----

----

| Nevada                                                         | 26-1607874                        |
|----------------------------------------------------------------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |

----

----

| Large accelerated filer | o      | Accelerated filer    | o      |
|-------------------------|--------|---------------------------|--------|
|                    |   |                      |   |
| Non-accelerated filer   | o      | Smaller reporting company | x      |

----

|     |                                                                                  |   |   |
|----------|---------------------------------------------------------------------------------------|--------|--------|
| Part I   | Financial Information                                                                 |   | 3      |
|     |                                                                                  |   |   |
| Item 1.  | Financial Statements:                                                                 |   | 3      |
|     |                                                                                  |   |   |
|     | Condensed Balance Sheets                                                              |   | 3      |
|     |                                                                                  |   |   |
|     | Unaudited Condensed Statements of Operations                                          |   | 4      |
|     |                                                                                  |   |   |
|     | Unaudited Statement of Stockholders' Equity                                           |   | 5      |
|     |                                                                                  |   |   |
|     | Unaudited Condensed Statements of Cash Flows                                          |   | 6      |
|     |                                                                                  |   |   |
|     | Notes to Financial Statements (unaudited)                                             |   | 7      |
|     |                                                                                  |   |   |
| Item 2.  | Management's Discussion and Analysis of Financial Condition and Results of Operations |   | 8      |
|     |                                                                                  |   |   |
| Item 3.  | Quantitative and Qualitative Disclosures About Market Risk             |   | 10     |
|     |                                                                                  |   |   |
| Item 4.  | Controls and Procedures                                                          |   | 10     |
|     |                                                                                  |   |   |
| Part II  | Other Information                                                                     |   | 11     |
|     |                                                                                  |   |   |
| Item 1.  | Legal Proceedings                                                                     |   | 11     |
|     |                                                                                  |   |   |
| Item 1A. | Risk Factors                                                                     |   | 11     |
|     |                                                                                  |   |   |
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                           |   | 11     |
|     |                                                                                  |   |   |
| Item 3.  | Defaults Upon Senior Securities                                             |   | 11     |
|     |                                                                                  |   |   |
| Item 4.  | (Removed and Reserved)                                                           |   | 11     |
|     |                                                                                  |   |   |
| Item 5.  | Other Information                                                                |   | 11     |
|     |                                                                                  |   |   |
| Item 6.  | Exhibits                                                                              |   | 11     |
|     |                                                                                  |   |   |
|     | Signatures                                                                            |   | 11     |

----

| HIGHLAND BUSINESS SERVICES, INC.                                                                    |   |
|-----------------------------------------------------------------------------------------------------|--------|
| (A DEVELOPMENT STAGE ENTERPRISE)                                                                    |   |
| CONDENSED BALANCE SHEETS                                                                            |   |
|                                                                                                |   |
|                                                                                                |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |
|                                                                                                |   | August 31, |   |   | May 31, |   |
|                                                                                                |   | 2010 |   |   | 2010 |   |
|                                                                                                |   | (unaudited) |   |   |   |   |
| ASSETS                                                                                              |   |
|                                                                                                |   |   |   |   |   |   |
| CURRENT ASSETS                                                                                      |   |   |   |   |   |   |
|      Cash                                                                  |   | $ | 519 |   |   | $ | 3,144 |   |
|      Prepaid Expenses - Fees                                               |   |   | 3,613 |   |   |   | 75 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| TOTAL CURRENT ASSETS                                                                                |   |   | 4,132 |   |   |   | 3,219 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| Total Assets                                                                                        |   | $ | 4,132 |   |   | $ | 3,219 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES                                                                                 |   |   |   |   |   |   |   |   |
|        Accounts payable - related parties                        |   | $ | 1,132 |   |   | $ | 2,013 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| TOTAL CURRENT LIABILITIES                                                                           |   |   | 1,132 |   |   |   | 2,013 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                       |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|      Common stock, par value $.001, 75,000,000                             |   |   |   |   |   |   |   |   |
|         shares authorized, 6,946,100 issued and outstanding |   |   | 6,946 |   |   |   | 6,946 |   |
|      Paid in Capital                                                       |   |   | 65,862 |   |   |   | 60,012 |   |
|      (Deficit) accumulated during the development stage                    |   |   | (69,809 | ) |   |   | (65,753 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |
| Total Stockholders' Equity                                                                          |   |   | 3,000 |   |   |   | 1,206 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                                                          |   | $ | 4,132 |   |   | $ | 3,219 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS                                                      |   |

