----

----

**UNITED          STATES **

**SECURITIES          AND EXCHANGE COMMISSION**

----

**FORM          10-QSB**

----

| x | **Quarterly                      Report Pursuant to Section 13 or 15(d) of the Securities Exchange                      Act of                      1934.** |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**For          the quarterly period ended September 30, 2007**

| o | **Quarterly                      Report Pursuant to Section 13 or 15(d) of the Securities Exchange                      Act of                      1934.** |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**KRAIG        BIOCRAFT LABORATORIES, INC.**

| **Wyoming**                                                                                     | **83-0459707**                                                     |
|-------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
| (State                  or other jurisdiction ofincorporation                  or organization) | (IRS                  EmployeeIdentification                  No.) |

| **N120                  N. Washington Square, Suite 805****Lansing,                  Michigan 48933** |
|-------------------------------------------------------------------------------------------------------|
| (Address                  of principal executive offices)                                             |

| **(517)                  336-0807**                |
|----------------------------------------------------|
| (Issuer’s                  telephone number) |

----

**KRAIG        BIOCRAFT LABORATORIES, INC.**

**FORM        10-QSB**

**TABLE        OF CONTENTS**

| **PART                  I - FINANCIAL INFORMATION**                                                  | 1      |
|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                      |   |
| Item                  1. Financial Statements                                                             | 1      |
|                                                                                                      |   |
| Item                  2. Management’s Discussion and Analysis or Plan of                  Operation | 17     |
|                                                                                                      |   |
| Item                  3. Controls and Procedures                                                          | 21     |
|                                                                                                      |   |
| **PART                  II - OTHER INFORMATION**                                                          | 21     |
|                                                                                                      |   |
| Item                  1. Legal Proceedings                                                                | 21     |
|                                                                                                      |   |
| Item                  2. Unregistered Sales of Equity Securities and Use of                  Proceeds     | 21     |
|                                                                                                      |   |
| Item                  3. Defaults Upon Senior Securities                                                  | 21     |
|                                                                                                      |   |
| Item                  4. Submission of Matters to a Vote of Security Holders                              | 21     |
|                                                                                                      |   |
| Item                  5. Other Information                                                                | 21     |
|                                                                                                      |   |
| Item                  6. Exhibits                                                                         | 22     |
|                                                                                                      |   |
| **SIGNATURES**                                                                                            | 23     |

*Except        as otherwise required by the context, all references in this report to “we”,“us”, “our”, “CHID”,*
*”China Digital” or “Company” refer to the        consolidated operations of China Digital Communication Group, a Nevada        corporation, and its wholly owned subsidiaries.*

----

**PART        I - FINANCIAL INFORMATION**

**Item        1.  Financial        Statements.**

**Kraig      Biocraft Laboratories, Inc.**

**(A      DEVELOPMENT STAGE COMPANY)**

**CONTENTS**

| PAGE   | 1                                                | CONDENSED                      BALANCE SHEET AS OF SEPTEMBER 30, 2007 (UNAUDITED)                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| PAGE   | 2                                                | CONDENSED                      STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED                      SEPTEMBER 30                      2007AND THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND THE PERIOD                      APRIL 25,                      2006 (INCEPTION) TO SEPTEMBER 30, 2006 AND THE PERIOD FROM                      APRIL 25, 2006                      (INCEPTION) TO SEPTEMBER 30, 2007 (UNAUDITED) |
|   |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| PAGE   | 3                                                | CONDENSED                      STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE PERIOD FROM APRIL                      25, 2006 (INCEPTION) TO SEPTEMBER 30, 2007 (UNAUDITED)                                                                                                                                                                                                                                                  |
|   |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| PAGE   | 4                                                | CONDENSED                      STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER                      30, 2007 AND                      THE PERIOD FROM APRIL 25, 2006 TO SEPTEMBER 30, 2006 AND FOR                      THE PERIOD                      FROM APRIL 25, 2006  (INCEPTION) TO SEPTEMBER 30, 2007                      (UNAUDITED)                                                                    |
|   |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| PAGES  | 5                      -                      14 | NOTES                      TO FINANCIAL STATEMENTS (UNAUDITED)                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

