**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**





(Mark
      One)





x****
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
                1934




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





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




**Commission
      File No. 000-50911**




**CHILCO
                  RIVER HOLDINGS
                  INC.**(Exact
                  name of small business issuer as
                  specified in it charter)




**Nevada**
            
            **98-0419129**(State
                or other jurisdiction of incorporation or
            
            (IRS
                Employer Identificationorganization)
            
            No.)




**355
                  Lemon Avenue, Suite C**
                **Walnut,
                  CA 91789**(Address
                of principal executive
                offices)**(909)
                869-7933**(Registrant's
                telephone number, including area
                code)





Check
      whether the issuer (1) filed all reports required to be filed by section 13
      or
      15 (d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter period that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days.  
Yes x No o





Indicate
      by check mark whether the registrant is a shell company (as defined by Rule
      12b-2 of the Exchange Act).  Yes o No x




APPLICABLE
      ONLY TO CORPORATE ISSUERS:





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: 49,845,600 issued and outstanding as of
      November 12, 2007.





Transitional
      Small Business Disclosure Form (Check one):  Yes o No x





**CHILCO
      RIVER HOLDINGS INC.**


TABLE
      OF
      CONTENTS


TO
      QUARTERLY REPORT ON FORM 10-QSB


FOR
      PERIOD ENDED SEPTEMBER 30, 2007





**Page****PART
                I**
            
            **FINANCIAL
                INFORMATION**Item
                1.
            
            Financial
                Statements
            
            3Consolidated
                Balance Sheets
            
            3Consolidated
                Statements of Operations and Other Comprehensive Income
            
            4Consolidated
                Statements of Cash Flows
            
            5Condensed
                Notes to Consolidated Financial Statements
            
            6Item
                2.
            
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            
            16Item
                3.
            
            Controls
                and Procedures
            
            28**PART
                II**
            
            **OTHER
                INFORMATION**Item
                1.
            
            Legal
                Proceedings
            
            28Item
                2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            28Item
                3.
            
            Defaults
                Upon Senior Securities
            
            28Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            28Item
                5.
            
            Other
                Information
            
            28Item
                6.
            
            Exhibits
            
            29Signatures
            
            
            
            31





(REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK)




2





**PART
      I - FINANCIAL INFORMATION**





**Item
      1.**  **Financial
      Statements.**




**CHILCO
        RIVER HOLDINGS INC.**
 **CONSOLIDATED
          BALANCE SHEET**
 **(Expressed
            in US$)**
 (Unaudited)


**September
                30, 2007****ASSETS****Current
                Assets**Cash
            
            $
            350,583Accounts
                receivable, net of allowance for doubtful accountsof
                $ nil as of September 30, 2007
            
            
            335,287Deposit
                receivable
            
            
            250,000Supplies
                inventory
            
            
            119,801Prepaid
                expense & other current assets
            
            
            392,951Prepaid
                income taxes
            
            
            79,049VAT
                tax recoverable
            
            
            53,274**Total
                Current Assets**
            
            
            1,580,945Property,
                furniture & equipment,net
                of accumulated depreciation of $8,125,455as
                of September 30, 2007
            
            
            15,902,274Intangible
                Asset
            
            
            8,072,526Unamortized
                bond issuance cost
            
            
            72,000Security
                deposit & other assets
            
            
            59,480**Total
                Other Assets**
            
            
            8,204,006**TOTAL
                ASSETS**
            
            $
            25,687,225**LIABILITIES
                AND STOCKHOLDERS' EQUITY****Current
                Liabilities**Accounts
                payable
            
            $
            126,642Accrued
                expenses and other payables
            
            
            12,836Installment
                payable - current portion
            
            
            2,612,498Loan
                from affiliates
            
            
            480,440Accrued
                interest expense
            
            
            64,295Deferred
                tax liabilities
            
            
            16,962**Total
                Current Liabilities**
            
            
            3,313,673**Long
                Term Liabilities**11%
                Convertible debenture payable
            
            
            1,000,000Installment
                payable - long term
            
            
            -**Total
                Long Term Liabilities**
            
            
            1,000,000**TOTAL
                LIABILITIES**
            
            
            4,313,673**Stockholders'
                Equity**Common
                stock: $0.001 par value, 100,000,000 authorizedshares,
                49,845,600 shares issued and outstanding
            
            
            49,846Additional
                paid-in capital
            
            
            27,405,583Prepaid
                stock compensation
            
            
            (575,000
            )Prepaid
                warrants copmpensation
            
            
            (577,530
            )Accumulated
                deficit
            
            
            (5,254,922
            )Accumulated
                foreign currency adjustment
            
            
            325,575**Total
                Stockholders' Equity**
            
            
            21,373,552**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            25,687,225








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


3


**CHILCO
        RIVER HOLDINGS INC.**
 **CONSOLIDATED
            STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE
            INCOME**
 **(Expressed
            in US$)**
 (Unaudited)


**Three
                Months Ending**
            **Nine
                Months Ending****September
                30,**
            **September
                30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006****Revenues**Slot
                machine leasing
            
            $
            127,142
            
            $
            116,133
            
            $
            408,986
            
            $
            288,510Rooms
            
            
            249,716
            
            
            284,851
            
            
            732,588
            
            
            828,734Food
                and beverage
            
            
            22,560
            
            
            21,656
            
            
            64,618
            
            
            72,624399,418
            
            
            422,640
            
            
            1,206,192
            
            
            1,189,868Less:
                Promotional Allowances
            
            
            -
            
            
            -
            
            
            -
            
            
            -**Total
                Revenues**
            
            
            399,418
            
            
            422,640
            
            
            1,206,192
            
            
            1,189,868**Operating
                Expenses**Operating
                departments
            
            
            141,890
            
            
            167,619
            
            
            401,970
            
            
            420,865General
                and administrative
            
            
            508,755
            
            
            785,998
            
            
            1,387,094
            
            
            1,849,209Depreciation
                & Amortization
            
            
            142,096
            
            
            299,580
            
            
            438,407
            
            
            670,266**Total
                Operating Expenses**
            
            
            792,741
            
            
            1,253,197
            
            
            2,227,471
            
            
            2,940,340**Income
                (Loss) from Operations**
            
            
            (393,323
            )
            
            (830,557
            )
            
            (1,021,279
            )
            
            (1,750,472
            )**Other
                Income and Expenses**Interest
                income
            
            
            4,803
            
            
            564
            
            
            6,576
            
            
            13,855Other
                income/gains
            
            
            687
            
            
            281
            
            
            2,354
            
            
            444Interest
                expense
            
            
            (111,838
            )
            
            -
            
            
            (432,592
            )
            
            -(106,348
            )
            
            845
            
            
            (423,662
            )
            
            14,299**Income
                (Loss) before income tax**
            
            
            (499,671
            )
            
            (829,712
            )
            
            (1,444,941
            )
            
            (1,736,173
            )**Benefit
                (Provision) for income tax**
            
            
            174
            
            
            (16,637
            )
            
            (30,780
            )
            
            (46,307
            )**Net
                Income (Loss)**
            
            
            (499,497
            )
            
            (846,349
            )
            
            (1,475,721
            )
            
            (1,782,480
            )**Other
                Comprehensive Income**Unrealized
                gain (loss) onForeign
                Currency Translation, net of tax
            
            
            129,650
            
            
            1,059
            
            
            284,327
            
            
            (6,523
            )**Total
                Comprehensive Income (loss)**
            
            $
            (369,847
            )
            $
            (845,290
            )
            $
            (1,191,394
            )
            $
            (1,789,003
            )Basic
                Earnings Per Share
            
            $
            (0.01
            )
            $
            (0.02
            )
            $
            (0.03
            )
            $
            (0.04
            )Diluted
                Earnings Per Share
            
            $
            (0.01
            )
            $
            (0.02
            )
            $
            (0.03
            )
            $
            (0.04
            )Weighted
                Average Shares Outstanding
            
            
            49,356,470
            
            
            46,775,536
            
            
            48,565,960
            
            
            45,048,245Diluted
                Average Shares Outstanding
            
            
            49,356,470
            
            
            46,775,536
            
            
            48,565,960
            
            
            45,048,245




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




4
 
 **CHILCO
        RIVER HOLDINGS INC.**
 **CONSOLIDATED
          STATEMENTS OF CASH FLOWS**
 **(Expressed
            in US$)**
 (Unaudited)


**For
                the Nine Months****Ended
                September 30****2007**
            
            
            **2006****Cash
                Flows from Operating Activities**Net
                Income (Loss)
            
            $
            (1,475,721
            )
            $
            (1,782,480
            )Adjustments
                to reconcile net income to cash flowsfrom
                operating activitiesDepreciation
                & amortization
            
            
            438,407
            
            
            669,918Prepaid
                expense via stock issuance
            
            
            345,000
            
            
            345,000Prepaid
                placement fee via warrant issuance
            
            
            64,170
            
            
            -Amortization
                of service contract
            
            
            340,440
            
            
            -(Increase)/Decrease
                in account balances of:Accounts
                receivable
            
            
            (191,687
            )
            
            (85,373
            )Deposit
                receivable
            
            
            (250,000
            )
            
