SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10−QSB





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





For
      the
      quarterly period ended December 31, 2005





or


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





For
      the
      transition period from __________ to __________.





Commission
      File Number: 000−50900





RIDDLE
      RECORDS, INC.


(Exact
      name of registrant as specified in its charter)





Nevada


(State
      of
      other jurisdiction of incorporation or organization)








88−0507969


(I.R.S.
      Employer Identification No.)





9595
      Wilshire Boulevard, Suite 700, Beverly Hills, California 90212


(Address
      of principal executive office)





(310)
      273−2407


(Registrant’s
      telephone number, including area code)








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
o
      No x





The
      aggregate market value of the voting and non−voting common equity held by
      non−affiliates of the issuer as of December 31, 2005 cannot be determined
      because the issuer’s common equity does not have an active trading market. There
      were 20,771,250 and 12,000,000 of outstanding shares of the issuer’s Class A and
      Class B Common Stock, respectively, as of May 24, 2006.








TABLE
      OF
      CONTENTS





PART
                I.
            FINANCIAL
                INFORMATION
            3ITEM
                1.
            FINANCIAL
                STATEMENTS
            3BALANCE
                SHEET AS OF DECEMBER 31, 2005 (UNAUDITED)
            3STATEMENTS
                OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2005 AND 2004
                (UNAUDITED)
            4STATEMENTS
                OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004
                AND FOR
                THE PERIOD FROM INCEPTION (AUGUST 8, 2001) TO DECEMBER 31, 2005
                (UNAUDITED)
            5STATEMENTS
                OF CASH FLOW FOR THE SIX MONTHS ENDED DECEMBER 31, 2005 AND 2004AND
                FOR
                THE PERIOD FROM INCEPTION (AUGUST 8, 2001) TO DECEMBER 31, 2005
                (UNAUDITED)
            6NOTES
                TO UNAUDITED FINANCIAL STATEMENTS
            7ITEM
                2.
            MANAGEMENT
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS
            13ITEM
                3.
            CONTROLS
                AND PROCEDURES
            24PART
                II.
            OTHER
                INFORMATION
            25ITEM
                1.
            LEGAL
                PROCEEDINGS
            25ITEM
                2.
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
            25ITEM
                3.
            DEFAULTS
                UPON SENIOR SECURITIES
            25ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            25ITEM
                5.
            OTHER
                INFORMATION
            25ITEM
                6.
            EXHIBITS
            25




Page:
          2




ITEM
      1.
      FINANCIAL STATEMENTS.




**RIDDLE
      RECORDS, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**BALANCE
      SHEET**


**(UNAUDITED)**


**December
      31, 2005**





**ASSETS**CURRENT
                ASSETS:Cash
            
            $
            818Film
                costs
            
            
            63,484Total
                current assets
            
            
            64,302EQUIPMENT,
                net of accumulated depreciation
            
            
            1,561**Total
                assets**
            
            **$**
            **65,863****LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)**CURRENT
                LIABILITIES:Accounts
                payable and accrued expenses
            
            $
            61,251Accrued
                interest payable
            
            
            15,957Amounts
                due to related parties
            
            
            15,132Notes
                payable - related party
            
            
            2,000Notes
                payable
            
            
            170,000Total
                current liabilities
            
            
            264,340COMMITMENTS
                AND CONTINGENCIESSTOCKHOLDERS'
                EQUITY (DEFICIT):Preferred
                stock: 10,000,000 shares authorized, -0- issued and
                outstanding
            
            
            —Class
                A Common Stock: 80,000,000 shares authorized, $.001 par value, 20,771,250
                issued and outstanding
            
            
            20,771Class
                B Common Stock: 20,000,000 shares authorized, $.001 par value, 12,000,000
                shares issued and outstanding
            
            
            250Additional
                paid-in-capital
            
            
            33,031Deficit
                accumulated during the development stage
            
            
            (252,529
            )Total
                stockholders' equity (deficit)
            
            
            (198,477
            )**Total
                liabilities and stockholders' equity (deficit)**
            
            **$**
            **65,863**See
                accompanying notes to unaudited financial
                statements.




Page:
          3




**RIDDLE
      RECORDS, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENTS
      OF OPERATIONS**


**(UNAUDITED)**


**Three
                Months Ended**
              **December
                31,****2005**
            
            **2004****EXPENSES:**General
                and administrative
            
            $
            16,637
            
            $
            20,810Depreciation
                and amortization
            
            
            180
            
            
            180Total
                expenses
            
            
            16,817
            
            
            20,990**OTHER
                EXPENSE:**Loan
                fees
            
            
            5,000
            
            
            1,000Interest
                expense
            
            
            4,300
            
            
            1,113Interest
                expense, related party
            
            
            20
            
            
            490Total
                other expenses
            
            
            9,320
            
            
            2,603(LOSS)
                BEFORE INCOME TAXES
            
            
            (26,137
            )
            
            (23,593
            )Provision
                for income taxes
            
            
            —
            
            
            —**NET
                (LOSS)**
            
            $
            (26,137
            )
            $
            (23,593
            )(Loss)
                per common share-basic and diluted
            
            $
            *
            
            $
            *Weighted
                average number of shares outstanding
            
            
            32,771,250
            
            
            32,771,250*Less
                than $0.01 per share




See
      accompanying notes to unaudited financial statements.


Page:
          4




**RIDDLE
      RECORDS, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENTS
      OF OPERATIONS**


**(UNAUDITED)**





**Six
                Months Ended**
              **December
                31,**
            ****
            **Inception**
              **(August
                8, 2001)**
              **to**
              **December
                31,**
            ********
            ****
            **2005**
            ****
            **2004**
            ****
            **2005****EXPENSES:**General
                and administrative
            
            $
            21,219
            
            $
            64,437
            
            $
            215,075Depreciation
                and amortization
            
            
            360
            
            
            360
            
            
            2,040Total
                expenses
            
            
            21,579
            
            
            64,797
            
            
            217,115**OTHER
                EXPENSE:**Loan
                fees
            
            
            8,750
            
            
            2,000
            
            
            14,000Interest
                expense
            
            
            7,850
            
            
            2,113
            
            
            16,345Interest
                expense, related party
            
            
            20
            
            
            773
            
            
            1,241Total
                other expenses
            
            
            16,620
            
            
            4,886
            
            
            31,586LOSS
                BEFORE INCOME TAXES
            
            
            (38,199
            )
            
            (69,683
            )
            
            (248,701
            )Provision
                for income taxes
            
            
            —
            
            
            —
            
            
            3,828**NET
                (LOSS)**
            
            $
            (38,199
            )
            $
            (69,683
            )
            $
            (252,529
            )(Loss)
                per common share-basic and diluted
            
            $
            *
            
            $
            *Weighted
                average number of shares outstanding
            
            
            32,771,250
            
            
            32,771,250*Less
                than $0.01 per shareSee
                accompanying notes to unaudited financial
                statements.




