U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





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


For the
quarterly period ended: March
31, 2010





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


For the
transition period from ________ to _________





Commission
file number: 000-53102





FARRALLON, INC.(Exact
      name of registrant as specified in its
charter)





Nevada
                    
                    26-1469891(State or other jurisdiction of incorporation or organization)
                    
                    (I.R.S. Employer Identification No.)





14908 Oxford Hollow,
Huntersville, NC  28078


(Address
of principal executive offices)





(704)
948-1183


Issuer’s
telephone number





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





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





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).           ̈ Yes  x No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer    ̈
              Accelerated
      filer      ̈Non-accelerated
      filer      ̈   
      (Do not check if a smaller reporting company)
              Smaller
      reporting company     x





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





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.           ̈  Yes    ̈  No





APPLICABLE
ONLY TO CORPORATE ISSUERS





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:  At May 14, 2010 there were
1,000,000 shares of common stock outstanding.








PART
I — FINANCIAL INFORMATION





Item
1. Financial Statements.





PageBalance
      Sheets as of March 31, 2010 (unaudited) and December 31, 2009
      (audited)
                  
                  F-1Statements
      of Operations for the three months ended March 31, 2010 and 2009 and the
      period from  November 13, 2007 (date of inception) to March 31,
      2010 (unaudited)
                  
                  F-2Statement
      of Stockholder’s Deficit as of March 31, 2010 (unaudited)
                  
                  F-3Statements
      of Cash Flows for the three months ended March 31, 2010 and 2009 and the
      period from  November 13, 2007 (date of inception) to March 31,
      2010 (unaudited)
                  
                  F-4Notes
      to Financial Statements
                  
                  F-5


2




Farrallon, Inc.(A
      Development Stage Company)Balance
Sheet
 
 As ofMarch 31, 2010
                                    
                                    
                                    December 31, 2009(Unaudited)
                                    
                                    
                                    (Audited)ASSETSCURRENT
      ASSETS:Cash
                                    
                                    $
                                    77
                                    
                                    
                                    $
                                    10TOTAL
      CURRENT ASSETS
                                    
                                    
                                    77
                                    
                                    
                                    
                                    10TOTAL
      ASSETS
                                    
                                    $
                                    77
                                    
                                    
                                    $
                                    10LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIES:Note
      Payable to Related Party
                                    
                                    
                                    21,937
                                    
                                    
                                    
                                    21,837Accrued
      Expenses
                                    
                                    
                                    2,102
                                    
                                    
                                    
                                    1,664TOTAL
      CURRENT LIABILITIES
                                    
                                    
                                    24,039
                                    
                                    
                                    
                                    23,501TOTAL
      LIABILITIES
                                    
                                    
                                    24,039
                                    
                                    
                                    
                                    23,501STOCKHOLDERS'
      DEFICITPreferred
      stock ($0.0001 par value; 10,000,000 shares authorized; no
      sharesissued
      and outstanding at March 31, 2010 and December 31, 2009)
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Common
      stock ($0.0001 par value; 100,000,000 shares authorized:1,000,000
      issued and outstanding at March 31, 2010 and December 31,
      2009)
                                    
                                    
                                    100
                                    
                                    
                                    
                                    100Paid
      in Capital
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Accumulated
      Deficit
                                    
                                    
                                    (24,062
                                    )
                                    
                                    
                                    (23,591
                                    )TOTAL
      STOCKHOLDERS' DEFICIT
                                    
                                    
                                    (23,962
                                    )
                                    
                                    
                                    (23,491
                                    )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                                    
                                    $
                                    77
                                    
                                    
                                    $
                                    10
  F-1
 
 Farrallon, Inc.(A
      Development Stage Company)Statement of Operations
      (Unaudited)
 