            -Supplies
                inventory
            
            
            (21,400
            )
            
            (15,413
            )Prepaid
                expense & other current assets
            
            
            (9,907
            )
            
            (126,230
            )Deferred
                tax assets
            
            
            -
            
            
            60,854VAT
                Recoverable
            
            
            37,129Unamortized
                bond issue cost
            
            
            (72,000
            )
            
            -Prepaid
                contract and security deposit
            
            
            (52,852
            )
            
            -Increase/(Decrease)
                in account balances of:Accounts
                payable
            
            
            87,885
            
            
            163,970Customer
                Deposit
            
            
            -
            
            
            100,000Accrued
                interest expense
            
            
            56,918
            
            
            -Accrued
                expenses and other payables
            
            
            (88,233
            )
            
            2,127Foreign
                Taxes Payable
            
            
            -
            
            
            (61,995
            )**Cash
                Flows from Operating Activities**
            
            
            (791,851
            )
            
            (729,622
            )**Cash
                Flows From Investing Activities**Purchase
                of properties and equipments
            
            
            (27,253
            )
            
            (256,094
            )Cash
                paid for construction in progress
            
            
            (375,307
            )
            
            (1,090,888
            )Acquisition
                of intangible licensing rights
            
            
            (1,000,000
            )
            
            (500,000
            )**Cash
                Flows From Investing Activities**
            
            
            (1,402,560
            )
            
            (1,846,982
            )**Cash
                Flows from Financing Activities**Net
                cash repayment for affiliate loans
            
            
            (50,921
            )
            
            (135,329
            )Cash
                proceeds from the 11% convertible debenture
            
            
            1,000,000
            
            
            -Cash
                proceeds from subscribed capital
            
            
            -
            
            
            1,817,149Cash
                proceeds from warrants exercise
            
            
            199,040
            
            
            -**Cash
                Flows From Financing Activities**
            
            
            1,148,119
            
            
            1,681,820Effect
                of exchange rate changes on cashbalances
                held in foreign currencies
            
            
            323,864
            
            
            (6,523
            )**Net
                Change in cash and cash equivalents**
            
            
            (722,428
            )
            
            (901,307
            )Cash
                and cash equivalents at the beginning of period
            
            
            1,073,011
            
            
            1,435,683Cash
                and cash equivalents at the end of period
            
            $
            350,583
            
            $
            534,376**Supplemental
                Disclosure Information**Cash
                paid during the period for interest
            
            $
            88,553
            
            $
            -Cash
                paid during the period for income taxes
            
            $
            43,658
            
            $
            212,465**Significant
                Non-cash Transactions**Issuance
                of 1,500,000 warrants to Chung Lienas
                placement agent fee
            
            $
            641,700
            
            $
            -Issuance
                of 1,500,000 common shares to KCTechnology
                under the Licensing Agreement
            
            $
            1,837,500
            
            $
            -Non-cash
                issuance of stock compensation
            
            $
            -
            
            $
            1,380,000


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


5


**Chilco
      River Holdings, Inc.**


**Notes
      To Consolidated Financial Statements**


**September
      30, 2007**


**Unaudited**




**Preliminary
      Note**




The
      accompanying condensed consolidated financial statements have been prepared
      without audit, pursuant to the rules and regulations of the Securities and
      Exchange Commission. Certain information and disclosures normally included
      in
      financial statements prepared in accordance with generally accepted accounting
      principles have been condensed or omitted. In the opinion of the management,
      the
      accompanying interim financial statements contain all adjustments, consisting
      of
      normal recurring accruals, necessary for a fair presentation. The results of
      operations for the nine-month period ended September 30, 2007, are not
      necessarily indicative of the results for a full-year period. It is suggested
      that these condensed financial statements be read in conjunction with the
      financial statements and notes thereto included in the Company’s annual audited
      financial statements for the year ended December 31, 2006.





***1.***
            ***Business
                Organization and
                Reorganization***





Chilco
      River Holdings, Inc. (CRH, or the Company) was incorporated in the State of
      Nevada on May 8, 2003. The Company acquired a 100% interest in 16 mineral claim
      units located in British Columbia, Canada in November 2003. After the completion
      of a preliminary exploration report on the claim, the Company suspended any
      mineral exploration effort. The Company abandoned these properties in
      2005.





Bruce
      Grupo Diversion SAC (BGD) was formed on March 1, 1996 and registered at the
      Registry for Legal Persons of Lima, Peru on April 28, 1996. BGD owned a
      fourteen-story building and a four-story adjacent structure that are operated
      as
      a casino and a hotel (the Miramar Hotel and Casino (“Miramar”), formerly known
      as “Bruce Hotel and Casino”). Miramar is licensed to operate slot machines,
      traditional gaming tables (blackjack, roulette, craps and poker), a night club,
      discothèques, and a restaurant. As of February 2005, the casino consisted of
      gaming tables on the second floor (the gaming floor) of the main building and
      of
      about 220 slot machines on the ground floor (the slot room).





Kubuk
      International, Inc. (KII) is a California corporation and was incorporated
      on
      January 7, 2002. The majority shareholders of KII also controlled 99% of total
      voting stock of BGD.





Kubuk
      Investment S.A.C. (KISAC) was formed in Peru in year 2001 by the majority
      shareholders of KII. KII’s majority shareholders also formed Kubuk Gaming S.A.C.
      (KGSAC) in Peru in year 2005.





Starting
      on August 4, 2001, BGD and KISAC entered into a series of sale and purchase
      agreements (collectively the “Sale and Purchase Agreements”) of the hotel assets
      and certain casino properties owned and operated by BGD for the purpose of
      transferring these properties to KISAC. Total consideration for the Sale and
      Purchase Agreements was in the amount of 62,970,744 Peruvian Nuevo Soles (“S/.”)
      (US$19,357,745 using spot rate of S/.3.253:US$1 on May 21, 2005). On May 21,
      2005, all assets subject to the scope of the Sale and Purchase Agreements were
      transferred to and received by KISAC, which then commenced to carry on the
      hotel
      lodging businesses of Miramar. The only assets that were transferred to KISAC
      are the assets as listed under “Property, Furniture, and Equipment” on the
      balance sheet. All other assets and liabilities were retained by BGD, which
      was
      subsequently dissolved in 2006. The accounting treatment used by KISAC to record
      the transfer of the assets followed the guidance for transactions between
      entities under common control as described in *SFAS
      141, Business Combinations.* This
      standard requires that the receiving entity use the carrying amount of the
      assets of the transferring entity. Therefore, no fair market value adjustments
      were made to the transferred assets. Furthermore, in accordance with Article
      11-01(d) of Regulation S-X, this transaction was treated as a business
      acquisition since the revenue-producing activity remained generally the same
      as
      before the transaction. Specifically, KISAC retained the following: physical
      facilities, employee base, customer base, operating rights, operation
      techniques, and trade name.





6


The
      gaming floor of Miramar has been closed for renovation since March 2005. During
      the renovation, BGD continued to operate slot machines in the casino until
      July
      1, 2005, when MINCETUR, the gaming authority of Peru, issued gaming licenses
      to
      KGSAC. KGSAC then took over the slot machine operation until November 2005
      when,
      in anticipation of the start of the planned renovation, the Company suspended
      the slot room operation and closed the restaurant to the general public. As
      of
      September 30, 2007, the Company’s operations are limited to (i) hotel lodging
      and leasing of slot machines retired from the former Bruce Casino by KISAC,
      and
      (ii) leasing of a limited number of “Kubuk” brand slot machines by KGSAC.
      Although our management had anticipated completing the renovation of Miramar
      in
      2007, the Company now looks to reopen Miramar sometime in the first half of
      2008, provided that sufficient capital is raised to complete the renovation
      efforts.





On
      June
      15, 2005, KII and the shareholders of KISAC and KGSAC entered into an Agreement
      and Plan of Reorganization (the “Reorganization Agreement”), under which KII
      issued 50,920,000 shares of common stock to the shareholders of KISAC and KGSAC
      in exchange for their entire ownership holdings of KISAC and KGSAC. As of June
      30, 2005, both KISAC and KGSAC were 100% owned by KII.





On
      July
      15, 2005, CRH entered into a Share Exchange Agreement with KII and certain
      representatives of its shareholders. Under the terms of the Share Exchange
      Agreement, CRH agreed to acquire all of the issued and outstanding capital
      stock
      of KII from KII’s shareholders. On
      August 3, 2005, CRH completed the acquisition of KII in accordance with the
      terms of the Share Exchange Agreement by issuing 38,500,000 (post-split) shares
      of its common stock to shareholders of KII as consideration (“Share Exchange”).
      KII had 51,000,400 shares of common stock issued and outstanding at the time
      of
      acquisition. KII shareholders received 0.3749970588 share of CRH’s common stock
      for each share of KII common stock tendered. In connection with the closing
      of
      the Share Exchange, the founding shareholder and two former officers and
      directors of CRH agreed to contribute an aggregate of 7,928,000 (post-split)
      shares of the CRH common stock to the Company as an additional capital
      contribution. These shares were cancelled effective as of August 3,
      2005.





