UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB

|(Mark One)                                                                            
|--------------------------------------------------------------------------------------
|[X]                                                                                   
|For the quarterly period ended: September 30, 2004                                    
|Or                                                                                    
|[  ]                                                                                  
|For the transition period from ____________ to _____________                          
|Commission File Number: 000-50465                                                     
|STAT SOFTWARE, INC.
(Exact name of registrant as specified in its charter)            
|                                                                                      
|Nevada
(State or other jurisdiction of incorporation or organization)                 
|                                                                                      
|2061 East Sahara Avenue
Las Vegas, Nevada
(Address of principal executive offices)    
|                                                                                      
|(702) 732-2744
(Registrant's telephone number, including area code)                   
|                                                                                      
|N/A
(Former name, former address and former fiscal year, if changed since last report)
|                                                                                      

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

Yes [X] No [ ]



APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [ ] No [ ]



APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 4,314,000





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STAT SOFTWARE, INC.

(A Development Stage Company)





Table of Contents

|                                                      | Page
|----------------------------------------------------- | ----
|PART I - FINANCIAL INFORMATION                        |     
|Item 1. Financial Statements                          | 3   
|Balance Sheet                                         | 4   
|Statements of Operations                              | 5   
|Statements of Cash Flows                              | 6   
|Notes                                                 | 7   
|Item 2. Management's Discussion and Plan of Operation | 8   
|PART II - OTHER INFORMATION                           |     
|Item 4. Controls and Procedures                       | 10  
|Item 6. Exhibits                                      | 10  
|SIGNATURES                                            | 11  





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PART I - FINANCIAL INFORMATION



Item 1. Unaudited Financial Statements



The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission").  While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  For further information, refer to the financial statements and footnotes that are included in the Company's Annual Report on Form 10-KSB previously filed with the Commission on March 31, 2004, and subsequent amendments made thereto.





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Stat Software, Inc.

(a Development Stage Company)

Balance Sheet

(Unaudited)



|                                                      | September 30,
|----------------------------------------------------- | -------------
|                                                      | 2004         
|Assets                                                |              
|                                                      |              
|Current assets:                                       |              
|Cash and equivalents                                  | $25,503      
|Accounts receivable                                   | 1,500        
|Total current assets                                  | 27,003       
|                                                      |              
|Fixed asses, net                                      | 11,592       
|                                                      |              
|                                                      | $38,595      
|                                                      |              
|Liabilities and Stockholders Equity                  |              
|                                                      |              
|Current liabilities:                                  |              
|Accounts payable                                      | -            
|                                                      |              
|Stockholders equity:                                 |              
|Preferred stock, $0.001 par value, 5,000,000          |              
|shares authorized, zero shares issued and outstanding | -            
|Common stock, $0.001 par value, 20,000,000            |              
|shares authorized, 4,314,000 shares                   |              
|issued and outstanding as of 9/30/04                  | 4,314        
|Additional paid-in capital                            | 96,386       
|Prior period adjustment                               | (1,656)      
|(Deficit) accumulated during development stage        | (60,449)     
|                                                      | 38,595       
|                                                      |              
|                                                      | $38,595      
|                                                      |              



The accompanying Notes are an integral part of these financial statements.



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Stat Software, Inc.

(a Development Stage Company)

Statements of Operations

(Unaudited)



|                                                    |                     |                    | June 13, 2002 
|--------------------------------------------------- | ------------------- | ------------------ | --------------
|                                                    | Three Months Ending | Nine Months Ending | (Inception) to
|                                                    | September 30,       | September 30,      | September 30, 
|                                                    | 2004                | 2003               | 2004          
|                                                    |                     |                    |               
|Revenue  related party                             | $3,819              | $13,150            | $21,069       
|                                                    |                     |                    |               
|Cost of revenue:                                    |                     |                    |               
|Contract labor  related party                      | -                   | 18,000             | 6,875         
|Contract labor                                      | -                   | 3,500              | 9,139         
|                                                    | -                   | 21,500             | 16,014        
|                                                    |                     |                    |               
|Gross profit (loss)                                 | 3,819               | (8,350)            | 5,055         
|                                                    |                     |                    |               
|Expenses:                                           |                     |                    |               
|General and administrative expenses                 | 2,581               | 5,131              | 8,835         
|General and administrative expenses  related party | -                   | -                  | -             
|Research and development                            | -                   | -                  | 2,962         
|Depreciation expense                                | 410                 | 253                | 1,032         
|Organizational and offering costs                   | -                   | -                  | -             
|Consulting  related party                          | -                   | -                  | -             
|Total expenses                                      | 2,991               | 5,384              | 12,829        
|                                                    |                     |                    |               
|Other income (expense):                             |                     |                    |               
|Gain on forgiveness of debt                         | -                   | -                  | 3,500         
|                                                    |                     |                    |               
|Net (loss)                                          | $828                | $(13,734)          | $(4,274)      
|                                                    |                     |                    |               
|Weighted average number of                          |                     |                    |               
|Common shares outstanding  basic and fully diluted | 4,314,000           | 3,300,000          | 4,314,000     
|                                                    |                     |                    |               
|Net (loss) per share  basic and fully diluted      | $(0.00)             | $(0.00)            | $(0.00)       
|                                                    |                     |                    |               
|                                                    |                     |                    |               
|                                                    |                     |                    |               





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



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Stat Software, Inc.

