U.S.            SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM            10-QSB

 

Quarterly Report under Section 12(b) or 12(g) of

The            Securities Act of 1934

 

For            the Period ended September 30, 2007

 

Commission File Number 333-146407

 

ORO            VOLCANICO CORP.

(Name            of small business issuer in its charter)

 

Delaware                                                                                                                           98-0494816

(State of            incorporation)                                                                                                  (Employer ID Number)

 

1            Place Ville Marie, Suite 2821

Montreal, Quebec, H3B 4R4

(514)            286-1999

(Address and telephone number of principal executive offices)

 

Check            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. YesxNo            o

 

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

| Yes o | Nox |
|-------|-----|

 

There            were 5,116,320 shares of Common Stock outstanding as of November 13, 2007.

 

 

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**ITEM            1. FINANCIAL INFORMATION**.

 

**(AN EXPLORATION STAGE COMPANY)**

CONDENSED FINANCIAL STATEMENTS

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND            2006

UNAUDITED

**CONTENTS**

 

|                                                                                 |   |     |
|--------------------------------------------------------------------------------------|--------|----------|
|                                                                                 |   |     |
| Condensed Balance Sheet                                                              |   | **3**    |
|                                                                                 |   |     |
| Condensed Statements of Operations and Comprehensive                            Loss |   | **4-5**  |
|                                                                                 |   |     |
| Condensed Statements of Stockholders' Equity                                         |   | **6**    |
|                                                                                 |   |     |
| Condensed Statements of Cash Flows                                                   |   | **7**    |
|                                                                                 |   |     |
| Notes to Condensed Financial Statements                                              |   | **8-12** |

 

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Condensed Balance Sheet

As of            September 30, 2007

Unaudited

 

| **ASSETS**                                                                          |
|-------------------------------------------------------------------------------------|
| **Current Assets**                                                                  |   |   |   |
| Cash                                                                                |   | **$** | **7,955** |
| Prepaid expense                                                                     |   |   | **3,280** |
|                                                                                |   |   |   |
| **Total Current Assets**                                                            |   |   | **11,235** |
| **Mineral Rights**(note                            4)                               |   |   | **20,714** |
|                                                                                |   |   |   |
| **Total Assets**                                                                    |   | **$** | **31,949** |
|                                                                                |   |   |   |
| **LIABILITIES**                                                                     |
| **Current Liabilities**                                                             |   |   |   |
| Accrued liabilities                                                                 |   | **$** | **5,455** |
| Loans from related parties (note 5)                                                 |   |   | **16,267** |
|                                                                                |   |   |   |
| **Total Current Liabilities**                                                       |   |   | **21,722** |
|                                                                                |   |   |   |
| **Total Liabilities**                                                               |   |   | **21,722** |
|                                                                                |   |   |   |
| **STOCKHOLDERS' EQUITY**                                                            |
| **Capital Stock**(note                            6)                                |   |   |   |
| Authorized                                                                          |   |   |   |
| 10,000,000 preferred shares, par value $0.0001 per                            share |   |   |   |
| 50,000,000 common shares, par value $0.0001 per                            share    |   |   |   |
| Issued and outstanding                                                              |   |   |   |
| 5,006,320 common shares                                                             |   |   | **512** |
| **Additional Paid-in Capital**                                                      |   |   | **59,214** |
| **Accumulated Other Comprehensive Loss**                                            |   |   | **(1,675)** |
| **Deficit Accumulated During the Exploration                            Stage**     |   |   | **(47,824)** |
|                                                                                |   |   |   |
| **Stockholders' Equity**                                                            |   |   | **10,227** |
|                                                                                |   |   |   |
| Total Liabilities and Stockholders' Equity                                          |   | **$** | **31,949** |

 

 

 

 

 

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

 

-3-

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Condensed Statements of Operations and Comprehensive Loss