In
      April
      2006, the Company established a software development center in Shenzhen, China
      to develop an online poker software and other devices related to online gaming
      activities. The Company intends to, after the software development becomes
      successful, license out the online gaming software to interested third parties
      for conducting online gaming activities outside of the United States. The
      Company has applied to the local government for the foreign business branch
      office status for its Chinese software development center.





***2.***
            ***Significant
                Accounting Policies***





(a)
        Principles of Consolidation





The
      financial statements include the accounts of CRH and KII, as well as the
      accounts of KII’s wholly-owned Peruvian subsidiaries, KISAC and KGSAC, which own
      the assets and operate the businesses of the former Bruce Grupo Diversion SAC.
      All significant inter-company balances and transactions have been eliminated
      in
      consolidation.





(b)
        Use of Estimates





The
      preparation of the Company’s financial statements in conformity with generally
      accepted accounting principles in the United States requires management of
      the
      Company to make certain estimates and assumptions. These estimates and
      assumptions affect the reported amounts of assets and liabilities and
      disclosures of contingent assets and liabilities at the date of the consolidated
      financial statements, as well as the reported amounts of revenue and expenses
      during the reporting period. Actual results could differ from those
      estimates.





7




(c)
        Cash and Cash Equivalents





The
      Company considers all highly liquid debt instruments purchased with a maturity
      of three months or less when purchased to be cash equivalents.





(d)
        Accounts Receivable





Trade
      receivables, including casino and hotel receivables, are typically non-interest
      bearing and are initially recorded at cost. Accounts are written off when
      management deems the account to be uncollectible. Recoveries of accounts
      previously written off are recorded when received. An estimated allowance for
      doubtful accounts is maintained to reduce the Company’s receivables to their
      carrying amount, which approximates fair value. The allowance is estimated
      based
      on specific review of customer accounts as well as historical collection
      experience and current economic and business conditions.





(e)
        Revenue Recognition and Promotional Allowances





Casino
      revenue is the aggregate net difference between gaming wins and losses, with
      liabilities recognized for funds deposited by customers before gaming play
      occurs (“casino front money”) and for chips in the customers’ possession
      (“outstanding chip liability”). Hotel, food and beverage, entertainment and
      other operating revenues are recognized as services performed.





In
      accordance with industry practice, the retail value of accommodations, food
      and
      beverage, and other services furnished to guests without charge is included
      in
      gross revenue and then deducted as promotional allowances. There was no
      promotional allowance for the quarter ended September 30, 2007 as there were
      no
      casino and slot machine operations during the period while our renovation
      efforts remained incomplete.





Revenues
      from slot machine rentals are recognized as earned either on a daily fixed-rate
      basis under the related rental contracts with customers or under profit-sharing
      arrangements based on net winnings reported by the customer-lessee. All leasing
      revenue is generated from slot machine rentals that are accounted for as
      operating leases. The rentals have no defined length of contract, but are on
      a
      month-to-month basis.





(f)
        Income Taxes





Provisions
      for income taxes are based on taxes payable or refundable for the current year
      and deferred taxes on temporary differences between the amount of taxable income
      and pretax financial income and between the tax basis of assets and liabilities
      and their reported amounts in the financial statements. Deferred tax assets
      and
      liabilities are included in the financial statements at currently enacted income
      tax rates applicable to the period in which the deferred tax assets and
      liabilities are expected to be realized or settled as prescribed in *SFAS
      No. 109* , “ *Accounting
      for Income Taxes.* ”
As
      changes in tax laws or rates are enacted, deferred tax assets and liabilities
      are adjusted through the provision for income taxes. A valuation allowance
      is
      recognized if it is more likely than not that some portion or all deferred
      tax
      asset will not be realized. Deferred income tax asset and liability balances
      are
      netted, as applicable, when they represent deferred amounts within the same
      taxing jurisdiction.





(g)
        Basic and Diluted Earnings (Loss) per Share





Basic
      earnings per share of common stock were computed by dividing income available
      to
      common stockholders, by the weighted average number of common shares
      outstanding, net of common stock held in the treasury for the year. Diluted
      earnings per share were computed using the “treasury stock method” under *SFAS
      No. 128 “Earnings per Share.* ”
As
      the
      Company has a loss for the quarter ended September 30, 2007, the potentially
      dilutive shares are anti-dilutive and are thus not added into the earnings
      per
      share calculation. As of September 30, 2007, there were 2,833,333
      potentially dilutive shares resulting from the issuances of warrants and
      convertible debt to Chung Lien under the Agency Agreement and Private
      Placement.





8


(h)
        Supplies Inventories





Supplies
      inventories are presented at adjusted cost or market value, whichever is lower.
      Cost is established based on either the first-in, first-out assumption or,
      in
      certain cases, specific identification method.




(i)
        Property, Plant and Equipment





Property,
      plant and equipment are stated at the historical cost. Depreciation is
      calculated based on straight-line method over the properties’ estimated useful
      lives, which range from 5 to 7 years for machinery and equipment and 39 years
      for building and building improvements. Betterment or improvements to properties
      are capitalized to properties, plant and equipment accounts. Repairs and
      maintenance costs are charged to expense accounts.





Certain
      long-lived assets of the Company are reviewed at least annually as to whether
      their carrying values have become impaired in accordance with *SFAS
      No. 144, “Accounting for the Impairment or Disposal of Long-Lived
      Assets.* ”
      Management considers assets to be impaired if the carrying value exceeds the
      undiscounted projected cash flows from operations. If impairment exists, the
      assets are written down to their fair value or the projected discounted cash
      flows from related operations.





(j)
        Intangibles





The
      Company adopted the rules set forth in *SFAS
      No. 142, “Goodwill and Other Intangible Assets* ,”
to
      account for its intangible assets acquired under the licensing agreement with
      third parties. The intangible assets acquired are initially recorded at their
      fair value. The intangibles with finite useful lives are amortized over their
      lives. Intangible assets with indefinite useful lives are not amortized and
      are
      examined at least annually to determine whether events and circumstances
      continue to support an indefinite useful life. All intangible assets are
      reviewed annually for impairment. If the fair value of an intangible is
      determined to be below its carrying amount, the intangible is written down
      to
      its fair value.





(k)
        Concentration of Credit Risk





The
      Company maintains substantially all of its day-to-day operating cash balances
      with Peruvian commercial banks and a California bank. Deposits with the
      California bank are insured by Federal Deposit Insurance Corporation (FDIC)
      up
      to $100,000 per depositor. As of September 30, 2007, the Company had no exposure
      of risk with respect to the FDIC insurance coverage.





In
      Peru,
      bank accounts and deposits with all financial institutions are insured by Fondo
      de Segiro de Deposito (FSD) up to S/. 75,742 (or US$24,160, based on the current
      exchange rate of S/.3.135: US$1 as of September 30, 2007). The Company has
      4
      Peruvian bank accounts and an exposure in the amount of $348,413 that exceeded
      the FSD insurance coverage as of September 30, 2007.





(l)
        Shares-Based Compensation





In
      December 2004, the Financial Accounting Standards Board (FASB) issued *SFAS
      No. 123R, “Share Based Payment.* ” *SFAS
      123R* is a
      revision of *SFAS
      No. 123 “Accounting for Stock-Based Compensation* ,”
and
      supersedes *APB
      Opinion No. 25, “Accounting for Stock Issued to Employees* ”
and
      its
      related implementation guidance. *SFAS
      123R* establishes standards for the accounting for transactions in which an entity
      exchanges its equity instruments for goods or services. It also addresses
      transactions in which an entity incurs liabilities in exchange for goods or
      services that are based on the fair value of the entity’s equity instruments or
      that may be settled by the issuance of those equity instruments. *SFAS
      123R* focuses
      primarily on accounting for transactions in which an entity obtains employee
      services in share-based payment transactions. *SFAS
      123R* does not
      change the accounting guidance for share-based payment transactions with parties
      other than employees provided in *SFAS
      123* as
      originally issued and *Emerging
      Issues Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are
      Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
      Goods or Services.” SFAS 123R* does not
      address the accounting for employee share ownership plans, which are subject
      to *AICPA
      Statement of Position 93-6, “Employers’ Accounting for Employee Stock Ownership
      Plans.” SFAS 123R* requires
      a public entity to measure the cost of employee services received in exchange
      for an award of equity instruments based on the grant-date fair value of the
      award (with limited exceptions). That cost will be recognized over the period
      during which an employee is required to provide service in exchange for the
      award - the requisite service period (usually the vesting period). *SFAS
      123R* requires
      that the compensation cost relating to share-based payment transactions be
      recognized in the financial statements. That cost will be measured based on
      the
      fair value of the equity or liability instruments issued. The scope of *SFAS
      123R* includes
      a wide range of share-based compensation arrangements including share options,
      restricted share plans, performance-based awards, share appreciation rights,
      and
      employee share purchase plans. The Company has adopted the provisions under *SFAS
      123R* as of
      January 1, 2006.





