**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**


__________________________





**FORM
      10-QSB**


__________________________





Quarterly
      Report Pursuant to Section 13 or 15 (D) of the Securities Act of
      1934


for
      the
      quarterly period ended: September 30, 2008





Commission
      File number **:** 333-152952





**___________________________**





**THE
      MOBILE STAR CORP.**


(Exact
      name of small business issuer as specified in its charter)





**Delaware**


(State
      or
      other jurisdiction of Incorporation or organization)





98-0565411


(IRS
      Employee Identification No.)





c/o
      Danny
      Elbaz


53
      Hanoter Street


Even
      Yehuda, Israel 40500


Phone
      number: 972 - (544) 655-341


Fax
      number: 972 - (9) 891-1123


(Address
      of principal executive offices)





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 and 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  ̈





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the latest practicable date:





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





Common
                Stock, $0.0001 par value
            8,000,000(Class)
            (Outstanding
                as of October 16, 2008)





**THE
      MOBILE STAR CORP.**


**Form
      10-QSB**





**Index**





PagePart
                I – FINANCIAL INFORMATIONItem
                1. Financial Statements (Unaudited)
            F-1Condensed
                Balance Sheet
            F-2Condensed
                Statements of Operations
            F-3Condensed
                Statements of Cash Flows
            F-4Notes
                on Condensed Financial Information
            F-5Item
                2 Management’s Discussion and Analysis or Plan of Operation
            3Item
                3 Control and Procedures
            10Part
                II. OTHER INFORMATIONItem
                1. Legal Proceedings
            11Item
                2. Changes in Securities
            11Item
                3. Defaults Upon Senior Securities
            11Item
                4. Submission Of Matters To A Vote of Security Holders
            11Item
                5. Other Information
            11Item
                6. Exhibits and Reports on Form 8 -K
            12Signatures
            13Certifications


2




**Part
      I:** **Financial
      Information**





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


**THE
        MOBILE STAR CORP.**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **INDEX
        TO FINANCIAL STATEMENTS**
 **SEPTEMBER
        30, 2008**
 **(Unaudited)**
  Financial
                  Statements-Balance
                  Sheet as of September 30, 2008
              F-2Statements
                  of Operations for the Three Months and Nine Months EndedSeptember
                  30, 2008, and Cumulative from Inception
              F-3Statements
                  of Cash Flows for the Nine Months Ended September 30,
                  2008,and
                  Cumulative from Inception
              F-4Notes
                  to Financial Statements September 30, 2008
              F-5
  F-1
 
 **THE
        MOBILE STAR CORP.**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **BALANCE
        SHEET (NOTE 2)**
 **AS
        OF SEPTEMBER 30, 2008**
 **(Unaudited)**
 
 **ASSETS****Current
                  Assets:**Cash
              
              $
              1,076Total
                  current assets
              
              
              1,076**Other
                  Assets:**Patent
                  pending
              
              
              7,300Assignement
                  of invention rights
              
              
              5,000Deferred
                  offering costs
              
              
              20,000Total
                  other assets
              
              
              32,300**Total
                  Assets**
              
              $
              33,376**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities:**Accounts
                  payable and accrued liabilities
              
              $
              23,000Loans
                  from related parties - Directors and stockholders
              
              
              14,300Total
                  current liabilities
              
              
              37,300Total
                  liabilities
              
              
              37,300**Commitments
                  and Contingencies****Stockholders'
                  (Deficit):**Common
                  stock, par value $.0001 per share, 200,000,000 sharesauthorized;
                  8,000,000 shares issued and outstanding
              
              
              800Additional
                  paid-in capital
              
              
              5,000(Deficit)
                  accumulated during the development stage
              
              
              (9,724
              )Total
                  stockholders' (deficit)
              
              
              (3,924
              )**Total
                  Liabilities and Stockholders' (Deficit)**
              
              $
              33,376
  The
        accompanying notes to financial statements
 are
        an
        integral part of this balance sheet.
  F-2
  **THE
        MOBILE STAR CORP.**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **STATEMENTS
        OF OPERATIONS (NOTE 2)**
 **FOR
        THE NINE MONTHS ENDED SEPTEMBER 30, 2008,**
 **AND
        CUMULATIVE FROM INCEPTION (SEPTEMBER 25, 2007)**
 **THROUGH
        SEPTEMBER 30, 2008**
 **(Unaudited)**
  **Three Months**
              
              **Nine Months****Ended**
              
              **Ended**
              
              **Cumulative****September 30,**
              
              **September 30,**
              
              **From****2008**
              
              **2008**
              
              **Inception****Revenues**
              
              $
              -
              
              $
              -
              
              $
              -**Expenses:**General
                  and administrative-Professional
                  fees
              
              
              4,889
              
              
              7,174
              
              
              7,174Legal
                  - incorporation
              
              
              -
              
              
              2,350
              
              
              2,350Other
              
              
              200
              
              
              200
              
              
              200Total
                  general and administrative expenses
              
              
              5,089
              
              
              9,724
              
              
              9,724**(Loss)
                  from Operations**
              
              
              (5,089
              )
              
