has from time to
time experienced significant price and volume fluctuations that have
particularly affected the market prices for the shares of developmental stage
companies, which may materially adversely affect the market price of our common
stock.

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

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

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

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to

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the customer orally or in writing prior to effecting the
transaction and must be given to the customer in writing before or with the
customers confirmation. In addition, the penny stock rules require that prior
to a transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.

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

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS

On November 12, 2008, we issued 1,500,000 common shares at a
price of CDN$0.10 per share for gross proceeds of CDN$150,000 to one non-U.S.
person (as that term is defined in Regulation S promulgated under the Securities
Act of 1933) in an offshore transaction. In issuing these common shares, we
relied on Regulation S and/or Section 4(2) of the Securities Act of 1933.

On November 12, 2008, Stuart Wooldridge, a director of our
company, voluntarily returned 1,500,000 common shares to our company for
cancellation.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.

On January 14, 2009, we held our annual and special general
meeting of stockholders as scheduled. At this meeting, our stockholders were
requested to approve the following items of business:

Appointment and Remuneration of Auditor

The stockholders approved a resolution appointing Manning
Elliott LLP, Chartered Accountants as our independent auditors for the fiscal
year ending September 30, 2009 and fixed their remuneration, with the following
votes:

|For       | Against | Abstain | Broker Non-Votes
|--------- | ------- | ------- | ----------------
|4,476,250 | 0       | 0       | 0               

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Fixing Number of Directors

The stockholders approved a resolution to set the number of
directors at three.

|For       | Against | Abstain | Broker Non-Votes
|--------- | ------- | ------- | ----------------
|4,476,250 | 0       | 0       | 0               

Election of Directors

The stockholders approved a resolution and elected Xin Li,
Stuart Wooldridge and Jun Huang to serve as directors of our company with the
following votes:

|                  |  | For       |  | Withheld
|----------------- |  | --------- |  | --------
|Xin Li            |  | 4,476,250 |  | 0       
|Stuart Wooldridge |  | 4,476,250 |  | 0       
|Jun Huang         |  | 4,476,250 |  | 0       

Change of Name

The stockholders approved a special resolution to change our
companys name change from Orca International Language Schools Inc. to SGB
International Holdings Inc. with the following votes:

|For       | Against | Abstain | Broker Non-Votes
|--------- | ------- | ------- | ----------------
|4,476,250 | 0       | 0       | 0               

Subdivision of Common Shares

The stockholders approved a special resolution to subdivide
each one issued and outstanding common share of our company into four and half
(4.5) common shares of our company with the following votes:

|For       | Against | Abstain | Broker Non-Votes
|--------- | ------- | ------- | ----------------
|4,476,250 | 0       | 0       | 0               

Creation of Preferred Shares

The stockholders approved a special resolution to change the
alteration of our companys capital to create a new class of preferred shares
with the following votes:

|For       | Against | Abstain | Broker Non-Votes
|--------- | ------- | ------- | ----------------
|4,476,250 | 0       | 0       | 0               

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS.

|Exhibit Number | Description                                                                                                                                                                                                 
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            | Articles of Incorporation (attached as an exhibit
      to our registration statement on Form SB-2 filed on August 7, 2007)                                                                                 
|10.1           | Share transfer agreement dated July 2, 2008 among
      Stuart Wooldridge, SGB C&C Investment Ltd. and our company (attached
      as an exhibit to our current report on Form 8-K filed on August 6, 2008).
|10.2           | Form of Private Placement Subscription Agreement
      between SGB C&C Investment Ltd. and our company (attached as an exhibit
      to our current report on Form 8-K filed on November 18, 2008)          
|31.1*          | Certification pursuant
      to Rule 13a-14(a) under the Securities Exchange Act of 1934                                                                                                                    
|32.1*          | Certification pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002                                                                          

* Filed herewith.

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SIGNATURES

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.

ORCA INTERNATIONAL LANGUAGE SCHOOLS INC.

By:

*/s/ Xin Li* Xin Li President, CEO and
Director(Principal Executive Officer, acting Principal Financial Officer and
Principal Accounting Officer)

Dated: February 20, 2009

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