9




(m)
        Impact of New Accounting Standards





In
      June
      2003, the Securities and Exchange Commission (“SEC”) adopted final rules under
      Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). The SEC issued a
      final rule under Release 33-8760 on December 15, 2006 to extend the due dates
      for the implementation of provisions under Section 404 for certain small public
      companies. Under the SEC rule, the Company is required to include in its annual
      and quarterly filings a report of management on the Company's internal control
      over financial reporting starting with fiscal years ending after December 15,
      2007. The internal control report must include a statement of management's
      responsibility for establishing and maintaining adequate internal control over
      financial reporting for the Company; of management's assessment of the
      effectiveness of the Company's internal control over financial reporting as
      of
      year end; and of the framework used by management to evaluate the effectiveness
      of the Company's internal control over financial reporting. The Company's
      independent accounting firm will have to issue an attestation report on
      management's assessment of the Company's internal control over financial
      reporting as part of the SEC filings starting with fiscal years ending after
      December 15, 2008.





In
      June
      2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty
      in
      Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48). FIN 48
      clarifies the accounting for uncertainties in income taxes recognized in an
      enterprise's financial statements. FIN 48 requires that the Company determine
      whether it is more likely than not that a tax position will be sustained upon
      examination by the appropriate taxing authority. If a tax position meets the
      more likely than not recognition criteria, FIN 48 requires the tax position
      be
      measured at the largest amount of benefit greater than 50% likely of being
      realized upon ultimate settlement. This accounting standard is effective for
      fiscal years beginning after December 15, 2006. The cumulative effect of
      applying the provisions of this interpretation is required to be reported
      separately as an adjustment to the opening balance of retained earnings in
      the
      year of adoption. The impact of our adoption of FIN 48 in 2007 has not been
      significant.




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
      defines fair value, establishes a framework for using fair value to measure
      assets and liabilities, and expands disclosures about fair value measurements.
      The Statement applies whenever other statements require or permit assets or
      liabilities to be measured at fair value. SFAS No. 157 is effective for fiscal
      years beginning after November 15, 2007. The impact of our adoption of SFAS
      No.
      157 has not yet been determined.





(n)
        Value Added Tax Recoverable





According
      to sales tax laws in Peru, a Peruvian entity is allowed to offset sales tax
      paid
      to vendors with sales tax received from their customers, prior to remitting
      the
      sales tax received to the local jurisdiction. The asset balance represents
      sales
      tax paid to vendors that is expected to be offset against future sales tax
      received during the one year period following the balance sheet
      date.





10


(o)
        Dividends





The
      Company accrues for declared dividends which are not yet paid. As of the balance
      sheet date, there were no dividends which were declared and unpaid.




***3.***
            ***Foreign
                  Currency
                  Transactions***




The
      Company conducted its gaming operations at Miramar in both US Dollars and the
      Peruvian Nuevo Soles. Likewise, the hotel and other business activities of
      Miramar are operated using both US Dollars and the Nuevo Soles. The functional
      currency of the Peruvian subsidiaries is the Nuevo Soles, whereas the functional
      currency of the US parent is the US dollar. Account balances on the balance
      sheet are translated into US Dollars equivalents using the spot rate of
      S/.3.135:US$1 on September 30, 2007, while the results of operations are
      translated into US Dollars equivalents using S/.3.2494:US$1, the weighted
      average exchange rates for the three-quarter period ended September 30,
      2007.





***4.***
            ***Related
                Party Transactions***





During
      the quarter ended September 30, 2007, the Company incurred $26,678 of cash
      expenditures at its software development center in Shenzhen, China. All
      expenditures incurred relating to the Shenzhen operation have been advanced
      by a
      former director of the Company. No interest has been accrued for the amount
      advanced. The outstanding balance of the advanced expenditures amounted to
      $183,087 as of September 30, 2007.





On
      December 14, 2006, the Company borrowed $250,000 from a shareholder
      (“Shareholder A”) and executed a promissory note in favor of this shareholder A.
      The note bears an annual interest rate of 8%. The entire principal and accrued
      interest were due on June 11, 2007. The maturity date has been extended first
      to
      September 30, 2007 and then once more to November 30, 2007. Shareholder A owns
      between 5% and 10% of the Company’s common stock as of September 30,
      2007.





On
      April
      19, 2007, Tom Liu, the Company’s CEO, and David Liu, both owning 10% or more of
      the Company’s outstanding common stock, each pledged 600,000 common shares to
      secure our repayment of the 11% convertible debenture issued to Chung Lien
      Investment Management Limited in a private placement transaction. See Notes
      8
      and 9 for additional details.





***5.***
            ***Issuance
                of Common Stock and
                Warrants***




On
      January 18, 2007, the board of directors resolved to amend the purchase warrant
      certificate for each Class A Warrant (issued in connection with the units sold
      in the December 17, 2005 private placement) to (i) lower the exercise price
      from
      $1.00 per share (split-adjusted) to $0.40 per share, and (ii) extend the
      exercise period from January 20, 2007 to February 20, 2007. Consequently, by
      the
      end of the February 20th extended exercise period, a total of 497,600 Class
      A
      warrants were exercised for which the Company received $199,040. See Notes
      8 and
      9 for additional issuance.





***6.***
            ***Cancellation
                of Shares***





During
      the third quarter ended December 31, 2005, we issued a notice of default under
      the terms of an escrow agreement through which an aggregate of 4,000,000
      (post-split) shares of our common stock were placed into escrow in connection
      with the Share Exchange (the “Escrow Shares”). The Escrow Shares were intended
      to satisfy certain obligations of KII under a series of consultant agreements
      with Nefilim Associates, LLC, a Massachusetts limited liability company, T
      Morgan LLC, a Delaware limited liability company, and Sean Sullivan
      (collectively the “Consultants”). Specifically, KII agreed to issue capital
      stock of KII or an entity acquired by or acquiring KII to the Consultants upon
      satisfaction of certain conditions under the terms of consulting agreements.
      The
      Escrow Shares, however, were subsequently released from escrow because we failed
      to raise $5 million in financing within 30 days of receiving KII’s audited
      financial statements. The Escrow Shares were tendered to us for cancellation
      and
      cancelled during the quarter ended March 31, 2006.





11




***7.***
            ***Share-Based
                Consulting Payment***





On
      December 29, 2005, the Company entered into a consulting agreement with Clear
      Channel Inc. (the “Clear Channel Agreement”), pursuant to which Clear Channel
      has been retained for a three-year term to provide us with strategic marketing
      and business planning consulting services and to assist the Company in
      developing corporate governance policies, recruiting qualified officers and
      director candidates and developing a corporate finance strategy. Pursuant to
      the
      terms of the Clear Channel Agreement, the Company paid Clear Channel Inc. a
      consulting fee of one million shares of common stock (the “Clear Channel
      Shares”), which were issued on February 14, 2006. The fair value of the Clear
      Channel Shares was recognized as a separate component of stockholders’
equity as of December 31, 2005, and was determined to be $1,380,000,
      which is being amortized as consulting expense from January 1, 2006 through
      December 31, 2008 as services are provided. Fair value of the shares was based
      on the unit price as of December 2005, less the fair value of the warrants.
      The
      total amortization during the quarter ended September 30, 2007 was $115,000,
      which was recognized in general and administrative expense.




***8.***
            ***Licensing
                Rights***





On
      July
      7, 2006 (the “Effective Date”) the Company entered into a License Agreement (the
“License Agreement”) with K.C. Technology, a Hong Kong corporation (“Licensor”),
      under which the Company acquired from Licensor a worldwide exclusive and
      perpetual license to use Licensor’s technology to manufacture, market and
      distribute Licensor designed slot machines and other gaming products, including
      an electronic data transfer device distributed under the trademark “Smartbook”
(collectively, the “Technology”). The Technology includes all technology, tools,
      design, components, hardware, software, and specification necessary for the
      design and manufacturing of slot machines and Smartbook and all associated
      patents, trademarks, copyrights, trade secrets, and know-how.




The
      Company agreed to pay Licensor a cash license fee of $2,500,000, of which,
      $500,000 was paid by July 15, 2006, and the balance to be paid in four equal
      installments of $500,000 each at the end of January and June, respectively,
      during the following two years (the “Installment Payments”). The Company also
      agreed to pay Licensor a licensee fee in common stock of 6,000,000 shares of
      restricted post-split common stock, par value $0.001, of which 3,000,000 were
      issued within seven days of the Effective Date, 1,500,000 to be issued on the
      first anniversary of the date of the Effective Date, and 1,500,000 to be issued
      on the second anniversary of the Effective Date (the “Installment Shares”). The
      Company granted Licensor registration rights and undertook to use commercially
      reasonable efforts to file a registration statement with the United States
      Securities Commission within 90 days of the Effective Date to register for
      resale by Licensor the first 3,000,000 Installment Shares issued to Licensor
      under the License Agreement.  The Company must also pay Licensor a
      royalty of $20.00 for each Smartbook sold by the Company under the License
      Agreement. The Company made the required Installment Payments of $500,000 in
      January and June 2007, and in July 2007, the Company issued 1,500,000 additional
      Installment Shares to the Licensor as required by the License
      Agreement.