 For the
                        
                        
                        Cumulative3 months ended
                        
                        
                        TotalsMarch 31,
                        
                        
                        Since Inception2010
                        
                        
                        2009
                        
                        
                        November 13, 2007REVENUESIncome
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -Total
      Revenues
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -EXPENSESSelling,
      general and administrative
                        
                        
                        33
                        
                        
                        
                        33
                        
                        
                        
                        4,060Professional
      Fees
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        17,900TOTAL
      EXPENSES
                        
                        
                        33
                        
                        
                        
                        33
                        
                        
                        
                        21,960Net
      Income/(Loss) from Operations
                        
                        
                        (33
                        )
                        
                        
                        (33
                        )
                        
                        
                        (21,960
                        )OTHER (EXPENSE)/INCOMEInterest
      Expense
                        
                        
                        (438
                        )
                        
                        
                        (547
                        )
                        
                        
                        (2,102
                        )Net
      Income/(Loss)
                        
                        $
                        (471
                        )
                        
                        $
                        (580
                        )
                        
                        $
                        (24,062
                        )Net
      income/(loss) per share—basic and fully dilutedNet
      income/(loss) per share
                        
                        $
                        (0.00
                        )
                        
                        $
                        (0.00
                        )
                        
                        $
                        (0.02
                        )Weighted
      average shares outstanding—basic and fully diluted
                        
                        
                        1,000,000
                        
                        
                        
                        1,000,000
                        
                        
                        
                        1,000,000
  F-2
 
 Farrallon, Inc.(A
      Development Stage Company)Statement of Stockholders' Deficit
  (Unaudited)
 
 DeficitAdditional
                      
                      
                      AccumulatedCommonStock
                      
                      
                      Preferredstock
                      
                      
                      Paid-in
                      
                      
                      Since InceptionShares
                      
                      
                      Amount
                      
                      
                      Shares
                      
                      
                      Amount
                      
                      
                      Capital
                      
                      
                      November13,2007Balances,
      December 31, 2007
                      
                      
                      1,000,000.00
                      
                      
                      $
                      100
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (2,683
                      )Net
      loss
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (14,031
                      )Issuance
      of common shares
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Balances,
      December 31, 2008
                      
                      
                      1,000,000
                      
                      
                      $
                      100
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (16,714
                      )Net
      loss
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (6,877
                      )Balances,
      December 31, 2009
                      
                      
                      1,000,000
                      
                      
                      $
                      100
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (23,591
                      )Net
      loss
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (471
                      )Balances,
      March 31, 2010
                      
                      
                      1,000,000
                      
                      
                      $
                      100
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (24,062
                      )
  F-3
 
 Farrallon, Inc.(A
      Development Stage Company)Statement of Cash Flows
      (Unaudited)
 
 CumulativeFor the three months ended
                          
                          
                          TotalsMarch 31,
                          
                          
                          Since Inception2010
                          
                          
                          2009
                          
                          
                          November 13, 2007CASHFLOWS
      FROM OPERATING ACTIVITIES:Net
      loss
                          
                          $
                          (471
                          )
                          
                          $
                          (580
                          )
                          
                          $
                          (24,062
                          )Adjustments
      to reconcile net (loss) to net cash used in operations:Increase/(decrease)
      in Accrued Expenses
                          
                          
                          438
                          
                          
                          
                          547
                          
                          
                          
                          2,102NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
                          
                          
                          (33
                          )
                          
                          
                          (33
                          )
                          
                          
                          (21,960
                          )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from Note Payable to Related Party
                          
                          
                          100
                          
                          
                          
                          1,600
                          
                          
                          
                          21,937Capital
      Stock purchase
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          100NET
      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                          
                          
                          100
                          
                          
                          
                          1,600
                          
                          
                          
                          22,037NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                          
                          
                          67
                          
                          
                          
                          1,567
                          
                          
                          
                          77CASH
      AND CASH EQUIVALENTS,BEGINNING
      OF THE PERIOD
                          
                          
                          10
                          
                          
                          
                          42
                          
                          
                          
