UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549














(Mark
One)


x
            Quarterly
      Report Under Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the quarterly period ended September 30, 2009o
            Transition
      Report Under Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the transition period from
                     
      to





Commission
File Number:000-50468





Modern
City Entertainment, Inc.


(Exact
name of registrant as specified in its charter)





Washington
            
            98-0206033(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)





1815 Griffin Rd , Suite 207 Fort Lauderdale,
      Florida
            
            33004(Address
      of principal executive offices)
            
            (Zip
      Code)





305-970-4898


(Registrant’s telephone
number, including area code)








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





Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.  Yesx
   Noo





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.





Large
      accelerated filer   o
            Accelerated
      filer     oNon-accelerated
      filer     o
            Smaller
      reporting company    x





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





-1-








PART
I – FINANCIAL INFORMATION





Item
1.  Financial Statements

















MODERN
      CITY ENTERTAINMENT INC.Condensed
      Consolidated Balance SheetsSeptember
      30, 2009 and December 31, 20082009
            
            
            2008ASSETSCurrent
      AssetsCash
            
            $
            413,364
            
            
            $
            486,972Total
      current assets
            
            
            413,364
            
            
            
            486,972Property
      & equipment, net of accumulateddepreciation
            
            
            929
            
            
            
            1,184Prepaid
      production costs
            
            
            96,363
            
            
            
            96,363Total
      Assets
            
            $
            510,656
            
            
            $
            584,519LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      LiabilitiesAccounts
      payable and accrued expenses
            
            $
            115,856
            
            
            $
            140,434Total
      current liabilities
            
            
            115,856
            
            
            
            140,434Stockholders’
      EquityPreferred
      Stock, $0.0001 par value20,000,000
      shares authorized; none issued
            
            
            -
            
            
            
            -Common
      stock, $0.0001 par value; 50,000,000 shares authorizedand
              23,051,993  and34,753,428 issued
      and outstanding respectively
            
            
            2,298
            
            
            
            2,298Additional
      paid-in capital
            
            
            1,057,762
            
            
            
            1,057,762Accumulated
      Deficit
            
            
            (123,852)
            
            
            
            (74,567)Deficit
      accumulated during the development stage
            
            
            (541,408)
            
            
            
            (541,408
            )Total
      stockholders’ equity
            
            
            394,800
            
            
            
            444,085Total
      Liabilities and Stockholders’ Equity
            
            $
            510,656
            
            
            $
            584,519The
      accompanying notes are an integral part of these financial
      statements







-2-








MODERN
CITY ENTERTAINMENT, INC.


Condensed
Consolidated Statements of Operations


For the
three and nine months ended September 30, 2009 and 2008





Nine
      months ended
            
            
            Three
      months endedSeptember
      30,
            
            
            September
      30,2009
            
            
            2008
            
            
            2009
            
            
            2008ExpensesBank
      charges
            
            $
            67
            
            
            $
            29
            
            
            $
            52
            
            
            $
            -Professional
      fees
            
            
            11,665
            
            
            
            42,315
            
            
            
            5,415
            
            
            
            10,500Depreciation
      expense
            
            
            255
            
            
            
            -
            
            
            
            85
            
            
            
            -Travel,
      meals and entertainment
            
            
            3,796
            
            
            
            54,147
            
            
            
            3,346
            
            
            
            5,139Payroll
      expenses
            
            
            35,418
            
            
            
            33,675
            
            
            
            11,787
            
            
            
            11,788Office,
      telephone and miscellaneous
            
            
            5,708
            
            
            
            6,670
            
            
            
            1,893
            
            
            
            1,371Total
      Expenses
            
            
            56,909
            
            
            
            136,836
            
            
            
            22,578
            
            
            
            (28,798
            )Loss
      before other items
            
            
            (56,909
            )
            
            
            (136,836
            )
            
            
            (22,578
            )
            
            
            (28,798
            )Other
      income(expense)Interest
      income
            
            
            7,624
            
            
            
            -
            
            
            
            1,457
            
            
            
            -Net
      loss
            
            $
            (49,285
            )
            
            $
            (136,836
            )
            
            $
            (21,121
            )
            
            $
            (28,798
            )Loss
      per share –basic and diluted
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )Weighted
      average number of shares outstanding
              for
      the period
            
            
            23,051,993
            
            
            
            31,828,078
            
            
            
            23,051,993
            
            
            
            28,902,716








The
      accompanying notes are an integral part of these financial
      statements










-3-





MODERN
CITY ENTERTAINMENT, INC.