The
      Company recorded the value of licensing rights acquired as intangible assets
      under SFAS No. 142, *Goodwill
      and Other Intangible Assets* .
      The
      majority portion of licensing rights acquired is not subject to amortization.
      However, 10% of the total value of the licensing rights is identified as a
      service contract that is amortizable over the 2-year term of the License
      Agreement. Total valuation of the rights and service contract acquired from
      Licensor is determined to be $8,969,473, which includes (1) the $500,000 payment
      made on July 15, 2006; (2) the fair market value of the 3,000,000 shares issued
      to KC Technology on the Effective Date, using the closing price quoted at $1.225
      per share; (3) discounted present value of the Installment Payments with imputed
      interest rate at 12% per annum; and (4) fair value of the Installment Shares,
      calculated based on the present value of estimated share prices at the future
      issuance dates. The estimated share prices at the issuance dates are assumed
      to
      be the same as $1.225 per share. The present value of the share prices are
      also
      discounted with an imputed interest rate of 12% per annum. Total discount,
      which
      will be amortized and recognized as interest expense over the term using the
      interest method, on the installment payments and installment shares as of
      September 30, 2007 was $225,002.




12





The
      amortization schedule for the service contract  for future periods is as
      follows:





2007
            
            $112,1182008
            
            224,237**Total**
            
            **$**
            **336,355**




Total
      amortization during the quarter ended September 30, 2007 was $112,118, which
      was
      recognized in general and administrative expense.




***9.***
            ***Private
                Placement With Chung Lien Investment Management
                Ltd.***




On
      April
      19, 2007, the Company entered into a placement agency agreement with Chung
      Lien
      Investment Management Limited, a Hong Kong corporation, by which the Company
      engaged Chung Lien as advisor and placement agent to raise funds from investors
      of up to $10,000,000 by September 30, 2007 (the “Offering”).




Pursuant
      to the placement agency agreement, the Company (1) agreed to pay Chung Lien
      a
      compensation fee in an amount equal to 8% of the aggregate gross proceeds raised
      by Chung Lien and received by the Company; (2) issued Chung Lien warrants
      exercisable for a term of five years to purchase up to 1,500,000 shares of
      our
      common stock at $0.45 per share, subject to terms and conditions of the warrant
      certificate; (3) agreed to reimburse expenses up to $30,000 incurred by Chung
      Lien in connection with the Offering; (4) agreed to deposit $250,000 in a
      segregated account at a financing institution designated by Chung Lien for
      the
      sole purpose of funding any losses due to currency fluctuations of any Chinese
      currency held by Chung Lien on behalf of any investor in the Offering from
      the
      date of receipt of such funds and the closing date of the Offering; and (5)
      agreed to file a registration statement within 90 days after signing the
      placement agency agreement for the common shares issuable upon Chung Lien’s
      exercise of the warrants. In addition, the Company agreed not to offer its
      common stock in any financing transaction at a price lower than $0.75 per share
      before September 30, 2007.




Concurrent
      with the placement agency agreement, the Company and Chung Lien entered into
      a
      subscription agreement, under which Chung Lien purchased from the Company a
      five-year convertible debenture for $1,000,000. The convertible debenture bears
      interest at an annual rate of 11%, with monthly principal and interest payments
      payable beginning on April 19, 2007. The convertible debenture is convertible
      into shares of our common stock at the greater of (a) $0.75 per share (the
      “floor price”) or (b) 70% of the five-day average market trading price of our
      common stock immediately preceding the date of conversion. The Company also
      agreed to file a registration statement to register Chung Lien’s resale of the
      common stock issuable upon conversion of the convertible debenture no later
      than
      September 30, 2007. The Company may prepay, in cash or common stock, all or
      portion of the convertible debenture at any time prior to the maturity date
      without penalty. Tom Liu (the Company’s Chief Executive Officer) and David Liu,
      two principal shareholders of the Company, each pledged 600,000 shares of common
      stock to secure the repayment of the convertible debenture. After paying Chung
      Lien $80,000 in compensation fees and reimbursing Chung Lien $30,000 in
      expenses, the Company received net proceeds of $919,150 from the placement
      of
      the convertible debenture.




13


The
      Company records the $1,000,000 convertible debenture issued to Chung Lien as
      a
      liability on its balance sheet and allocates $nil to the conversion feature
      of
      the instrument, as the market price of the Company’s common shares was below the
      floor price at the time of issuance of such debenture. As of September 30,
      2007,
      Chung Lien has not exercised any conversion rights pursuant to the subscription
      agreement. Chung Lien has waived, in a separate agreement, the interest expense
      accruable under the convertible debenture for the first six-month period. The
      Company uses the straight-line method to amortize the interest premium over
      the
      5-year term of the debenture.




The
      Company records the fair value of the 1,500,000 warrants issued to Chung Lien
      as
      advisor costs in a contra account under the equity section of the balance sheet
      as of September 30, 2007. The fair value of the total warrants has been
      determined to be $641,700 as of April 19, 2007 and is amortized as bond issue
      expense over the 5-year term of the convertible debenture to which Chung Lien’s
      placement services are related. Bond issue expense, including amortized fair
      value of the warrants and the 8% placement compensation fees (plus other
      incidental expenses) for the quarter ended September 30, 2007 was $36,085 and
      was included in general and administrative expenses.




As
      of the
      balance sheet date, the Company is continuing to work with Chung Lien to raise
      funds up to the Offering amount. The parties have agreed to extend the placement
      agency agreement for an additional 2-month period.




***10.***
            ***Going
                Concern***




The
      Company's financial statements are prepared using generally accepted accounting
      principles applicable to a going concern that contemplates the realization
      of
      assets and liquidation of liabilities in the normal course of business. The
      Company has limited financial resources and, before completing the renovation
      project of the Miramar Hotel & Casino or securing sufficient funding to
      expand the slot machine leasing activities, relies solely on the cash flows
      generated from the hotel lodging and leasing revenue.  The completion of
      the renovation project of Miramar Hotel & Casino may be delayed if the
      Company fails to raise sufficient capital. Although the Company has entered
      into
      specific financing activities to raise fund (See Note 9 above for transactions
      with Chung Lien and the issuance of the $1,000,000 convertible debenture),
      the
      outcome of its fund raising efforts is uncertain at this time. These factors
      raise substantial doubt about its ability to continue as a going concern. 
If the Company is unsuccessful in their fund raising efforts and cannot attain
      sufficient profitable operations or if it cannot obtain additional sources
      of
      funding or investment, it may substantially curtail its operations or abandon
      some of its business plans. For the same reason, the Company may be unable
      to
      continue as a going concern.




***11.***
              ***Subsequent
                  Events***


In
      December 2006, the Company borrowed $250,000 from IFG Investments Services
      Inc.
      ("IFG"), a Nevis corporation located in Nevis Federation of St. Kitts &
Nevis West Indies and controlled by an existing minority shareholder, to fund
      the second installment payment to KC which we made in January 2007.  The
      IFG loan bears an annual interest of 8% and was due on June 11, 2007.  On
      June 28, 2007, Chilco and IFG extended the maturity date for another 90
      days.  Chilco also agreed to specifically use the proceeds from the release
      of a certain $250,000 currency exchange deposit from Chung Lien for the purpose
      of repayment of principal and interest of the IFG loan.  In October 2007,
      IFG agreed to extend the maturity of the $250,000 loan to November 30,
      2007.




On
      October 19, 2007, IFG made another $100,000 short-term bridge loan to the
      Company.  The short-term bridge loan bears an interest rate of 10% per
      annum and is due on November 30, 2007.




14


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





All
      statements other than statements of historical or current facts included in
      this
      report on Form 10-QSB or incorporated by reference herein, including, without
      limitation, statements regarding our future financial position, business
      strategy, budgets, projected costs and plans and objectives of management for
      future operations, are forward-looking statements. Forward-looking statements
      generally can be identified by the use of forward-looking terminology such
      as
“may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe” or
“continue” or the negative thereof or variations thereon or similar terminology.
      These statements involve known and unknown risks, uncertainties and other
      factors that may cause our actual results and performance to be materially
      different from any future results or performance expressed or implied by these
      forward-looking statements. These factors include those discussed under the
      caption “Risk Factors” in the Company’s most recent annual reports filed with
      the SEC on Form 10-KSB on April 2, 2007, and incorporated herein by reference,
      as well as the following:





·
            the
                impact of general economic conditions in the Peru and other countries
                in
                which we conduct business;·
            industry
                conditions, including competition;·
            business
                strategies and intended results;·
            our
                ability to integrate acquisitions into our operations and
                management;·
            our
                ability to market, sell, lease or profit-share slot machines under
                our
                licensing agreement;·
            risks
                associated with the hotel industry and real estate markets and manufacture
                of slot machines in general;·
            the
                impact of terrorist activity or war, threats of terrorist activity
                or war
                and responses to terrorist activity on the economy in general and
                the
                travel and hotel industries in particular;·
            travelers'
                fears of exposure to contagious diseases;·
            legislative
                or regulatory requirements;·
            access
                to capital markets; and·
            other
                factors beyond our control.





Although we believe that these statements are based upon reasonable assumptions,
      we can give no assurance that our goals will be achieved. Given these
      uncertainties, prospective investors are cautioned not to place undue reliance
      on these forward-looking statements. These forward-looking statements are made
      as of the date of this report. We assume no obligation to update or revise
      them
      or provide reasons why actual results may differ.