                          -END
      OF THE PERIOD
                          
                          $
                          77
                          
                          
                          $
                          1,609
                          
                          
                          $
                          77SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:CASH
      PAID DURING THE PERIOD FOR:Interest
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -Taxes
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
  F-4
 
 FARALLON,
INC.
 NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
 FOR
THE THREE MONTHS ENDED MARCH 31, 2010
 
 
 NOTE A—BUSINESS
ACTIVITY
 
 Business
Activity—Farrallon, Inc. (the "Company”) was organized under the laws of
the State of Nevada on November 13, 2007 as a corporation.  The
Company’s objective is to acquire or merge with a target business or company in
a business combination.
 
 NOTE B—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of
Presentation—The financial statements included herein were prepared under
the accrual basis of accounting.
 
 Cash and Cash
Equivalents—For purposes of the Statement of Cash Flows, the Company
considers liquid investments with an original maturity of three months or less
to be cash equivalents.
 
 Management’s Use of
Estimates—The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results
could differ from those estimates.  The financial statements above
reflect all of the costs of doing business.
 
 Revenue
Recognition—The Company’s policy is to recognize income when it is
earned.
 
 Comprehensive Income
(Loss)—The Company adopted Financial Accounting Standards Board Statement
of Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income”, which establishes standards for the reporting and display of
comprehensive income and its components in the  financial
statements.  There were no items of comprehensive income (loss)
applicable to the Company during the period covered in the financial
statements.
 
 Net Income per Common
Share—Statement of Financial Accounting Standard (SFAS) No. 128 requires
dual presentation of basic and diluted earnings per share (EPS) with a
reconciliation of the numerator and denominator of the EPS
computations.  Basic earnings per share amounts are based on the
weighted average shares of common stock outstanding.  If applicable,
diluted earnings per share would assume the conversion, exercise or issuance of
all potential common stock instruments such as options, warrants and convertible
securities, unless the effect is to reduce a loss or increase earnings per
share.  Accordingly, this presentation has been adopted for the period
presented.  There were no adjustments required to net income for the
period presented in the computation of diluted earnings per share.
 
 Deferred Taxes—Income
taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS No. 109), “Accounting for Income
Taxes.” A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating loss-carry
forwards.
 
 Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that, some portion or all of the deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
 
 Fair Value of Financial
Instruments—The carrying amounts reported in the balance sheet for cash,
accounts receivable and payable approximate fair value based on the short-term
maturity of these instruments.
  F-5
  NOTE B—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT.)
 
 Accounts
Receivable—Accounts deemed uncollectible are written off in the year they
become uncollectible.  As of March 31, 2010, the balance in Accounts
Receivable was $0.
 
 Impairment of Long-Lived
Assets—The Company evaluates the recoverability of its fixed assets and
other assets in accordance with Statement of Financial Accounting Standards No.
144, “Accounting for the
Impairment or Disposal of Long-Lived Assets” (“SFAS 144’). SFAS 144
requires recognition of impairment of long-lived assets in the event the net
book value of such assets exceeds its expected cash flows, it is considered to
be impaired and is written down to fair value, which is determined based on
either discounted future cash flows or appraised values. The Company adopted the
statement on inception. No impairments of these types of assets were recognized
as of March 31, 2010.
 
 Going Concern— The
accompanying financial statements have been prepared on a going concern basis,
which assumes the Company will realize its assets and discharge its liabilities
in the normal course of business.  As reflected in the accompanying
financial statements, the Company has a deficit accumulated during the
development stage of $24,062, used cash from operations of $21,960 since its
inception, and has a negative working capital of $23,962 at March 31,
2010.
 
 The
Company’s ability to continue as a going concern is dependent upon its ability
to generate future profitable operations and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from normal
business operations when they come due.  The Company’s ability to
continue as a going concern is also dependent on its ability to find a suitable
target company and enter into a possible reverse merger with such
company.  Management’s plan includes obtaining additional funds by
equity financing through a reverse merger transaction and/or related party
advances; however there is no assurance of additional funding being
available.  These circumstances raise substantial doubt about the
Company’s ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might arise as a result of this
uncertainty.
 
