UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 þ           Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the
quarterly period ended: March 31, 2008
 
 o           Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the
transition period from _______ to _________
 
 Commission
file number: 000-1426567
 
 LABWIRE,
INC.
 (Exact
name of registrant as specified in its charter)
 
 Nevada
                  
                  37-1501818(State
      or other jurisdiction of incorporation or organization)
                  
                  (I.R.S.
      Employer Identification
No.)
 
 
 1514
      FM 359 N., Brookshire, Texas
                
                77423(Address
      of principal executive offices)
                
                (Zip
      Code)
  281-934-3153
 (Registrant’s
telephone number, including area code)
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
 Yes x No o
 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 o                                           Accelerated
filer o
 Non-accelerated
filer   o                                           Smaller
Reporting Company  þ
 (Do not
check if a smaller reporting company)
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x
 The
number of shares of common stock, $.001 par value, outstanding as of November
28, 2008: 142,699,001shares
 
  Page
1
  LABWIRE,
INC.
 PERIOD
ENDED MARCH 31, 2008
 
 INDEX
  PagePART
      I.   FINANCIAL INFORMATIONITEM
      1.
                                FINANCIAL
      STATEMENTSFinancial
      statements of Labwire, Inc. (unaudited):Consolidated
      balance sheets as of March 31, 2008 (Unaudited) and December 31, 2007
      (Restated)
                                3Consolidated
      statements of operations for the three months ended March 31, 2008 and
      2007 (Unaudited)
                                4Consolidated
      statement of stockholders' deficiency for the Period from December 31,
      2005 through March 31, 2008 (Unaudited)
                                5Consolidated
      statements of cash flows for the three months ended March 31, 2008 and
      2007 (Unaudited)
                                6Notes
      to consolidated financial statements (Unaudited)
                                7ITEM
      2.
                                MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                                16ITEM
      4T.
                                CONTROLS
      AND PROCEDURES
                                22PART
      II.  OTHER INFORMATIONITEM
      1.
                                LEGAL
      PROCEEDINGS
                                22ITEM
      2.
                                UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
                                22ITEM
      6.
                                EXHIBITS
                                23
  
  Page
2
  PART
I.   FINANCIAL INFORMATION
 ITEM
1.   FINANCIAL STATEMENTS
 
 LABWIRE,
INC.
 Consolidated
Balance Sheets
 ASSETS
                                3/31/2008
                                  (Unaudited)
                                12/31/2007
                                  (Restated)CURRENT
      ASSETS:Cash
      and cash equivalents - interest bearing
                                $   158,990
                                $   206,520Accounts
      receivable, net of allowance for doubtful accounts of $5,600 as of March
      31, 2008 and December 31, 2007, respectively
                                552,702
                                860,098Advances
      to employees
                                12,500
                                -Prepaid
      expenses
                                212,437
                                20,696Total
      Current Assets
                                936,629
                                1,087,314PROPERTY
      AND EQUIPMENT:Laboratory
      equipment
                                53,781
                                53,781Vehicles
                                7,000
                                7,000Office
      furniture and equipment
                                36,925
                                35,251Proprietary
      software
                                153,855
                                118,550251,561
                                214,582Less:  accumulated
      depreciation
                                (65,847)
                                (54,207)Total
      Property and Equipment
                                185,714
                                160,375OTHER
      ASSETS:Goodwill
                                455,210
                                455,210TOTAL
      ASSETS
                                $   1,577,553
                                $   1,702,899LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
      LIABILITIES:Accounts
      payable and accrued expenses
                                $   497,832
                                $   866,796Income
      taxes payable
                                -
                                24,303Current
      portion of long-term debt
                                249,784
                                160,000Unearned
      income
                                194,994
                                -Notes
      payable to related parties
                                156,985
                                156,985Accrued
      interest payable
                                17,088
                                7,045Accrued
      interest payable – related parties
                                22,922
                                21,690Total
      Current Liabilities
                                1,139,605
                                1,236,819LONG-TERM
      LIABILITIES:Long
      term-debt, less current portion above
                                526,503
                                561,932Total
      Long-term Liabilities
                                526,503
                                561,932TOTAL
      LIABILITIES
                                1,666,108
                                1,798,751STOCKHOLDERS’
      EQUITY (DEFICIT):Common
      stock; $0.001par value; 150,000,000 shares authorized; 140,499,001 and
      140,399,001 shares issued and outstanding at March 31, 2008 and December
      31, 2007, respectively
                                140,499
                                140,399Additional
      paid-in capital
                                486,284
                                471,384Accumulated
      deficit
                                (715,338)
                                (707,635)Total
      Stockholders' Equity (Deficit)
                                (88,555)
                                (95,852)TOTAL
      LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
                                $   1,577,553
                                $   1,702,899
 The accompanying notes are an integral part of these financial
statements.
  Page
3
  
 LABWIRE,
INC.
 Consolidated
Statements of Operations
  For
      the Three Months
                  Ended
      March 31,2008
                
                2007REVENUES
                $    864,997
                
                $    1,167,976COST
      OF SALES
                462,708
                
                794,288GROSS
      PROFIT
                402,289
                
                373,688OPERATING EXPENSES:General
      and administrative expenses
                163,827
                
                169,297Bad
      debt expense
                520
                
                -Advertising
      and marketing expense
                4,244
                
                909Payroll
      expenses
                239,393
                
                127,072Total
      Operating Expenses
                407,984
                
                297,278OPERATING INCOME (LOSS)
                (5,695)
                
                76,410OTHER INCOME
    (EXPENSES)Interest expense
                (18,385
                )
                (6,069
                )Interest
      income
                78
                
                -Total
      Other Income (Expenses)
                (18,307
                )
                (6,069
                )NET INCOME (LOSS) BEFORE
      TAXES
                (24,002
                )
                70,341INCOME
      TAX EXPENSE (BENEFIT)
                (16,299
                )
                -NET INCOME (LOSS)
                $     (7,703)
                
                $    70,341BASIC EARNINGS (LOSS) PER
      SHARE
                $0.00
                
                $    0.00WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING
                140,399,001
                
                138,315,665
  
 The
accompanying notes are an integral part of these financial
statements.
 