----

| HIGHLAND BUSINESS SERVICES, INC.               |   |
|------------------------------------------------|--------|
| (A DEVELOPMENT STAGE ENTERPRISE)               |   |
| CONDENSED STATEMENTS OF OPERATIONS             |   |
| (UNAUDITED)                                    |   |
|                                           |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   | Cumulative |   |
|                                           |   |   |   |   |   |   |   | from |   |
|                                           |   |   |   |   |   |   |   | February 24, 2006 |   |
|                                           |   | For the three months ended |   |   | (Inception) |   |
|                                           |   | August 31, |   |   | to |   |
|                                           |   | 2010 |   |   | 2009 |   |   | August 31, 2010 |   |
|                                           |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |
| REVENUES                                       |   | $ | 1,406 |   |   | $ | - |   |   | $ | 3,436 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|    General and administrative   |   |   | 5,462 |   |   |   | 4,405 |   |   |   | 73,254 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total expenses               |   |   | 5,462 |   |   |   | 4,405 |   |   |   | 73,254 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest Income              |   |   | - |   |   |   | - |   |   |   | 9 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| NET (LOSS)                                     |   | $ | (4,056 | ) |   | $ | (4,405 | ) |   | $ | (69,809 | ) |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| NET (LOSS) PER SHARE - BASIC                   |   |   | * |   |   |   | * |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF                     |   |   |   |   |   |   |   |   |   |   |   |   |
|   COMMON SHARES OUTSTANDING          |   |   | 6,946,100 |   |   |   | 6,946,100 |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| *  less than $0.01 per share         |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS |   |

----

| HIGHLAND BUSINESS SERVICES, INC.                                                 |   |
|----------------------------------------------------------------------------------|--------|
| (A DEVELOPMENT STAGE ENTERPRISE)                                                 |   |
| STATEMENT OF STOCKHOLDERS' EQUITY                                                |   |
|                                                                             |   |
|                                                                             |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   | (Deficit) |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   | Shareholders' |   |   |   |   |   | During the |   |   |   |   |
|                                                                             |   | Common Stock |   |   | Services - |   |   | Paid-in |   |   | Development |   |   |   |   |
|                                                                             |   | Shares |   |   | Amount |   |   | Deferred |   |   | Capital |   |   | Stage |   |   | Total |   |
| Balances, at inception                                                           |   |   | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|  Issuance of common stock, February 24, 2006                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     at $.001 per share for future services                   |   |   | 6,000,000 |   |   |   | 6,000 |   |   |   | (6,000 | ) |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Value of services subsequently rendered                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  for previously issued shares of common stock                               |   |   |   |   |   |   |   |   |   |   | 960 |   |   |   |   |   |   |   |   |   |   |   | 960 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and services contributed to capital                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 549 |   |   |   |   |   |   |   | 549 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net (loss) for the period                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,509 | ) |   |   | (1,509 | ) |
| Balances, May 31, 2006                                                           |   |   | 6,000,000 |   |   |   | 6,000 |   |   |   | (5,040 | ) |   |   | 549 |   |   |   | (1,509 | ) |   |   | - |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Value of services subsequently rendered                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  for previously issued shares of common stock                               |   |   |   |   |   |   |   |   |   |   | 2,557 |   |   |   |   |   |   |   |   |   |   |   | 2,557 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and services contributed to capital                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2,277 |   |   |   |   |   |   |   | 2,277 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net (loss) for the year                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (4,834 | ) |   |   | (4,834 | ) |
| Balances, May 31, 2007                                                           |   |   | 6,000,000 |   |   |   | 6,000 |   |   |   | (2,483 | ) |   |   | 2,826 |   |   |   | (6,343 | ) |   |   | - |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash in a private placement at $0.01 per share on May 28, 2008 |   |   | 946,100 |   |   |   | 946 |   |   |   |   |   |   |   | 8,515 |   |   |   |   |   |   |   | 9,461 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Value of services subsequently rendered                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for previously issued shares of common stock                                     |   |   |   |   |   |   |   |   |   |   | 2,483 |   |   |   |   |   |   |   |   |   |   |   | 2,483 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and services contributed to capital                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 9,172 |   |   |   |   |   |   |   | 9,172 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) for the year                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (11,646 | ) |   |   | (11,646 | ) |
| Balances, May 31, 2008                                                           |   |   | 6,946,100 |   |   |   | 6,946 |   |   |   | - |   |   |   | 20,513 |   |   |   | (17,989 | ) |   |   | 9,470 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and services contributed to capital                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 16,183 |   |   |   |   |   |   |   | 16,183 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) for the year                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (25,710 | ) |   |   | (25,710 | ) |
| Balances, May 31, 2009                                                           |   |   | 6,946,100 |   |   |   | 6,946 |   |   |   | - |   |   |   | 36,696 |   |   |   | (43,699 | ) |   |   | (57 | ) |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Services contributed to capital                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 23,316 |   |   |   |   |   |   |   | 23,316 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) for the year                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (22,054 | ) |   |   | (22,054 | ) |
| Balances, May 31, 2010                                                           |   |   | 6,946,100 |   |   |   | 6,946 |   |   |   | - |   |   |   | 60,012 |   |   |   | (65,753 | ) |   |   | 1,205 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and services contributed to capital                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,850 |   |   |   |   |   |   |   | 5,850 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) for the period                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (4,056 | ) |   |   | (4,056 | ) |
| Balances, August 31, 2010, (unaudited)                                           |   |   | 6,946,100 |   |   | $ | 6,946 |   |   | $ | - |   |   | $ | 65,862 |   |   | $ | (69,809 | ) |   | $ | 3,000 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS                                   |   |