| **Kraig                    Biocraft Laboratories, Inc.**                                                                 |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|
| **(A                    Development Stage Company)**                                                                     |   |
| **Condensed                    Balance Sheet**                                                                           |   |
| **September                    30, 2007**                                                                                |   |
| **(Unaudited)**                                                                                                          |   |
|                                                                                                                     |   |   |   |
|                                                                                                                     |   |
|                                                                                                                     |   |
|                                                                                                                     |   |   |   |
| **ASSETS**                                                                                                               |   |
|                                                                                                                     |   |   |   |
| **Current                    Assets**                                                                                    |   |   |   |
|   Cash                                                                                                         |   | $ | 201,335 |   |
|   Prepaid                    expenses                                                                          |   |   | 150 |   |
| **Total                    Current Assets**                                                                              |   |   | 201,485 |   |
|                                                                                                                     |   |   |   |   |
| **Total                    Assets**                                                                                      |   | **$** | **201,485** |   |
|                                                                                                                     |   |   |   |   |
| **LIABILITIES                    AND STOCKHOLDERS' DEFICIENCY**                                                          |   |
|                                                                                                                     |   |   |   |   |
| **Current                    Liabilities**                                                                               |   |   |   |   |
|   Accounts                    payable                    and Accrued expenses                                  |   | $ | 249,226 |   |
|   Payroll                    Tax                    Payable                                                    |   |   | 20,594 |   |
| **Total                    Current Liabilities**                                                                         |   | ** ** | **269,820** |   |
|                                                                                                                     |   |   |   |   |
| **Commitments                    and Contingencies**                                                                     |   |   | - |   |
|                                                                                                                     |   |   |   |   |
| **Stockholders'                    Deficiency**                                                                          |   |   |   |   |
|   Preferred                    stock, no                    par value; 10,000,000 shares authorized,           |   |   |   |   |
|   none                    issued and outstanding                                                          |   |   | - |   |
|   Common                    stock Class                    A, no par value; 60,000,000 shares authorized, |   |   |   |   |
|    49,934,850                    shares issued and outstanding                                            |   |   | 779,050 |   |
|   Common                    stock Class                    B, no par value; 25,000,000 shares authorized, |   |   |   |   |
|    no                    shares                    issued and outstanding                                 |   |   | - |   |
|   Additional                    paid-in                    capital                                             |   |   | 42,060 |   |
|   Deficit                    accumulated                    during the development stage                       |   |   | (889,445 | ) |
|                                                                                                                     |   |   |   |   |
| **Total                    Stockholders' Deficiency**                                                                    |   | ** ** | **(68,335** | **)** |
|                                                                                                                     |   |   |   |   |
| **Total                    Liabilities and Stockholders' Deficiency**                                                    |   | **$** | **201,485** |   |