  Page
4
  
 LABWIRE,
INC.
 Consolidated
Statement of Stockholders’ Equity (Deficit)
   DESCRIPTION
                  Common
                    Shares
                  Stock
                    Amount
                  Additional
      Paid-In Capital
                  Accumulated
                    Deficit
                  Total
      Stockholders’
                    Equity
      (Deficit)Balance, December 31, 2005
                  136,232,330
                  $136,232
                  $  
      168,346
                  $  
      (310,401)
                  $   
      (5,823)Common
      shares issued for cash
                  4,166,671
                  4,167
                  303,038
                  -
                  307,205Net
      loss for the year ended December 31, 2006
                  -
                  -
                  -
                  (500,981)
                  (500,981)Balance, December 31, 2006
                  140,399,001
                  140,399
                  471,384
                  (811,382)
                  (199,599)Net income for the year ended December 31, 2007 (Restated)
                  -
                  -
                  -
                  103,747
                  103,747Balance, December 31, 2007 (Restated)
                  140,399,001
                  140,399
                  471,384
                  (707,635)
                  (95,852)Common shares issued for cash
                  100,000
                  100
                  14,900
                  
                  15,000Net loss for the three months ended March 31, 2008
                  -
                  -
                  -
                  (7,703)
                  (7,703)Balance, March 31, 2008
                  140,499,001
                  $
      140,499
                  $  
      486,284
                  $  
      (717,338)
                  $  
      (88,555)
  
 
 
 The
accompanying notes are an integral part of these financial
statements.
   Page
5
  LABWIRE,
INC.
 Consolidated
Statements of Cash Flows
 
 For the Three
      Months
                      Ended
      March 31,2008
                    
                    2007OPERATING
      ACTIVITIESNet
      income (loss)
                    $   
      (7,703)
                    
                    $   70,341Adjustments
      to reconcile net income (loss) to net cash provided (used) by operating
      activities:Depreciation
                    11,640
                    
                    4,561Changes
      in operating assets and liabilities(Increase) decrease in accounts receivable
                    294,896
                    
                    (310,375
                    )(Increase) decrease in prepaid expenses
                    (191,741
                    )
                    6,148Increase (decrease) in accounts payable and  accrued
      expenses
                    (368,964
                    )
                    115,178Increase
      (decrease) in unearned income
                    194,994
                    
                    -Increase
      (decrease) in accrued interest payable
                    11,275
                    
                    -Income taxes payable
                    (24,303
                    )
                    (11,544
                    )Net
      Cash Provided by (Used)  in Operating Activities
                    (79,906)
                    
                    (125,691
                    )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
                    (1,479
                    )
                    -Development
      of Software
                    (35,500
                    )
                    -Net
      Cash Used in Investing Activities
                    (36,979
                    )
                    -CASH
      FLOWS FROM FINANCING ACTIVITIESRepayment
      of notes payable
                    (45,645
                    )
                    (2,432
                    )Increase
      in bank line of credit
                    100,000
                    
                    -Sale
      of common stock for cash
                    15,000
                    
                    (2,432
                    )Net
      Cash Provided by Financing Activities
                    69,355
                    
                    (2,432
                    )NET
      INCREASE (DECREASE) IN CASH
                    (47,530
                    )
                    (128,123
                    )CASH
      AT BEGINNING OF YEAR
                    206,520
                    
                    108,346CASH
      AT END OF PERIOD
                    $   158,990
                    
                    $   
      (19,777
                    )CASH
      PAID FOR:Interest
                    $   31,305
                    
                    $   6,069Income
      Taxes
                    $            
      -
                    
                    $        
        -
  The
accompanying notes are an integral part of these financial
statements.
  Page
6
  Labwire,
Inc.
 Notes to
Consolidated Financial Statements
 References
to March 31, 2008 are Unaudited
 
 1.
Summary of Significant Accounting Policies
  Nature of
Operations-Labwire, Inc. (referred to herein as "the Company") was incorporated in
Nevada on October 8, 2004. The Company was established as an employee screening
company specializing in drug testing, background investigations, employee
training, on-line certification and security with a client base of large US and
European corporations which provides compliance services for Department Of
Transportation (49CFR Part 40) and Federal Trade Commission  (Fair
Credit Reporting Act) governed programs.
 
 Basis of
Consolidation – The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary.  All
intercompany balances and transactions have been eliminated in
consolidation.
 
 Basis of
presentation- The accompanying
financial statements have been prepared on the accrual basis of accounting in
accordance with accounting principles generally accepted in the United States of
America (“U.S. GAAP”). Significant accounting principles followed by the Company
and the methods of applying those principles, which materially affect the
determination of financial position and cash flows, are summarized
below.
 
 In the
opinion of management, the accompanying balance sheets and related interim
statements of income, cash flows, and stockholders’ equity include all
adjustments, consisting only of normal recurring items, necessary for their fair
presentation in conformity with GAAP.  Preparing financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, and expenses.  Actual
results and outcomes may differ from management’s estimates and
assumptions.
 
 Cash and
Cash Equivalents - For purposes of the statement of cash flows, the
Company considers all highly liquid instruments with original maturities of
ninety days or less, to be cash equivalents.
 
 Allowance
for Uncollectible Receivables-The allowance
for all probable uncollectible receivables is based on a combination of
historical data, cash payment trends, specific customer issues, write-off
trends, general economic conditions and other factors. These factors are
continuously monitored by management to arrive at an estimate for the amount of
accounts receivable that may ultimately be uncollectible. In circumstances where
the Company is aware of a specific customer’s inability to meet its financial
obligations, the Company records a specific allowance for bad debts against
amounts due to reduce the net recognized receivable to the amount it reasonably
believes will be collected. This analysis requires making significant estimates,
and changes in facts and circumstances could result in material changes in the
allowance for uncollectible receivables.  The Company’s allowance for
uncollectible receivables was $5,600 at March 31, 2008 and December 31, 2007,
respectively.
 
 Fair
Value of Financial Instruments – The Company’s financial instruments
includes accounts receivable, accounts payable, notes payable and long-term
debt. The fair market value of accounts receivable and accounts payable
approximate their carrying values because their maturities are generally less
than one year. Long-term notes receivable and debt obligations are estimated to
approximate their carrying values based upon their stated interest
rates.
 