For            the Three-Months Ended September 30, 2007 and 2006

Unaudited

           

|                                   |   | **Three-Months Ended** |          | Three-Months Ended |
|----------------------------------------|--------|------------------------|---------------|--------------------|
|                                   |   | **September 30, 2007** |          | September 30, 2006 |
|                                   |   |                   |          |               |   |   |
| **Revenue**                            |   | **$**                  | **-**         |               | $ | - |
|                                   |   |                   |          |               |   |   |
| **Expenses**                           |   |                   |          |               |   |   |
| Professional fees                      |   |                   | **11,434**    |               |   | - |
| Office and general                     |   |                   | **500**       |               |   | - |
| Bank fees                              |   |                   | **111**       |               |   | - |
| Taxes and dues                         |   |                   | **-**         |               |   | - |
| Foreign exchange (gain)                |   |                   | **(161)**     |               |   | - |
|                                   |   |                   |          |               |   |   |
| **Total Expenses**                     |   |                   | **11,884**    |               |   | - |
|                                   |   |                   |          |               |   |   |
| **Net Loss**                           |   |                   | **(11,884)**  |               |   | - |
| **Comprehensive Loss**                 |   |                   |          |               |   |   |
| Foreign currency translation           |   |                   | **(1,675)**   |               |   | - |
|                                   |   |                   |          |               |   |   |
| **Comprehensive Loss**                 |   | **$**                  | **(13,559)**  |               | $ | - |
|                                   |   |                   |          |               |   |   |
| **Basic and Diluted (Loss) per Share** |   | **$**                  | (0.00)        |               | **$** | (0.00) |
|                                   |   |                   |          |               |   |   |
| **Basic and Diluted Weighted Average** |   |                   |          |               |   |   |
| **Number of Shares Outstanding**       |   |                   |          |               |   |   |
| **During the Periods (note 6)**        |   |                   | **5,116,320** |               |   | 4,000,000 |

 

 

 

 

 

 

 

 

 

 

 

 

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

 

-4-

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Condensed Statements of Operations and Comprehensive Loss            (cont'd)

For            the Nine-Months Ended September 30, 2007, and Period from

Date            of Inception (May 9, 2006) Through to September 30, 2007 and 2006

Unaudited

                

|                                    |   |               |          |               |   |                 |   | Period from       |
|-----------------------------------------|--------|--------------------|---------------|--------------------|--------|----------------------|--------|-------------------|
|                                    |   |               |          |               |   |                 |   | Date of Inception |
|                                    |   |               |          |               |   |                 |   | (May 9, 2006)     |
|                                    |   | Nine-Months Ended  |          | Period Ended       |   | Through to           |
|                                    |   | September 30, 2007 |          | September 30, 2006 |   | (September 30, 2007) |
|                                    |   |               |          |               |   |                 |   |              |   |
| **Revenue**                             |   | **$**              | **-**         |               | $      | -                    |   | $                 | - |
|                                    |   |               |          |               |   |                 |   |              |   |
| **Expenses**                            |   |               |          |               |   |                 |   |              |   |
| Professional fees                       |   |               | **25,597**    |               |   | **-**                |   |              | 46,477 |
| Office and general                      |   |               | **500**       |               |   | **-**                |   |              | 500 |
| Bank fees                               |   |               | **414**       |               |   | **-**                |   |              | 504 |
| Taxes and dues                          |   |               | **291**       |               |   | **-**                |   |              | 291 |
| Foreign exchange loss                   |   |               | **52**        |               |   | **-**                |   |              | 52 |
|                                    |   |               |          |               |   |                 |   |              |   |
| **Total Expenses**                      |   |               | **26,854**    |               |   | -                    |   |              | 47,824 |
|                                    |   |               |          |               |   |                 |   |              |   |
| **Net Loss**                            |   |               | **(26,854)**  |               |   | -                    |   |              | (47,824) |
| **Comprehensive Loss**                  |   |               |          |               |   |                 |   |              |   |
| Foreign currency translation adjustment |   |               | **(1,675)**   |               |   | -                    |   |              | (1,675) |
|                                    |   |               |          |               |   |                 |   |              |   |
| **Total Comprehensive Loss**            |   | **$**              | **(28,529)**  |               | **$**  | **-**                |   | $                 | (49,499) |
|                                    |   |               |          |               |   |                 |   |              |   |
| **Basic and Diluted Loss per Share**    |   | **$**              | (0.00)        |               | **$**  | (0.00)               |   |              |   |
|                                    |   |               |          |               |   |                 |   |              |   |
| **Basic and Diluted Weighted Average**  |   |               |          |               |   |                 |   |              |   |
| **Number of Shares Outstanding**        |   |               |          |               |   |                 |   |              |   |
| **During the Periods (note 6)**         |   |               | **5,116,320** |               |   | 4,000,000            |   |              |   |