Condensed
Consolidated Statements of Cash Flows


For the
nine months ended September 30,





2009
            
            
            2008Cash
      flows used in operating activitiesNet
      loss
            
            $
            (49,285
            )
            
            $
            (136,836
            )Add
      items not involving cash:Depreciation
            
            
            255
            
            
            
            -Changes
      in non-cash working capital item related
              to
      operations:Accounts
      payable and accrued expenses
            
            
            (24,578
            )
            
            
            42,779Net
      cash used in operating activities
            
            
            ( 73,608
            )
            
            
            (94,057
            )Cash
      flows used in investing activitiesPurchase
      of outstanding common stock
            
            
            -
            
            
            
            (150,000
            )Net
      cash used in investing activities
            
            
            -
            
            
            
            (150,000
            )Cash
      flows used in financing activities(Decrease)
      in amount due to related party
            
            
            -
            
            
            
            (12,616
            )(Decrease)
      in loan payable to stockholders
            
            
            -
            
            
            
            (16,284
            )Net
      cash used in financing activities
            
            
            -
            
            
            
            (28,900
            )(Decrease)
      in cash during the period
            
            
            (73,608
            )
            
            
            (272,957
            )Cash,
      beginning of the period
            
            
            486,972
            
            
            
            757,906Cash,
      end of the period
            
            $
            413,364
            
            
            $
            484,949Supplementary
      disclosure of cash flow informationCash
      paid for:Interest
            
            $
            -
            
            
            $
            -The
      accompanying notes are an integral part of these financial
      statements








-4-


MODERN
CITY ENTERTAINMENT, INC.


NOTES TO
FINANCIAL STATEMENTS








Note
1                      Nature
and Continuance of Operations





Modern
City Entertainment, Inc. (formerly Azul Studios International Inc.) (the
“Company”) was incorporated on September 23, 1996 under the laws of the State of
Texas as Alvin Consulting Inc.  On July 15, 1999, the stockholders of
the Company approved a merger with a newly incorporated company in the State of
Washington and the surviving company, Realty Technologies Inc., operates under
the laws of the State of Washington.  On August 12, 1999 stockholders
of the Company approved an amendment to the articles of the Company changing its
name to Equinta Corp.  On April 10, 2000, the stockholders of the
Company approved a change to the articles of the Company changing its name to
Courier Corps Inc.  On May 16, 2000, the stockholders the Company
approved a change in the name of the Company to eCourierCorps Inc.  On
March 12, 2004, the Company changed its name to Azul Studios International Inc.
and adopted a business plan to develop a group of boutique hotels catering to
the professional photographers and film artists.  In July 2004 the
Company incorporated Azul Studios Properties S.L., in Barcelona, Spain, a
wholly-owned subsidiary.  The Company also incorporated a wholly-owned
corporation, Azul Media Inc., in the State of Washington on March 8,
2005.  The Company intended to develop a group of professional
photographic studios in select locales around the world.  On June 29,
2006, the Company sold all of the issued and outstanding shares of its
wholly-owned subsidiary, Azul Studios Property, S.L..  On February 28,
2007, the Company agreed to acquire Modern City Entertainment LLC (“MCE”), a
Miami based development stage independent movie company, which is in the
business of acquiring, producing and distributing feature films
internationally.  Currently the Company has no revenue.





On April
27, 2007, the Company changed its name to Modern City Entertainment,
Inc.





The
Company was a development stage company as defined under Statement of Financial
Accounting Standards (“FAS”) No. 7 through the year ended December 31,
2007.  Prior to April 1, 2000, the Company developed and sold the
rights to a web based internet application in the real estate
industry.  During 2008, the company commenced incurring production
costs related to the production of the aforementioned screenplay.