 Impairment
of Long-Lived Assets– The Company reviews
long-lived assets, such as property and equipment, and purchased intangibles
subject to amortization, for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable, in accordance with Statement of financial Accounting Standards
(“SFAS”) No. 144, Accounting for the Impairment for Disposal of Long-Lived
Assets. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to estimated undiscounted future cash flows
expected to be generated by the asset. If the carrying amount of an asset
exceeds its estimated future cash flows, an impairment charge is recognized by
the amount of the asset exceeds the fair value of the asset.
 At
December 31, 2007, the Company determined that the fair value of the reporting
entity unit exceeds its carrying amount and hence the goodwill is not
impaired.
 
 Property
and equipment– Property and equipment
are stated at cost, net of accumulated depreciation. Depreciation is provided
primarily by the straight-line method over the estimated useful lives of the
related assets generally of five to seven years.
 
 Income
Taxes-The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes", which requires an
asset and liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce the deferred tax assets to the amount
expected to be realized. Income tax expense is payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities.
 
 Use of
Estimates - The preparation of financial statements in conformity with
GAAP requires management to make estimates and assumptions that affect reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
 
 Revenue
Recognition– We have three main
sources of revenue: drug testing and related services, training and online
certification, and security services provided by an allied
company.  Drug testing: we fulfill orders for drug testing services,
wherein we are responsible for the performance and data maintenance related to
employee drug testing for its clients.  We do not perform the drug
tests, but we fulfill the order through our network of third party labs and
other drug testing facilities.  Revenue is recognized when the drug
testing has been completed by the lab and the customer has been invoiced for the
services.  We have low bad debt levels because our policy is to deal
with large well-positioned firms that pay monthly. Because we track these
company's activities daily, we are constantly aware of our position and
therefore can demand and receive timely payments as we provide on-going
compliance services. Pursuant to EITF 99-19, we are responsible for fulfilling a
customer’s order, including whether the service is acceptable and therefore
bears the risks and rewards of principal.  As such, we have elected to
record the gross amounts of the contracts.  Our service agreements
rarely include multiple parts that would have a material impact on the
recognition of revenue.  As such, we have created our revenue
recognition policies pursuant to EITF 00-21.
 
 Online
training and certification: the Company has designed online testing for various
certifications which client employees must attain for their
employment.  The employee takes the certification examinations online
and the client is automatically tagged for billing, which coincides with
performance of services.
 
 Security
services provided by the Company through its allied company: the process is
handled in similar fashion to that described above for drug
testing.
 
 Software
Development Costs- The Company has
begun developing a software platform for certain exclusively internal
purposes.  The Company follows the guidance set forth in Statement of
Position 98-1, Accounting for
the Cost of Computer Software Developed or Obtained for Internal Use(SOP 98-1), in accounting for costs incurred in the development of
its on-demand application suite. SOP 98-1 requires companies to capitalize
qualifying computer software costs that are incurred during the application
development stage and amortize them over the software’s estimated useful
life.
 
 The
Company capitalizes costs associated with developing software for internal use,
which costs primarily include salaries of developers.  Direct costs
incurred in the development of software are capitalized once the preliminary
project stage is completed, management has committed to funding the project and
completion, and use of the software for its intended purpose are
probable.  The Company ceases capitalization of development costs once
the software has been substantially completed and is ready for its intended use.
The estimation of useful lives requires a significant amount of judgment related
to matters, specifically, future changes in technology. The Company believes
there have not been any events or circumstances that warrant revised estimates
of useful lives of the software.
 
 Purchase
Accounting-
The Company completed acquisitions in 2004 and in the fourth quarter of 2007.
The purchase method of accounting requires companies to assign values to assets
and liabilities acquired based upon their fair values. In most instances, there
is not a readily defined or listed market price for individual assets and
liabilities acquired in connection with a business, including intangible assets.
The determination of fair value for assets and liabilities in many instances
requires a high degree of estimation. The valuation of intangibles assets, in
particular, is very subjective.  The Company generally uses internal
cash flow models and, in certain instances, third party valuations in estimating
fair values. The use of different valuation techniques and assumptions can
change the amounts and useful lives assigned to the assets and liabilities
acquired, including goodwill and other intangible assets and related
amortization expense.
 
 Advertising
Costs-
Advertising costs are reported in selling, general and administrative expenses
and include advertising, marketing and promotional programs. As of December 31,
2007 and 2006, all of these costs were charged to expenses in the period or year
in which incurred. Advertising costs for the three months ended March 31, 2008
and the year ended December 31, 2007 were $9,990and $10,240,
respectively.
 
 Stock
Options-
The Company accounts for stock options issued to employees in accordance with
APB No.25.
 The
Company has elected to adopt the disclosure requirements of SFAS No.123
"Accounting for Stock-based Compensation". This statement requires that the
Company provide proforma information regarding net income (loss) and
income (loss) per share as if compensation cost for the Company's stock
options granted had been determined in accordance with the fair value based
method prescribed in SFAS No. 123. Additionally, SFAS No. 123 generally requires
that the Company record options issued to non-employees, based on the fair value
of the options.
 
 Stock
Based Compensation- ASRC accounts for
stock-based employee compensation arrangements using the fair value method in
accordance with the provisions of Statement of Financial Accounting Standards
no.123(R) , Share-Based Payments, and Staff Accounting Bulletin No. 107,
Share-Based Payments. The company accounts for the stock options issued to
non-employees in accordance with the provisions of Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation, and
Emerging Issues Task Force No. 96-18, Accounting for Equity Instruments with
Variable Terms That Are Issued for Consideration other Than Employee Services
Under FASB Statement No. 123. The fair value of stock options and warrants
granted to employees and non-employees is determined using the Black-Scholes
option pricing model. The Company has adopted SFAS 123(R) and applied it in the
period presented.  The Company had not issued any options to employees
in the prior periods; thus there was no impact of adopting the new
standard.
 