 

 

 

 

 

 

 

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

 

-5-

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Condensed Statements of Stockholders' Equity

Period from Date of Inception (May 9, 2006) Through to September 30,            2007

Unaudited

 

|                            |   |          |          |        |   |        |           |              |       |            |            |              |            | **Deficit** |         |   |   |
|---------------------------------|--------|---------------|---------------|-------------|--------|-------------|----------------|-------------------|------------|-----------------|-----------------|-------------------|-----------------|-------------|--------------|--------|--------|
|                            |   |          |          |        |   |        |           |              |       |            | **Accumulated** |              | **Accumulated** |        |         |   |
|                            |   | **Number of** |          |        |   |        | **Additional** |              | **Other**  |            | **During the**  |              |            |        |
|                            |   | **Common**    |          | **Capital** |   | **Paid-in** |           | **Comprehensive** |       | **Exploration** |            | **Stockholders'** |
|                            |   | **Shares**    |          | **Stock**   |   | **Capital** |           | **Loss**          |       | **Stage**       |            | **Equity**        |
| Balance, May 9, 2006            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| (date of inception)             |   |          | -             |        | $      | -           |           | $                 | -          |            | $               | -                 |            | $           | -            |   | $      | - |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| Common shares issued for cash   |   |          | 4,000,000     |        |   | 400         |           |              | 3,600      |            |            | -                 |            |        | -            |   |   | 4,000 |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| Balance, September 30, 2006     |   |          | 4,000,000     |        |   | 400         |           |              | 3,600      |            |            | -                 |            |        | -            |   |   | 4,000 |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| Common shares issued for        |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| mineral rights (note 4)         |   |          | 100,000       |        |   | 10          |           |              | -          |            |            | -                 |            |        | -            |   |   | 10 |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| Common shares issued for cash   |   |          | 1,016,320     |        |   | 102         |           |              | 55,614     |            |            | -                 |            |        | -            |   |   | 55,716 |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| Net (loss) for period           |   |          | -             |        |   | -           |           |              | -          |            |            | -                 |            |        | (20,970)     |   |   | (20,970) |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| Balance - December 31, 2006     |   |          | 5,116,320     |        |   | 512         |           |              | 59,214     |            |            | -                 |            |        | (20,970)     |   |   | 38,756 |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| Net (loss) for period           |   |          | -             |        |   | -           |           |              | -          |            |            | -                 |            |        | (26,854)     |   |   | (26,854) |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| Foreign currency translation    |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| adjustment                      |   |          | -             |        |   | -           |           |              | -          |            |            | (1,675)           |            |        | -            |   |   | (1,675) |
|                            |   |          |          |        |   |        |           |              |       |            |            |              |            |        |         |   |   |   |
| **Balance, September 30, 2007** |   |          | **5,116,320** |        | **$**  | **512**     |           | **$**             | **59,214** |            | **$**           | **(1,675)**       |            | **$**       | **(47,824)** |   | **$**  | **10,227** |

 

 

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

 

-6-

----

**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Condensed Statements of Cash Flows

For            the Nine-Months Ended September 30, 2007, and Periods from

Date            of Inception (May 9, 2006) through to September 30, 2007 and 2006