 Stock-Based
Compensation—The Company accounts for stock-based compensation using the
fair value method of Financial Accounting Standard No. 123R.  This
Statement 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).  No compensation cost is recognized for equity
instruments for which employees do not render the requisite
service.
 
 Recent Accounting
Pronouncements— In June 2009, the Financial Accounting Standards Board
(FASB) issued its final Statement of Financial Accounting Standards (SFAS)
No. 168,“The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles a Replacement of FASB StatementNo. 162”.
SFAS No. 168 made the FASB Accounting Standards Codification (the
Codification) the single source of U.S. GAAP used by nongovernmental
entities in the preparation of financial statements, except for rules and
interpretive releases of the Securities and Exchange Commission (SEC) under
authority of federal securities laws, which are sources of authoritative
accounting guidance for SEC registrants. The Codification is meant to simplify
user access to all authoritative accounting guidance by reorganizing
U.S. GAAP pronouncements into roughly 90 accounting topics within a
consistent structure; its purpose is not to create new accounting and reporting
guidance. The Codification supersedes all existing non-SEC accounting and
reporting standards and was effective for the Company beginning July 1,
2009. Following SFAS No. 168, the Board will not issue new standards
in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force
Abstracts; instead, it will issue Accounting Standards Updates (ASU). The FASB
will not consider ASUs as authoritative in their own right; these updates
will serve only to update the Codification, provide background information about
the guidance, and provide the bases for conclusions on the change(s) in the
Codification.
  F-6
  NOTE B—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
 
 Recent Accounting
Pronouncements (cont’d)
 
 In August
2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10,
“Fair Value Measurements and Disclosures—Overall”. The update provides
clarification that in circumstances, in which a quoted price in an active market
for the identical liability is not available, a reporting entity is required to
measure fair value using one or more of the techniques provided for in this
update. The amendments in this ASU clarify that a reporting entity is not
required to include a separate input or adjustment to other inputs relating to
the existence of a restriction that prevents the transfer of the liability and
also clarifies  that both a quoted price in an active market for the
identical liability at the measurement date and the quoted price for the
identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the asset are required are Level 1 fair value
measurements. The guidance provided in this ASU is effective for the first
reporting period, including interim periods, beginning after
issuance.  The adoption of this standard did not have a material
impact on the Company’s consolidated financial position and results of
operations.
 
 In
September 2009, the FASB issued ASU 2009-06, Income Taxes (Topic 740),
”Implementation Guidance on Accounting for Uncertainty in Income Taxes and
Disclosure Amendments for Nonpublic Entities”, which provides implementation
guidance on accounting for uncertainty in income taxes, as well as eliminates
certain disclosure requirements for nonpublic entities.  For entities
that are currently applying the standards for accounting for uncertainty in
income taxes, this update shall be effective for interim and annual periods
ending after September 15, 2009. For those entities that have deferred the
application of accounting for uncertainty in income taxes in accordance with
paragraph 740-10-65-1(e), this update shall be
effective upon adoption of those standards. The adoption of this standard is not
expected to have an impact on the Company’s consolidated financial position and
results of operations since this accounting standard update provides only
implementation and disclosure amendments.
 
 In
September 2009, the FASB has published ASU No. 2009-12, “Fair Value Measurements
and Disclosures (Topic 820) - Investments in Certain Entities That Calculate Net
Asset Value per Share (or Its Equivalent)”. This ASU amends Subtopic 820-10,
“Fair Value Measurements and Disclosures – Overall”, to permit a reporting
entity to measure the fair value of certain investments on the basis of the net
asset value per share of the investment (or its equivalent). This ASU also
requires new disclosures, by major category of investments including the
attributes of investments within the scope of this amendment to the
Codification. The guidance in this Update is effective for interim and annual
periods ending after December 15, 2009. Early application is
permitted.   The adoption of this standard did not have an impact
on the Company’s consolidated financial position and results of
operations.
 