 Net
earnings (loss) per share- Basic and diluted net loss
per share information is presented under the requirements of SFAS No. 128,
Earnings per Share. Basic net loss per share is computed by dividing net loss by
the weighted average number of shares of common stock outstanding for the
period, less shares subject to repurchase. Diluted net loss per share reflects
the potential dilution of securities by adding other common stock equivalents,
including stock options, shares subject to repurchase, warrants and convertible
notes in the weighted-average number of common shares outstanding for a period,
if dilutive. During the three months ended March 31, 2008 and 2007 there were no
dilutive securities.  The computation of earnings (loss) per share is
as follows:
 
 Three
      Months Ended
                      March
      31,2008
                    
                    2007Net
      Income (Loss)
                    $      (7,703)
                    
                    $      70,341Weighted
      average shares outstanding
                    140,399,001
                    
                    138,315,665Basic
      Earnings (Loss) per share
                    $      0.00
                    
                    $      (0.00)
 
 
 Recent Accounting
Pronouncements
 In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, “Fair Value Measurements” which defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. Where applicable, SFAS No. 157 simplifies and codifies
related guidance within GAAP and does not require any new fair value
measurements. SFAS No. 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier adoption is encouraged. The Company does
not expect the adoption of SFAS No. 157 to have a significant effect on its
financial position or results of operation.
 
 In
February 2007, the FASB issued SFAS NO. 159, The Fair Value Option for Financial
Assets and Financial Liabilities-Including an amendment of FASB Statement No.
115. This statement permits entities to choose to measure many financial
instruments and certain items at fair value. The objective is to improve
the financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This statement is expected to expand the use of fair value
measurement objectives for accounting for financial instruments. This
statement is effective as of the beginning of an entity's first fiscal year that
begins after November 15, 2007.
 
 In December 2007, the
FASB issued SFAS 160, Non-controlling Interest in
Consolidated Financial Statements-an amendment of ARB No. 51.
This statement amends ARB 51 to establish accounting and reporting standards for
the non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It also changes the way the consolidated income statement is
presented for non-controlling interest. This statement improves comparability by
eliminating diversity of methods. This statement also requires expanded
disclosure. The Company does not expect the adoption of SFAS No. 160
to have a significant effect on its financial position or results of
operation.
 
 In
March 2008, the FASB issued SFAS 161, Disclosures about Derivative
Instruments and Hedging Activities--an amendment of FASB Statement No. 133. This
statement is intended to enhance the disclosure requirements
for   for derivative instruments and hedging activities as
required by SFAS 133. The Company is currently evaluating the impact, if
any, the adoption of SFAS 161 will have on its disclosure
requirements.
 
 In May
2008, the FASB issued SFAS 162, The Hierarchy of Generally Accepted Accounting
Principles. This Statement identifies the sources
of accounting principles and the
framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles
(GAAP) in the United States (the GAAP hierarchy). The Company is currently
evaluating the impact, if any, the adoption of SFAS 161 will have on its
disclosure requirements.
 
 
 2.  Restatement
 In
preparing the financial statements for the quarter ended March 31, 2008, the
Company determined that it had recorded excess revenue during the year ended
December 31, 2007.   As the result of this error, we are
restating our financial statements (“The Restatement”) and associated
disclosures to reduce revenues.  The error resulted in the over
statement of and a corresponding understatement of net loss by $241,932, for the
year ending December 31, 2007. The restatement impacted certain line items
within cash flows from operations, but had no effect on total cash flows from
operations and did not impact cash flows from financing or investing
activities.
 
 The
restatement also affected Note 7.
  The
effect of the restatement on specific items in the balance sheet is as
follows:
 December
      31, 2007As
      Previously Reported
                  Adjustments
                  As
      RestatedSTOCKHOLDERS'
      EQUITY:Retained
      earnings (deficit)
                  $ 
      (465,703)
                  $  
      (241,932)
                  $ 
      (707,635)Total
      Stockholders’ Equity
                  $    
      146,080
                  $  
      (241,932)
                  $   
      (95,852)
 
 
 The
effect of the restatement on specific items in the statements of operations is
as follows:
 Year
      ended December 31, 2007As
      Previously Reported
                Adjustments
                As
      RestatedREVENUES:
                $   
      4,799,631
                $   
      (241,932)
                $   
      4,557,699GROSS
      PROFIT
                1,705,101
                (241,932)
                1,463,169OPERATING
      INCOME
                420,190
                (241,932)
                178,258NET
      INCOME
                345,679
                (241,932)
                103,747
 
  The
effect of the restatement on specific items in the statements of cash flows is
as follows:
 Year
      ended December 31, 2007As
      Previously
                      Reported
                    Adjustments
                    As
      RestatedOPERATING
      ACTIVITIES:Net
      Income
                    $ 
        345,679
                    $
      (241,932)
                    $   
      103,747Changes
      in operating assets and liabilities:Increase in accounts receivable
                    (369,486)
                    241,932
                    (127,554)Net
      cash used in operating activities
                    62,054
                    -
                    62,054
 
 
 3.
Goodwill
 The
Company acquired 100% of Occupational Testing, Inc. (OTI) on October 31, 2007
for $120,000
 Cash and
a $480,000 note bearing interest at 1% over New York floating prime. The note is
payable in quarterly installments of $40,000 plus accrued interest beginning
January 31, 2008. The purchase of OTI resulted in $455,210 in goodwill as an
asset on the Company’s financial statements.
 
 
 4.  Notes
payable
 As of
March 31, 2008 and December 31, 2007, the Company had outstanding notes payable
as follows:
 
 March
      31, 2008
                December
      31, 2007A
      .  Murphy, due in quarterly installments of $40,000
      beginning
                  January
      31, 2008 and bears interest at 1% over New York floating
    prime
                $  434,355
                $  480,000Bank
      installment loan, payable in monthly installments of $7,482.43 at interest
      rate of 1% over prime interest
                241,932
                241,932Bank
      line of credit due February 13, 2010 and bears interest at per annum
      interest rate of 1% over prime interest
                100,000
                -776,287
                721,932Less:  current
      portion
                249,784
                401,932Long
      term portion
                $   526,503
                $320,000Related
      Party Notes Payable:Shareholders,
      due on demand, bearing interest at1.71% per annum
                $100,985
                $100,985Workplace
      Health, due on demand, bearing interest at 4.5% per annum
                56,000
                56,000Total
      Related Party Notes Payable
                156,985
                156,985Less:  current
      portion
                156,985
                156,985Long
      term portion
                $          -
                $  -
 
 The A.
Murphy note payable is secured by all of the outstanding stock and all of the
assets of Occupational Testing, Inc.  The related party notes payable
are unsecured.
 