Unaudited

                

|                                                                          |   |               |         |               |   |               |   | Period from       |
|-------------------------------------------------------------------------------|--------|--------------------|--------------|--------------------|--------|--------------------|--------|-------------------|
|                                                                          |   |               |         |               |   |               |   | Date of Inception |
|                                                                          |   |               |         |               |   |               |   | (May 9, 2006)     |
|                                                                          |   | Nine-Months Ended  |         | Period Ended       |   | Through to         |
|                                                                          |   | September 30, 2007 |         | September 30, 2006 |   | September 30, 2007 |
| **Cash Flows from Operating Activities**                                      |   |               |         |               |   |               |   |              |   |
| Net (loss)                                                                    |   | **$**              | **(26,854)** |               | **$**  | **-**              |   | $                 | (47,824) |
| Adjustments required to reconcile                                             |   |               |         |               |   |               |   |              |   |
| net loss to net cash used in operating                            activities: |   |               |         |               |   |               |   |              |   |
| Prepaid expense                                                               |   |               | **(3,280)**  |               |   | **-**              |   |              | (3,280) |
| Accrued liabilities                                                           |   |               | **(12,607)** |               |   | **-**              |   |              | 5,455 |
|                                                                          |   |               |         |               |   |               |   |              |   |
| **Net Cash Used in Operating Activities**                                     |   |               | **(42,741)** |               |   | **-**              |   |              | (45,649) |
|                                                                          |   |               |         |               |   |               |   |              |   |
| **Cash Flows from Investing Activities**                                      |   |               |         |               |   |               |   |              |   |
| Acquisition of mineral rights                                                 |   |               | **(310)**    |               |   | **-**              |   |              | (20,714) |
|                                                                          |   |               |         |               |   |               |   |              |   |
| **Net Cash Used in Investing Activities**                                     |   |               | **(310)**    |               |   | **-**              |   |              | (20,714) |
|                                                                          |   |               |         |               |   |               |   |              |   |
| **Cash Flows from Financing Activities**                                      |   |               |         |               |   |               |   |              |   |
| Stock issuance for cash                                                       |   |               | **-**        |               |   | 4,000              |   |              | 59,726 |
| Loans from related parties                                                    |   |               | **2,999**    |               |   | **-**              |   |              | 14,592 |
|                                                                          |   |               |         |               |   |               |   |              |   |
| **Net Cash Provided by Financing                            Activities**      |   |               | **2,999**    |               |   | 4,000              |   |              | 74,318 |
|                                                                          |   |               |         |               |   |               |   |              |   |
| **Net (Decrease) Increase in Cash**                                           |   |               | **(40,052)** |               |   | 4,000              |   |              | 7,955 |
| **Cash - Beginning of Period**                                                |   |               | **48,007**   |               |   | -                  |   |              | - |
|                                                                          |   |               |         |               |   |               |   |              |   |
| **Cash - End of Period**                                                      |   | **$**              | **7,955**    |               | $      | 4,000              |   | $                 | 7,955 |
|                                                                          |   |               |         |               |   |               |   |              |   |
| **Supplementary Information**                                                 |   |               |         |               |   |               |   |              |   |
| Interest                                                                      |   | **$**              | **-**        |               | $      | -                  |   | $                 | - |
|                                                                          |   |               |         |               |   |               |   |              |   |
| Income taxes                                                                  |   | **$**              | **-**        |               | $      | -                  |   | $                 | - |

 

 

 

 

 

 

 

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

 

-7-

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Notes            to Condensed Financial Statements

September 30, 2007 and 2006

| **1.** | **Operations and Business** |
|--------|-----------------------------|

Oro Volcanico Corp., ("the Company"), incorporated in the State of            Delaware on May 9, 2006, is an exploration stage company operating in Canada. The            Company's principal business is the acquisition and exploration of mining properties.            The Company has not presently determined whether its mineral rights contain mineral            reserves that are economically recoverable. The exploration and development of mineral            deposits involves significant financial risks. The success of the Company will be            influenced by a number of factors, including exploration and extraction risks,            regulatory issues, environmental regulations and other matters.

| **2.** | **Exploration Activities and Going                            Concern** |
|--------|-------------------------------------------------------------------------|

The accompanying unaudited condensed financial statements have been            prepared in accordance with accounting principles generally accepted in the United            States of America with the assumption that the Company will be able to realize its            assets and liabilities in the normal course of business. The Company has not generated            revenues since inception and has not 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 dependant upon the continued financial support            from the shareholders, the ability of the Company to obtain necessary equity financing            to continue operations, and the attainment of profitable operations from its mineral            rights. Management is planning to obtain equity financing to continue operations.            Although the Company plans to pursue additional financing, there can be no assurance            that the Company will be able to secure financing when needed or obtain such on terms            satisfactory to the Company, if at all. As of September 30, 2007, the Company had an            accumulated deficit during the exploration stage of $47,824 and a comprehensive loss of            $28,529 for nine months ended September 30, 2007. These and other factors raise            substantial doubt regarding the Company's ability to continue as a going            concern.