Page:
          5




**RIDDLE
      RECORDS, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**


**STATEMENTS
      OF CASH FLOWS**


**(UNAUDITED)**





**Six
                Months Ended**
              **December
                31,**
            ****
            **Inception**
              **(August
                8, 2001)**
              **to**
              **December
                31,**
            ********
            ****
            **2005**
            ****
            **2004**
            ****
            **2005****CASH
                FLOWS FROM (TO) OPERATING ACTIVITIES:**Net
                loss
            
            $
            (38,199
            )
            $
            (69,683
            )
            $
            (252,529
            )Adjustments
                to reconcile net (loss) to net cash(used
                in) operating activities:Depreciation
            
            
            360
            
            
            360
            
            
            2,040Class
                A Common Stock issued for services
            
            
            —
            
            
            —
            
            
            400Changes
                in assets and liabilities:Decrease
                in prepaid loan fees
            
            
            3,750
            
            
            2,000
            
            
            —(Decrease)
                Increase in accounts payable
            
            
            (1,257
            )
            
            17,415
            
            
            66,814Increase
                in accrued interest payable
            
            
            7,870
            
            
            1,944
            
            
            12,144Increase
                in amounts due to related parties
            
            
            —
            
            
            13,832
            
            
            13,604Net
                cash (used in) operating activities
            
            
            (27,476
            )
            
            (34,132
            )
            
            (157,527
            )**CASH
                FLOWS (TO) INVESTING ACTIVITIES:**Investment
                in film costs
            
            
            (7,400
            )
            
            (26,209
            )
            
            (63,484
            )Purchase
                of equipment
            
            
            —
            
            
            —
            
            
            (3,602
            )Net
                cash (used in) investing activities
            
            
            (7,400
            )
            
            (26,209
            )
            
            (67,086
            )**CASH
                FLOWS FROM (TO) FINANCING ACTIVITIES:**Proceeds
                from the sale of common shares
            
            
            —
            
            
            —
            
            
            57,625Payment
                of offering costs
            
            
            —
            
            
            —
            
            
            (7,394
            )Proceeds
                from note payable
            
            
            25,000
            
            
            50,000
            
            
            170,000Repayment
                of note payable to stockholder
            
            
            —
            
            
            (10,000
            )
            
            (39,500
            )Proceeds
                from note payable from stockholder
            
            
            —
            
            
            30,000
            
            
            44,700Net
                cash provided by financing activities
            
            
            25,000
            
            
            70,000
            
            
            225,431**NET
                INCREASE (DECREASE) IN CASH**
            
            
            (9,876
            )
            
            9,659
            
            
            818**CASH
                AT BEGINNING OF PERIOD**
            
            
            10,694
            
            
            4,518
            
            
            —**CASH
                AT END OF PERIOD**
            
            $
            818
            
            $
            14,177
            
            $
            818





See
      accompanying notes to unaudited financial statements.


Page:
            6




RIDDLE
        RECORDS, INC.
 (A
        DEVELOPMENT STAGE COMPANY)
 NOTES
        TO
        UNAUDITED FINANCIAL STATEMENTS




NOTE
      1 −
BASIS OF PRESENTATION AND NATURE OF BUSINESS





**Basis
      of Presentation**


The
      accompanying unaudited 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
      and
      Item 310 of Regulation S-B. Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting principles
      for complete financial statements. The accompanying unaudited financial
      statements reflect all adjustments that, in the opinion of management, are
      considered necessary for a fair presentation of the financial position, results
      of operations, and cash flows for the periods presented. The results of
      operations for such periods are not necessarily indicative of the results
      expected for the full fiscal year or for any future period. The accompanying
      unaudited financial statements should be read in conjunction with the audited
      financial statements of Riddle Records, Inc. included in the Form 10-KSB for
      the
      fiscal year ended June 30, 2005.





**Organization
      and Business**


Riddle
      Records, Inc. (the “Company”) (a development stage company) was incorporated on
      August 8, 2001 under the laws of the State of Nevada to engage in business
      as an
      independent record label that was established to capitalize on the growth of
      the
      music industry and that of the “hip-hop” and “rap” genres in particular. The
      fiscal year end is June 30. The Company is considered to be in the development
      stage as defined in Statement of Financial Accounting Standards No. 7,
      Accounting and Reporting by Development Stage Enterprises.





**Going
      Concern and Plan of Operation**


The
      Company’s financial statements have been presented on the basis that it is a
      going concern, which contemplates the realization of assets and the satisfaction
      of liabilities in the normal course of business. The Company is in the
      development stage and has not earned any revenues from operations to date.





The
      Company is currently devoting its efforts to raising investment capital. The
      Company’s ability to continue as a going concern is dependent upon its ability
      to develop additional sources of capital, and ultimately, achieve profitable
      operations. The accompanying financial statements do not include any adjustments
      that might result from the outcome of these uncertainties.





The
      Company entered into an agreement with NT Media Corp. of California (“NT”), a
      related party entity in which a director of the Company is also the president,
      dated July 9, 2004, wherein it agreed to pay an amount equal to all of NT’s out
      of pocket costs associated with the project presently entitled “Rap Battle” in
      exchange for all of NT’s rights in and to the project. The Company believes that
      it will be able to exploit the results and proceeds of the Project in the
      distribution of the “direct to DVD”. The Company believes that it is too soon to
      project total sales related to the Project.




Page:
          7





RIDDLE
          RECORDS, INC.
 (A
          DEVELOPMENT STAGE COMPANY)
 NOTES
          TO
          UNAUDITED FINANCIAL STATEMENTS


NOTE
      2 −
SIGNIFICANT ACCOUNTING POLICIES




**Recently
      Issued Accounting Pronouncements**




In
      February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments”. SFAS No. 155 amends SFAS No 133, “Accounting for
      Derivative Instruments and Hedging Activities”, and SFAS No. 140, “Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities”. SFAS No. 155, permits fair value remeasurement for any hybrid
      financial instrument that contains an embedded derivative that otherwise would
      require bifurcation, clarifies which interest-only strips and principal-only
      strips are not subject to the requirements of SFAS No. 133, establishes a
      requirement to evaluate interest in securitized financial assets to identify
      interests that are freestanding derivatives or that are hybrid financial
      instruments that contain an embedded derivative requiring bifurcation, clarifies
      that concentrations of credit risk in the form of subordination are not embedded
      derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
      qualifying special-purpose entity from holding a derivative financial instrument
      that pertains to a beneficial interest other than another derivative financial
      instrument. This statement is effective for all financial instruments acquired
      or issued after the beginning of the Company’s first fiscal year that begins
      after September 15, 2006. Management believes that this statement will not
      have
      a significant impact on the financial statements.




In
      March
      2006 FASB issued SFAS 156 `Accounting for Servicing of Financial Assets’ this
      Statement amends FASB Statement No. 140, ACCOUNTING FOR TRANSFERS AND SERVICING
      OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES, with respect to the
      accounting for separately recognized servicing assets and servicing liabilities.
      This Statement:




1.
      Requires an entity to recognize a servicing asset or servicing liability each
      time it undertakes an obligation to service a financial asset by entering into
      a
      servicing contract.




2.
      Requires all separately recognized servicing assets and servicing liabilities
      to
      be initially measured at fair value, if practicable.