 The bank
loans are secured by the Company’s accounts receivable and by the personal
guarantee of the Company’s Chief Executive Officer.
 
 Maturities
of notes payable and long-term debt for each of the years succeeding December
31, 2007 are as follows:
 
 Year
      ending December 31,2008
                $  406,7692009
                249,7842010
                276,719$     933,272
 
 
 5.
Stockholders’ Equity
 The
Company is authorized to issue 150,000,000 shares of common stock with a par
value of $.001 per share.  The Company had 140, 499,001 and
140,399,001 shares issued and outstanding at March 31, 2008 and December 31,
2007, respectively.
 
 During
the three months ended March 31, 2008, the Company sold 100,000 shares in a
private placement to an accredited investor for $15,000 in cash.
 
 In the
year ended December 31, 2006, the Company sold 4,177,670 shares in private
placements to accredited investors for $307,205 in cash.
 
 
 6. Income
Taxes
 The
Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse. The Company’s predecessor
operated as entity exempt from Federal and State income taxes.
 
 SFAS No.
109 requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized.
 
 The
provision for income taxes differs from the amounts which would be provided by
applying the statutory federal income tax rate of 39% to the net loss before
provision for income taxes for the following reasons:
  Three
      Months Ended
                  March
      31, 2008
                
                Year
      Ended
                  December
      31, 2007Income
      tax expense at statutory rate
                $
             (3,120)
                
                $       (134,806)Valuation
      allowance
                3,120
                
                134,806Income
      tax expense per books
                $                   -
                
                $                     -
 
 Net
deferred tax assets consist of the following components as of:
 
 Three
      Months Ended
                  March
      31, 2008
                
                Year
      Ended
                  December
      31, 2007NOL
      carryover
                $       3,120
                
                $       181,740Valuation
      allowance
                (3,120)
                
                (181,740)Net
      deferred tax asset
                $               -
                
                $                  -
 
 
 At
December 31, 2007, the Company had total net operating losses carried forward of
approximately $466,000 that may be offset against future taxable income through
2027.   Due to the change in ownership provisions of the Tax
Reform Act of 1986, net operating loss carry forwards are subject to annual
limitations.   Should a change in ownership occur, net operating
loss carry forwards may be limited as to use in future years.  No tax
benefit has been reported in the December 31, 2007 financial statements since
the potential tax benefit is offset by a valuation allowance of the same
amount.
 
 In July
2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
No. 48 regarding “Accounting for Uncertainty in Income Taxes,” an interpretation
of FASB No. 109 (“FIN 48”), which defines the threshold for recognizing the
benefits of tax-return positions in the financial statements as
“more-likely-than-not” to be sustained by the taxing authorities. The Company
has reviewed its tax positions for open tax years 2005 and later and the
adoption of FIN 48 on January 1, 2007 did not result in establishing a
contingent tax liability reserve nor a corresponding charge to retained
earnings. Also, no such uncertainties were identified during 2007. The Company
has substantial tax benefits derived from its operating loss carryforwards but
has provided 100% valuation allowances against them due to uncertainties
associated with the realization of those tax benefits.
 
 The
recognition and measurement of certain tax benefits includes estimates and
judgment by management and inherently includes subjectivity. Changes in
estimates may create volatility in the Company’s effective tax rate in future
periods from obtaining new information about particular tax positions that may
cause management to change its estimates. If the Company would establish a
contingent tax liability reserve, interest and penalties related to uncertain
tax positions would be classified in general and administrative
expenses.
 
 
 7.   Related
Party Transactions
 As
of  March 31, 2008 and December 31,  2007,  loans
and  advances from the Company’s two directors
bore  interest at 1.71% and were unsecured,  aggregated
$156,985,  plus accrued and unpaid interest of $22,922 and $21,690,
respectively and are  reflected  in "Loans
and  advances  from  related party" and "Accrued
interest,  related party" on the accompanying balance
sheet.
 
 Labwire
(dba Labwire Security, Inc.) contracts with American K-9 Bomb Search, Inc.,
which is one-half owned by Labwire’s Chairman and Chief Executive Officer, to
perform security services.  Labwire Security, Inc. is fully licensed
with the State of Texas.   Labwire is paid a 5% commission for
the K-9 security services that it refers to Labwire Security,
Inc.  The commissions received by the Company have been less than 1%
of the Company’s gross revenues.
 
 
 8.  Subsequent
Events
 On May
27, 2008, the Board of Directors and shareholders owning approximately 85% of
the Company’s issued and outstanding common shares voted to increase its
authorized shares of common stock from 150,000,000 to 200,000,000 at par value
of $0.001 per share.  The Company has filed the amended articles of
incorporation with the Nevada Secretary of State.
 
 
 ITEM
2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 
 Company
Overview
 
 Labwire,
Inc. was incorporated in 2004 as a Nevada corporation and is headquartered in
Brookshire, Texas, close to metropolitan Houston.   We are a leading
provider of certain third party administrator (“TPA”) services.  As a
provider of TPA services, we administer certain programs for our clients,
allowing them to outsource matters that they would prefer not to undertake
in-house on their own.  We act as a TPA with respect to the following
three types of services:
 
 1.
              Drug
      testing and other employee screening – In connection with the provision of
      these services, we supervise specimen collection and test processing by
      federally certified labs.  We also provide a medical review
      officer, who interprets the results of the testing.  Moreover,
      unrelated to drug testing, we supervise background screening and on-site
      testing, which includes audio and vision testing, general employee
      physicals, and metal testing of employees engaged in operations such as
      mining.
 
 2.
              Employee
      training and online certification – In connection with the provision of
      these services, we have developed training and education programs to
      enable clients to comply with certain government
      regulations.  Currently, some of these programs deal with
      Department of Transportation regulations, while others deal with Federal
      Trade Commission regulations.  We plan to broaden our offering
      of these programs in the future, as we are
able.
 
 3.
              Security –
      In connection with the provision of these services, we provide K-9 dog
      teams that search for bombs or drugs, supervise on-site physical security
      teams, and undertake some surveillance
work.
 