(a Development Stage Company)

Statements of Cash Flows

(Unaudited)



|                                              |                    | June 13, 2002 
|--------------------------------------------- | ------------------ | --------------
|                                              | Nine Months Ending | (Inception) to
|                                              | September 30,      | September 30, 
|                                              | 2004               | 2003          
|Cash flows from operating activities          |                    |               
|Net (loss)                                    | $(4,274)           | $(22,589)     
|Adjustment to reconcile net (loss) to         |                    |               
|net cash (used) by operating activities:      |                    |               
|Depreciation                                  | 1,032              | -             
|Amortization of prepaid rent related party   | -                  | -             
|Shares issued for consulting  related party  | -                  | -             
|Changes in operating assets and liabilities   |                    |               
|(Increase) in accounts receivable             | (1,500)            | -             
|(Increase) in prepaid expenses                | -                  | 6,250         
|(Decrease) in accounts payable                | (3,500)            | 3,500         
|Net cash (used) by operating activities       | (8,242)            | (12,839)      
|                                              |                    |               
|Cash flows from investing activities          |                    |               
|Purchase of fixed assets                      | (9,631)            | (3,558)       
|Net cash (used) by investing activities       | (9,631)            | (3,558)       
|                                              |                    |               
|Cash flows from financing activities          |                    |               
|Issuances of common stock                     | -                  | 50,700        
|Net cash provided by financing activities     | -                  | 50,700        
|                                              |                    |               
|Net increase in cash                          | (17,873)           | 34,303        
|Cash and equivalents  beginning              | 43,376             | 10,214        
|Cash and equivalents  ending                 | $25,503            | $44,517       
|                                              |                    |               
|Supplemental disclosures:                     |                    |               
|Interest paid                                 | $-                 | $-            
|Income taxes paid                             | $-                 | $-            
|                                              |                    |               
|Non-cash transactions:                        |                    |               
|Shares issued for consulting and prepaid rent |                    |               
|to related parties                            | $-                 | $-            
|Number of shares issued for consulting and    |                    |               
|prepaid rent to related parties               | -                  | -             



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



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Stat Software, Inc.

(a Development Stage Company)

Notes



Note 1 - Basis of presentation



The consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.



These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein.  It is suggested that these consolidated interim financial statements be read in conjunction with the audited financial statements and notes of the Company filed with its Form 10KSB with the US Securities and Exchange Commission for the year ended December 31, 2003.  The Company follows the same accounting policies in the preparation of interim reports.



Results of operations for the interim periods are not indicative of annual results.



Note 2 - Fixed assets



The Company recorded depreciation expense of $1,032 and $253 during the nine months ended September 30, 2004 and 2003, respectively.



Note 3 - Stockholder equity



The Company did not issue any shares of its preferred or common stock during the nine months ended September 30,2004.



Note 4 - Related party transactions



The Company paid its officer and director contract labor fees totaling $6,875 during the nine months ended September 30,2004.



The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities.  If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests.  The Company has not formulated a policy for the resolution of such conflicts.



Note 5  Research and development costs



The Company expended $2,962 towards research and development of its software technology during the nine months ended September 30,2004.







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Item 2. Management's Discussion and Plan of Operation



Forward-Looking Statements



This Quarterly Report contains forward-looking statements about STAT Software, Inc.s business, financial condition and prospects that reflect managements assumptions and beliefs based on information currently available.  We can give no assurance that the expectations indicated by such forward-looking statements will be realized.  If any of our managements assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, STATs actual results may differ materially from those indicated by the forward-looking statements.



The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.



There may be other risks and circumstances that management may be unable to predict.  When used in this Quarterly Report, words such as,  "believes,"  "expects," "intends,"  "plans,"  "anticipates,"  "estimates"and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.



Managements Discussion and Analysis



We were incorporated on June 13, 2002.  Our efforts to date have focused primarily on recruiting independent contract labor and on the development of biometric security products that use individually unique physical characteristics for identification and security purposes, inventory database applications and secure on-line education products.