These
financial statements have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which assumes that the
Company will be able to meet its obligations and continue its operations for its
next fiscal year.  Realization values may be substantially different
from carrying values as shown and these financial statements do not give effect
to adjustments that would be necessary to the carrying values and classification
of assets and liabilities should the Company be unable to continue as a going
concern.  At September 30, 2009, the Company had not yet achieved
profitable operations, has accumulated losses of approximately $800,000 since
its recapitalization, and expects to incur further losses in the development of
its business, all of which casts substantial doubt about the Company’s ability
to continue as a going concern.  The Company’s ability to continue as
a going concern is dependent upon its ability to generate future profitable
operations and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come
due.  Management considers that the Company will be able to obtain
additional funds by equity financing and/or related party advances, however
there is no assurance of additional funding being
available.





Note
2                    Summary
of Significant Accounting Policies





BASIS OF
PRESENTATION





The
accompanying unaudited interim consolidated financial statements have been
prepared in accordance with United States generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q of Regulation S-K.  They may not include all information and
footnotes required by United States generally accepted accounting principles for
complete financial statements.  However, except as disclosed herein,
there have been no material changes in the information disclosed in the notes to
the financial statements for the year ended December 31, 2008 included in the
Company’s Annual Report on Form 10-K filed with the United States Securities and
Exchange Commission.  The unaudited interim consolidated financial
statements should be read in conjunction with those financial statements
included in the Form 10-K.  In the opinion of management, all
adjustments considered necessary for a fair presentation, consisting solely of
normal and recurring adjustments have been made.  Operating results
for the nine months ended September 30, 2009 are not necessarily indicative of
the results that may be expected for the fiscal year ending December 31,
2009.





Principles of
Consolidation





The
consolidated financial statements included the accounts of the Company and its
wholly-owned subsidiary, Azul Media Inc.  All significant
inter-company transactions and balances have been eliminated on
consolidation.





Impairment
of Long-lived Assets





The
Company reports the impairment of long-lived assets and certain identifiable
intangibles in accordance with FAS No. 144, “Accounting for the Impairment of
Long-lived Assets”.  Certain long-lived assets held by the Company are
reviewed for impairment whenever assets or changes in circumstances indicate the
carrying amount of an asset may not be recoverable.  Accordingly, an
impairment loss is recognized in the year it is determined.





-5-


Income
Taxes





The
Company uses the asset and liability method of accounting for income taxes
pursuant to FAS, No. 109 “Accounting for Income Taxes”.  Deferred tax
assets and liabilities are recognized for future tax consequences attributable
to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases.  Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.  When necessary, a valuation allowance is
recorded to reduce tax assets to an amount for which realization is more likely
than not.  The effect of changes in tax rates is recognized in the
period in which the rate change occurs.





Basic
and Diluted Loss Per Share





The
Company reports basic loss per share in accordance with the FAS No. 128,
“Earnings Per Share”.  Basic loss per share is computed using the
weighted average number of shares outstanding during the
period.  Diluted loss per share includes the potentially dilutive
effect of outstanding debt and stock options which are convertible into common
shares.  Diluted loss per share has not been provided as it would be
anti-dilutive.





Property
and Equipment





Property
and equipment are stated at cost.  Depreciation is provided over the
estimated useful lives of the related assets using the straight-line
method.





Financial
Instruments





The
carrying value of the Company’s financial instruments, consisting of cash and
accounts payable and accrued liabilities approximate their fair value due to the
short term maturity of such instruments.  Due to related parties and
loans payable to stockholders also approximate fair value. Unless otherwise
noted, it is management’s opinion that the Company is not exposed to significant
interest, currency or credit risks arising from these financial
instruments.





Stock-based
Compensation





The
Company has a stock-based compensation plan, which is described in Note
5.  Under this plan, all stock based payments to non-employees are
accounted for using a fair value based method of accounting.  No
compensation expense is recognized when the stock options are granted to
employees or directors.  Consideration received from employees,
directors or consultants on exercise of stock options is credited to share
capital.  If stock is repurchased from employees, directors or
consultants, the excess of the consideration paid over the carrying amount of
the stock is charged to deficit.  On the granting of stock options to
employees or directors the Company has elected to provide pro forma disclosure
on their fair value.