The exploration program will be oriented towards probing the conductive            zones by ground geophysics followed by diamond drilling. The total budget for the            exploration program is approximately $26,858. The result of the program will then be            evaluated to plan the investigation by drilling.

These unaudited condensed financial statements do not include any            adjustments to reflect the possible future effects of 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.

 

-8-

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Notes            to Condensed Financial Statements

September 30, 2007 and 2006

Unaudited

| **3.** | **Summary of Significant Accounting                            Policies** |
|--------|---------------------------------------------------------------------------|

|   | a) | Basis of Financial Statement Presentation |
|--------|----|-------------------------------------------|

The accompanying unaudited condensed financial statements have been            prepared in accordance with accounting principles generally accepted in the United            States of America for interim financial information and with the instructions to Form            10 QSB. Accordingly, they do not include all of the information and footnotes required            by accounting principles generally accepted in the United States of America for            complete financial statements. In the opinion of management, all adjustments            (consisting of normal recurring accruals) considered necessary for a fair presentation            have been included. Interim results are not necessarily indicative of the results that            may be expected for a full year. There have been no significant changes of accounting            policies since December 31, 2006. These condensed financial statements should be read            in conjunction with the audited financial statements and notes thereto included in the            Company's Annual Report for the fiscal year ended December 31, 2006.

|   | b) | Recent Accounting Pronouncements |
|--------|----|----------------------------------|

In February 2007, the Financial Accounting Standards Board            (“FASB”) issued SFAS No. 159, “The Fair Value Option for Financial            Assets and Financial Liabilities Including an Amendment of FASB Statement No.            115”. This statement permits entities to choose to measure many financial            instruments and certain other items at fair value. The objective is to improve            financial reporting by providing entities with the opportunity to mitigate volatility            in reported earnings caused by measuring related assets and liabilities differently            without having to apply complex hedge accounting provisions. This statement is expected            to expand the use of fair value measurement, which is consistent with the Board’s            long term measurement objectives for accounting for financial instruments. This            statement also establishes presentation and disclosure requirements designed to            facilitate comparisons between entities that choose different measurement attributes            for similar types of assets and liabilities. This statement does not affect any            existing accounting literature that requires certain assets and liabilities to be            carried at fair value. This statement does not establish requirements for recognizing            and measuring dividend income, interest income, or interest expense. This statement            does not eliminate disclosure requirements included in other accounting standards,            including requirements for disclosures about fair value measurements included in FASB            Statements No. 157, “Fair Value Measurements”, and No. 107,            “Disclosures about Fair Value of Financial Instruments.” This statement is            effective as of the beginning of the entity’s first fiscal year that begins after            November 15, 2007. The Company is currently reviewing the effect, if any, the proposed            guidance will have on its financial statements.

In May 2007, the FASB issued a FASB Staff Position on FIN 46(R)-7,            "Application of FASB Interpretation No. 46(R) to Investment Companies" ("FSP FIN 46            (R)-7"). FSP FIN 46(R)-7 addresses the application of FASB Interpretation No. 46            (revised December 2003), "Consolidation of Variable Interest Entities", by an entity            that accounts for its investments in accordance with the specialized accounting            guidance in the American Institute of Certified Public Accountants            (“AICPA”) Audit and Accounting Guide, "Investment Companies" (the            “Guide”). The adoption of FSP FIN 46(R)-7 did not have a material impact on            the Company's results of operations and financial condition.