 In
October 2009, the FASB has published ASU 2009-13, “Revenue Recognition (Topic
605)-Multiple Deliverable Revenue Arrangements”, which addresses the accounting
for multiple-deliverable arrangements to enable vendors to account for products
or services (deliverables) separately rather than as a combined unit.
Specifically, this guidance amends the criteria in Subtopic 605-25, “Revenue
Recognition-Multiple-Element Arrangements”, for separating consideration in
multiple-deliverable arrangements. This guidance establishes a selling price
hierarchy for determining the selling price of a deliverable, which is based on:
(a) vendor-specific objective evidence; (b) third-party evidence; or (c)
estimates. This guidance also eliminates the residual method of allocation and
requires that arrangement consideration be allocated at the inception of the
arrangement to all deliverables using the relative selling price method and also
requires expanded disclosures. The guidance in this update is effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Early adoption is permitted.
The adoption of this standard is notexpected to have a
material impact on the Company’s consolidated financial position and results of
operations.
  F-7
  NOTE C—SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the quarters ended March 31, 2010 and
2009 is summarized as follows:
 
 Cash paid
during the quarters ended March 31, 2010 and 2009 for interest and income
taxes:
 
 2010
                    
                    
                    2009Income
      Taxes
                    
                    $
                    —
                    
                    
                    $
                    —Interest
                    
                    $
                    —
                    
                    
                    $
                    —
 
 NOTE D—SEGMENT
REPORTING
 
 In June
1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 131, “Disclosures about Segments of an
Enterprise and Related Information.”  This statement requires
companies to report information about operating segments in interim and annual
financial statements.  It also requires segment disclosures about
products and services, geographic areas and major customers.  The
Company determined that it did not have any separately reportable operating
segments as of March 31, 2010.
 
 NOTE E—INCOME
TAXES
 
 Due to
the operating loss and the inability to recognize an income tax benefit, there
is no provision for current or deferred federal or state income taxes for the
years ended December 31, 2009 and 2008.
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.
 
 The
Company’s total deferred tax asset, calculated using federal and state effective
tax rates, as of December 31, 2009 is as follows:
 
 Total
      Deferred Tax Asset
                    
                    $
                    (8,000
                    )Valuation
      Allowance
                    
                    
                    8,000Net
      Deferred Tax Asset
                    
                    $
                    -
 
 The
reconciliation of income taxes computed at the federal statutory income tax rate
to total income taxes as of December 31, 2009 and 2008 is as
follows:
 
 2009
                      
                      
                      2008Income
      tax computed at the federal statutory rate
                      
                      
                      34.0
                      %
                      
                      
                      34.0
                      %State
      income tax, net of federal tax benefit
                      
                      
                      0.0
                      %
                      
                      
                      0.0
                      %Total
                      
                      
                      34.0
                      %
                      
                      
                      34.0
                      %Valuation
      allowance
                      
                      
                      -34.0
                      %
                      
                      
                      -34.0
                      %Total
      deferred tax asset
                      
                      
                      0.0
                      %
                      
                      
                      0.0
                      %
  F-8
 
 NOTE E—INCOME TAXES
(CONT’D)
 
 Because
of the Company’s lack of earnings history, the deferred tax asset has been fully
offset by a valuation allowance.  The valuation allowance increased
(decreased) by approximately $2,400 and $4,700 for the years ended December 31,
2009 and 2008.
 
 As of
December 31, 2009, the Company had a federal and state net operating loss carry
forward in the amount of approximately $23,591, which expires in the year
2029.
 
 NOTE F—CAPITAL
STOCK
 
 The
Company is authorized to issue 100,000,000 common shares at $.0001 par value per
share.
 