Revenue
Recognition and Production Costs





The
Company recognizes revenue in accordance with Securities and Exchange Commission
Staff Accounting Bulletin No. 104, "Revenue Recognition.” and also adheres to
AICPA Statement of Position 00-2 "Accounting by Producers or Distributors of
Films" which specifically addresses the film industry. SOP 00-2 states that an
entity should recognize revenue from a sale or licensing arrangement of a film
when all of the following conditions are met:





a.
              Persuasive
      evidence of a sale of licensing arrangement with a customer
      exists


b.
            The
      film is complete and, in accordance with the terms of the arrangement, has
      been delivered or is available for immediate and unconditional
      delivery.





c.
            The
      license period of the arrangement has begun and the customer can begin its
      exploitation, exhibition, or sale.


d.
              The
      arrangement fee is fixed or
determinable.
 
 e.
              Collection
      of the arrangement fee is reasonably
  assured.
  -6-


Production
costs incurred are capitalized and will be recognized as expenses when the
related revenue is recognized.





Reclassification





Certain
accounts in the prior-year financial statements have been reclassified for
comparative purposes to conform with the presentation in the current-year
financial statements.




New
Accounting Pronouncement





In April
2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly (FSP 157-4),
and FSP FASB 107-1 and Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair Value
of Financial Instruments (FSP 107-1). These two staff positions relate to
fair value measurements and related disclosures. The FASB also issued a third
FSP relating to the accounting for impaired debt securities titled FSP FAS 115-2
and FAS 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments(FSP 115-2). These
standards are effective for interim and annual periods ending after
September 15, 2009. The Company has determined that FSP 157-4 and FSP 115-2
do not currently apply to its activities and has adopted the disclosure
requirements of FSP 107-1.





In May
2009, the FASB issued Statement No. 165, “Subsequent Events” (“SFAS 165”), which
establishes general standards of accounting for, and requires disclosure of,
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued.  The Company adopted the
provisions of SFAS 165 for the quarter ended September 30, 2009.  The
adoption of these provisions did not have a material effect on the Company’s
consolidated financial statements.





The
Company evaluated subsequent events through the time of filing this Quarterly
Report on Form 10-Q on August 14, 2009.





EITF
08-6, which is effective January 1, 2009, clarifies the accounting for
certain transactions and impairment considerations involving equity method
investments and is applied on a prospective basis to future
transactions.





EITF
08-7, which is effective January 1, 2009, clarifies that a defensive
intangible asset (an intangible asset that the entity does not intend to
actively use, but intends to hold to prevent others from obtaining access to the
asset) should be accounted for as a separate unit of accounting and should be
assigned a useful life that reflects the entity’s consumption of the expected
benefits related to the asset. EITF 08-7 is applied on a prospective basis to
future transactions.





FSP EITF
03-6-1 clarifies that share-based payment awards that entitle holders to receive
nonforfeitable dividends before they vest will be considered participating
securities and included in the earnings per share calculation pursuant to the
two class method. The effect of adoption of FSP EITF 03-6-1 was not material to
the Company’s consolidated results of operations.





APB 14-1
requires the issuer to separately account for the liability and equity
components of convertible debt instruments in a manner that reflects the
issuer’s nonconvertible debt borrowing rate. The guidance will result in
companies recognizing higher interest expense in the statement of operations due
to amortization of the discount that results from separating the liability and
equity components. APB 14-1 was adopted on January 1, 2009, and did not affect
the Company’s consolidated financial position or consolidated results of
operations.








In
September 2009, the FASB issued SFAS No. 166, Accounting for Transfers of
Financial Assets, an
amendment to SFAS No. 140 (SFAS 166). SFAS 166 eliminates the
concept of a “qualifying special-purpose entity,” changes the requirements for
derecognizing financial assets, and requires additional disclosures in order to
enhance information reported to users of financial statements by providing
greater transparency about transfers of financial assets, including
securitization transactions, and an entity’s continuing involvement in and
exposure to the risks related to transferred financial assets. SFAS 166 is
effective for fiscal years beginning after November 15, 2009. The
Company will adopt SFAS 166 in fiscal 2010 and is evaluating the impact it
will have on the consolidated results of the Company.