“We”,
      “us”, “our”, the “Company” and the “Registrant” in this report refers to Chilco
      River Holdings Inc. and its subsidiaries, as the context requires.





**Overview**




We,
      Chilco River Holdings, Inc., through our wholly-owned subsidiaries, (i) own
      all
      of the assets of and operate the Miramar Hotel and Casino (formerly known as
      ‘Bruce Hotel and Casino”); (ii) hold an exclusive license to manufacture and
      market low-cost proprietary slot machines; and (iii) develop internet gaming
      software and systems.




15


Historically,
      our operating revenue was derived from the following aspects of our business,
      expressed as percentages relative to total revenue:




**Three
                Quarters**
              **ended**
              **September
                30, 2007**
            
            
            **Year
                2006**
            
            
            **Year
                2005**Casino-Leasing
            
            
            34
            %
            
            25
            %
            
            58
            %Rooms
            
            
            61
            %
            
            69
            %
            
            25
            %Food
                & Beverage
            
            
            5
            %
            
            6
            %
            
            11
            %Other
            
            
            0
            %
            
            0
            %
            
            6
            %Total
            
            
            100
            %
            
            100
            %
            
            100
            %




***Miramar
      Hotel and Casino***





The
      Miramar Hotel and Casino (“Miramar”) is located at Jiron Francisco Bolognesi #
      171-191 in the Miraflores District, Province and Department of Lima, Peru,
      approximately 30 minutes from Jorge Chavez International Airport in the heart
      of
      Miraflores. Miramar is comprised of a full-service hotel, restaurants, a casino
      (with a gaming floor and a slot machines room) real property. Pursuant to a
      plan
      to expand, renovate and modernize the facilities of Miramar, we suspended
      operation of the gaming room in February 2005 and operation of the restaurant
      and slot room in November 2005. Upon completion of the renovations, Miramar
      is
      intended to be a “destination” hotel and casino location for local residents and
      visitors traveling to Peru, especially those from the People’s Republic of
      China.





Gaming
      Casino :
      Before
      closing for renovations, the gaming casino was a full featured casino with
      20
      traditional gaming tables (blackjack, roulette, craps and poker) and
      approximately 220 slot machines. The casino was located on the second floor
      of
      the hotel and was approximately 622 square meters. Once the renovations are
      completed, the casino is expected to feature two full bars, a VIP area and
      will
      be able to accommodate 300 guests. The casino is now scheduled to reopen to
      the
      public in the first half of 2008, assuming adequate financing is available
      by
      December 31, 2007. We are in the process of raising additional capital, but
      have
      no current commitment for such financing. Any delay in raising additional
      financing will delay our scheduled opening date.





Slot
      Room :
      The
      slot room is planned to be located on the first floor of the hotel next to
      the
      lobby. Before closing for renovations, the slot room featured 220 slot machines
      and could accommodate approximately 300 guests. As of September 30, 2007, we
      leased out over 130 slot machines that are retired from the slot room to other
      local slot parlor operators under various lease terms and profit-sharing
      agreements. These operating leases vary in terms and average $10 per machine
      per
      day in net rental income. We believe the slot machine rental income should
      continue at least through the end of year 2007.  Under
      our
      current renovation plan, the new gaming casino will have a slightly larger
      space
      and will feature 300 new slot machines, some of which will be manufactured
      by us
      under the Kubuk brand name. Much like the casino, we now schedule to reopen
      the
      slot room in the first half of 2008, assuming that we can obtain sufficient
      funds by December 31, 2007.





Restaurants
      and Lounge :
      Prior
      to closing for renovations, Miramar featured two full service restaurants
      serving Chinese and international cuisine. The restaurants each seated 200
      guests. Under our renovation plan, a new lounge will replace one of the
      restaurants and will serve food and beverages to the general public. We have
      started the interior construction and decoration in the 300 square meters lounge
      area in July 2007 and are planning the soft opening of the lounge on obtaining
      the late night club license from the Miraflores local government.





16


Hotel:
      During our renovation efforts, we continue to operate our hotel. The following
      table sets forth the occupancy rate for our hotel during 2006 and the first
      nine
      months of 2007:




**Hotel
        Average Occupancy Rate**


**Month**
            
            
            **2006**
            
            
            **2007**January
            
            
            64.88
            %
            
            53.10
            %February
            
            
            68.31
            %
            
            45.79
            %March
            
            
            70.85
            %
            
            63.62
            %April
            
            
            65.10
            %
            
            57.67
            %May
            
            
            71.51
            %
            
            64.65
            %June
            
            
            68.85
            %
            
            55.88
            %July
            
            
            74.26
            %
            
            60.53
            %August
            
            
            69.21
            %
            
            64.58
            %September
            
            
            65.33
            %
            
            63.69
            %October
            
            
            68.54
            %
            
            -November
            
            
            72.44
            %
            
            -December
            
            
            67.44
            %
            
            -




***Kubuk
      Slot Machines***





In
      July
      2006, we acquired the exclusive world-wide license to manufacture slot machines
      based on technology developed by KC Technology, a Hong Kong corporation. We
      are
      seeking to raise capital to manufacture and sell, lease or profit-share the
      slot
      machines beginning in the last quarter of 2007 or early 2008. As of September
      30, 2007, we have entered into slot machine profit-sharing contracts with a
      number of Peruvian slot parlor operators for the lease of more than 300 slot
      machines. These contracts allow us, upon completing formal lease agreements
      and
      our delivery of the machines, to charge a fixed per-machine, per-day rent or
      to
      share the net earnings of the slot machines that we lease out in 50%-50% or
      60%-40% ratio. Because of lack of funding to mass produce the slot machines,
      we
      have only manufactured and delivered 22 slot machines to as of September 30,
      2007. We cannot assure you, however, that we will be successful in raising
      sufficient funds to manufacture the number of slot machines deliverable under
      the profit-sharing contracts.





***Internet
      Software Development***





In
      April
      2006, we established a software development office in Shenzhen, China to develop
      an internet-based computer application for potential future licensing to third
      parties, who can legally operate licensed internet gaming websites. Internet
      gaming is illegal in the United States, and we intend to license our software,
      if successfully developed, only to licensed internet gaming companies which
      have
      established controls to operate legally. Internet gaming is subject to
      substantial regulation and we cannot assure you that we will be able to develop
      or license our software.




During
      the third quarter of 2007 we have successfully tested the completed version
      of
      an online poker software developed by our software development office. The
      online poker software is available for sale/lease/license to interested online
      gaming operators. As of September 30, 2007 we have not discussed the sale or
      licensing of the software with any identified third party.




In
      light
      of the passage of the Unlawful Internet Gambling Enforcement Act of 2006, which
      was signed into law by President Bush on October 13, 2006, we may have to
      license our developed software to companies that are not subject to the
      jurisdiction of the United States and operate exclusively in foreign markets
      including, but not limited to, South America. This is expected to limit the
      potential users of our software, even if we are successful in our development
      efforts. Since
      its
      inception, most of the operating expenses in Shenzhen have been advanced by
      Wai
      Yung Lau, a former director of the Company. These advances are payable by demand
      and do not bear stated interest. The unpaid balance of such advancements was
      $183,087 as of September 30, 2007.




***Financing
      Arrangements***




On
      April
      19, 2007, the Company entered into a placement agency agreement (the “Chung Lien
      Agreement”) with Chung Lien Investment Management Limited, a Hong Kong
      corporation (“Chung Lien”), by which the Company engaged Chung Lien as advisor
      and placement agent to raise funds from investors of up to $10,000,000 by
      September 30, 2007 (the “Chung Lien Offering”).





On
      June
      28, 2007, we amended the Chung Lien Agreement to extend the term from June
      30,
      2007, to September 30, 2007. In October, 2007 we agreed to a further 2-month
      extension of the term, thereby keeping the Chung Lien Agreement effective to
      November 30, 2007. Despite the extension, however, we cannot assure you that
      we
      will raise any additional funds under the Chung Lien Agreement. If we are unable
      to raise sufficient funds through Chung Lien or with any other potential
      investors or mortgage lender in debt or equity transactions to complete the
      renovations, we intend to fund completion of the renovations through cash flow
      from operations and reopen the casino in stages. We currently have no firm
      commitments with respect to additional financing. Without additional funding,
      there is substantial doubt that we will be able to continue as a going
      concern.




17





**Explanatory
      Note on Financial Statements**




The
      condensed consolidated financial statements included in this quarterly report
      on
      Form 10-QSB have been prepared without audit, pursuant to the rules and
      regulations of the SEC. Certain information and disclosures normally included
      in
      financial statements prepared in accordance with generally accepted accounting
      principles have been condensed or omitted. In the opinion of management, the
      accompanying interim financial statements contain all adjustments, consisting
      of
      normal recurring accruals, necessary for a fair presentation of our financial
      position as of September 30, 2007, and our results of operations and cash flows
      for the quarter ended September 30, 2007. The results of operations for the
      quarter ended September 30, 2007 are not necessarily indicative of the results
      for a full-year period. It is suggested that these condensed financial
      statements be read in conjunction with the financial statements and notes
      thereto included in our Annual Audit for the year ended December 31,
      2006.