*Page          1*

----

| **Kraig                  Biocraft Laboratories,                  Inc.**   |   |
|-------------------------------------------------------------------------------------|--------|
| **(A                  Development Stage****Company)**** **** **           |   |
| **Condensed                  Statements of Operations**                   |   |
| **(Unaudited)**                                                           |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |                  **For                  the Period** |   |   | **For                  the Period ** |   |
|                                                                                |   | **Three                  Months Ended September 30,** |   |   |  |  **Nine                  Months Ended** |   |  **from                  April 25,  2006 ****(Inception)                  to ** |   |   | **from                  April 25,****2006**  **(Inception)                  to**  |   |
|                                                                                |   | **2007** |   |   | **2006** |   |   |  | **September                  30,**** 2007** |   |  **September                30,****2006** |   |   | **September                  30, 2007**  |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |    |   |
| **Revenue**                                                                         |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                  Expenses**                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General                  and Administrative                                         |   |   | 9,529 |   |   |   | - |   |   |   | 27,138 |   |   |   | - |   |   |   | 34,981  |   |
| Professional                  Fees                                                  |   |   | 38,775 |   |   |   | - |   |   |   | 40,275 |   |   |   | - |   |   |   | 40,275   |   |
| Officer's                  Salary                                                   |   |   | 49,025 |   |   |   | - |   |   |   | 147,075 |   |   |   | - |   |   |   | 396,843  |   |
| Contract                  Settlement                                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 107,143  |   |
| Payroll                  Taxes                                                      |   |   | 946 |   |   |   | - |   |   |   | 8,421 |   |   |   | - |   |   |   | 8,421  |   |
| Research                  and Development                                           |   |   | 40,925 |   |   |   | 140,000 |   |   |   | 136,093 |   |   |   | 155,780 |   |   |   | 301,006  |   |
| **Total                  Operating Expenses**                                       |   |   | 139,200 |   |   |   | 140,000 |   |   |   | 359,002 |   |   |   | 155,780 |   |   |   | 888,669  |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Loss                  from Operations**                                           |   |   | (139,200 | ) |   |   | (140,000 | ) |   |   | (359,002 | ) |   |   | (155,780 | ) |   |   | (888,669 | ) |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Other                  Expense**                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Expense                                                   |   |   | - |   |   |   | - |   |   |   | (122 | ) |   |   | - |   |   |   | (776 | ) |
| **Total                  Other Income**                                             |   |   | - |   |   |   | - |   |   |   | (122 | ) |   |   | - |   |   |   | (776 | ) |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Provision                  for Income  Taxes**                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | -   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  Loss**                                                       |   | **$** | **(139,200** | **)** |   | **$** | **(140,000** | **)** |   | **$** | **(359,124** | **)** |   | **$** | **(155,780** | **)** |   | **$** | **(889,445** | **)** |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  Loss Per Share  - Basic and Diluted**              |   | **$** | **(0.00** | **)** |   | **$** | **(0.01** | **)** |   | **$** | **(0.01** | **)** |   | **$** | **(0.01** | **)** |   | ** ** |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Weighted                  average number of shares outstanding**                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **  during                  the period - basic and diluted**              |   | ** ** | **41,877,454** |   |   | ** ** | **34,233,924** |   |   | ** ** | **38,206,293** |   |   | ** ** | **34,023,420** |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Page          2*

----

| **Kraig                  Biocraft Laboratories, Inc.**                                                     |   |
|------------------------------------------------------------------------------------------------------------|--------|
| **(A                  Development Stage Company)**                                                         |   |
| **Statement                  of Changes in Stockholders Deficit**                                          |   |
| **For                  the period from April 25, 2006 (inception) to September 30,                  2007** |   |
| **(Unaudited)**                                                                                            |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | **Deficit** |   |   |   |   |
|                                                                                                       |   | **Preferred                  Stock** |   |   | **Common                  Stock - Class A** |   |   | **Common                  Stock - Class B** |   |   |   |   |   | **Accumulated                  during** |   |   |   |   |
|                                                                                                       |   | **Shares** |   |   | **Par** |   |   | **Shares** |   |   | **Par** |   |   | **Shares** |   |   | **Par** |   |   | **APIC** |   |   | **Development                  Stage** |   |   | **Total** |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                  April 25, 2006                                                                   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued to founder                                                                   |   |   | - |   |   |   | - |   |   |   | 33,229,200 |   |   |   | 180 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 180 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for services                                                                 |   |   | - |   |   |   | - |   |   |   | 1,750,000 |   |   |   | 140,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 140,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for services                                                                 |   |   |   |   |   |   |   |   |   |   | 70,000 |   |   |   | 5,600 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,600 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  contributed by shareholder                                                          |   |   | - |   |   |   | - |   |   |   | (1,166,650 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   | - |   |   |   | - |   |   |   | 400 |   |   |   | 200 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 200 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   | - |   |   |   | - |   |   |   | 400 |   |   |   | 200 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 200 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of warrants issued                                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 126,435 |   |   |   | - |   |   |   | 126,435 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Loss                                                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (530,321 | ) |   |   | (530,321 | ) |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                  December 31, 2006**                                                            |   | ** ** | **-** |   |   | ** ** | **-** |   |   | ** ** | **33,883,350** |   |   | ** ** | **146,180** |   |   | ** ** | **-** |   |   | ** ** | **-** |   |   | ** ** | **126,435** |   |   | ** ** | **(530,321** | **)** |   | ** ** | **(257,706** | **)** |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 175,000 |   |   |   | 15,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 15,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 1,200,000 |   |   |   | 103,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 103,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 900,000 |   |   |   | 3,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 187,500 |   |   |   | 15,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 15,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 187,500 |   |   |   | 15,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 15,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Stock                  issued for services                                                                 |   |   |   |   |   |   |   |   |   |   | 200,000 |   |   |   | 16,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 1,312,500 |   |   |   | 105,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 105,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 8,049,500 |   |   |   | 241,485 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 241,485 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 20,000 |   |   |   | 600 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 600 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for c ash                                                                    |   |   |   |   |   |   |   |   |   |   | 830,000 |   |   |   | 24,900 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 24,900 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 2,500 |   |   |   | 75 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 75 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 12,000 |   |   |   | 360 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 360 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for cash                                                                     |   |   |   |   |   |   |   |   |   |   | 102,500 |   |   |   | 3,075 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,075 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued in connection to cash offering                                               |   |   |   |   |   |   |   |   |   |   | 2,812,500 |   |   |   | 84,375 |   |   |   | - |   |   |   | - |   |   |   | (84,375 | ) |   |   | - |   |   |   | - |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                  issued for services                                                                 |   |   |   |   |   |   |   |   |   |   | 60,000 |   |   |   | 6,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,000 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss, nine months ended September 30, 2007                                            |   |   |   |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (359,124 | ) |   |   | (359,124 | ) |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                  September 30, 2007**                                                           |   | ** ** | **-** |   |   | **$** | **-** |   |   | ** ** | **49,934,850** |   |   | **$** | **779,050** |   |   | ** ** | **-** |   |   | **$** | **-** |   |   | **$** | **42,060** |   |   | **$** | **(889,445** | **)** |   | **$** | **(68,335** | **)** |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