 We
operate through two wholly-owned subsidiaries, Workplace Screening Services,
Inc. and Occupational Testing, Inc.  We have developed the LabwireTM
Platform, an innovative, proprietary Web-based application that (a) streamlines
the complex regulatory and record management activities associated with our drug
testing, and (b) offers our employee training and online certification
programs.  This application figures prominently into our business
strategy.  Moreover, our management team has extensive experience in
our business and industry.
 
 During
the first quarter of 2008, we implemented our Department of Transportation
training and education online for our client base.  Subsequent to the
first quarter of 2008, we became a reporting company with the U.S. Securities
and Exchange Commission (the “Commission”) when our General Form for
Registration of Securities on Form 10 became effective on or about April 14,
2008.
 
 There can
be no assurance that we will be successful in our business.  Our
business involves numerous risks, the principal ones of which are described in
the section captioned “Risk Factors” inour General Form for
Registration of Securities on Form 10.
 
 The
following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and related notes included elsewhere in this Report. In addition to
historical information, the discussion in this Report contains forward-looking
statements that involve risks and uncertainties. Actual results could differ
materially from those anticipated by these forward-looking statements due to
factors including, but not limited to, those factors set forth elsewhere in this
Report and in the section captioned "RISK FACTORS" in our General Form for
Registration of Securities on Form 10.
 
 Results
of Operations
 
 Quarter Ended March 31, 2008
Compared to the Quarter Ended March 31, 2007
 
 The
following table sets forth certain operating information (unaudited) regarding
the Company for the three-month periods ended March 31, 2008 and
2007:
 
 Three
      Months Ended
                  March
      31,2008
                2007(unaudited)
                (unaudited)Revenues
                $    864,997
                $  1,167,975Cost
      of operations
                $    462,708
                $  
        794,288Gross
      Profit
                $    402,289
                $   
       373,687General
      and administrative expenses
                $    407,984
                $   
       297,278Net
      income (loss)
                $     (7,703)
                $    
        70,341Net
      income (loss) per share
                $    0.00
                $    0.00
  
 Revenues
 Revenues
for the three-month periods ended March 31, 2008 and 2007 were $864,997 and
$1,167,975, respectively.  Our revenues decreased principally because
of the expiration of a particular client’s account agreement amounting to
approximately $400,000 per quarter.  We are currently in negotiations
to resume services to this client, and we anticipate that revenues from this
client may resume in some amount in the first quarter of 2009.
 
 
 General and Administrative
Expenses
 General
and administrative expenses for the three-month periods ended March 31, 2008 and
2007 were $407,984 and $297,278, respectively.  The $110,706 increase
was primarily due to a $112,000 increase in the Company’s payroll expense
resulting from the addition of the OTI operation in Wyoming and the continued
development of its infrastructure to prepare for increased
business.
 
 
 Operating
Income
 Our
operating loss for the three-month period ended March 31, 2008 was $(5,695)
compared to an operating income of $76,410 for the three-month period ended
March 31, 2007.  The $82,105 decrease in operating income from the
2008 period to the 2007 period is attributed to the decrease in training and
drug testing revenues and the increase in general and administrative expenses as
described above.  The Company anticipates the possible renewal at some
level in the first quarter of 2009 of the training and drug testing contract
whose expiration lead to the decrease in training and education
revenues.
   Liquidity
and Capital Resources
 From
inception until the third quarter of 2007, our primary sources of capital were
proceeds from private placements of our common stock, loans from shareholders
and bank lines of credit.  We began to experience positive cash flow
in the third quarter of 2007, which has allowed us to provide our own operating
capital for our operations and reduced the need to access outside capital
sources to support current operations.  We currently require
approximately $130,000 per month to fund our recurring operations. This amount
would likely increase if we expand our sales and marketing efforts and continue
to develop new products and services as are our plans.  Our cash needs
are primarily attributable to funding sales and marketing efforts, strengthening
technical and helpdesk support, expanding our development capabilities, and
building administrative infrastructure, including costs and professional fees
associated with being a public company.  We intend to meet our
immediate capital needs from cash flow provided from operations.  We
believe that we have sufficient funding to cover our cash needs for the next 12
months, although there can be no assurance in this regard.
 
 As of
March 31, 2008, we had cash and cash equivalents of $158,990. The largest uses
of our funds are funding general and administrative expenses, and salaries and
related expenses.  As of March 31, 2008, we had total current
liabilities of $1,139,605 and total current assets of $936,629, with our current
liabilities exceeding our current assets by $202,976.
  Net cash
used by operating activities was $79,906 for the three months ended March 31,
2008, compared to net cash used by operating activities of $125,691 for the
three months ended March 31, 2007.  The decrease of $45,785 in net
cash provided by operating activities was due to a substantial reduction in
accounts receivable, which was partially offset by a substantial decrease in
accounts payable. Other factors include an increase in unearned revenues
collected for future services, an increase in prepaid expenses, and a decrease
in net income.
 
 We have
two outstanding loans with Frost National Bank (“Frost”).  On February
13, 2007, we established a $300,000 revolving line of credit with Frost that was
originally scheduled to mature on February 13, 2008.  However, on or
about March 4, 2008, we converted this revolving line of credit into a term note
with an original principal amount of approximately $241,932.  This
term note is due and payable in 36 level monthly payments.  The
interest rate on the outstanding balance of this term note is a floating rate of
prime plus 1%.  This term note is secured by out accounts
receivable.  The outstanding principal balance on this term note as of
March 31, 2008 was $241,932.
 
 On or
about March 4, 2008, we established a new $300,000 revolving line of credit with
Frost that is scheduled to mature on February 13, 2010, at which time a balloon
payment comprised of all outstanding principal and accrued interest must be
paid.  The interest rate on the outstanding balance of the revolving
line of credit is a floating rate of prime plus 1%, and a payment of all accrued
interest is due monthly throughout the term of the line of
credit.  This revolving line of credit is secured by out accounts
receivable.  The outstanding principal balance on this line of credit
as of March 31, 2008 was $100,000.
 
 As of
March 31, 2008, we also had a $434,355 promissory note outstanding and payable
at a floating rate of interest of prime plus 1%.  The note is related
to the purchase of Occupational Testing, Inc.
 