              (9,724
              )
              
              (9,724
              )**Other
                  Income (Expense)**
              
              
              -
              
              
              -
              
              
              -**Provision
                  for income taxes**
              
              
              -
              
              
              -
              
              
              -**Net
                  (Loss)**
              
              $
              (5,089
              )
              $
              (9,724
              )
              $
              (9,724
              )**(Loss)
                  Per Common Share:**(Loss)
                  per common share - Basic and Diluted
              
              $
              (0.00
              )
              $
              (0.00
              )**Weighted
                  Average Number of Common Shares****Outstanding
                  - Basic and Diluted**
              
              
              8,000,000
              
              
              7,007,299
 
 The
        accompanying notes to financial statements are
 an
        integral part of these statements.
  F-3
 
 **THE
        MOBILE STAR CORP.**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **STATEMENTS
        OF CASH FLOWS (NOTE 2)**
 **FOR
        THE NINE MONTHS ENDED SEPTEMBER 30, 2008,**
 **AND
        CUMULATIVE FROM INCEPTION (SEPTEMBER 25, 2007)**
 **THROUGH
        SEPTEMBER 30, 2008**
 **(Unaudited)**
 
 **Nine Months****Ended**
              
              **Cumulative****September 30,**
              
              **From****2008**
              
              **Inception****Operating
                  Activities:**Net
                  (loss)
              
              $
              (9,724
              )
              $
              (9,724
              )Adjustments
                  to reconcile net (loss) to net cash(used
                  in) operating activities:Changes
                  in net liabilities-Accounts
                  payable and accrued liabilites
              
              
              3,000
              
              
              3,000**Net
                  Cash Used in Operating Activities**
              
              
              (6,724
              )
              
              (6,724
              )**Investing
                  Activities:**
              
              
              -
              
              
              -**Net
                  Cash Used in Investing Activities**
              
              
              -
              
              
              -**Financing
                  Activities:**Stock
                  subscription received
              
              
              800
              
              
              800Loans
                  from shareholders
              
              
              7,000
              
              
              7,000**Net
                  Cash Provided by Financing Activities**
              
              
              7,800
              
              
              7,800**Net
                  (Decrease) Increase in Cash**
              
              
              1,076
              
              
              1,076**Cash
                  - Beginning of Period**
              
              
              -
              
              
              -**Cash
                  - End of Period**
              
              $
              1,076
              
              $
              1,076**Supplemental
                  Disclosure of Cash Flow Information:**Cash
                  paid during the period for:Interest
              
              $
              -
              
              $
              -Income
                  taxes
              
              $
              -
              
              $
              -
  **Supplemental
                  schedule of noncash investing and financing
                  activities:**Common
                  stock was issued in exchange for subscriptions receivable in the
                  amount of
                  $800.Accruals
                  in the amount $20,000 were incurred for deffered offering
                  costs.Loans
                  from related parties increased as a result of payment of $7,300
                  for patent
                  applications.Assignment
                  of invention rights valued at $5,000 were acquired through additional
                  paid-in capital.
 
 The
        accompanying notes to financial statements are
 an
        integral part of these statements.
  F-4
 **THE
          MOBILE STAR CORP.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **SEPTEMBER
          30, 2008**
 **(Unaudited)**
 **(1)****Summary
        of Significant Accounting Policies**
 
 *Basis
        of Presentation and Organization*
 
 The
        Mobile Star Corp. (“The Mobile Star” or the “Company”) is a Delaware corporation
        in the development stage and has not commenced operations. The Company was
        incorporated under the laws of the State of Delaware on September 25, 2007
        and
        began activity in January 2008. The business plan of the Company is to develop
        a
        commercial application of a self operated computerized karaoke recording
        booth.
        The Company also intends to obtain approval of its patent application, and
        manufacture and market the product and/or seek third party entities interested
        in licensing the rights to manufacture and market the device. The accompanying
        financial statements of The Mobile Star were prepared from the accounts of
        the
        Company under the accrual basis of accounting.
 
 The
        Company has commenced a capital formation activity to submit a Registration
        Statement on Form S-1 to the Securities and Exchange Commissions (“SEC”) to
        register and sell in a self-directed offering 2,000,000 shares of newly issued
        common stock at an offering price of $0.10 for proceeds of up to $200,000.
        The
        Registration Statement on Form S-1 was filed with the SEC on August 12, 2008
        and
        declared effective on September 8, 2008.
 