*Page          3*

----

| **Kraig                  Biocraft Laboratories, Inc.**                                                 |   |
|--------------------------------------------------------------------------------------------------------|--------|
| **(A                  Development Stage Company)**                                                     |   |
| **Condensed                  Statements of Cash Flows**                                                |   |
| **(Unaudited)**                                                                                        |   |
|                                                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |  **For                the Period From April 25,** |   |   | **For                  the Period from April 25,** |   |
|                                                                                                   |   | **For                  the Nine Months Ended** |   |  **2006****(Inception)                  to** |   |   | **2006****(Inception)                  to** |   |
|                                                                                                   |   | **September                  30,****2007** |   |   | **September                  30,****2006** |   |   | **September                  30, 2007** |   |
| **Cash                  Flows From Operating Activities:**                                             |   |   |   |   |   |   |   |   |   |
| Net                  Loss                                                                              |   | $ | (359,124 | ) |   | $ | (155,780 | ) |   | $ | (889,445 | ) |
|   Adjustments                  to reconcile net loss to net cash used in operations          |   |   |   |   |   |   |   |   |   |   |   |   |
|       Stock                  issued for services                         |   |   | 22,000 |   |   |   | 145,780 |   |   |   | 294,215 |   |
|   Changes                  in operating assets and liabilities:                              |   |   |   |   |   |   |   |   |   |   |   |   |
|       Increase                  in prepaid expenses                      |   |   | (150 | ) |   |   | - |   |   |   | (150 | ) |
|       Increase                  in payroll taxes payable                 |   |   | 20,594 |   |   |   | - |   |   |   | 20,594 |   |
|       Increase                  in accounts payable and accrued expenses |   |   | 1,130 |   |   |   | - |   |   |   | 249,226 |   |
| **Net                  Cash Provided by (Used In) Operating Activities**                               |   | ** ** | **(315,550** | **)** |   | ** ** | **(10,000** | **)** |   | ** ** | **(325,560** | **)** |
|                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Cash                  Flows From Financing Activities:**                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from Notes Payable - Stockholder                                             |   |   | - |   |   |   | 10,000 |   |   |   | 10,000 |   |
| Repayments                  of Notes Payable - Stockholder                                             |   |   | (10,000 | ) |   |   | - |   |   |   | (10,000 | ) |
| Proceeds                  from issuance of common stock                                                |   |   | 526,495 |   |   |   | 400 |   |   |   | 526,895 |   |
| **Net                  Cash Provided by Financing Activities**                                         |   | ** ** | **516,495** |   |   | ** ** | **10,400** |   |   | ** ** | **526,895** |   |
|                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  Increase (Decrease) in Cash**                                                   |   |   | 200,945 |   |   |   | 400 |   |   |   | 201,335 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  at Beginning of Period/Year                                                      |   |   | 390 |   |   |   | - |   |   |   | - |   |
|                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Cash                  at End of Period/Year**                                                        |   | **$** | **201,335** |   |   | **$** | **400** |   |   | **$** | **201,335** |   |
|                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Supplemental                  disclosure of cash flow information:**                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  paid for interest                                                                |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Cash                  paid for taxes                                                                   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |

**SUPPLEMENTAL      DISCLOSURE OF NON CASH ITEMS**

*Page          4*

----

**KRAIG        BIOCRAFT LABORATORIES, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2007**

**(UNAUDITED)**

**NOTE        1      SUMMARY OF SIGNIFICANT ACCOUNTING        POLICIES AND ORGANIZATION**

***(A)        Basis of Presentation***

** **

***(B)        Organization***

|   |   | Kraig                  Biocraft Laboratories, Inc. (a development stage company) (the                  "Company")                  was incorporated under the laws of the State of Wyoming on April                  25, 2006.                  The Company was organized to develop high strength, protein based                  fiber,                  using recombinant DNA technology, for commercial applications in                  the                  textile and specialty fiber                  industries. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Activities                  during the development stage include developing the business plan,                  negotiating intellectual property agreements and raising                  capital. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***(C)        Use of Estimates***

***(D)        Cash***

***(E)        Loss Per Share***

*Page            5*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

***(F)        Research and Development Costs***

***(G)        Income Taxes***

***(H)        Stock-Based Compensation***

|   | The                  Company has adopted the provisions of SFAS No. 123R and related                  interpretations as provided by SAB 107.  As such, compensation                  cost is measured on the date of grant at their fair value.  Such                  compensation amounts, if any, are amortized over the respective                  vesting                  periods of the option grant. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **
** **

*Page            6*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

***(I)        Business Segments***

**(J)        Recent Accounting Pronouncements**

*Accounting for Nonrefundable Advance Payments for Goods or Services        to Be        Used in Future Research and Development Activities*

*Accounting for Collaborative        Arrangements, *

*Fair Value Measurements*

*The Fair Value Option for        Financial Assets and Financial Liabilities, Including an amendment of SFAS        115*

*Page            7*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

**(K)        Concentration of Credit Risk**

**.**

**NOTE        2                  GOING        CONCERN**

**NOTE        3                STOCKHOLDERS’ DEFCIT**

**                                       *(A)**Common        Stock Issued for Cash***

*Page            8*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

***(B)        Common Stock Issued for Intellectual Property***

***(C)        Common Stock Issued for Services***

*Page            9*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

***(D)        Cancellation and Retirement of Common Stock***

**(E)        Common Stock Warrants**

**NOTE        4                  COMMITMENTS        AND CONTINGENCIES**

**(A)        Employment Agreement**

*Page            10*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

| 1.   | Upon                  the Company’s successful laboratory development of a new silk fiber                  composed of one or more proteins that are exogenous to a host,                  the Company                  will issue 500,000 eight year warrants at an exercise price of                  $.20 per                  share and raise executive’s base salary by                  14%. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   |  Upon                  the Company’s successful laboratory development of a new silk fiber                  composed of two or more proteins that are exogenous to a host,                  the Company                  will issue 600,000 eight year warrants at an exercise price of                  $.18 per                  share and raise executive’s base salary by                  15%. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Upon                  the Company’s successful laboratory development of a new silk fiber                  composed of at least in part of one or more synthetic proteins,                  the                  Company will issue 900,000 eight year warrants at an exercise price                  of                  $.18 per share and raise executive’s base salary by                  18%. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | Upon                  the Company’s successful laboratory development of a new silk fiber                  composed of at least in part of one or more proteins that are genetic                  modifications or induced mutations of a host silk proteins, the                  Company                  will raise the executive’s base salary by                  8%. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | Upon                  the Company becoming either a registered company or upon its stock                  trading                  and the company achieving a market capitalization in excess of                  $35 million                  for over 120 calendar day period, the executive’s base salary will                  increase to $225,000. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.   | Upon                  the Company becoming either a registered company or upon its stock                  trading                  and the company achieving a market capitalization in excess of                  $65 million                  for over 91 calendar day period, the executive’s base salary will increase                  to $260,000. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.   | Upon                  the Company becoming either a registered company or upon its stock                  trading                  and the company achieving a market capitalization in excess of                  $100                  million for over 91 calendar day period, the executive’s base salary will                  increase to $290,000. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            11*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