In
September 2009, the FASB issued SFAS No. 167,Amendments to FASB Interpretation
No. 46(R) (SFAS 167). The amendments include: (1) the elimination of the
exemption for qualifying special purpose entities, (2) a new approach for
determining who should consolidate a variable-interest entity, and (3) changes
to when it is necessary to reassess who should consolidate a variable-interest
entity. SFAS 167 is effective for the first annual reporting period beginning
after November 15, 2009 and for interim periods within that first annual
reporting period. The Company will adopt SFAS 167 in fiscal 2010 and is
evaluating the impact it will have on the consolidated results of the
Company.





-7-


In
September 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting
Principles (SFAS 168). SFAS 168 replaces FASB Statement No. 162,
The Hierarchy of Generally
Accepted Accounting Principles, and establishes the FASB Accounting
Standards Codification TM (the
Codification) as the source of authoritative accounting principles recognized by
the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with generally accepted accounting principles
(GAAP). SFAS 168 is effective for interim and annual periods ending after
September 15, 2009.





In
September 2009, Accounting Standards Codification (“ASC”) became the source
of authoritative U.S. GAAP recognized by the Financial Accounting Standards
Board (“FASB”) for nongovernmental entities, except for certain FASB Statements
not yet incorporated into ASC. Rules and interpretive releases of the SEC under
federal securities laws are also sources of authoritative U.S. GAAP for
registrants. The discussion below includes the applicable ASC
reference.





The
Company adopted ASC Topic 810-10 Consolidation(formerly SFAS
No. 160, Noncontrolling
Interests in Consolidated Financial Statements – an amendment of ARB
No. 51) effective January 2, 2009. Topic 810-10 changes
the manner of presentation and related disclosures for the noncontrolling
interest in a subsidiary (formerly referred to as a minority interest) and
for the deconsolidation of a subsidiary. The presentation changes are
reflected retrospectively in the Company’s unaudited condensed consolidated
financial statements.





ASC Topic
815-10 Derivatives and
Hedging (formerly SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities) was adopted by the Company effective
January 2, 2009. The guidance under Topic 815-10 changes the manner of
presentation and related disclosures of the fair values of derivative
instruments and their gains and losses.


The
Company adopted ASC Topic 825-10 Financial Instruments
(formerly, FASB Staff Position No. SFAS 107-1 and APB No. 28-1, Disclosures about the Fair Value of
Financial Instruments), which requires quarterly disclosure of
information about the fair value of financial instruments within the scope of
Topic 825-10. The Company adopted this pronouncement effective April 1,
2009.


In April
2009, the Company adopted ASC Topic 820-10-65 Fair Value Measurements and
Disclosures (formerly FASB Staff Position No. SFAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly).The standard provides
additional guidance for estimating fair value in accordance with Topic 820-10-65
when the volume and level of activity for the asset or liability have
significantly decreased and includes guidance on identifying circumstances that
indicate if a transaction is not orderly. The Company adopted this pronouncement
effective April 1, 2009 with no impact on its consolidated financial
statements.





The
Company adopted, ASC Topic 855-10 Subsequent Events(formerly
SFAS 165, Subsequent
Events) effective April 1, 2009. This pronouncement changes the
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before financial statements are issued or are
available to be issued.





In June
2009, the FASB finalized SFAS No. 167, Amending FASB interpretation
No. 46(R),which was included in ASC Topic 810.The provisions of ASC
810 amend the definition of the primary beneficiary of a variable interest
entity and will require the Company to make an assessment each reporting period
of its variable interests. The provisions of this pronouncement are effective
January 1, 2010. The Company is evaluating the impact of the statement on
its consolidated financial statements.