 *Unaudited
        Interim Financial Statements*
 
 The
        interim financial statements of the Company as of September 30, 2008, and
        for
        the periods then ended, and cumulative from inception, are unaudited. However,
        in the opinion of management, the interim financial statements include all
        adjustments, consisting only of normal recurring adjustments, necessary to
        present fairly the Company’s financial position as of September 30, 2008, and
        the results of its operations and its cash flows for the periods ended September
        30, 2008, and cumulative from inception. These results are not necessarily
        indicative of the results expected for the calendar year ending December
        31,
        2008. The accompanying financial statements and notes thereto do not reflect
        all
        disclosures required under accounting principles generally accepted in the
        United States. Refer to The Company’s audited financial statements contained in
        its Registration Statement on Form S-1 as of June 30, 2008, for additional
        information, including significant accounting policies.
  *Cash
        and Cash Equivalents*
 
 For
        purposes of reporting within the statement of cash flows, the Company considers
        all cash on hand, cash accounts not subject to withdrawal restrictions or
        penalties, and all highly liquid debt instruments purchased with a maturity
        of
        three months or less to be cash and cash equivalents.
  *Revenue
        Recognition*
 
 The
        Company is in the development stage and has yet to realize revenues from
        operations. Once the Company has commenced operations, it will recognize
        revenues when delivery of goods or completion of services has occurred provided
        there is persuasive evidence of an agreement, acceptance has been approved
        by
        its customers, the fee is fixed or determinable based on the completion of
        stated terms and conditions, and collection of any related receivable is
        probable.
  *Loss
        per Common Share*
 
 Basic
        loss per share is computed by dividing the net loss attributable to the common
        stockholders by the weighted average number of shares of common stock
        outstanding during the period. Fully diluted loss per share is computed similar
        to basic loss per share except that the denominator is increased to include
        the
        number of additional common shares that would have been outstanding if the
        potential common shares had been issued and if the additional common shares
        were
        dilutive. There were no dilutive financial instruments issued or outstanding
        for
        the period ended September 30, 2008.
 
 F-5
 **THE
          MOBILE STAR CORP.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **SEPTEMBER
          30, 2008**
 **(Unaudited)**
 *Income
        Taxes*
 
 The
        Company accounts for income taxes pursuant to SFAS No. 109, *Accounting
        for Income Taxes* (“SFAS
        109”). Under SFAS 109, deferred tax assets and liabilities are determined based
        on temporary differences between the bases of certain assets and liabilities
        for
        income tax and financial reporting purposes. The deferred tax assets and
        liabilities are classified according to the financial statement classification
        of the assets and liabilities generating the differences.
 
 The
        Company maintains a valuation allowance with respect to deferred tax assets.
        The
        Company establishes a valuation allowance based upon the potential likelihood
        of
        realizing the deferred tax asset and taking into consideration the Company’s
        financial position and results of operations for the current period. Future
        realization of the deferred tax benefit depends on the existence of sufficient
        taxable income within the carryforward period under the Federal tax
        laws.
 
 Changes
        in circumstances, such as the Company generating taxable income, could cause
        a
        change in judgment about the realizability of the related deferred tax asset.
        Any change in the valuation allowance will be included in income in the year
        of
        the change in estimate.
 
 *Fair
        Value of Financial Instruments*
 
 The
        Company estimates the fair value of financial instruments using the available
        market information and valuation methods. Considerable judgment is required
        in
        estimating fair value. Accordingly, the estimates of fair value may not be
        indicative of the amounts the Company could realize in a current market
        exchange. As of September 30, 2008, the carrying value of accrued liabilities,
        and loans from directors and stockholders approximated fair value due to
        the
        short-term nature and maturity of these instruments.
  *Patent
        and Intellectual Property*
 
 The
        Company capitalizes the costs associated with obtaining a Patent or other
        intellectual property associated with its intended business plan. Such costs
        are
        amortized over the estimated useful lives of the related assets.
  *Deferred
        Offering Costs*
 
 The
        Company defers as other assets the direct incremental costs of raising capital
        until such time as the offering is completed. At the time of the completion
        of
        the offering, the costs are charged against the capital raised. Should the
        offering be terminated, deferred offering costs are charged to operations
        during
        the period in which the offering is terminated.
  *Impairment
        of Long-Lived Assets*
 
 The
        Company evaluates the recoverability of long-lived assets and the related
        estimated remaining lives when events or circumstances lead management to
        believe that the carrying value of an asset may not be recoverable. For the
        period ended September 30, 2008, no events or circumstances occurred for
        which
        an evaluation of the recoverability of long-lived assets was
        required.
  *Common
        Stock Registration Expenses*
 
 The
        Company considers incremental costs and expenses related to the registration
        of
        equity securities with the SEC, whether by contractual arrangement as of
        a
        certain date or by demand, to be unrelated to original issuance transactions.
        As
        such, subsequent registration costs and expenses are expensed as
        incurred.
  F-6
 **THE
          MOBILE STAR CORP.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **SEPTEMBER
          30, 2008**
 **(Unaudited)**
 *Estimates*
 
 The
        financial statements are prepared on the basis of accounting principles
        generally accepted in the United States. The preparation of financial statements
        in conformity with generally accepted accounting principles requires management
        to make estimates and assumptions that affect the reported amounts of assets
        and
        liabilities as of September 30, 2008, and expenses for the period ended
        September 30, 2008, and cumulative from inception. Actual results could differ
        from those estimates made by management.
  *Fiscal
        Year End*
 
 The
        Company has adopted a fiscal year end of December 31.
 