 

-9-

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Notes            to Condensed Financial Statements

September 30, 2007 and 2006

Unaudited

 

 

| **3.** | **Summary of Significant Accounting Policies**(cont'd) |
|--------|--------------------------------------------------------|

|   | b) | Recent Accounting Pronouncements (cont'd) |
|--------|----|-------------------------------------------|

In May 2007 the FASB issued FASB Interpretation FIN No. 48-1,            “Definition of Settlement in FASB Interpretation 48” (“FIN            48-1”). FIN 48-1 amends FIN 48, “Accounting for Uncertainty in Income            Taxes—an interpretation of FASB Statement No. 109”, to provide guidance on            how an enterprise should determine whether a tax position is effectively settled for            the purpose of recognizing previously unrecognized tax benefits. FIN 48-1 is effective            retroactively to January 1, 2007. The adoption of FIN 48-1 did not have a material            effect on the Company’s condensed financial statements

In June 2007, the AICPA issued Statement of Position ("SOP") No. 07-1,            ''Clarification of the Scope of the Audit and Accounting Guide Investment Companies and            Accounting by Parent Companies and Equity Method Investors for Investments in            Investment Companies" (“SOP No. 07-1”). SOP No. 07-1 clarifies when an            entity may apply the provisions of the Guide. Investment companies that are within the            scope of the Guide report investments at fair value; consolidation or use of the equity            method for investments is generally not appropriate. SOP No. 07-1 also addresses the            retention of specialized investment company accounting by a parent company in            consolidation or by an equity method investor. SOP No. 07-1 is effective for fiscal            years beginning on or after December 15, 2007 with early adoption encouraged. The            Company is currently evaluating the impact, if any of SOP No. 07-1 on the            Company’s condensed financial statements.

In September 2007, the FASB published Proposed FASB Staff Position            ("FSP") No. APB 14-a, “Accounting for Convertible Debt Instruments That May Be            Settled in Cash upon Conversion.” The proposed FSP applies to convertible debt            instruments that, by their stated terms, may be settled in cash (or other assets) upon            conversion, including partial cash settlement, unless the embedded conversion option is            required to be separately accounted for as a derivative under SFAS No.133. Convertible            debt instruments within the scope of the proposed FSP are not addressed by APB 14.            Therefore, the liability and equity components of convertible debt instruments within            the scope of the proposed FSP shall be separately accounted for in a manner that will            reflect the entity’s nonconvertible debt borrowing rate. This will require an            allocation of the convertible debt proceeds between the liability component and the            embedded conversion option (i.e., the equity component). The difference between the            principal amount of the debt and the amount of the proceeds allocated to the liability            component would be reported as a debt discount and subsequently amortized to earnings            over the instrument’s expected life using the effective interest method. The            proposed FSP is expected to be effective for fiscal years beginning after December 15,            2007 and will require retrospective application. The Company is currently reviewing the            effect, if any, if the proposed FSP were to be adopted.

 

-10-

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Notes            to Condensed Financial Statements

September 30, 2007 and 2006

Unaudited

 

 

| **4.** | **Mineral Rights** |
|--------|--------------------|

On November 29, 2006, the Company entered into an agreement to acquire            an 80% interest in twenty four mineral claims located in Dalet Township in the            northwestern part of the province of Quebec, Canada, from a company under common            control. The interest was purchased for approximately $17,600 plus issuance of 100,000            common shares by the Company valued at $10.

| **5.** | **Loans from Related Parties** |
|--------|--------------------------------|

| Les Services Financiers Francis Mailhot Inc.                                   |   |   |       |
|--------------------------------------------------------------------------------|--------|--------|------------|
| - 100% owned by the chief executive officer                            and     |   |   |       |
| major shareholder of the Company (Loan 1)                                      |   | **$**  | **2,411**  |
| 6541950 Canada Inc. - 50% owned by the chief                                   |   |   |       |
| executive officer and major shareholder, and                            50%    |   |   |       |
| owned by a director and minority shareholder                            of     |   |   |       |
| the Company (Loan 2)                                                           |   |   | **10,856** |
| Francis Mailhot - Chief executive officer and                            major |   |   |       |
| shareholder                                                                    |   |   | **3,000**  |
|                                                                           |   |   |       |
|                                                                           |   | **$**  | **16,267** |

             

The loan from Les Services Financiers Francis Mailhot Inc. is            non-interest bearing, unsecured, and due on demand.