**Satisfaction
      of cash obligations for the next twelve months**




We
      believe that the cash flow from our hotel and the rental of old slot machines
      will not be sufficient to meet our minimum operating cash requirements to permit
      us to continue as a going concern for the next twelve months. We will require
      additional financing. We intend to use a combination of available cash and
      additional financing to meet obligations over the next twelve months, including
      the cost of renovation of the casino and restaurant at an estimated amount
      of
      $4,200,000. We intend to secure additional financing in the amount of
      approximately $7,387,000 in one or more transactions as soon as practicable.
      As
      of September 30, 2007, we had approximately $935,000 in quick assets and various
      financial obligations and budgeted capital expenditures that are payable in
      cash
      in the amount of $8,345,000 within the next 12 months. These financial
      obligations and budgeted capital expenditures included:   (1)
 casino and hotel renovation in total budgeted amount of $2,700,000; (2)
 voluntary and statutory cash reserves for the casino in the amount of
      $1,500,000, (3)  two $500,000 installment payments payable to KC by January
      31 and June 30, 2008, respectively; (4)  $2,200,000 for the production of
      approximately 400 new Kubuk Slot Machines; (5)  related party loans and
      accrued interest in the amount of $585,000; (6) accrued interest payable to
      Chung Lien (see below) for $110,000; and (7) general working capital needs
      for $250,000.





In
      December 2006, we borrowed $250,000 from IFG Investments Services Inc. (“IFG”),
      a Nevis corporation located in Nevis Federation of St. Kitts & Nevis West
      Indies and controlled by an existing minority shareholder, to fund the second
      installment payment to KC which we made in January 2007. The IFG loan bears
      an
      annual interest of 8% and was due on June 11, 2007. On June 28, 2007, Chilco
      and
      IFG extended the maturity date for another 90 days. Chilco also agreed to
      specifically use the proceeds from the release of a certain $250,000 currency
      exchange deposit from Chung Lien for the purpose of repayment of principal
      and
      interest of the IFG loan. In October 2007, IFG agreed to extend the maturity
      of
      the $250,000 loan to November 30, 2007.





On
      October 19, 2007, IFG made another $100,000 short-term bridge loan to the
      Company. The short-term bridge loan bears an interest rate of 10% per annum
      and
      is due on November 30, 2007.


18




**Results
      of Operations for the Nine Months and the Three Months Ended September 30,
      2007 and 2006.**




We
      had
      revenues of $1,206,192 and $399,418 during the nine-month and three-month
      periods ended September 30, 2007, respectively; compared to revenues of
      $1,189,868 and $422,640 during the same periods in 2006. Overall revenues were
      up 1% and down 5%, respectively, for the nine-month and three-month periods
      comparative periods. Revenue from leasing of the slot machines increased
      $120,476, or 42% in the first nine months of 2007 versus 2006. We did not lease
      out all retired slot machines until the end of second quarter of 2006, which
      caused the leasing revenue for the first half of 2006 to appear significantly
      lower than the first half of 2007. Additionally, hotel room revenue was down
      by
      $35,135, or 14%, in the third quarter of 2007 as compared to the same period
      in
      2006, partly because of the 7.9 magnitude earthquake that hit coastal regions
      of
      Peru on August 15, 2007. We anticipate the related effects of the earthquake
      on
      local tourism and on our hotel operations to be temporary.





Operating
      expenses during the nine-month and three-month periods ended September 30,
      2007
      were $2,227,471 and $792,741, respectively; compared to $2,940,340 and
      $1,253,197 for the same periods in 2006. Operating expenses were significantly
      higher in the comparative periods of 2006 because the Company committed
      relatively large amounts of financial resources in various promotional programs,
      pursuant to certain private placement commitments. In addition to depreciation
      expense in the amount of $438,407, which does not require payment of cash,
      we
      have the following non-cash expenses during the nine months ended September
      30,
      2007:





(i)
            Amortization
                of prepaid stock compensation for consulting services provided by
                Clear
                Channel Inc. totaling $345,000 ($115,000 for each
                quarter).





(ii)
            Amortization
                of maintenance service contract under the KC Licensing Agreement
                totaling
                $336,354 ($112,118 for each quarter).(iii)
            Amortization
                of bond issue cost related to the warrants issued to Chung Lien totaling
                $64,170(iv)
            Imputed
                interest on installment obligation settled via issuance of shares
                $253,914




Total
      non-cash expenses amounted to $1,437,845 for the nine-month period ended
      September 30, 2007, or 54.05% of the entire operating and other expenses for
      the
      period.





Consequently,
      losses from operation for the nine-month and three-month periods ended September
      30, 2007 were $(1,021,279) and $(393,323), respectively; compared to losses
      from
      operation in the amounts of $(1,750,472) and $(830,557) for the same periods
      in
      2006. Income (losses) from operation as a percentage of revenue for the
      nine-month and three-month periods ended September 30, 2007 were (85%) and
      (98%), respectively. The decreases in losses from operation during these periods
      of 2007 compared to the same periods of 2006 were a direct result of reduced
      marketing and promotional expenses, as well as the implementation of
      expense-reduction measures.




Net
      loss,
      after other income and expenses and provision for income taxes, was $(1,475,721)
      and $(499,497) for the nine-month and three-month periods (a net loss of $0.03
      and $0.01 per share) ended September 30, 2007, respectively, compared to net
      loss of $(1,782,480) and $(846,349) for the nine-month and three-month periods
      ended September 30, 2006, respectively. The increase in other income and
      expenses in 2007 versus 2006 was largely attributable to (1) the imputed
      interest expense in the amount of $368,297 (for the nine-month period in 2007)
      on our obligations to pay cash and issue shares to KC pursuant to the KC License
      Agreement, and (2) accrued interest on the IFG loan and Chung Lien debenture.
      We
      paid Peruvian income taxes of $30,780 and $46,307 for the nine-month periods
      ended September 30, 2007 and 2006, respectively. We had an unrealized gain
      on
      foreign currency translation of $284,327 during the nine-month period ended
      September 30, 2007, compared to a $(6,523) loss during the same period in
      2006.





19


Our
      revenues during the periods after the closure of our slot room and restaurant
      in
      November 2005 were principally derived from hotel revenue and revenue from
      rental of old slot machines. We do not anticipate that revenues will return
      to
      historical levels until the renovations of the casino floor are completed.
      We
      have several fixed costs related to our operations, which resulted in higher
      operating expenses and lower operating revenue as a percentage of sales. We
      anticipate that our expenses as a percentage of sales will remain at
      approximately the same level until our casino is fully operational. We are
      currently seeking to raise at least $7.4 million, $4.2 million of which is
      expected to be allocated to renovate and modernize the current facilities of
      Miramar. We have no firm commitments to raise such capital to complete such
      renovations and we cannot assure you that such funds will be available on
      acceptable terms, if at all. Any delay in raising financing will delay our
      planned reopening of our hotel and casino in the first half of
      2008.




In
      addition, under the terms of the KC Licensing Agreement, we are required to
      pay
      KC an installment license payment of $500,000 on January 30, 2008 and to issue
      KC 1,500,000 shares of our common stock on July 7, 2008. If we fail to make
      such
      payment and issuance, KC may terminate the license and we will lose our
      investment. In addition, we undertook to file a registration statement with
      the
      SEC to use commercially reasonable efforts to register the resale of the
      6,000,000 shares issued or issuable to KC under the KC License Agreement. We
      plan to file a registration statement with the SEC during the fourth quarter
      of
      2007 and our failure to do so may be deemed a breach of the agreement giving
      rise to KC’s ability to terminate the license. A termination of the license will
      have a material adverse effect on our business and results of
      operations.





We
      anticipate that we will need to raise at least $2.2 million in additional
      capital to fund our plan of operation related to our slot machine business.
      We
      cannot assure you that we will successfully raise such financing on acceptable
      terms, if at all, or that we will be successful in marketing and selling our
      slot machines.





**Liquidity
      and Capital Resources**




We
      are in
      the process of a comprehensive renovation of Miramar and will require additional
      capital to complete the remodeling of the gaming floor, slot room and one of
      the
      restaurant areas and resume operations of these facilities. We are currently
      seeking to raise at least $4.2 million in capital to complete the renovations.
      Out of the $4.2 million budget, $1.45 million will have to be raised in the
      fourth quarter of 2007 in order for us to launch the new lounge that replaces
      one of the former restaurants and reopen the slot room. We anticipate that
      we
      will require an additional $3.2 million for working capital and to fund our
      slot
      machine business during the next 12 months.




Because
      of lack of funding, we were only able to produce and lease out 22 slot machines
      since 2006, manufactured pursuant to our licensing agreement (the “License
      Agreement”) with K.C. Technology (“Licensor”). In accordance with the terms of
      the License Agreement, we made two $500,000 installment payments to the Licensor
      in January and June 2007, and we have commitments to make two final payments
      of
      $500,000 in January and June 2008. We are also required to issue to the Licensor
      another 1,500,000 shares of our common stock in July 2008. If we fail to make
      such payments or issue such shares in a timely manner, we will default under
      the
      terms of the =License Agreement and could lose the license. We cannot assure
      you
      that we will successfully raise such financing on acceptable terms, if at all,
      or that we will be successful in marketing and selling our slot machines. We
      have no firm commitments for such financing.