| 8.   | Upon                  the Company becoming either a registered company or upon its stock                  trading                  and the company achieving a market capitalization in excess of                  $200                  million for over 120 calendar day period, the executive’s base salary will                  increase to $365,000. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.   | Upon                  the Company becoming either a registered company or upon its stock                  trading                  and the company achieving a market capitalization in excess of                  $350                  million for over 150 calendar day period, the executive’s base salary will                  increase to $420,000. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Page            12*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

***(B)        License Agreement***

|   | On                  May 8, 2006, the Company entered into a license                  agreement.  Pursuant to the terms of the agreement, the Company                  paid a non-refundable license fee of $10,000. The Company will                  pay a                  license maintenance fee of $10,000 on the one year anniversary                  of this                  agreement and each year thereafter.  The Company will pay an                  annual research fee of $13,700 with first payment due January 2007,                  then                  on each subsequent anniversary of the effective date commencing                  May 4,                  2007.  Pursuant to the terms of the agreement the Company may be                  required to pay additional fees aggregating up to a maximum of                  $10,000 a                  year for patent maintenance and prosecution relating to the licensed                  intellectual property.    (See Note 3(C)) for equity                  component of payment) |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***(C)        Royalty Agreement***

*Page            13*

----

**KRAIG          BIOCRAFT LABORATORIES, INC.**

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(UNAUDITED)**

**NOTE        5                  RELATED        PARTY TRANSACTIONS**

*Page          14*

----

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

*The        following discussion should be read in conjunction with the Financial Statements        and Notes thereto appearing elsewhere in this Form 10-QSB.*

**Safe        Harbor Regarding Forward-Looking Statements**

*The        following discussion contains forward-looking statements within the meaning        of        Section 27A of the Securities Act of 1933 and Section 21E of the Securities        Exchange Act of 1934 relating to future events or our future performance.        Actual        results may materially differ from those projected in the forward-looking        statements as a result of certain risks and uncertainties set forth in this        prospectus. Although management believes that the assumptions made and        expectations reflected in the forward-looking statements are reasonable,        there        is no assurance that the underlying assumptions will, in fact, prove to be        correct or that actual results will not be different from expectations expressed        in this report.*

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| » | We                  expect to spend approximately $150,000 on collaborative research                  and                  development of high strength polymers at the University of Notre                  Dame over                  the next twelve months.  We believe that this research is                  essential to our product development.  If our financing will                  allow, management will give strong consideration to accelerating                  the pace                  of spending on research and development within the University of                  Notre                  Dame’s laboratories.                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| » | We                  expect to spend approximately $13,800 on collaborative research                  and                  development of high strength polymers and spider silk protein at                  the                  University of Wyoming over the next twelve months.  We believe                  that this research is important to our product                  development.  This level of research spending at the university                  is also a requirement of our licensing agreement with the                  university.  If our financing will allow, management will give                  strong consideration to accelerating the pace of spending on research                  and                  development within the University of Wyoming’s                  laboratories. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| » | We                  will actively consider pursuing collaborative research opportunities                  with                  other university laboratories in the area of high strength                  polymers.  If our financing will allow, management will give                  strong consideration to increasing the depth of our research to                  include                  polymer production technologies that are closely related to our                  core                  research                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| » | We                  will consider buying an established revenue producing company which                  is                  operating in the biotechnology arena, in order to broaden our financial                  base and increase our research and development capability. We expect                  to                  use a combination of stock and cash for any such                  purchase.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| » | We                  will also actively consider pursuing collaborative research opportunities                  with university laboratories in areas of research which overlap                  the                  company’s existing research and development.  One such potential                  area for collaborative research which the company is considering                  is                  protein expression platforms.  If our financing will allow,                  management will give strong consideration to increasing the breadth                  of our                  research to include protein expression platform                  technologies.                                                                                                                                            |