In July
2009, the FASB issued SFAS No. 168, The Hierarchy of Generally Accepted
Accounting Principles. SFAS 168 codified all previously issued accounting
pronouncements, eliminating the prior hierarchy of accounting literature, in a
single source for authoritative U.S. GAAP recognized by the FASB to be applied
by nongovernmental entities. SFAS 168, now ASC Topic 105-10 Generally Accepted Accounting
Principles, is effective for financial statements issued for interim and
annual periods ending after September 15, 2009. The adoption of this
pronouncement did not have an effect on the consolidated financial
statements.





In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05,
Measuring Liabilities at Fair
Value, which clarifies, among other things, that when a quoted price in
an active market for the identical liability is not available, an entity must
measure fair value using one or more specified techniques. The Company adopted
the pronouncement effective July 1, 2009 with no impact on its consolidated
financial statements.





In
October 2009, the FASB issued ASU No. 2009-13, Multiple-Deliverable Revenue
Arrangements, which revises the existing multiple-element revenue
arrangements guidance and changes the determination of when the individual
deliverables included in a multiple-element revenue arrangement may be treated
as separate units of accounting, modifies the manner in which the transaction
consideration is allocated across the separately identified deliverables and
expands the disclosures required for multiple-element revenue arrangements. The
pronouncement is effective for financial statements issued after
December 31, 2010. The Company does not expect the pronouncement to have a
material effect on its consolidated financial statements.





Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date are
not expected to have a material impact on the consolidated financial statements
upon adoption.





-8-


Note
3                      Property
and Equipment





The
Company’s property and equipment are as follows:


September
      30, 2009AccumulatedCost
            
            
            Depreciation
            
            
            NetComputer
      equipment
            
            $
            1,690
            
            
            $
            762
            
            
            $
            929December
      31, 2008AccumulatedCost
            
            
            Depreciation
            
            
            NetComputer
      equipment
            
            $
            1,690
            
            
            $
            507
            
            
            $
            1,183





Depreciation
expense for the nine and three months ended September 30, 2009 and 2008 was $85
and $0, respectively.





Note
4                      Income
Taxes





The
following table summarizes the significant components of the Company’s future
tax assets:


September
      30,
            
            
            December
      312009
            
            
            2008Future
      tax assetsNon-capital
      loss carry-forward
            
            $
            585,000
            
            
            $
            575,400Valuation
      allowance for deferred tax asset
            
            
            (585,000
            )
            
            
            (575,400
            )$
            -
            
            
            $
            -





The
amount taken into income as future tax assets must reflect that portion of the
income tax loss carry-forwards that is more likely-than-not to be realized from
future operations.  The Company has chosen to provide an allowance of
100% against all available income tax loss carry-forwards, regardless of their
time of expiry.





As of
September 30, 2009 and December 31, 2008, the Company has accumulated
non-capital losses totaling approximately $1,575,000 and $1,526,000,
respectively, which are available to reduce taxable income in future taxation
years.  These losses expire beginning in 2017.  The
potential benefit of these losses, if any, has not been recorded in the
financial statements.







-9-








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





Overview


Modern
City Entertainment, Inc. (formerly Azul Studios International Inc.) (the
“Company”) was incorporated on September 23, 1996 under the laws of the State of
Texas as Alvin Consulting Inc.  On July 15, 1999, the stockholders of
the Company approved a merger with a newly incorporated company in the State of
Washington and the surviving company, Realty Technologies Inc., operates under
the laws of the State of Washington.  On August 12, 1999 stockholders
of the Company approved an amendment to the articles of the Company changing its
name to Equinta Corp.  On April 10, 2000, the stockholders of the
Company approved a change to the articles of the Company changing its name to
Courier Corps Inc.  On May 16, 2000, the stockholders the Company
approved a change in the name of the Company to eCourierCorps Inc.  On
March 12, 2004, the Company changed its name to Azul Studios International Inc.
and adopted a business plan to develop a group of boutique hotels catering to
the professional photographers and film artists.  In July 2004 the
Company incorporated Azul Studios Properties S.L., in Barcelona, Spain, a
wholly-owned subsidiary.  The Company also incorporated a wholly-owned
corporation, Azul Media Inc., in the State of Washington on March 8,
2005.  The Company intended to develop a group of professional
photographic studios in select locales around the world.  On June 29,
2006, the Company sold all of the issued and outstanding shares of its
wholly-owned subsidiary, Azul Studios Property, S.L..  On February 28,
2007, the Company agreed to acquire Modern City Entertainment LLC (“MCE”), a
Miami based development stage independent movie company, which is in the
business of acquiring, producing and distributing feature films
internationally.  Currently the Company has no revenue.





FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2008





The
Company‘s net loss from operations decreased approximately 64% to $49,285 during
the nine months ended September 30, 2009 as compared to $136,836 for the nine
months ended September 30, 2008.  The primary reason for this was due
to the reduction in professional fees and office related expenses.





LIQUIDITY
AND CAPITAL RESOURCES





Net cash
used in operating activities was $73,608 for the nine months ended September 30,
2009 compared to $218,252 for the nine months ended September 30, 2008, due to a
decrease in net loss for the period.





FORWARD
LOOKING STATEMENTS





There are
statements in this registration statement that are not historical facts. These
“forward-looking statements” can be identified by use of terminology such as
“believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,”
“expect,” “estimate,” “project,” “positioned,” “strategy” and similar
expressions. You should be aware that these forward-looking statements are
subject to risks and uncertainties that are beyond our control.  For a
discussion of these risks, you should read this entire Registration Statement
carefully.  Although management believes that the assumptions underlying
the forward looking statements included in this Registration Statement are
reasonable, they do not guarantee our future performance, and actual results
could differ from those contemplated by these forward looking statements. The
assumptions used for purposes of the forward-looking statements specified in the
following information represent estimates of future events and are subject to
uncertainty as to possible changes in economic, legislative, industry, and other
circumstances. As a result, the identification and interpretation of data and
other information and their use in developing and selecting assumptions from and
among reasonable alternatives require the exercise of judgment. To the extent
that the assumed events do not occur, the outcome may vary substantially from
anticipated or projected results, and, accordingly, no opinion is expressed on
the achievability of those forward-looking statements.  In the light of
these risks and uncertainties, there can be no assurance that the results and
events contemplated by the forward-looking statements contained in this
Registration Statement will in fact transpire. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of their
dates. We do not undertake any obligation to update or revise any
forward-looking statements.





Item
3. Quantitative and Qualitative Disclosures About Market Risk.





Not
applicable.








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Item
4A.  Controls and Procedures.





An
evaluation was conducted by the registrant’s president of the effectiveness of
the design and operation of the registrant’s disclosure controls and procedures
as of December 31, 2008. Based on that evaluation, the president concluded that
the registrant’s controls and procedures were effective as of such date to
ensure that information required to be disclosed in the reports that the
registrant files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms. If the registrant
develops new business or engages or hires a chief financial officer or similar
financial expert, the registrant intends to review its disclosure controls and
procedures.





Management
is aware that there is a lack of segregation of duties due to the small number
of employees dealing with general administrative and financial matters. However,
at this time management has decided that considering the abilities of the
employees now involved and the control procedures in place, the risk associated
with such lack of segregation is low and the potential benefits of adding
employees to clearly segregate duties do not justify the substantial expenses
associated with such increases. Management may reevaluate this situation as
circumstances dictate.








The was
no change in the registrant's internal control over financial reporting
identified in connection with the evaluation required by paragraph (d) of Rule
13a–15 or Rule 15d–15 under the Securities Exchange Act of 1934 that occurred
during the registrant's last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control over
financial reporting.





Item
4T. Controls and Procedures.





Reference
is made to the response to Item 4 above.










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PART
II- OTHER INFORMATION








Item
1.                      Legal
Proceedings.





None





Item
1A.                      Risk
Factors.





There are
no material changes to the Company’s risk factors as previously reflected in the
form 10-K that was filed on June 30, 2009.





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





a.
            N/A





b.
            N/A





c.
            N/A





Item
3.                      Defaults
upon Senior Securities.





N/A





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





None





Item
5.                      Other
Information.





None











-12-


SIGNATURES





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





Modern
      City Entertainment Inc.Date:
      November 25, 2009
            By:
            /s/ William
      ErfurthWilliam
      ErfurthPresident
      and Director














-13-