 **(2)**  **Development
        Stage Activities and Going Concern**
 
 The
        Company is currently in the development stage, and has no operations. The
        business plan of the Company is to develop a commercial application of a
        self
        operated computerized karaoke recording booth. The Company also intends to
        obtain approval of its patent application, and manufacture and market the
        product and/or seek third party entities interested in licensing the rights
        to
        manufacture and market the device
 
 In
        January 2008, the Company entered into a Assignment Agreement whereby the
        Company acquired all of the rights, title and interest in the invention known
        as
        the “Self operated computerized karaoke recording booth” for consideration of
        royalties ranging from 1% to 5% based on the net income of the Company for
        30
        years from the date of the Company's incorporation. On February 20, 2008
        the Company
        filed PCT and U.S. patent applications for the invention.
  The
        Company has also commenced a capital formation activity to submit a Registration
        Statement on Form S-1 to the SEC to register and sell in a self-directed
        offering 2,000,000 shares of newly issued common stock at an offering price
        of
        $0.10 per share for proceeds of up to $200,000. The Registration Statement
        on
        Form S-1 was filed with the SEC on August 12, 2008 and declared effective
        on
        September 8, 2008.
 
 The
        accompanying financial statements have been prepared in conformity with
        accounting principles generally accepted in the United States of America,
        which
        contemplate continuation of the Company as a going concern. The Company has
        not
        established any source of revenue to cover its operating costs, and as such,
        has
        incurred an operating loss since inception. Further, as of September 30,
        2008,
        the cash resources of the Company were insufficient to meet its current business
        plan, and the Company had negative working capital. These and other factors
        raise substantial doubt about the Company’s ability to continue as a going
        concern. The accompanying financial statements do not include any adjustments
        to
        reflect the possible future effects on the recoverability and classification
        of
        assets or the amounts and classification of liabilities that may result from
        the
        possible inability of the Company to continue as a going concern.
 
 **(3)**  **Patent
        pending**
 
 In
        January 2008, the Company entered into a Assignment Agreement whereby the
        Company acquired all of the rights, title and interest in the invention known
        as
        the “Self operated computerized karaoke recording booth” for consideration of
        royalties ranging from 1% to 5% based on the net income of the Company for
        30
        years from the date of the Company's incorporation. On February 20, 2008
        the
        Company filed PCT and U.S. patent applications for the invention.
 
 F-7
 **THE
          MOBILE STAR CORP.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **SEPTEMBER
          30, 2008**
 **(Unaudited)**
 **(4)**  **Loans
        from Related Parties - Directors and Stockholders**
 
 As
        of
        September 30, 2008, loans from related parties - Directors and stockholders
        amounted to $14,300, and represented working capital advances from officers
        who
        are also stockholders of the Company. The loans are unsecured, non-interest
        bearing, and due on demand.
  **(5)**  **Common
        Stock**
 
 On
        February 4, 2008, the Company issued 8,000,000 shares of its common stock
        to
        founders of the Company, some of whom are directors and officers, for proceeds
        of $800.
  The
        Company has commenced a capital formation activity to submit a Registration
        Statement on Form S-1 to the SEC to register and sell in a self-directed
        offering 2,000,000 shares of newly issued common stock at an offering price
        of
        $0.10 per share for proceeds of up to $200,000. As of September 30, 2008,
        the
        Company had incurred $20,000 of deferred offering costs related to this capital
        formation activity.
 
 **(6)**  **Income
        Taxes**
 
 The
        provision (benefit) for income taxes for the period ended September 30, 2008,
        was as follows (assuming a 23% effective tax rate):
 
 Current
                  Tax Provision:Federal
                  and state-Taxable
                  income
              
              $
              -Total
                  current tax provision
              
              $
              -Deferred
                  Tax Provision:Federal
                  and state-Loss
                  carryforwards
              
              $
              2,237Change
                  in valuation allowance
              
              
              (2,237
              )Total
                  deferred tax provision
              
              $
              -
 
 The
        Company had deferred income tax assets as of September 30, 2008, as
        follows:
 
 Loss
                  carryforwards
              
              $
              2,237Less
                  - Valuation allowance
              
              
              (2,237
              )Total
                  net deferred tax assets
              
              $
              -
 
 The
        Company provided a valuation allowance equal to the deferred income tax assets
        for the period ended September 30, 2008, because it is not presently known
        whether future taxable income will be sufficient to utilize the loss
        carryforwards.
 
 As
        of
        September 30, 2008, the Company had approximately $9,724 in tax loss
        carryforwards that can be utilized in future periods to reduce taxable income,
        and expire in the year 2028.
 
 F-8
 **THE
          MOBILE STAR CORP.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **SEPTEMBER
          30, 2008**
 **(Unaudited)**
 **(7)**  **Related
        Party Transactions**
 
 As
        described in Note 4, as of September 30, 2008, the Company owed $14,300 to
        Directors, officers, and principal stockholders of the Company for working
        capital loans.
 
 As
        described in Note 5, on February 4, 2008, we subscribed 2,720,000 shares
        of our
        common stock to directors of the Company, for $272.
 