----

**Limited        Operating History**

**Results        of Operations for the Three Months Ended September 30,        2007.**

**Capital        Resources and Liquidity**

----

**Recent        Accounting Pronouncements**

*Fair Value        Measurements*

*The Fair Value Option for Financial Assets and Financial Liabilities        -        Including an Amendment of FASB Statement No. 115*

*Accounting for Certain Investments in Debt        and Equity Securities*
*Fair Value Measurements”.*

----

**Critical        Accounting Policies**

**Off        Balance Sheet Arrangements**

**Item        3.  Controls and Procedures**

**Evaluation        of Disclosure Controls and Procedures**

**Changes        in Internal Controls**

----

**PART        II - OTHER INFORMATION**

**Item        1.  **
**Legal        Proceedings.**

**Item        2.  **
**Unregistered        Sales of Equity Securities and Use of Proceeds.**

**Item        3.  **
**Defaults        Upon        Senior Securities.**

| Sean                    March                        | 4,000,000 |
|------------------------------------------------------|-----------|
| Nicholas                    G. Kontos                | 2,250,000 |
| Edward                    M. Defeudis                | 830,000   |
| Woodland                    Hills Fund, SA           | 600,000   |
| Coral                    Springs Fund, SA            | 300,000   |
| Kristin                    Lee Sirota                | 10,000    |
| Ann                    Harvey                        | 10,000    |
| Barry                    S. Wattenberg               | 10,000    |
| Lucie                    Rousse                      | 10,000    |
| Karen                    E. Gallagher                | 6,000     |
| Kyan                    W. Kraus                     | 6,000     |
| Carlos                    E. Gauch                   | 5,000     |
| Sarah                    Ferreira                    | 5,000     |
| Caroline                    Sirota                   | 5,000     |
| Priscila                    Ferreira                 | 2,500     |
| Gene                    Defeudis                     | 830,000   |
| Heidi                    Thompson                    | 5,000     |
| Frank                    Thompson                    | 5,000     |
| Jonathan                    Sweet                    | 10,000    |
| Gary                    Lam                          | 2,500     |
| Frank                    Dantimo                     | 6,000     |
| Denise                    M Demarco Dantimo          | 6,000     |
| Sirota                    & Associates PA        | 54,000    |
| JR                    Acquisitions & Consultants | 28,000    |
| Marcos                    A. Lopez, Jr.              | 2,500     |
| Olga                    C. Lopez                     | 2,500     |
| Camila                    Camargo                    | 2,500     |
| Bizmar                    Martinez                   | 2,500     |
| Michelle                    Y. Galletto              | 2,500     |
| Inversiones                    G & G Corp.       | 2,500     |
| Douglas                    Nicaragua                 | 2,500     |
| Michael                    L. Price                  | 3,000     |

----

| (A)       | No                    general solicitation or advertising was conducted by us in connection                    with                    the offering of any of the Shares.                                                                                                                                                    |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |                                                                                                                                                                                                                                                                                                                         |
| (B)  | At                    the time of the offering we were not: (1) subject to the reporting                    requirements of Section 13 or 15 (d) of the Exchange Act; or                    (2) an                    “investment company” within the meaning of the federal securities                    laws. |

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

**Item        5.  **
**Other        Information.**

**Item        6.  **
**Exhibits.**

| **Exhibit                  No.** |   | **                       Document Description**                                  |
|----------------------------------|--------|-----------------------------------------------------------------------------------------------------------|
|                             |   |                                                                                                      |
| 31.1                             |   | Certification                  pursuant to Section 302 of the Sarbanes-Oxley Act of                  2002 |
|                             |   |                                                                                                      |
| 31.2                             |   | Certification                  pursuant to Section 302 of the Sarbanes-Oxley Act of                  2002 |
|                             |   |                                                                                                      |
| 32.1                             |   | Certification                  pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002 |
|                             |   |                                                                                                      |
| 32.2                             |   | Certification                  pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002 |

**SIGNATURES**

|                                                      |                                                                  |                                                 |
|-----------------------------------------------------------|-----------------------------------------------------------------------|------------------------------------------------------|
|                                                      | **KRIAG                  BIOCRAFT LABORATORIES, INC.**                |
|                                                 |                                                             |                                            |
| Date: November                  14, 2007   | By:                                                         | */s/                  Kim                  Thompson* |
|                                                      | Kim                  ThompsonChief                  Executive Officer |