 The
long-term success of our operations depends on our ability to (1) increase the
deployment of our LabwireTM Platform, (2) significantly increase our services
revenue through the deployment of the LabwireTM Platform, both through increases
in drug and alcohol testing, and usage of employee training and online
certification programs, and (3) increase our revenues from K-9 security
services.  We intend to raise additional capital through an offering
of our Common Stock or other securities to provide additional working capital to
fund the expansion of operations through acquisitions and the addition of new
clients through marketing efforts and joint ventures with other service
organizations.  We intend to seek up to approximately $2.0 million in
capital in the near future in this connection.  The exact amount of
funds raised, if any, will determine how aggressively we can grow and what
additional projects we will be able to undertake.  Assuming that we
are able to raise the $2.0 million in new capital, we currently anticipate
spending approximately $250,000 in marketing and sales in its efforts to sign
new clients and seek additional alliances.  No assurance can be given
that we will be able to raise additional capital, when needed or at all, or that
such capital, if available, will be on terms acceptable to us.  If
adequate funds are not available on acceptable terms, our business, results of
operations and financial condition could be materially adversely
affected.  In a worst-case scenario, we would have to scale back or
cease operations, and we might not be able to remain a viable
entity.
 
 In
addition common stock may also be issued for conversion or settlement of debt
and/or payables for equity, future obligations which may be satisfied by the
issuance of common shares, and other transactions and agreements which may in
the future result in the issuance of additional common shares. The common shares
that we may issue in the future could significantly increase the number of
shares outstanding and could be extremely dilutive.
 
 Contractual
Obligations
 Future
payments due on our contractual obligations as of March 31, 2008 are as
follows:
 
 Total
                2008
                2009-2010
                2010-2012
                ThereafterOperating
      lease
                $
              64,800
                $        64,800
                $          
         -
                $        -
                $        
      -Notes
      payable
                591,340
                316,985
                274,355
                -
                -Bank
      loans
                341,932
                89,784
                252,148
                -
                -Total
                $
           998,072
                $      471,569
                $ 
      526,503
                $       
      -
                $        
      -
  
 Critical
Accounting Policies and Estimates
 Our
discussion of our financial condition and results of operations is based on the
information reported in our financial statements. The preparation of our
financial statements requires us to make assumptions and estimates that affect
the reported amounts of assets, liabilities, revenues and expenses as well as
the disclosure of contingent assets and liabilities as of the date of our
financial statements. We base our assumptions and estimates on historical
experience and other sources that we believe to be reasonable at the time.
Actual results may vary from our estimates due to changes in circumstances,
weather, politics, global economics, mechanical problems, general business
conditions and other factors. Our significant accounting policies are detailed
in Note 1 to our financial statements included in this Quarterly
Report.  We have outlined below certain of these policies that have
particular importance to the reporting of our financial condition and results of
operations and that require the application of significant judgment by our
management.
 
 
 Impairment
of Long-Lived Assets
 We review
long-lived assets, such as property and equipment, and purchased intangibles
subject to amortization, for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable, in accordance with Statement of financial Accounting Standards
(“SFAS”) No. 144, Accounting for the Impairment for Disposal of Long-Lived
Assets. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to estimated undiscounted future cash flows
expected to be generated by the asset. If the carrying amount of an asset
exceeds its estimated future cash flows, impairment charge is recognized by the
amount of the asset exceeds the fair value of the asset.
 
 
 Fair
Value of Financial Instruments
 Management
believes that the carrying amounts of our financial instruments, including cash
and cash equivalents, accounts receivable, accounts payable, and accrued
liabilities approximate fair value due to the short-term nature of these
instruments. The carrying amount of our long-term debt also approximates fair
value, based on market quote values (where applicable) or discounted cash flow
analyses.
 
 
 Income
Taxes
 We
account for income taxes under SFAS No. 109, which requires the asset and
liability approach to accounting for income taxes. Under this method, deferred
tax assets and liabilities are measured based on differences between financial
reporting and tax bases of assets and liabilities measured using enacted tax
rates and laws that are expected to be in effect when differences are expected
to reverse. Valuation allowances are established when it is necessary to reduce
deferred income tax assets to the amount, if any, expected to be realized in
future years.
 
 
 Net
earnings (loss) per share
 Basic and
diluted net loss per share information is presented under the requirements of
SFAS No. 128, Earnings per Share. Basic net loss per share is computed by
dividing net loss by the weighted average number of shares of Common Stock
outstanding for the period, less shares subject to repurchase. Diluted net loss
per share reflects the potential dilution of securities by adding other common
stock equivalents, including stock options, shares subject to repurchase,
warrants and convertible notes in the weighted-average number of common shares
outstanding for a period, if dilutive. All potentially dilutive securities have
been excluded from the computation, as their effect is
anti-dilutive.
 
 
 Use
of Estimates
 The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets,
liabilities and disclosures at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting periods. Actual
results could differ from those estimates.
 
 
 Revenue
recognition
 We have
three main sources of revenue: drug testing and related services, training and
online certification, and security services provided by an allied
company.  Drug testing: we fulfill orders for drug testing services,
wherein we are responsible for the performance and data maintenance related to
employee drug testing for its clients.  We do not perform the drug
tests, but we fulfill the order through our network of third party labs and
other drug testing facilities.  Revenue is recognized when the drug
testing has been completed by the lab and the customer has been invoiced for the
services.  We have low bad debt levels because our policy is to deal
with large well-positioned firms that pay monthly. Because we track these
company's activities daily, we are constantly aware of our position and
therefore can demand and receive timely payments as we provide on-going
compliance services. Pursuant to EITF 99-19, we are responsible for fulfilling a
customer’s order, including whether the service is acceptable and therefore
bears the risks and rewards of principal.  As such, we have elected to
record the gross amounts of the contracts.  Our service agreements
rarely include multiple parts that would have a material impact on the
recognition of revenue.  As such, we have created our revenue
recognition policies pursuant to EITF 00-21.
 
 Online
training and certification: the Company has designed online testing for various
certifications which client employees must attain for their
employment.  The employee takes the certification examinations online
and the client is automatically tagged for billing, which coincides with
performance of services.
 
 Security
services provided by the Company through its allied company: the process is
handled in similar fashion to that described above for drug
testing.
 