 **(8)**  **Commitments**
 
 As
        described in Notes 1, 2 and 5, as of September 30, 2008, the Company had
        commenced a capital formation activity to submit a Registration Statement
        on
        Form S-1 to the SEC. In connection with this capital formation activity,
        the
        Company is committed to pay legal and accounting fees amounting to approximately
        $20,000.
 
 On
        June
        15, 2008, the Company entered into a Transfer Agent and Registrar Agreement
        with
        Nevada Agency and Trust Company ("NATCO"). Under the Agreement, the Company
        agreed to pay to NATCO an annual fee amounting to $1,500 for the first year
        and
        $1,800 for every year thereafter. NATCO will act as the Company’s transfer agent
        and registrar.
 
 As
        described in Note 3, in January 2008, the Company entered into a Assignment
        Agreement whereby the Company acquired all of the rights, title and interest
        in
        the invention known as the “Self operated computerized karaoke recording booth”
for consideration of royalties ranging from 1% to 5% based on the net income
        of
        the Company for 30 years from the date of the Company's
        incorporation.
 
 **(9)**  **Recent
        Accounting Pronouncements**
  In
        September 2006, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards (“SFAS”) No. 157, *“Fair
        Value Measurement* s *.”* This
        statement defines fair value, establishes a framework for measuring fair
        value
        in generally accepted accounting principles, and expands disclosure about
        fair
        value measurements. This statement applies under other accounting pronouncements
        that require or permit fair value measurement, the FASB having previously
        concluded in those accounting pronouncement that fair value is the relevant
        measurement attribute. This statement does not require any new fair value
        measurements. However, for some entities, the application of the statement
        will
        change current practice. This statement is effective for financial statements
        issued for fiscal years beginning after November 15, 2007, and interim periods
        within those fiscal years. The management of the Company does not expect
        the
        adoption of this pronouncement to have a material impact on its financial
        statements.
  In
        September 2006, the FASB issued SFAS No. 158, *“Employers’
        Accounting for Defined Benefit Pension and Other Postretirement Plans - An
        Amendment of FASB Statements No. 87, 88, 106 and 132(R)* . *”* This
        statement improves financial reporting by requiring an employer to recognize
        the
        overfunded or underfunded status of a defined benefit postretirement plan
        (other
        than a multi-employer plan) as an asset or liability in its statement of
        financial position and to recognize changes in that funded status in the
        year in
        which the changes occur through comprehensive income of a business entity
        or
        changes in unrestricted net assets of a not-for-profit organization. This
        statement also improves financial reporting by requiring an employer to measure
        the funded status of a plan as of the date of its year-end statement of
        financial position, with limited exceptions. The requirement to measure plan
        assets and benefit obligations as of the date of the employer’s fiscal year-end
        statement of financial position is effective for fiscal years ending after
        December 15, 2008. The management of the Company does not expect the adoption
        of
        this pronouncement to have a material impact on its financial
        statements.
  F-9
 **THE
          MOBILE STAR CORP.**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **SEPTEMBER
          30, 2008**
 **(Unaudited)**
 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,”* which
        permits entities to choose to measure many financial instruments and certain
        other items at fair value that are not currently required to be measured
        at fair
        value. An entity would report unrealized gains and losses on items for which
        the
        fair value option has been elected in earnings at each subsequent reporting
        date. 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. The decision about whether to elect the fair value
        option
        is applied instrument by instrument, with a few exceptions; the decision
        is
        irrevocable; and it is applied only to entire instruments and not to portions
        of
        instruments. SFAS No. 159 requires disclosures that facilitate comparisons
        (a)
        between  entities
        that choose different measurement attributes for similar assets and liabilities
        and (b) between assets and liabilities in the financial statements of an
        entity
        that selects different measurement attributes for similar assets and
        liabilities. SFAS No. 159 is effective for financial statements issued for
        fiscal years beginning after November 15, 2007. Early adoption is permitted
        as
        of the beginning of a fiscal year provided the entity also elects to apply
        the
        provisions of SFAS No. 157. Upon implementation, an entity shall report the
        effect of the first re-measurement to fair value as a cumulative-effect
        adjustment to the opening balance of retained earnings. Since the provisions
        of
        SFAS No. 159 are applied prospectively, any potential impact will depend
        on the
        instruments selected for fair value measurement at the time of implementation.
        The management of the Company does not expect the adoption of this pronouncement
        to have a material impact on its financial statements.
 