3.
      Permits an entity to choose `Amortization method’ or Fair value measurement
      method’ for each class of separately recognized servicing assets and servicing
      liabilities:




4.
      At its
      initial adoption, permits a one-time reclassification of available-for-sale
      securities to trading securities by entities with recognized servicing rights,
      without calling into question the treatment of other available-for-sale
      securities under Statement 115, provided that the available-for-sale securities
      are identified in some manner as offsetting the entity’s exposure to changes in
      fair value of servicing assets or servicing liabilities that a servicer elects
      to subsequently measure at fair value.




Page:
          8




RIDDLE
          RECORDS, INC.
 (A
          DEVELOPMENT STAGE COMPANY)
 NOTES
          TO
          UNAUDITED FINANCIAL STATEMENTS


5.
      Requires separate presentation of servicing assets and servicing liabilities
      subsequently measured at fair value in the statement of financial position
      and
      additional disclosures for all separately recognized servicing assets and
      servicing liabilities.




This
      Statement is effective as of the beginning of the Company’s first fiscal year
      that begins after September 15, 2006. Management believes that this statement
      will not have a significant impact on the financial statements.




**Earnings
      (Loss) per Share**


The
      Company computes earnings per common share in accordance with Statement of
      Financial Accounting Standards No. 128, Earnings per Share (“SFAS 128”). The
      Statement requires dual presentation of basic and diluted EPS on the face of
      the
      income statement for all entities with complex capital structures and requires
      a
      reconciliation of the numerator and denominator of the basic EPS computation
      to
      the numerator and denominator of the diluted EPS computation. Basic loss per
      share is computed by dividing loss available to common shareholders by the
      weighted average number of common shares outstanding. The computation of diluted
      loss per share is similar to the basic loss per share computation except the
      denominator is increased to include the number of additional shares that would
      have been outstanding if the dilutive potential common shares had been issued.
      In addition, the numerator is adjusted for any changes in income or loss that
      would result from the assumed conversions of those potential shares. As of
      December 31, 2005, the Company has no dilutive securities and therefore no
      such
      presentation is made.





**Stock-Based
      Compensation**


The
      Company accounts for its stock-based compensation in accordance with SFAS No.
      123R, “Share-Based Payment, an Amendment of FASB Statement No. 123.” The Company
      recognizes in the statement of operations the grant- date fair value of stock
      options and other equity-based compensation issued to employees and
      non-employees. To date the Company has not issued any equity instruments under
      its employee compensation plans.





NOTE
      3 −
RELATED PARTY TRANSACTIONS




During
      the period ended June 30, 2002, the stockholders advanced a total of $300 for
      the payment of operating expenses. This note was paid in full on March 31,
      2004.




During
      the year ended June 30, 2003, the Company’s President advanced $3,700 to the
      Company under a bridge note payable agreement due upon the sooner of April
      7,
      2004, or upon the Company raising additional funding of more than $50,000,
      with
      interest at a rate of 5%. In April 2004, the note was extended for six months
      and is payable upon the sooner of October 7, 2004 or upon the Company raising
      additional funds of more than $50,000. $1,700 of this note was paid on December
      31, 2004 and the remaining $2,000 was paid back on January 17,
      2005.




Page:
          9




RIDDLE
          RECORDS, INC.
 (A
          DEVELOPMENT STAGE COMPANY)
 NOTES
          TO
          UNAUDITED FINANCIAL STATEMENTS


On
      January 30, 2004, the Company’s President advanced an additional $1,000 for the
      payment of operating expenses. This note was paid in full on March 31,
      2004.




On
      June
      25, 2004, the Company’s President advanced $10,000 to the Company under a
      promissory note agreement due June 5, 2005, with interest at a rate of 9%.
      This
      note was paid on December 28, 2004.




The
      Company entered into an agreement with NT on July 9, 2004, wherein it agreed
      to
      pay an amount equal to all of NT’s out of pocket costs associated with the
      project presently entitled “Rap Battle” in exchange for all of NT’s rights in
      and to the project. The payment for the rights mentioned herein will be due
      not
      later than December 31, 2005. The Company has recorded $12,717 of related film
      costs. The agreement due date has been extended by mutual consent of the
      parties.




On
      October 29, 2004, the Company entered into a bridge loan promissory note
      agreement with JRT Holdings, Inc. in the amount of $10,000, interest at 9%
      per
      annum, due December 31, 2004.




On
      November 16, 2004, the Company entered into a bridge loan promissory note
      agreement with JRT Holdings, Inc. in the amount of $10,000, interest at 9%
      per
      annum, due December 31, 2004.




On
      December 10, 2004, the Company’s President, advanced $10,000 to the Company
      under a promissory note due March 10, 2005, with an interest rate of 12% per
      annum.




On
      December 31, 2004, the Company entered into a bridge promissory note agreement
      with the Company’s President and Chief Executive Officer, in the amount of
      $12,000, interest at 9% per annum, due June 30, 2005. This amount represents
      the
      $10,000 loaned to the Company on December 10, 2004 plus accrued interest of
      $800
      and an additional $1,200 for extending the due date to June 30, 2005. In
      connection with this transaction, the officer agreed to forgive $1,700 of
      previous debt. The amount forgiven was credited to additional paid in
      capital.




On
      December 31, 2004, the Company entered into a promissory note agreement with
      JRT
      Holdings, Inc. in the amount of $21,000. This amount represents the $20,000
      loaned to the Company from JRT Holdings, Inc. during October and November 2004
      plus accrued interest of $263 and an additional $738 for extending the due
      date
      to June 30, 2005.




On
      January 27, 2005, the Company entered into an amendment to the bridge note
      dated
      December 31, 2004 with JRT Holdings. In consideration of JRT Holdings agreeing
      to reduce the amount owed them by the Company from $21,000 to $19,000, the
      due
      date was changed to January 27, 2005. This amount was paid in full by the
      Company on January 27, 2005. In connection with this transaction, the $2,000
      of
      forgiven debt was credited to additional paid in capital.




Page:
          10




RIDDLE
          RECORDS, INC.
 (A
          DEVELOPMENT STAGE COMPANY)
 NOTES
          TO
          UNAUDITED FINANCIAL STATEMENTS


On
      January 27, 2005, the Company entered into an amendment to the bridge note
      dated
      December 31, 2004 with an officer of the Company. In consideration of the
      officer agreeing to reduce the amount owed them by the Company from $12,000
      to
      $10,500, the due date was changed to January 27, 2005. This amount was paid
      in
      full by the Company on January 27, 2005. In connection with this transaction,
      the $1,500 of forgiven debt was credited to additional paid in
      capital.




On
      May 8,
      2005, the Company’s President, advanced $1,000 to the Company under a promissory
      note due June 30, 2005, with an interest rate of 9% per annum. This note was
      paid back on May 31, 2005.




On
      November 22, 2005 the Company’s president made payments on behalf of the Company
      in the amount of $2,000 to the Company under a promissory note due December
      7,
      2005, and verbally extended to a date to be mutually agreed upon by the parties,
      with an interest rate of 12% per annum.