----

| HIGHLAND BUSINESS SERVICES, INC.                                                               |   |
|------------------------------------------------------------------------------------------------|--------|
| (A DEVELOPMENT STAGE ENTERPRISE)                                                               |   |
| CONDENSED STATEMENTS OF CASH FLOWS                                                             |   |
| (UNAUDITED)                                                                                    |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   | Cumulative |   |
|                                                                                           |   |   |   |   |   |   |   | from |   |
|                                                                                           |   |   |   |   |   |   |   | February 24, 2006 |   |
|                                                                                           |   | For the three months ended |   |   | (Inception) |   |
|                                                                                           |   | August 31, |   |   | to |   |
|                                                                                           |   | 2010 |   |   | 2009 |   |   | August 31, 2010 |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |
| OPERATING ACTIVITIES                                                                           |   |   |   |   |   |   |   |   |   |
|          Net (loss)                               |   | $ | (4,056 | ) |   | $ | (4,405 | ) |   | $ | (69,809 | ) |
|     Adjustments to reconcile net (loss) to net cash used by                |   |   |   |   |   |   |   |   |   |   |   |   |
|        operating activities                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|          Stock issued for services                |   |   | - |   |   |   | - |   |   |   | 6,000 |   |
|          Services and rent contributed to capital |   |   | 2,850 |   |   |   | 2,250 |   |   |   | 38,650 |   |
|     Changes in operating assets and liabilities                            |   |   |   |   |   |   |   |   |   |   |   |   |
|          Accounts receivable                      |   |   | - |   |   |   | - |   |   |   | - |   |
|          Accounts payable                         |   |   | - |   |   |   | - |   |   |   | - |   |
|          Accounts payable - related party         |   |   | (881 | ) |   |   |   |   |   |   | 1,132 |   |
|          Prepaid expenses                         |   |   | (3,538 | ) |   |   | (2,850 | ) |   |   | (3,613 | ) |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| NET CASH USED IN OPERATING ACTIVITIES                                                          |   |   | (5,625 | ) |   |   | (5,005 | ) |   |   | (27,640 | ) |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| FINANCING ACTIVITIES                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|         Cash advances contributed to capital           |   |   | 3,000 |   |   |   | 4,912 |   |   |   | 18,697 |   |
|          Proceeds from sale of common stock       |   |   | - |   |   |   | - |   |   |   | 9,461 |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                                                      |   |   | 3,000 |   |   |   | 4,912 |   |   |   | 28,158 |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH                                                                |   |   | (2,625 | ) |   |   | (93 | ) |   |   | 519 |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH, BEGINNING OF PERIOD                                                                      |   |   | 3,144 |   |   |   | 93 |   |   |   | - |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH, END OF PERIOD                                                                            |   | $ | 519 |   |   | $ | - |   |   | $ | 519 |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES:                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash paid for income taxes                                                                     |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Cash paid for interest                                                                         |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                                           |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS                                                 |   |

----

----

----

----

----

| EXHIBIT NO. | DESCRIPTION                                                                                                                  |
|-------------|------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                         |
| 31.1   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                           |
|        |                                                                                                                         |
| 31.2        | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                      |
|        |                                                                                                                         |
| 32.1        | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  |

|                              |   |   | Highland Business Services, Inc.(Registrant)               |   |
|-----------------------------------|--------|--------|------------------------------------------------------------|--------|
|                              |   |   |                                                       |   |
|                              |   |   |                                                       |   |
| Dated: October 13, 2010 |   |   | /s/ Rodger D Spainhower                                    |   |
|                              |   |   | Name: Rodger D Spainhower                             |   |
|                              |   |   | Title: Chief Executive Officer and Chief Financial Officer |   |
|                              |   |   |                                                       |   |

|                         |   |   |                                              |   |
|------------------------------|--------|--------|---------------------------------------------------|--------|
|                         |   |   |                                              |   |
| Dated: October 13, 2010 |   |   | /s/ Marie C Moffett                               |   |
|                         |   |   | Name: Marie C Moffett                             |   |
|                         |   |   | Title: President and Chief Operating Officer |   |
|                         |   |   |                                              |   |

----