 As of
March 31, 2010, the Company has the following shares of common stock
issued:
 
 DYP
      Enterprises, LLC
                    
                    
                    550,000Garvin
      Investments, LLC
                    
                    
                    150,000Garvin
      Strategic Capital
                    
                    
                    300,000
 
 The
Company is authorized to issue 10,000,000 preferred shares at $.0001 par value
per share. As of March 31, 2010 the Company had not issued any preferred
shares.
 
 NOTE G – DEVELOPMENT STAGE
COMPANY
 
 The
Company is in the development stage as of March 31, 2010 and to date has had no
significant operations.  Recovery of the Company’s assets is dependent
on future events, the outcome of which is indeterminable. In addition,
successful completion of the Company’s development program and its transition,
ultimately, to attaining profitable operations is dependent upon obtaining
adequate financing to fulfill its development activities and achieving a level
of sales adequate to support the Company’s cost structure.
 
 NOTE H—SHAREHOLDER
LOAN/RELATED PARTY
 
 The
Company has signed a promissory note with two related parties.  The
notes are demand notes bearing interest at 8% per annum.  The
outstanding balance as of March 31, 2010 was $21,937.  The accrued
interest not paid as of March 31, 2010 is $2,102, respectively.
  F-9





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





Overview.





Farrallon,
Inc. (“we”, “us” or the “Company”) was organized in the State of Nevada on
November 13, 2007.  We are a developmental stage company and have not
generated any revenues to date.  We were organized to serve as a
vehicle for a business combination through a capital stock exchange, merger,
reverse acquisition, asset acquisition or other similar business combination (a
“Business Combination”) with an operating or development stage business (the
“Target Business”) which desires to utilize our status as a reporting company
under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).  We are in the process of identifying and evaluating targets
for a Business Combination.  We are not presently engaged in, and will
not engage in, any substantive commercial business operations unless and until
we consummate a Business Combination.





Our
management has broad discretion with respect to identifying and selecting a
prospective Target Business.  We have not established any specific
attributes or criteria (financial or otherwise) for prospective Target
Businesses.  Our sole officer and director has never served as an
officer or director of a development stage public company with the business
purpose of acquiring a Target Business.  Accordingly, he may not
successfully identify a Target Business or conclude a Business
Combination.





Any
entity with which we may enter into a Business Combination is subject to
numerous risks in connection with its operations.  To the extent we
affect a Business Combination with a financially unstable company or an entity
in its early stage of development or growth, including entities without
established records of sales or earnings, we may be affected by numerous risks
inherent in the business and operations of financially unstable and early stage
or potential emerging growth companies.  If we consummate a Business
Combination with a foreign entity, we will be subject to all of the risks
attendant to foreign operations.  Although our management will
endeavor to evaluate the risks inherent in a particular Target Business, we
cannot assure you that we will properly ascertain or assess all significant risk
factors.





We expect
that in connection with any Business Combination, we will issue a significant
number of shares of our common stock (equal to at least 80% of the total number
of shares outstanding after giving effect to the transaction and likely a
significantly higher percentage) in order to ensure that the Business
Combination qualifies as a tax-free transaction under federal tax
laws.  The issuance of additional shares of our capital stock
will:




·
            significantly
      reduce the equity interest of our stockholders prior to the transaction;
      and





·
            cause
      a change in control of our Company and likely result in the resignation or
      removal of one or more of our present officers and
    directors.





Our
management anticipates that the Company will affect only one Business
Combination, due primarily to our financial resources and the dilution of
interest for present and prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a Target
Business in order to achieve a tax-free reorganization.  This lack of
diversification should be considered a substantial risk in investing in us
because it will not permit us to offset potential losses from one venture
against potential gains from another.





Liquidity and Capital
Resources.