NOTE
      4 −
NOTES PAYABLE





The
      following provides the principle terms of the outstanding debt as of December
      31, 2005:




On
      June
      5, 2004, the Company received $40,000 under a bridge note payable agreement
      with
      an unrelated party, due June 5, 2005, with interest at a rate of 10%. In
      connection with the note agreement, the Company paid loan fees in the amount
      of
      $4,000 to Astor capital (an entity owned by the Company’s President &
Secretary.) The company has not made its scheduled payments but the note has
      been verbally extended by mutual consent of the parties.




On
      December 23, 2004, the Company received $50,000 under a promissory note
      agreement with an unrelated party, due June 30, 2005, with interest at a rate
      of
      9%. On June 22, 2005 the note was amended to extend the due date until October
      15, 2005. The company has not made its scheduled payments but the note has
      been
      verbally extended by mutual consent of the parties.




Page:
          11




On
      January 19, 2005, the Company received $30,000 under a promissory note agreement
      with an unrelated party, due June 30, 2005, with interest at a rate of 9%.
      On
      June 22, 2005 the note was amended to extend the due date until October 15,
      2005. The company has not made its scheduled payments but the note has been
      verbally extended by mutual consent of the parties.




On
      June
      1, 2005, the Company received $25,000 under a promissory note agreement with
      an
      unrelated party, due September 30, 2005, with interest at a rate of 12% per
      annum. Loan fees of $5,000 are due at maturity. The Company has not made its
      scheduled payments but the note has been verbally extended by mutual consent
      of
      the parties.





On
      September 30, 2005, the Company received $25,000 under a promissory note
      agreement with an unrelated party, due December 30, 2005, with interest at
      a
      rate of 12%. Loan fees of $5,000 are due at maturity. The Company has not made
      its scheduled payments but the note has been verbally extended by mutual consent
      of the parties.





NOTE
      5 -
      SUBSEQUENT EVENTS





During
      January through May 2006, the Company’s president made payments on behalf of the
      Company totaling $18,178 under various promissory note agreements with an
      interest rate of 12% per annum. No payments have been made on these notes but
      the notes have been verbally extended by mutual consent of the
      parties.




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          12




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





The
      following discussion should be read in conjunction with our financial statements
      and notes thereto appearing elsewhere in this quarterly report on Form 10-QSB.
      This quarterly report may contain forward-looking statements within the meaning
      of the Private Securities Litigation Reform Act of 1995, including statements
      with regard to descriptions of our plans or objectives for future operations,
      products or services, and forecasts of our revenues, earnings or other measures
      of economic performance. Forward-looking statements can be identified by the
      fact that they do not relate strictly to historical or current facts. They
      often
      include the words "believe," "expect," "anticipate," "intend," "plan,"
      "estimate," or words of similar meaning, or future or conditional verbs such
      as
      "will," "would," "should," "could," or "may." Forward-looking statements, by
      their nature, are subject to risks and uncertainties. A number of factors -
      many
      of which are beyond our control - could cause actual conditions, events or
      results to differ significantly from those described in the forward-looking
      statements and reported results should not be considered an indication of our
      future performance.





Some
      of
      these risk factors include, among others, our ability to successfully obtain
      additional financing to continue future operations, our ability to continue
      as a
      going concern, our limited experience in the market as an independent record
      label, our ability to attract new artists to our label and maintain agreements
      with them, our dependence on our artists' commercial success in order to sign
      additional new artists, the successful promotion of our artists and the
      commercial success of our music offerings in order to generate revenue,
      competition among record labels within the music industry, the limited
      experience of our management team and our ability to attract and retain key
      personnel, our ability to develop brand identity as a record label, potential
      liability to third parties for music and other content that we produce and
      distribute, enforcement of our intellectual property rights, control of our
      company by our majority stockholders, and the unpredictability of our operating
      results and other factors could cause the price of our Class A common stock
      to
      fluctuate significantly in the future assuming the successful development of
      a
      trading market for those securities.





These
      risk factors are not exhaustive, and additional factors that could have an
      adverse effect on our business and financial performance are set forth under
      "Risk Factors" and elsewhere in this quarterly report. Forward-looking
      statements speak only as of the date they are made. We do not undertake to
      update forward-looking statements to reflect circumstances or events that occur
      after the date forward-looking statements are made.





OVERVIEW




Unless
      the context otherwise requires, the terms "Company," "we," "us," and "our"
      refer
      to Riddle Records, Inc., a Nevada corporation incorporated in August 2001.
      We
      file our annual report on Form 10-KSB, quarterly reports on Form 10-QSB, current
      reports on Form 8-K and any amendments to those reports filed pursuant to
      Section 13(a) or 15(d) of the Securities Exchange Act of 1934 with the
      Securities and Exchange Commission ("SEC"). You can learn more about us by
      reviewing such filings and other information that we may file or furnish to
      the
      SEC at the SEC's website at www.sec.gov.


Page:
          13




We
      recently established our company as an independent record label to focus on
      signing artists in the "hip-hop" and rap genres particularly. We believe the
      "hip-hop" and rap genres represent a growing portion of the music industry.
      By
      identifying and representing new, high-potential artists in these categories,
      our primary objective will be to successfully introduce these artists to large
      audiences and create a loyal following from fans. As a record label, Riddle
      Records expects to be directly involved in every stage of developing the careers
      of our artists. Our plan for the next 12 months is to focus on acquiring artists
      as clients and developing our brand name within the music industry.




As
      part
      of our activities we have actively organized rap battles in various locations
      around the US. In these events various artists take part in a lyrical
      competition against one another and sing to a beat in front of a large audience.
      The artist that receives a more pronounced applause from the public is the
      winner and moves to the next round to compete against others. In the end there
      will be one winner who wins a prize. This is also an efficient mechanism for
      identifying new talented artists with minimal related expenses.




We
      had no
      substantial operations from inception through August 2003. In August 2003,
      we
      commenced operations as an independent record label by establishing our business
      model, raising initial monies through the sale of our equity securities and
      solidifying informal advisory agreements with a number of industry professionals
      who agreed to afford our company access to their existing relationships in
      the
      music and entertainment industry. We have, and intend to continue to market
      our
      business model by generally making those in the music and entertainment
      industries aware of the services we will provide. We have had discussions with
      a
      number of artists, but have not signed any artist as of December 31,
      2005.





During
      the next 12 months, we plan to focus on acquiring two artists as clients and
      developing our brand name within the music industry. We anticipate expenditures
      of approximately $225,000 over the next 12 months to maintain our business.
      Of
      this amount, approximately $75,000 will be spent on general and administrative
      costs (which includes legal and other professional costs), and $125,000 on
      artist development, which includes entertainment, travel, costs to promote
      those
      artists that we engage as clients and $25,000 for consultant and advisory fees.
      In addition, we require approximately $172,000 to repay indebtedness in the
      next
      twelve months. Given the current lack of revenues and the lack of a client
      base,
      we will be required to rely primarily on the sale of additional equity and
      debt
      securities to fund our operations. If we raise less than $225,000, we expect
      to
      scale back our planned operations and cut back our general and administrative
      and artist development costs in equal proportions. To the extent we are unable
      to raise sufficient financing, we will not have sufficient cash to continue
      operations. See "Risk Factors - Risks Related to Our Financial
      Results.”