 In
        December 2007, the FASB issued SFAS No. 160, *“Noncontrolling
        Interests in Consolidated Financial Statements – An Amendment of ARB No.
        51,”* which
        establishes accounting and reporting standards to improve the relevance,
        comparability, and transparency of financial information in its consolidated
        financial statements. This is accomplished by requiring all entities, except
        not-for-profit organizations, that prepare consolidated financial statements
        to
        (a) clearly identify, label, and present ownership interests in subsidiaries
        held by parties other than the parent in the consolidated statement of financial
        position within equity, but separate from the parent’s equity, (b) clearly
        identify and present both the parent’s and the noncontrolling’s interest
        attributable consolidated net income on the face of the consolidated statement
        of income, (c) consistently account for changes in parent’s ownership interest
        while the parent retains it controlling financial interest in subsidiary
        and for
        all transactions that are economically similar to be accounted for similarly,
        (d) measure of any gain, loss or retained noncontrolling equity at fair value
        after a subsidiary is deconsolidated, and (e) provide sufficient disclosures
        that clearly identify and distinguish between the interests of the parent
        and
        the interests of the noncontrolling owners. This Statement also clarifies
        that a
        noncontrolling interest in a subsidiary is an ownership interest in the
        consolidated entity that should be reported as equity in the consolidated
        financial statements. SFAS No. 160 is effective for fiscal years, and interim
        periods on or after December 15, 2008. The management of the Company does
        not
        expect the adoption of this pronouncement to have a material impact on its
        financial statements.
  In
        December 2007, the FASB issued SFAS 141R, “ *Business
        Combinations - Revised 2007* ,”
which
        replaces FASB Statement No. 141, “ *Business
        Combinations* .”
SFAS
        141R ** establishes
        principles and requirements intending to improve the relevance, representational
        faithfulness, and comparability of information that a reporting entity provides
        in its financial reports about a business combination and its effects. This
        is
        accomplished through requiring the acquirer to recognize assets acquired
        and
        liabilities assumed arising from contractual contingencies as of the acquisition
        date, measured at their acquisition-date fair values. This includes contractual
        contingencies only if it is more likely than not that they meet the definition
        of an asset or a liability in FASB Concepts Statement No. 6, “ *Elements
        of Financial Statements* - *a
        replacement of FASB Concepts Statement No. 3.* ” ** This
        statement also requires the acquirer to recognize goodwill as of the acquisition
        date, measured as a residual. However, this statement improves the way in
        which
        an acquirer’s obligations to make payments conditioned on the outcome of future
        events are recognized and measured, which in turn improves the measure of
        goodwill. This statement also defines a bargain purchase as a business
        combination in which the total acquisition-date fair value of the consideration
        transferred plus any noncontrolling interest in the acquiree, and it requires
        the acquirer to recognize that excess in earnings as a gain attributable
        to the
        acquirer. This therefore improves the representational faithfulness and
        completeness of the information provided about both the acquirer’s earnings
        during the period in which it makes a bargain purchase and the measures of
        the
        assets acquired in the bargain purchase. The Company does not expect the
        adoption of this pronouncement to have a material impact on its financial
        statements.
 
 F-10





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


3


USE
      OF
      NAMES





In
      this
      annual report, the terms “THE MOBILE STAR CORP. ”, “Company”, “we”, or “our”,
      unless the context otherwise requires, mean THE MOBILE STAR CORP. and its
      subsidiaries.





CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS





This
      annual report on Form 10-QSB and other reports that we file with the SEC contain
      statements that are considered forward-looking statements. Forward-looking
      statements give the Company’s current expectations, plans, objectives,
      assumptions or forecasts of future events. All statements other than statements
      of current or historical fact contained in this annual report, including
      statements regarding the Company’s future financial position, business strategy,
      budgets, projected costs and plans and objectives of management for future
      operations, are forward-looking statements. In some cases, you can identify
      forward-looking statements by terminology such as “anticipate,” “estimate,”
“plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,”
“we believe,” “we intend,” and similar expressions. These statements are based
      on the Company’s current plans and are subject to risks and uncertainties, and
      as such the Company’s actual future activities and results of operations may be
      materially different from those set forth in the forward looking statements.
      Any
      or all of the forward-looking statements in this annual report may turn out
      to
      be inaccurate and as such, you should not place undue reliance on these
      forward-looking statements. The Company has based these forward-looking
      statements largely on its current expectations and projections about future
      events and financial trends that it believes may affect its financial condition,
      results of operations, business strategy and financial needs. The
      forward-looking statements can be affected by inaccurate assumptions or by
      known
      or unknown risks, uncertainties and assumptions due to a number of factors,
      including:


·
            dependence
                on key personnel;


·
            competitive
                factors;


·
            degree
                of success of research and development
                programs


·
            the
                operation of our business; and


·
            general
                economic conditions in the United States, Israel and
                China


These
      forward-looking statements speak only as of the date on which they are made,
      and
      except to the extent required by federal securities laws, we undertake no
      obligation to update any forward-looking statements to reflect events or
      circumstances after the date on which the statement is made or to reflect the
      occurrence of unanticipated events. In addition, we cannot assess the impact
      of
      each factor on our business or the extent to which any factor, or combination
      of
      factors, may cause actual results to differ materially from those contained
      in
      any forward-looking statements. All subsequent written and oral forward-looking
      statements attributable to the Company or persons acting on its behalf are
      expressly qualified in their entirety by the cautionary statements contained
      in
      this annual report.