At March
31, 2010, we had a de minimus amount of cash on hand.  Our existing
cash reserves will not be sufficient to cover our operating costs and expenses
over the next twelve months which we expect will comprise costs and expenses in
connection with the preparation and filing of reports under the Securities
Exchange Act, the identification and evaluation of targets and, possibly, in
connection with consummating a Business Combination, and we will require funds
therefor.





To date,
we have funded our operations through loans from our stockholders and, as of
March 31, 2010, we had borrowed an aggregate of $21,937 from
them.  Our stockholders have advised us that they expect to fund
additional costs and expenses that we will incur through loans or further
investment in the Company, as and when necessary.


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We cannot
provide investors with any assurance that we will have sufficient capital
resources to identify a suitable Target Business, to conduct effective due
diligence as to any Target Business or to consummate a Business
Combination.  As a result of our negative working capital, our losses
since inception, and failure to generate revenues from operations, our financial
statements include a note in which our auditor has expressed doubt about our
ability to continue as a "going concern."





Results of
Operations.





Since our inception, we have not
generated any revenues.  We reported a net loss for the three-month
period ended March 31, 2010 of $33 and a net loss since inception of
$24,062.  The Company has used cash from operations of $21,960 since
its inception, and has a negative working capital of $23,962 at March 31,
2010.   Our expenses have consisted mainly of professional fees
and interest expense.





We do not expect to engage in any
substantive activities unless and until such time as we enter into a Business
Combination, if ever.  We cannot provide investors with any assessment
as to the nature of a Target Business’s operations or speculate as to the status
of its products or operations, whether at the time of the Business Combination
it will be generating revenues or its future prospects.





Item
3. Quantitative and Qualitative Disclosures about Market Risk.





Not applicable.





Item
4(T). Controls and Procedures.





Evaluation
of Disclosure Controls and Procedures





As of
March 31, 2010, the Company’s management carried out an evaluation, under the
supervision and with the participation of the Company’s Chief Executive Officer,
who is the Company’s principal executive officer and principal financial
officer, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under
the Exchange Act), pursuant to Exchange Act Rule 13a-15. Based on such
evaluation, the Company’s Chief Executive Officer has concluded that the
Company's disclosure controls and procedures were effective.




Changes
in Internal Controls





There
have been no changes in the Company’s internal control over financial reporting
(as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three
months ended March 31, 2010 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial
reporting.





PART
II — OTHER INFORMATION





Item
1. Legal Proceedings.





The
Company is not a party to any legal proceeding or litigation.





Item
1A. Risk Factors.





Smaller
reporting companies are not required to provide the information required by this
item.





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





(a) During
the three months ended March 31, 2010, the Company did not issue any
securities.





(b) Not
applicable.


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(c)
During the three months ended March 31, 2010, neither the issuer nor any
"affiliated purchaser," as defined in Rule 10b-18(a)(13), purchased any shares
or other units of any class of the issuer's equity securities.





Item
3. Defaults Upon Senior Securities.





None.





Item
4. (Removed and Reserved)





Item
5. Other Information.





(a) None.





(b) The Company has not adopted any
procedures by which security holders may recommend nominees to the registrant's
board of directors.





Item
6. Exhibits.





Index to
Exhibits




Exhibit
              
              Description31.1
              
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
      respect to the registrant’s Quarterly Report on Form 10-Q for the quarter
      ended March 31, 2010.32.1*
              
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of
2002.





*  Pursuant
to Commission Release No. 33-8238, this certification will be treated as
“accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of
such report for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of Section 18 of
the Securities Exchange Act of 1934, as amended, and this certification will not
be deemed to be incorporated by reference into any filing under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
except to the extent that the registrant specifically incorporates it by
reference.




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SIGNATURES





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





FARRALLON,
      INC.Date:
      May 14, 2010
                By:
                /s/ Bryan ArthurName:
                Bryan
      ArthurTitle:
                President,
      Principal Executive Officer
                  and
      Principal Financial
Officer


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