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          14


We
      expect
      that our promotional efforts on behalf of our clients will primarily consist
      of
      the creation of recordings of their projects and talent typically on compact
      disc or online, the distribution of these recordings to the appropriate parties
      in the music industry, the introduction of our clients to related industry
      decision-makers, and the making of personal presentations on behalf of our
      clients to prospective interested parties. During the next 12 months, we intend
      to focus our efforts on two aspects of the business. The first is creating
      awareness within the music industry of our business. While none of our existing
      directors or officers has prior business experience with a record label company,
      these persons have arranged informal advisory arrangements with a number of
      industry professionals who have agreed to afford our company access to their
      existing relationships in the music and entertainment industry. In addition,
      two
      artist and repertoire (A&R) advisors are providing us with introductions to
      their contacts within the music and entertainment industry as well as scouting
      and identifying for us new, high-potential artists performing at showcases,
      clubs and other small venues. These A&R advisors are providing their
      services with the understanding that if we sign any artists that they introduce
      to us, they will receive compensation at a negotiated royalty rate on future
      sales of those artists' products. We have and intend to continue to market
      our
      business by generally making those in the music and entertainment industry
      aware
      of the services we will provide. Our marketing efforts undertaken to date
      include generating interest in our record label by word-of-mouth and
      distributing business cards and other promotional materials and at concerts
      and
      other music events, as well as, networking with other professionals at courses,
      seminars and other music and entertainment industry gatherings.





Our
      goal
      is to build a database of industry participants through these advisory
      relationships and to thereafter build upon that database through referrals
      from
      existing contacts. After our initial marketing campaign, we anticipate that
      further marketing of our company will be conducted almost exclusively through
      word-of-mouth, as well as the successful distribution of our project "Rap
      Battle." During our first year of operations, we intend to start identifying
      clients that show promise but require our services to move forward, and clients
      that we determine are likely to generate recurring revenues. We intend to derive
      these initial clients from that pool of industry referrals and relationships
      referenced above. Following that, we anticipate using these initial clients
      to
      generate sufficient revenue to maintain our operating expenses. Our main focus
      is the production of additional editions and commencing the distribution of
      our
      first project, "Rap Battle."





We
      entered into an agreement dated July 9, 2004 with NT Media Corp. of California
      ("NT"), a related party entity in which one of our directors is also a director,
      wherein we agreed to pay an amount equal to all of NT's out of pocket costs
      associated with a project presently entitled "Rap Battle" in exchange for all
      of
      NT's rights in and to the project. The payment for the rights mentioned herein
      will be due not later than December 31, 2005. The agreement has been verbally
      extended by mutual consent of the parties. We have recorded $63,484 of related
      film costs. We believe that we will be able to exploit the results and proceeds
      of this project in the distribution of the "direct to DVD". We have produced
      4
      volumes of “Rap Battle” and are currently negotiating with a third party
      distributor to distribute "Rap Battle" through its distribution channels.


Page:
          15





RESULTS
      OF OPERATIONS





We
      are a
      development stage company. We have not generated any revenue since inception
      through December 31, 2005. Operating expenses from inception through December
      31, 2005 is comprised of general and administrative fees of $215,075, and
      depreciation expenses of $2,040. We had a net loss for the period from inception
      through December 31, 2005 of $252,529.





LIQUIDITY
      AND CAPITAL RESOURCES





We
      are
      not engaged in a capital-intensive business. Our costs are primarily incurred
      by
      the business development costs, travel and entertainment related to our business
      operations, and business overhead normal to an independent record label
      business. We have generated a net amount of $50,231 as of December 31, 2005
      through the private sales of restricted Class A common stock to 28 accredited
      investors. As of December 31, 2005, we have outstanding loans from unrelated
      parties in the amount of $170,000. During June 2004, our company received
      $40,000 under a bridge note payable agreement, due June 5, 2005, with interest
      at a rate of 10%. On December 23, 2004, our company received $50,000 under
      a
      promissory note agreement with an unrelated party, with interest at 9%, due
      June
      30, 2005. On January 19, 2005, our company received $30,000 under a promissory
      note agreement with an unrelated party, with interest at 9%, due June 30, 2005.
      On June 1, 2005, our company received $25,000 under a promissory note agreement
      with an unrelated party, with interest at 12%, due September 30, 2005. On
      September 30, 2005, our Company received $25,000 under a promissory note
      agreement with an unrelated party, with interest at 12%, due December 30, 2005.
      As of December 31, 2005, we had $818 in available cash. We will need to raise
      additional funds in order to satisfy our future liquidity requirements,
      including working capital to fund the cash requirements of our company as well
      as expand our business during the next 12 months and capital expenditures that
      relate to the organization of our company. It is unlikely that we will be able
      to generate sufficient cash flows from operations to meet any cash requirements
      during the next 12 months or to meet our anticipated needs for working capital
      and capital expenditures thereafter. It is likely that we will seek to meet
      these liquidity requirements through public or private equity offerings or debt
      financings.





We
      may be
      unable to obtain any required additional financing on terms favorable to us,
      if
      at all. If adequate funds are not available on acceptable terms, we will be
      unable to fund our expansion, successfully promote our brand, sign and develop
      any artists and promote and produce any signed artists, respond to competitive
      pressures or take advantage of acquisition opportunities, any of which would
      have a material adverse effect on our business. If we raise additional funds
      through the issuance of equity securities, our stockholders may experience
      dilution of their ownership interest, and the newly-issued securities may have
      rights superior to those of our Class A common stock. If we raise additional
      funds by issuing debt, we may be subject to limitations on our operations,
      including limitations on the payment of dividends. There can be no assurances
      that we will be able to secure additional financing, or obtain favorable terms
      on such financing if it is available. Continued negative cash flows create
      substantial doubt about our ability to fully implement our operating plan and
      we
      may have to reduce the scope of our planned operations, which may jeopardize
      our
      ability to continue our business. If cash and cash equivalents, together with
      any cash generated from operations, are insufficient to satisfy our liquidity
      requirements, we will not have sufficient resources to continue operations.


Page:
          16





RISK
      FACTORS





In
      addition to the other information in this quarterly report on Form 10-QSB,
      the
      following factors should be considered in evaluating us and our business.





RISKS
      RELATED TO OUR FINANCIAL RESULTS





If
      we are
      unable to successfully obtain additional financing we will not have sufficient
      cash to continue operations.





As
      of
      December 31, 2005, we had $818 in available cash. We will need to raise
      additional funds in order to satisfy our future liquidity requirements,
      including working capital to fund the cash requirements of our company as well
      as expand our business during the next 12 months and capital expenditures that
      relate to the organization of our company. It is unlikely that we will be able
      to generate sufficient cash flows from operations to meet any unexpected cash
      requirements during the next 12 months or to meet our anticipated needs for
      working capital and capital expenditures thereafter. It is likely that we will
      seek to meet these liquidity requirements through public or private equity
      offerings or debt financings.