Cash
      flows from operations during the nine months ended September 30, 2007 (a net
      cash outflow in the amount of ($791,851) were lower than cash flows from
      operations during the same period in 2006 (a net cash outflow in the amount
      of
      $(729,622) by $62,227. Among the major changes in operating cash flows in 2007
      is a $250,000 currency deposit required under the Chung Lien Agency Agreement.




As
      of
      September 30, 2007, we had current assets of $1,580,945 including cash and
      cash
      equivalents of $350,583, and current liabilities of $3,313,673. We had a working
      capital deficit of $(1,732,728). As of September 30, 2007, we have commitments
      and contractual obligations during the next 12 months of approximately
      $1,600,000, which is attributable to the License Agreement as well as related
      party loans and accrued interest. In April 2007, we borrowed $1,000,000 from
      Chung Lien with a 5-year convertible debenture bearing interest at 11% per
      annum. As of September 30, 2007, out of the total installment payable (all
      current portion) related to the KC License Agreement, $1,675,376 is attributable
      to our obligation to issue shares of common stock to KC in the next 10 months
      and will not require any cash outlay when we satisfy this obligation. As of
      September 30, 2007, the present value of our future monetary obligations for
      the
      installment payments under the KC license right is $937,122.




20




In
      December 2006, we borrowed $250,000 from IFG before we made a currency exchange
      deposit pursuant to the term sheet with Chung Lien. The IFG loan bears an annual
      interest of 8% and was due on June 11, 2007. On June 28, 2007, Chilco and IFG
      extended the maturity date for another 90 days. Chilco also agreed to
      specifically use the proceeds from the release of the $250,000 currency exchange
      deposit from Chung Lien for the purpose of repayment of principal and interest
      of the IFG loan. On October 19, 2007, Chilco and IFG extended the due date
      of
      the $250,000 loan to November 30, 2007. In addition, IFG has provided Chilco
      with another $100,000 short-term bridge loan with 10% interest per annum.
      Maturity date of the short term bridge loan is also November 30, 2007.




Since
      the
      inception of our software development center in Shenzhen, China, most of the
      operating expenses in China have been advanced by Wai Yung Lau, a former
      director. These advances are payable on demand and do not bear stated interest.
      The unpaid balance of such advancements was $183,087 as of September 30,
      2007.




Due
      to
      funding restraints, we expect to complete only the new lounge by December 31,
      2007. Even if we can complete the construction and interior decoration of the
      slot room, we may still have to raise substantial amount of money to pay for
      the
      costs of manufacturing and installing the slot machines, as well as customs
      and
      duties imposed on the slot machines imported into Peru, before we can plan
      for
      the grand opening of the slot room.




We
      will
      defer the renovation of our casino floor until further funding is available.
      We
      are seeking to raise approximately $4.2 million to complete the entire
      renovation, but have no firm commitments for such financing. Any delay in
      raising additional financing will delay our scheduled opening date.




Historically,
      in 2004, casino and slot machine revenue accounted for 82% (approximately $8.75
      million) of out total revenue. Slot machine revenue accounted for 45% ($3.96
      million) of total casino and slot machine revenue. We project that our future
      annual revenue will exceed 2004 historical revenue of $10.7 million if we are
      able to complete our renovations. If we are able to complete renovations of
      our
      casino floor, based on historical operations, we estimate that annual casino
      revenues should increase to approximately $6.4 million. If we complete
      renovations of our slot room, we estimate that annual slot machine revenue
      could
      increase to approximately $6.5 million. Restaurant revenue has historically,
      based on 2004 revenue, accounted for approximately 4.67% ($500,000) of our
      total
      revenue.




We
      currently have no alternative sources of funding, and we currently rely on
      cash
      flow from our hotel and the rental of old slot machines to meet our working
      capital requirements. Our current plan is to reopen our entire gaming and
      restaurant operations once we have completed all of the renovations. However,
      if
      funds are not available to complete all of the renovations, we may reopen
      portions of our gaming operation in stages as renovations are completed
      beginning with our casino floor and then our slot room.




As
      a
      result of the December 31, 2006 audit, our auditors have expressed substantial
      doubt regarding our ability to continue as a going concern. Our financial
      statements have been prepared based on the assumption that we will be able
      to
      continue as a going concern. If we fail to raise additional capital in the
      next
      six months, we may be unable to continue as a going concern.




**Item
      3.**  **Controls
      and Procedures.**





Under
      the
      supervision and with the participation of our management, including our Chief
      Executive Officer and Chief Financial Officer, we evaluated the effectiveness
      of
      the design and operation of our disclosure controls and procedures (as defined
      in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934 (the
      "Exchange Act")). Based upon that evaluation, the Chief Executive Officer and
      Chief Financial Officer concluded that, as of the end of the period covered
      by
      this report, our disclosure controls and procedures were adequately designed
      and
      are effective to ensure that information required to be disclosed by us in
      the
      reports we file or submit under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in applicable rules
      and forms.





21


In
      addition, our Chief Executive Officer and Chief Financial Officer have
      determined that the disclosure controls and procedures are effective to ensure
      that information required to be disclosed in the reports that are filed under
      the Exchange Act are accumulated and communicated to management, including
      our
      Chief Executive Officer and Chief Financial Officer, to allow timely decisions
      regarding required disclosure.





During
      the most recent fiscal quarter ended September 30, 2007, there has been no
      change in our internal control over financial reporting (as defined in Rule
      13a-15(f) or 15d-15(f) under the Exchange Act) that has materially affected,
      or
      is reasonably likely to materially affect, our internal control over financial
      reporting.





**PART
      II - OTHER INFORMATION**





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





None******





**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.**





22





**EXHIBIT
      INDEX**





**Number**
            
            **Description**3.1
            
            Articles
                of Incorporation (1)3.2
            
            Bylaws
                (1)4.1
            
            Convertible
                Debenture dated April 19, 2007 issued to Chung Lien Investment Management
                Limited (2)4.2
            
            Warrants
                dated April 19,2007 issued to Chung Lien Investment Management Limited
                (2)10.1
            
            Share
                Exchange Agreement (previously filed as Exhibit 99.1)
                (1)10.2
            
            Escrow
                Agreement dated August 3, 2005 (previously filed as Exhibit 99.1)
                (1)10.3
            
            Contribution
                Agreement dated July 26, 2005 (previously filed as Exhibit 99.1)
                (1)10.4
            
            Stock
                Purchase Agreement dated July 26, 2005 (previously filed as Exhibit
                99.1)
                (1)10.5
            
            Marketing
                Services Agreement with Parker Communication Corporation
                (3)10.6
            
            Consulting
                Agreement with Clear Channel Inc., as amended (4)10.7
            
            Form
                of Unit Purchase Agreement (3)10.8
            
            Form
                of Warrant Certificate (3)10.9
            
            Loan
                Agreement dated December 31, 2005 with David Liu (4)10.10
            
            Loan
                Agreement dated December 31, 2005 with Lottery Online U.S.A.
                (4)10.11
            
            License
                Agreement dated July 7, 2006 with K.C. Technology (5)10.12
            
            Promissory
                Note dated December 14, 2006 issued to IFG Investments Services Inc.
                (6)10.13
            
            Promissory
                Note dated December 27, 2006 issued to Lee Kuen Cheung
                (6)10.14
            
            Placement
                Agent Agreement dated April 19, 2007 with Chung Lien Investment Management
                Limited (2)10.15
            
            Subscription
                Agreement dated April 19, 2007 by Chung Lien Investment Management
                Limited
                (2)31.1
            
            Certification
                of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
                promulgated under the Securities and Exchange Act of 1934, as amended
                (8)31.2
            
            Certification
                of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
                promulgated under the Securities and Exchange Act of 1934, as amended
                (8)32.1
            
            Certification
                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act (8)32.2
            
            Certification
                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act (8)99.1
            
            Press
                Release dated April 20, 2007 with respect to Chung Lien transaction
                (2)99.2
            
            Press
                Release dated May 3, 2007 with respect to Chung Lien transaction
                (7)




23




(1)
            
            Previously
                filed on Form SB-2 dated March 8, 2004(2)
            
            Previously
                filed on Form 8-K dated April 25, 2007(3)
            
            Previously
                filed on Form SB-2 dated February 17, 2006(4)
            
            Previously
                filed on Form 10-KSB dated March 31, 2006(5)
            
            Previously
                filed on Form 8-K dated July 10, 2006(6)
            
            Previously
                filed on Form 10-KSB dated April 2, 2007(7)
            
            Previously
                filed on Form 8-K dated May 3, 2007(8)
            
            Filed
                herewith.




24




**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      as
      amended, the registrant caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.




**CHILCO
              RIVER HOLDINGS INC.**(Registrant)Date: November
              14, 2007
            By:
            /s/
                Tom Yu LiuTom
                Yu Liu
              Chief
                Executive Officer(Principal
                Executive Officer)


Date: November
                14, 2007
              By:
              /s/
                  Martin Torres GarciaMartin
                  Torres Garcia
                Chief
                  Financial Officer(Principal
                    Financial and Accounting
                    Officer)


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