 
 Allowance
for Uncollectible Receivables
 The
allowance for all probable uncollectible receivables is based on a
combination of historical data, cash payment trends, specific customer issues,
write-off trends, general economic conditions and other factors. These factors
are continuously monitored by management to arrive at an estimate for the amount
of accounts receivable that may ultimately be uncollectible. In circumstances
where we are aware of a specific customer’s inability to meet its financial
obligations, we record a specific allowance for bad debts against amounts due to
reduce the net recognized receivable to the amount it reasonably believes will
be collected. This analysis requires making significant estimates, and changes
in facts and circumstances could result in material changes in the allowance for
uncollectible receivables.
 
 
 Software
Development Costs
 The
Company has begun developing a software platform for certain exclusively
internal purposes.  We follow the guidance set forth in Statement of
Position 98-1, Accounting for
the Cost of Computer Software Developed or Obtained for Internal Use(SOP 98-1), in accounting for costs incurred in the development of
its on-demand application suite. SOP 98-1 requires companies to capitalize
qualifying computer software costs that are incurred during the application
development stage and amortize them over the software’s estimated useful
life.
 
 We
capitalize costs associated with developing software for internal use, which
costs primarily include salaries of developers.  Direct costs incurred
in the development of software are capitalized once the preliminary project
stage is completed, management has committed to funding the project and
completion and use of the software for its intended purpose are
probable.  We cease capitalization of development costs once the
software has been substantially completed at the date of conversion and is ready
for its intended use. The estimation of useful lives requires a significant
amount of judgment related to matters, specifically, future changes in
technology. We believes there have not been any events or circumstances that
warrant revised estimates of useful lives of the software.
 
 
 Purchase
Accounting
 We
completed acquisitions in 2004 and the fourth quarter of 2007. The purchase
method of accounting requires companies to assign values to assets and
liabilities acquired based upon their fair values. In most instances, there is
not a readily defined or listed market price for individual assets and
liabilities acquired in connection with a business, including intangible assets.
The determination of fair value for assets and liabilities in many instances
requires a high degree of estimation. The valuation of intangibles assets, in
particular, is very subjective.  We generally use internal cash flow
models and, in certain instances, third party valuations in estimating fair
values. The use of different valuation techniques and assumptions can change the
amounts and useful lives assigned to the assets and liabilities acquired,
including goodwill and other intangible assets and related amortization
expense.
 
 
 Intangible
Assets
 Intangible
assets with estimable useful lives are amortized over respective estimated
useful lives, and reviewed for impairment in accordance with FASB Statement No.
142, Goodwill and Other
Intangible Assets.
 
 Recent
Accounting Pronouncements
  In
September 2006, the FASB issued FASB Statement 157 “Fair Value Measurements”
(“SFAS No. 157”) that defines and measures fair value and expands
disclosures about fair value measurements. The statement emphasizes that fair
value is a market-based measurement and not an entity-specific measurement. The
provisions of SFAS No. 157 are effective for fiscal years beginning after
November 15, 2007.
 
 In
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial
Assets and Financial Liabilities, which permits entities to choose to
measure many financial instruments and certain other items at fair value. 
The objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions.  SFAS No. 159 applies to all entities and is
effective for fiscal years beginning after November 15, 2007.
 
 We do not
expect the adoption of any other recently issued accounting pronouncements to
have a significant impact on their consolidated financial position, results of
operations or cash flow.
 
 
 Off
Balance Sheet Arrangements
 We have
no off balance sheet arrangements.
 
 ITEM 4T.  CONTROLS AND
PROCEDURES
 
 Evaluation
of Disclosure Controls and Procedures
 Our
Principal Executive Officer and Principal Financial Officer, after evaluating
the effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period
covered by this report, have concluded that, based on the evaluation of these
controls and procedures, that our disclosure controls and procedures were not
effective due to the lack of segregation of duties in financial reporting, as
our accounting functions are performed by one person with no internal review, as
our company does not have an audit committee. This is due to our lack of working
capital to hire additional staff. To remedy this, we intend to engage another
accountant to assist with financial reporting as soon as our finances will
allow.
 
 Change
in Internal Controls Over Financial Reporting
 There
have not been any changes in our predecessors’ internal controls over financial
reporting that occurred during the quarterly period ended March 31, 2008 that
has materially affected, or is reasonably likely to materially affect, our
internal controls over financial reporting.
 
 PART
II. OTHER INFORMATION
 
 ITEM
1.  LEGAL PROCEEDINGS
 We are
not now a party to any legal proceeding requiring disclosure in accordance with
the rules of the U.S. Securities and Exchange Commission.  In the
future, we may become involved in various legal proceedings from time to time,
either as a plaintiff or as a defendant, and either in or outside the normal
course of business.  We are not now in a position to determine when
(if ever) such a legal proceeding may arise. If we ever become involved in such
a legal proceeding, our financial condition, operations, or cash flows could be
materially and adversely affected, depending on the facts and circumstances
relating to such proceeding.
 
 ITEM
2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
 During
the first quarter of 2008, we sold 100,000 shares of our common stock to a
single accredited investor at a per share price of $0.15.  This sale
of common stock is claimed to be exempt pursuant to Rule 506 of Regulation D
under the Act.  No advertising or general solicitation was employed in
offering these securities.  The offering and sale were made only to an
accredited investor, and subsequent transfers were restricted in accordance with
the requirements of the Act.
 
 ITEM
6.  EXHIBITS
 (a)           The
following exhibits are filed with this Quarterly Report or are incorporated
herein by reference:
 
  Exhibit
                Number
              Description31.1
              Certification
      pursuant to Rule 13a-14(a) of the Securities Exchange Act of
      1934.31.2
              Certification
      pursuant to Rule 13a-14(a) of the Securities Exchange Act of
      1934.32.1
              Certification
      Pursuant to 18 U.S.C. Section 1350, as pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
              Certification
      Pursuant to 18 U.S.C. Section 1350, as pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.
 
 SIGNATURES
 
 In
accordance with the requirements of the Exchange Act, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
  LABWIRE,
      INC.(Registrant)December
      23, 2008
              By:
              /s/ G. Dexter
      MorrisG.
      Dexter Morris,Chief
      Executive Officer(Principal
      Executive Officer, Principal Financial
Officer)