Current
      market conditions present uncertainty as to our ability to secure additional
      financing. There can be no assurances that we will be able to secure additional
      financing, or obtain favorable terms on such financing if it is available,
      or as
      to our ability to achieve positive cash flow from operations. Continued negative
      cash flows create substantial doubt about our ability to implement our operating
      plan and we may have to reduce the scope of our planned operations. If cash
      and
      cash equivalents, together with cash generated from operations, if any, are
      insufficient to satisfy our liquidity requirements, we will not have sufficient
      resources to continue operations. We have experienced operating losses since
      our
      inception and our independent auditors report expresses substantial doubt
      concerning our ability to continue operations as a going concern.





We
      have
      earned no revenue since our inception and have incurred a net loss of $252,259
      from inception through December 31, 2005. We expect to continue to incur
      substantial losses and may not generate significant revenue, if any, for the
      immediate future. Our independent auditors report, dated October 25, 2005,
      includes an explanatory paragraph expressing substantial doubt as to our ability
      to continue as a going concern due to the fact that we are in the development
      stage and have not commenced operations. Our ability to continue as a going
      concern prior to the generation of significant revenue is dependent upon
      obtaining additional financing for our planned operations. If we fail to
      generate enough working capital, either from future equity or debt sales or
      revenue from operations, our ability to expand and complete our business plan
      will be materially affected, and you may lose all or substantially all of your
      investment. It is difficult to evaluate our business and prospects because
      we
      have a limited operating history.


Page:
          17


Although
      we were incorporated in August 2001, we are a development stage company and
      have
      had no significant operations to date. Because we have a limited operating
      history, it is difficult to accurately predict whether and when we will generate
      any revenue or to evaluate our future prospects and an investment in our Class
      A
      common stock. Our prospects are uncertain and must be considered in light of
      the
      risks, expenses and difficulties frequently encountered by independent record
      labels in the early stages of development. Our operating results may prove
      unpredictable, and, if a market for our Class A common stock develops, our
      Class
      A common stock price may decrease or fluctuate significantly.





Our
      operating results are likely to fluctuate significantly in the future due to
      a
      variety of factors, many of which are outside of our control. If a market for
      our Class A common stock develops and our operating results fluctuate negatively
      in any future period, the trading price of our Class A common stock may fall
      significantly. Factors that may cause our operating results to fluctuate
      significantly include the following:





·
            our
                ability to generate enough working capital from future equity
                sales;


·
            our
                ability to recruit and retain new
                artists;


·
            the
                level of commercial acceptance by the public of the music offerings
                of our
                artists;


·
            the
                long-term commercial success of our artists and their songs with
                the
                public;


·
            the
                timing and success of our promotions of our
                artists;


·
            fluctuations
                in the levels of consumer purchasing activity relating to the purchase
                of
                recorded music;


·
            the
                level of commercial success achieved by new music and new music products
                introduced by us or by our
                competitors;


·
            our
                ability to enter into joint venture distribution and promotion agreements,
                which reduce our risk in investing in new unproven
                artists;


·
            fluctuations
                in the demand for recorded music sales and products associated with
                music
                and other entertainment events;


·
            extensive
                competition in the music industry, including direct competition for
                talent
                from major recording labels, substantially all of which have significantly
                greater capital resources and infrastructure than we have;


·
            the
                general threat to the music industry posed by the dissemination of
                free
                music over the internet;


·
            the
                amount and timing of operating costs and capital expenditures relating
                to
                expansion of our business, operations and infrastructure; and


·
            general
                economic conditions and economic conditions specific to the music
                industry.





We
      expect
      that we will experience seasonality in our business, reflecting traditional
      retail seasonality patterns affecting sales of recorded music. Sales in the
      traditional retail music industry are significantly higher in the fourth
      calendar quarter of each year than in the preceding three quarters. However,
      to
      date, our limited operating history makes it difficult to ascertain the effects
      of seasonality on our business.


Page:
          18


RISKS
      RELATED TO OUR BUSINESS





We
      are a
      development stage independent record label with no experience in the market,
      and
      failure to successfully compensate for this inexperience may adversely impact
      our ability to successfully generate revenue. We operate as an independent
      record label with no substantial tangible assets in a highly competitive
      industry. Our management has no significant experience in managing an
      independent record label. We have little operating history, no client base
      and
      no revenue to date. This makes it difficult to evaluate our future performance
      and prospects. Our prospectus must be considered in light of the risks,
      expenses, delays and difficulties frequently encountered in establishing a
      new
      business in an emerging and evolving industry characterized by intense
      competition, including:





·
            our
                business model and strategy are still evolving and are continually
                being
                reviewed and revised;


·
            we
                may not be able to raise the capital required to develop our initial
                client base and reputation;


·
            we
                may not be able to successfully implement our business model and
                strategy;


·
            our
                management has not worked together for very long.





We
      cannot
      be sure that we will be successful in meeting these challenges and addressing
      these risks and uncertainties. If we are unable to do so, our business will
      not
      be successful and the value of your investment in our company will decline.
      If
      we are initially unable to attract new artists to our label, we will not succeed
      in our business plan, and even if we are initially able to attract new artists,
      we will be dependent on their success with us to sign additional new
      artists.





We
      have
      not signed any artists and may not be successful in signing any artists. In
      order to attract and sign our initial artists, we will need to overcome the
      fact
      that we are a start-up independent record label with no experience in the
      industry. Artists may be unwilling to be associated with our company because
      of
      our lack of expertise and lack of brand name. Even if we do attract initial
      artists, in order for us to sign additional new artists, any principal artists
      that we initially sign must remain with us, become popular with our customers
      and thereafter sustain their popularity. In order to retain initial artists
      that
      we have signed, we will need to raise sufficient funds to meet our anticipated
      needs for working capital and capital expenditures, and we will need to overcome
      increased competition from other labels. Our business would be adversely
      affected by:





·
            our
                inability to recruit new artists with commercial promise and to enter
                into
                production and promotional agreements with them;


·
            the
                loss of popularity of any artists that we may sign;


·
            our
                inability to maintain relationships with and retain any artists that
                we
                may initially sign;


Page:
          19




·
            non-renewals
                of current agreements with any artists that we may sign;
                and


·
            poor
                performance or negative publicity of any artists that we may sign.





If
      we are
      not successful in promoting any artists that we may sign and in retaining those
      artists that we successfully promote, we will be unable to generate steady
      and
      ongoing revenues.





We
      expect
      that any future revenues will be primarily derived from a specified percentage
      of the income generated by any artists that we may sign so, to operate
      successfully, we must attract and retain highly qualified artists as clients.
      We
      face intense competition for qualified personnel in the entertainment
      industries, and any clients that we may sign will face intense competition
      in
      achieving success and steady income generation in these industries. If we are
      unable to successfully promote our clients, we will not generate revenues.
      Furthermore, upon the expiration of an artist's recording agreement with us,
      if
      we are unable to re-sign and retain the artist, we would not necessarily earn
      any revenues from recordings, tours or other commercial properties that we
      have
      not produced during the term of our relationship with the artist. If our music
      offerings are not commercially successful, we will be unable to successfully
      generate revenue.