The loan from 6541950 Canada Inc. is non-interest bearing, unsecured,            and due on demand.

The loan from Francis Mailhot is non-interest bearing, unsecured, and            due on demand.

| **6.** | **Capital Stock** |
|--------|-------------------|

 

| Issued                  |   |   |    |
|-------------------------|--------|--------|---------|
| 5,116,320 common shares |   | **$**  | **512** |

 

| **7.** | **Income Taxes** |
|--------|------------------|

The Company accounts for income taxes pursuant to SFAS No. 109. This            standard prescribes the use of the liability method whereby deferred tax asset and            liability account balances are determined based on differences between financial            reporting and tax bases of assets and liabilities and are measured using the enacted            tax rates. The effects of future changes in tax laws or rates are not            anticipated.

             

 

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**ORO VOLCANICO CORP.**

**(AN EXPLORATION STAGE COMPANY)**

Notes            to Condensed Financial Statements

September 30, 2007 and 2006

             

Under SFAS No. 109 income taxes are recognized for the following: a)            amount of tax payable for the current year, and b) deferred tax liabilities and assets            for future tax consequences of events that have been recognized differently in the            financial statements than for tax purposes.

The current provision for income taxes has been computed as            follows:

             

| Expected income tax recovery at the statutory rate -                            32% |   | **$**  | **(8,593)** |
|-------------------------------------------------------------------------------------|--------|--------|-------------|
| Valuation allowance                                                                 |   |   | **8,593**   |
|                                                                                |   |   |        |
| Current provision for income taxes                                                  |   | **$**  | **-**       |

 

The Company has tax losses available to be applied against future years'            income. Due to the losses incurred in the current period and expected future operating            results, management determined that it is more likely than not that the deferred tax            asset resulting from the tax losses available for carryforward will not be realized            through the reduction of future income tax payments, accordingly a 100% valuation            allowance has been recorded for the current income taxes and deferred income tax            assets.

The Company has deferred income tax assets as follows:

| Net operating loss carryforward                                               |   | **$**  | **15,304**   |
|-------------------------------------------------------------------------------|--------|--------|--------------|
| Valuation allowance for deferred income tax                            assets |   |   | **(15,304)** |
|                                                                          |   |   |         |
| Deferred income tax assets                                                    |   | **$**  | **-**        |

 

As of September 30, 2007, the Company had $47,824 of Federal and state            net operating loss carryforwards available to offset future taxable income. The Company            has the following losses which expire in 20 years from the date the loss was            incurred:

| Expiry 2026 |   | **$**  | **20,970** |
|-------------|--------|--------|------------|
| Expiry 2027 |   |   | **26,854** |
|        |   |   |       |
|        |   | **$**  | **47,824** |

 

 

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**ITEM            2. Management's Discussion and Analysis or Plan of Operation**

 

**CAUTION REGARDING 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”, “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 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.

 

Over            the next twelve months, we intend to explore the Dalet Properties in order to determine            if any mineral deposits in commercially viable quantities are present in such            properties. Exploration activities at the early exploration stage generally consist of            conducting geological exploration work on the properties in order to discover the            existence of any mineral deposits. Initially, we will focus on probing the conductive            zones by ground geophysics, followed by diamond drilling. The existing database is very            good and the activities will be used to locate the drilling targets on the ground.            Induced polarization is the preferred method of detection for disseminated and massive            metallic mineralization. It has the capability to detect lower grade zones and is not            influenced by the physical environment of mineral occurrences. It is also less            sensitive to variations in conductivity. If we discover any mineral deposits, we will            also undertake additional exploration work in order to determine the economic and legal            feasibility of mining any such mineral deposits.