4


**ABOUT
      OUR COMPANY**




We
      were
      incorporated in Delaware on September 25, 2007 and are a development stage
      company. We began operations only on January 1, 2008. On January 16, 2008,
      Eli
      Malki assigned all his technology and invention rights including to develop
      and
      market a “Self Operated Computerized Karaoke Recording Booth” to The Mobile Star
      Corp. in exchange for a percentage of revenues ( royalties ) on future sales.
      This transfer agreement included all technology rights to the “Self Operated
      Computerized Karaoke Recording Booth”. On February 20, 2008 The Mobile Star
      Corp. filed a patent application for the “Self Operated Computerized Karaoke
      Recording Booth” (Patent Application Number: 60/902,076) with the United States
      Patent Office. The technology describes a coin-operated karaoke machine that
      combines a digital media proprietary software platform, a US-wide broadband
      network, and a pay-per-use device. To date, to our knowledge, no such product
      exists in the market.




The
      Mobile Star Corp. invention comprises a closed booth, divided into two parts:
      an
      acoustically isolated space wherein the singer sings, and the recording and
      processing hardware including a computer and a computerized disc dispenser.
      The
      system improves and upgrades the sound of the user allowing for better result.
      Four different instruments process the user's voice: amplifier, compressor,
      reverb, and equalizer. The amplifier amplifies the voice to the appropriate
      volume compared to the background music. The compressor restricts singing volume
      to a preset maximum. The reverb imitates the acoustics of a hall. The equalizer
      allows frequency changes to loud and super loud frequencies for dramatic sound
      improvement.




An
      animated three dimensional character acts as the virtual recording technician
      that guides the user from the beginning of the process until the end, thereby
      improving user satisfaction and enjoyment. The digital recording is saved
      directly to a file on the hard disc, and the service includes burning a compact
      disc (CD) while the program mergers between the singing and the
      music.




The
      associated software controls the machine activities, including recording,
      playback, burning, robotic arm movements, presenting the interface vocally
      and
      visually, and choosing the songs and their categories. All songs, backgrounds,
      and words are coded in files saved on the hard disc, which allows a choice
      of
      hundreds and potentially even thousands of songs. The digitalized process
      records only the user's voice digitally after processing with four instruments
      and software algorithms digitally merge the voice with the background
      music.





We
      do not
      yet have a fully operational working valid prototype, but intend to create
      one.
      Once the working prototype has been developed, we will then work to develop
      and
      manufacture the Product or license the manufacturing and related marketing
      and
      selling rights to a third party.




5




Our
      principal offices are located at 53 Hanoter Street, Even Yehuda, Israel. Our
      telephone number is 972 - (544) 655-341 Our registered office in Delaware is
      located at 113 Barksdale Professional Center, Newark, DE 19711, and our
      registered agent is Delaware Intercorp. All references to "we," "us," "our,"
      or
      similar terms used in this prospectus refer to Mobile Star. Our fiscal year
      end
      is December 31.




Our
      auditors have issued an audit opinion which includes a statement describing
      our
      going concern status. Our financial status creates substantial doubt whether
      we
      will continue as a going concern. Investors should note, we have not generated
      any revenues to date, we do not yet have any products available for sale, and
      we
      do not have a fully operational valid working prototype of our proposed product.





All
      references to "we," "us," "our," or similar terms used in this prospectus refer
      to Dynamic Applications Corporation. Our fiscal year end is December
      31.




**Employees**





Other
      than our current Directors and officers, Danny Elbaz and Eran Gronich, we have
      no other full time or part-time employees. If and when we develop the prototype
      for our electromagnetic percussion system, and are able to begin manufacturing
      and marketing, we may need additional employees for such operations. We do
      not
      foresee any significant changes in the number of employees or consultants we
      will have over the next twelve months.





**PLAN
      OF OPERATIONS**





**GENERAL
      DEVELOPMENT**




We
      were
      incorporated in Delaware on September 25, 2007 and we are a development stage
      company. We intend to engage in the manufacture and distribution of a new
      self-operated, computerized Karaoke recording booth which uses a patent pending
      technology. We have not generated any revenues to date and our operations have
      been limited to organizational, start-up, and capital formation activities.
      We
      currently have no employees other than our officers, who are also our
      Directors.





We
      have
      never declared bankruptcy, have never been in receivership, and have never
      been
      involved in any legal action or proceedings. We have not made any significant
      purchase or sale of assets, nor has the Company been involved in any mergers,
      acquisitions or consolidations. We are not a blank check registrant as that
      term
      is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933,
      because we have a specific business plan and purpose. Neither The Mobile Star
      Corp., nor its officers, Directors, promoters or affiliates, has had preliminary
      contact or discussions with, nor do we have any present plans, proposals,
      arrangements or understandings with any representatives of the owners of any
      business or company regarding the possibility of an acquisition or
      merger.




6




We
      have
      entered into a technology transfer agreement with Eli Malki regarding the
      self-operated, computerized Karaoke recording boothon January 16 2008 . On
      February 20, 2008 a patent application was filed with the United States Patent
      and Trademark Office under the name of The Mobile Star Corp. (Patent Application
      Serial Number: 60/902,076).