We
      expect
      a significant amount of our revenue to come from the production and distribution
      of records, as well as the use of our artists' music in feature films and
      television programs. The success of these music offerings depends primarily
      upon
      their acceptance by the public, which is difficult to predict. The commercial
      success of a record, feature film or television program depends on consumer
      taste, the quality and acceptance of competing offerings released into the
      marketplace at or near the same time, the availability of alternative forms
      of
      entertainment and leisure time activities, general economic conditions and
      other
      tangible and intangible factors, all of which can change quickly. Because we
      expect the popularity of our music offerings to be a significant factor driving
      the growth of our company, if we fail to produce records with broad consumer
      appeal, we will be unable to successfully generate revenue. The music industry
      is extremely competitive and we may not be able to compete successfully against
      other record labels, both large and small, for both artists and the public's
      attention.





The
      market for the promotion and distribution of music is extremely competitive
      and
      rapidly changing. We currently and in the future face competitive pressures
      from
      numerous actual and potential competitors. Many of our current and potential
      competitors in the recorded music business have more substantial competitive
      advantages than we have, including:





·
            longer
                operating histories;


·
            significantly
                greater financial, technical and marketing resources;


·
            greater
                brand name recognition;


·
            better
                distribution channels;


·
            larger
                client bases of artists; and


·
            more
                popular content or artists.


Page:
          20




Our
      competitors may be able to respond more quickly to new or emerging technologies
      and changes in the public's musical tastes and devote greater resources to
      identify, develop and promote artists, and distribute and sell their music
      offerings than we can. Furthermore, historically, when recording artists have
      achieved substantial commercial success they have sought to renegotiate the
      terms of their recording agreements, or we may lose these artists to those
      competitors of ours who offer recording agreements with more favorable terms.
      Our success depends in large part on our current key personnel and our ability
      to attract and retain additional key personnel, which we may or may not be
      able
      to do.





Our
      success depends to some extent on the skills, experience and reputation of
      our
      president, Jacques Tizabi and our director, Ali Moussavi, and the contacts
      that
      they each have with a number of music and entertainment industry professionals.
      Additionally, we hope to attract additional key personnel who can contribute
      to
      our success in various ways. The loss or unavailability of either Messrs. Tizabi
      or Moussavi for an extended period of time, and/or our inability to attract
      additional key personnel could have a material adverse effect on our ability
      to
      conduct our business. We do not have any employment agreements with any of
      our
      officers, directors or employees. The members of our management team have
      limited experience in leadership roles in the music industry or in a public
      company and may be unable to successfully lead us to profitability.





We
      cannot
      assure you that our management team will be able to successfully lead an
      independent record label. Our officers have limited significant experience
      in
      this industry. We have not signed any artists and may not be successful in
      signing any. The failure of our management team to adequately handle these
      challenges would have a material adverse effect on our ability to conduct our
      business. Unless our artists develop a strong brand identity, our business
      may
      not grow and our financial results may suffer.





We
      believe that historical growth and brand recognition are important factors
      not
      only in persuading artists to choose us as their record label, but also in
      our
      ability to effectively utilize the dominant marketing resources in the music
      industry (radio, public relations, trade publications, etc.). We believe that
      our ability to promote and strengthen our brand will be critical to attracting
      artists and achieving widespread acceptance of their music. However, brand
      promotion activities may not yield revenues, and even if they do, any such
      revenues may not offset the expenses we incur in building our brand. We may
      be
      liable to third parties for music and other content that is on the compact
      discs
      we will produce and distribute. We may be liable to third parties for the
      content on the compact discs that we expect to distribute:





·
            if
                the music, text, graphics, or other content on our compact discs
                violates
                their copyright, trademark, or other intellectual property rights;


·
            if
                our artists violate their contractual obligations to others by providing
                content on our compact discs; or


·
            if
                anything on our compact discs is deemed obscene, indecent or defamatory.





We
      will
      attempt to minimize these types of liability by requiring representations and
      warranties relating to our artists' ownership of and rights to distribute and
      submit their music and by taking related measures to review content on our
      compact discs. However, alleged liability could harm our business by damaging
      our reputation, requiring us to incur legal costs in defense, exposing us to
      awards of damages and costs and diverting management's attention away from
      our
      business.


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          21


If
      we
      have difficulty enforcing our intellectual property rights our future
      profitability may suffer. The decreasing cost of electronic equipment and
      related technology has made it easier to create unauthorized versions of audio
      and audiovisual products such as compact discs, videotapes and DVDs. A
      substantial portion of our revenue is expected to come from the sale of audio
      and audiovisual products potentially subject to unauthorized copying. Similarly,
      advances in Internet technology have increasingly made it possible for computer
      users to share audio and audiovisual information without the permission of
      the
      copyright owners and without paying royalties to holders of applicable
      intellectual property or other rights. While we do not currently hold any
      intellectual property rights, intellectual property rights to information that
      are expected to represent a substantial portion of our market value may be
      subject to widespread, uncompensated dissemination on the Internet. If we fail
      to obtain appropriate relief through the judicial process or the complete
      enforcement of judicial decisions issued in our favor, or if we fail to develop
      effective means of protecting our intellectual property or entertainment-related
      products and services, our future profitability may suffer.





RISKS
      RELATED TO OUR CAPITAL STRUCTURE





The
      control by our majority stockholders, and their disparate voting rights, may
      make certain transactions impossible without the approval of these majority
      stockholders. We are controlled by Jacques Tizabi and Ali Moussavi, who
      beneficially own 57.8% of our Class A common stock and 100% of our outstanding
      Class B common stock (or approximately 73.2% of our outstanding capital stock).
      The holders of Class A common stock and Class B common stock have identical
      rights except that holders of Class A common stock are entitled to one vote
      per
      share while holders of Class B common stock are entitled to ten votes per share
      on all matters submitted to a vote of the stockholders. As a result, Messrs.
      Tizabi and Moussavi hold approximately 93.8% of the aggregate number of votes
      eligible to be cast by our stockholders. Therefore, Messrs. Tizabi and Moussavi
      will be able to control substantially all matters requiring approval by our
      stockholders, including the election of directors and the approval of mergers
      or
      other business combination transactions, and will also have control over our
      management and affairs. As a result of such control, certain transactions may
      not be possible without the approval of Messrs. Tizabi and Moussavi, including
      proxy contests, tender offers, open market purchase programs or other
      transactions that could give our stockholders the opportunity to realize a
      premium over the then-prevailing market prices for their shares of Class A
      common stock.