 

We have            sufficient resources to pay for the operating expenses that we expect to incur in            connection with our proposed exploration program over the next twelve months. As of            September 30, 2007 we had $7,995 in cash. We estimate that we will incur approximately            $31,300 in expenses in carrying out our proposed exploration program over the next            twelve months. With respect to Dalet I, such expenses will amount to approximately            $25,300 and will consist of the following: $6,800 for line cutting over the zone of            airborne anomalies; $12,000.00 for geophysical survey – induced polarization;            $1,800 in fees payable to consultants; $2,000 in travel expenses and lodging; and            $2,500 for contingencies. With respect to Dalet II, such expenses will amount to            approximately $6,000 and will consist of the following: $4,000 for location of the grid            and flagging of the survey stations; and $2,000 for travel and lodging. To the extent            our cash resources are not adequate for the next twelve months of operations, our            principal shareholder, Les Services Financiers Francis Mailhot Inc., has committed to            arrange for a loan, advance or investment of up to $50,000 by itself or others to fund            our operations.

 

If we            discover any mineral deposits, we may need additional funds to undertake additional            exploratory work to determine if the development of such mineral deposits is feasible.            Because we do not expect to have any cash flow from operations, we will need to raise            additional capital to pay for such expenses. We

 

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may            have to borrow money from shareholders or issue debt or equity or enter into a            strategic arrangement with a third party. There can be no assurance that additional            capital will be available to us. We currently have no agreements, arrangements or            understandings with any person to obtain funds through bank loans, lines of credit or            any other sources.

 

**Going Concern Consideration**

 

Our            independent auditors included an explanatory paragraph in their report on our financial            statements for the year ended December 31, 2006 regarding concerns about our ability to            continue as a going concern. Our financial statements contain additional note            disclosures describing the circumstances that lead to this disclosure by our            independent auditors.

 

**Off-Balance Sheet Arrangements**

 

We have            no off-balance sheet arrangements.

 

**Recent Accounting Pronouncements**

 

No new            pronouncement issued by the Financial Accounting Standards Board, the American            Institute of Certified Public Accountants or the Securities and Exchange Commission is            expected to have a material impact on the Company’s financial position or            reported results of operations.

 

**ITEM            3. Controls and Procedures**

 

**Evaluation of Disclosure Controls and Procedures**

 

Our            management (consisting of 2 persons) conducted an evaluation of our "disclosure            controls and procedures" (as defined in the General Rules and Regulations under the            Securities Exchange Act of 1934 at Rules 13a-15 and 15d-15). Based on management's            evaluation, it was concluded that as of the Evaluation Date, our disclosure controls            and procedures are effective to ensure that all material information required to be            filed in this Quarterly Report on Form 10-QSB has been made known to management in a            timely fashion.

 

There            have been no significant changes (including corrective actions with regard to            significant deficiencies or material weaknesses) in our internal controls or in other            factors that could significantly affect these controls subsequent to the Evaluation            Date set forth above.

 

**ITEM            4 - Submission of Matters to a Vote of Security Holders**

 

The            Company has held no regularly scheduled, called or special meetings of shareholders            during the reporting period.

 

**ITEM            5. Other Information**

 

None.

 

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**PART            II. OTHER INFORMATION**

 

ITEM 1.            Legal Proceedings: None

 

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

|   | a. | None |
|--------|----|------|

|   | b. | Not Applicable. |
|--------|----|-----------------|

c. There were no Company repurchases of equity securities during the            period covered by this Form 10-QSB.

 

ITEM 3.            Defaults Upon Senior Securities: None

 

ITEM 4.            Submission of Matters to a Vote of Shareholders: None.

 

ITEM 5.            Other Information: None

 

ITEM 6.            Exhibits and Reports on Form 8-K

 

EXHIBITS

| 31.1 | Sec. 302 Certification of Principal Executive Officer                            and Principal Financial Officer |
|------|------------------------------------------------------------------------------------------------------------------|

 

| 32.1 | Sec 906 Certification of Principal Executive Officer and                            Principal Financial Officer |
|------|-----------------------------------------------------------------------------------------------------------------|

 

REPORTS            ON FORM 8-K

The            Company filed no Current Reports on Form 8-K during the period covered by this report            on Form 10-QSB.

 

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SIGNATURE

 

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

 

| Dated: | November 21, 2007 |
|--------|-------------------|

Quebec,            Canada

 

Oro            Volcanico Corp

(Registrant)

/s/            Francis Mailhot

------------------------------------------

Francis            Mailhot, President

 

 

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