Results of Operations for the Quarter Ended September 30, 2004



We generated $3,819 in revenues during the three months ended September 30, 2004.  In the year ago period ended September 30, 2003, we generated revenues of $13,150.



There was no Cost of revenues for the three-month period ended September 30, 2004.  Comparatively, cost of labor for the third quarter ended September 30, 2003 was $21,500, of which $18,000 was paid to related parties.



Total expenses for the three months ended September 30, 2004 was $2,991.  Approximately $2,281 of that amount is attributable to general and administrative expenses.  Additionally, we recorded $410 in depreciation expense for the period.  In the three months ended September 30, 2003, total expenses were $5,384.



During the three months ended September 30, 2004, we had a net gain of $828, an increase of $12,906 from the year ago three month period ended September 30, 2003.



Comparison of Operating Results for the Nine Month Period Ended Septemer 30, 2004 and September 30, 2003



In the nine months ended September 30, 2004, revenues were $21,069, an decrease of $5,581 compared with revenues of $26,650 during the nine months ended September 30, 2003.  From our inception on June 13, 2002 to September 30, 2004, we generated an aggregate of $64,407 in revenues.  All of these revenues were derived solely from sales of our information technology services and software products.  We have two recurring clients who account for substantially all of our revenues.



In the nine months ended September 30, 2004, cost of revenues was $16,014, $6,875 of which was paid to a related party.  During the nine months ended September 30, 2003, our cost of revenues totaled $33,500, with $9,500 being paid to a related party.  Since our inception, cost of revenues has been  $57,228.





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Liquidity and Capital Resources



At Septmeber 30, 2004, the Company had $25,503 in cash and liquid assets with which to conduct operations. Minimal cash or liquid assets raises substantial doubt about the Company's ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its obligations and sustain operations. To meet required current operating expenses the Company is dependent upon its principal shareholders to advance funds until the Company has acquired another entity that has sufficient resources to fund the Company's operations.



Need for Additional Financing



Since our incorporation, we have raised capital through sales of our common equity.  All told, we raised $70,032 in cash from sales of our common stock.  If our costs of operations increase unexpectedly, we may need to raise additional capital by issuing equity or debt securities in exchange for cash.  There can be no assurance that we will be able to secure additional funds in the future to stay in business.



There can be no assurance that any additional funds will be available to the Company to allow it to cover its expenses as they may be incurred.



Irrespective of whether the Company's cash assets prove to be inadequate to meet the Company's operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash.



The Company has no plans for any research and development in the next twelve months. The Company has no plans at this time for purchases or sales of fixed assets which would occur in the next twelve months.



The Company has no expectation or anticipation of significant changes in number of employees in the next twelve months, however, if it commences acquisition, it may acquire or add employees of an unknown number in the next twelve months.



The Company's auditor has issued a "going concern" qualification as part of his opinion in the Audit Report. There is substantial doubt about the ability of the Company to continue as a "going concern."



Item 3. Controls and Procedures



The management of the company has evaluated the effectiveness of the issuer's disclosure controls and procedures as of a date within 90 days prior to the filing date of the report (evaluation date) and have concluded that the disclosure controls and procedures are adequate and effective based upon their evaluation as of the evaluation date.



There were no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the most recent evaluation of such, including any corrective actions with regard to significant deficiencies and material weaknesses.



Trends: The company expects that the trend of minimal income and ongoing losses will continue in the future until a business operation has been achieved which may afford revenues and potential cash flows. No assurance can be made that any such operation will ever occur.







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PART II - OTHER INFORMATION



Item 1.  Legal Proceedings



The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.



Item 2.  Change in Securities



None



Item 3.  Defaults Upon Senior Securities



(Not applicable)





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



(Not applicable)





Item 5.  Other Information



(Not applicable)



Item 6. Exhibits



|Exhibit Number | Name and/or Identification of Exhibit                                             
|-------------- | ----------------------------------------------------------------------------------
|               |                                                                                   
|3              | Articles of Incorporation & By-Laws                                               
|               |                                                                                   
|               | (a) Articles of Incorporation (1)                                                 
|               |                                                                                   
|               | (b) By-Laws (1)                                                                   
|               |                                                                                   
|31             | Certifications                                                                    
|               |                                                                                   
|32             | Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)



(1) Incorporated by reference to the exhibits to the Company's General Form for Registration of Securities of Small Business Issuers on Form 10-SB, filed on November 12, 2003.

















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SIGNATURES



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



|STAT SOFTWARE, INC.   
|----------------------
|(Registrant)          
|                      
|Signature             
|                      
|/s/ Douglas P. Condie 
|Douglas P. Condie     
|                      
|/s/ Richard B. Vincent
|Richard B. Vincent    















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