The
      differential in the voting rights could adversely affect the value of the Class
      A common stock to the extent that investors or any potential future purchaser
      of
      our company view the superior voting rights of the Class B common stock to
      have
      value. Some provisions of our certificate of incorporation and bylaws may deter
      takeover attempts, which may limit the opportunity of our stockholders to sell
      their shares at a favorable price. Some of the provisions of our certificate
      of
      incorporation and bylaws could make it more difficult for a third party to
      acquire us, even if doing so might be beneficial to our stockholders by
      providing them with the opportunity to sell their shares possibly at a premium
      over the then market price. For example, our certificate of incorporation,
      as
      amended, authorizes the board of directors to issue up to 10,000,000 shares
      of
      preferred stock. The preferred stock may be issued in one or more series, the
      terms of which may be determined at the time of issuance by our board of
      directors without further action by the stockholders. These terms may include
      voting rights including the right to vote as a series on particular matters,
      preferences as to dividends and liquidation, conversion rights, redemption
      rights and sinking fund provisions. No shares of preferred stock are outstanding
      or will be outstanding upon the closing of this offering and we have no present
      plans for the issuance of any preferred stock. The issuance of any preferred
      stock, however, could diminish the rights of holders of our Class A common
      stock, and therefore could reduce the value of our common stock. In addition,
      specific rights granted to future holders of preferred stock could be used
      to
      restrict our ability to merge with, or sell assets to, a third party. The
      ability of our board of directors to issue preferred stock could make it more
      difficult, delay, discourage, prevent or make it more costly to acquire or
      effect a change in control, thereby preserving the current stockholders'
      control.


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          22


In
      addition, Messrs. Tizabi's and Moussavi's substantial beneficial ownership
      position, together with the authorization of preferred stock, the disparate
      voting rights between the Class A and Class B common stock, and the lack of
      cumulative voting in our certificate of incorporation and bylaws, may have
      the
      effect of delaying, deferring or preventing a change in control of our company,
      may discourage bids for our Class A common stock at a premium over the market
      price of the Class A common stock and may adversely affect the market price
      of
      our Class A common stock.





RISKS
      RELATED TO OUR CLASS A COMMON STOCK





Our
      Class
      A common stock has never been traded, and assuming a trading market develops
      in
      the future, prices for our Class A common stock may decline and investors may
      have difficulty selling their securities. There is no public market for our
      Class A common stock and we cannot assure you that a market will develop or
      that
      any stockholder will be able to liquidate his investment without considerable
      delay, if at all. We cannot assure you that any brokerage firm will act as
      a
      market maker of our securities. A trading market may not develop in the future,
      and if one does develop, it may not be sustained. If an active trading market
      does develop, the market price of our Class A common stock is likely to be
      highly volatile due to, among other things, the nature of our business and
      because we are a new public company with a limited operating history. The market
      price of our Class A common stock may also fluctuate significantly in response
      to the following factors, most of which are beyond our control:





·
            variations
                in our quarterly operating results;


·
            changes
                in securities analysts estimates of our financial
                performance;


·
            changes
                in general economic conditions and in the music retailing
                industry;


·
            changes
                in market valuations of similar companies;


Page:
          23





·
            announcements
                by us or our competitors of significant new contracts with artists,
                acquisitions, strategic partnerships or joint ventures, or capital
                commitments;


·
            loss
                of a major artist, partner or joint venture participant or the failure
                to
                effectively exploit the catalogs of our musicians; and


·
            the
                addition or loss of key managerial and creative personnel.





The
      equity markets have, on occasion, experienced significant price and volume
      fluctuations that have affected the market prices for many companies' securities
      and that have often been unrelated to the operating performance of these
      companies. Any such fluctuations may adversely affect the market price of our
      Class A common stock, regardless of our actual operating performance. As a
      result, stockholders may be unable to sell their shares, or may be forced to
      sell them at a loss. There are a substantial number of shares eligible for
      future sale which could adversely affect the price of our Class A common stock.





The
      sales
      of substantial amounts of our Class A common stock in the public market or
      the
      prospect of such sales could materially and adversely affect the market price
      of
      our Class A common stock.





Jacques
      Tizabi and Ali Moussavi, who each beneficially own 6,000,000 shares of our
      Class
      A common stock and 6,000,000 shares of our Class B common stock, have received
      certain registration rights to sell shares of Class A common stock held by
      them
      and issuable upon conversion of their shares of Class B common stock in the
      public market. We also intend to register the shares of our Class A common
      stock
      reserved for issuance pursuant to our Stock Option Plan.





We
      do not
      intend to pay dividends to our stockholders, so you will not receive any return
      on your investment in our company prior to selling your interest in Riddle
      Records. We have never paid any dividends to our stockholders. We currently
      intend to retain any future earnings for funding growth and, therefore, do
      not
      expect to pay any dividends in the foreseeable future. If we determine that
      we
      will pay dividends to the holders of our Class A common stock, we cannot assure
      that such dividends will be paid on a timely basis. As a result, you will not
      receive any return on your investment prior to selling your shares in our
      company.





ITEM
      3.
      CONTROLS AND PROCEDURES





(a)  Evaluation
      of disclosure controls and procedures





The
      term
      "disclosure controls and procedures" refers to the controls and procedures
      of a
      company that are designed to ensure that information required to be disclosed
      by
      a company in the reports that it files the Securities Exchange Act of 1934
      (the
      "Exchange Act") is recorded, processed, summarized and reported within required
      time periods. As of the end of the period covered by this quarterly report
      on
      Form 10−QSB (the "Evaluation Date"), we carried out an evaluation under the
      supervision and with the participation of our Chief Executive Officer and Chief
      Financial Officer of the effectiveness of our disclosure controls and
      procedures. Based on that evaluation, our Chief Executive Officer and Chief
      Financial Officer have concluded that, as of the Evaluation Date, such controls
      and procedures were effective in ensuring that required information will be
      disclosed on a timely basis in our periodic reports filed under the Exchange
      Act.


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          24


(b)  Changes
      in internal control over financial reporting





Based
      on
      the evaluation of our management as required by paragraph (d) of Rule 13a−15 of
      15d−15 of the Exchange Act, we believe that there were no changes in our
      internal control over financial reporting that occurred during our last fiscal
      quarter that have materially affected, or are reasonably likely to materially
      affect our internal control over financial reporting.




PART
      II.
      OTHER INFORMATION




ITEM
      1:
      LEGAL PROCEEDINGS





We
      are
      not a party to any material legal proceedings with respect to us or any of
      our
      properties.





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





None.





ITEM
      3:
      DEFAULTS UPON SENIOR SECURITIES





None.





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





None.





ITEM
      5:
      OTHER INFORMATION





None.





ITEM
      6:
      EXHIBITS





(a)
      Exhibits


Page:
          25




Exhibit
                Number
              
              Description31.1
              
              Certification
                  of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation
                  S−B,
                  as adopted pursuant to Section 302 of the Sarbanes−Oxley Act of
                  2002.31.2
              
              Certification
                  of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation
                  S−B,
                  as adopted pursuant to Section 302 of the Sarbanes−Oxley Act of
                  2002.32.1
              
              Certifications
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes−Oxley Act of 2002.*




*
        This exhibit shall not be deemed "filed" for purposes of Section 18 of the
        Securities Exchange Act of 1934 or otherwise subject to the liabilities of
        that
        section, nor shall it be deemed incorporated by reference in any filing under
        the Securities Act of 1933 or the Securities Exchange Act of 1934, whether
        made
        before or after the date hereof and irrespective of any general incorporation
        language in any filings.


Page:
          26





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.




RIDDLE
              RECORDS,
              INC./s/
              Jacques
              TizabiJacques
              TizabiChief Executive Officer (Principal Executive Officer)Date:





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