A
      Technology & Rights Transfer Agreement was signed between Eli Malki and The
      Mobile Star Corp. on January 16, 2008, granting The Mobile Star Corp. exclusive
      rights, title, and interest in and to future Patent Application and all
      Intellectual Property rights, free and clear of any lien, charge, claim,
      preemptive rights, etc. in exchange for future royalties for a Self Operated
      Computerized Karaoke Recording Booth invention. We have filed a patent
      application (Patent Application Number: 60902076) to protect our
      rights.




The
      Self
      Operated Computerized Karaoke Recording Booth comprises of the
      following:


(a)
      a
      DVD, a flash memory device, a device connectable to automated means for
      recording audio via a physical cable,


(b)
      a
      device connectable to automated means for recording audio via a communication
      link with the user multimedia file.


(c)
      a
      door, ventilation means, a computer, screen, video camera and microphone,


(d)
      optional lighting and an automatic money box,


(e)
      a
      database of multimedia files, earphones, a recording means for recording audio
      and multimedia on a computer usable media, and a processing unit, and may
      comprise labeling and packing means for labeling and packing said computer
      usable media,


(f)
      a
      graphical user interface (GUI), an audio processing application, a multimedia
      processing application, a control application.




Our
      principal offices are located c/o Danny Elbaz, 53 Hanoter Street, Even
      Yehuda.


Our
      telephone number is 972 - (544) 655341




**BUSINESS
      SUMMARY AND BACKGROUND**




A
      singer
      enters an automated recording booth to record a multimedia file comprising
      an
      audio performance of the singer in combination with a multimedia recording
      from
      a database. The result is a computer-usable media with the singer’s multimedia
      file.




The
      recording booth comprises a door, means of ventilation, a computer and screen,
      a
      video camera, and a microphone. There is a means for lighting and an automatic
      money box to collect the payment.




The
      recording booth further comprises a database of multimedia files from which
      the
      singer selects the songs, and earphones through which the singer hears the
      music
      and his voice integrated together. A recording device records the audio and
      the
      selected multimedia on a computer usable media. The processing unit burns the
      media. The media is then labeled and packaged.




7




The
      processing unit comprises a graphical user interface (GUI), an audio processing
      application, a multimedia processing application, and a control
      application.




**THIRD-PARTY
      MANUFACTURERS**




We
      will
      rely on third parties to develop a prototype and to work with us to manufacture
      the product. If our manufacturing and distribution agreements are not
      satisfactory, we may not be able to develop or commercialize our device as
      planned. In addition, we may not be able to contract with third parties to
      manufacture our device in an economical manner. Furthermore, third-party
      manufacturers may not adequately perform their obligations, which may impair
      our
      competitive position. If a manufacturer fails to perform, we could experience
      significant time delays or we may be unable to commercialize or continue to
      market our electromagnetic percussion system.




**INTELLECTUAL
      PROPERTY**




On
      January 16, 2008, we signed a Technology and Rights Transfer Agreement with
      Eli
      Malki, the original owners of the technology, licensing all rights, title and
      interest in, the self operated, computerized Karaoke booth. On February 20,
      2008, We filed the patent application with the United States Patent and
      Trademark Office.





**COMPETITION**




To
      date,
      to our knowledge, no such product exists in the market. A person who wants
      to
      record himself or herself singing to music must approach a professional
      recording studio in order to have a personal disc produced. The cost is
      extremely high. Although there are semi-professional studios, the cost is still
      prohibitive and these studios are scarce and hard to find.





**PATENT
      AND TRADEMARK**


**LICENSE
      & FRANCHISE RESTRICTIONS**


**CONTRACTUAL
      OBLIGATIONS & CONCESSIONS**




As
      described above, we have entered into an exclusive licensing agreement for
      the
      technology on which our self operated computerized karaoke recording booth
      is
      based. In addition, as described above, we have entered into a Technology
      Transfer and Sale Agreement whereby we acquired full rights to all title,
      interests etc. related to the technology. Finally, we have filed a patent
      application (Patent Application Number: 60902076) to protect our
      rights.





In
      addition, we are developing a website related to our product, which we intend
      to
      use to promote, advertise, and potentially market our invention, once the
      prototype and development stages are complete. We intend to full protect our
      invention and development stages with copyright and trade secrecy
      laws.




8




**EXISTING
      OR PROBABLE GOVERNMENT REGULATIONS**




We
      may be
      subject to the provisions of the Federal Consumer Product Safety Act and the
      Federal Hazardous Substances Act, among other laws. These acts empower the
      CPSC
      to protect the public against unreasonable risks of injury associated with
      consumer products. The CPSC has the authority to exclude from the market
      articles that are found to be hazardous and can require a manufacturer to repair
      or repurchase such devices under certain circumstances. Any such determination
      by the CPSC is subject to court review. Violations of these acts may also result
      in civil and criminal penalties. Similar laws exist in some states and cities
      in
      the U.S. and in many jurisdictions throughout the world.





**Liquidity,
      Capital Resources and Operations:**




During
      the fiscal quarter ended September 30, 2008, net cash used by operating
      activities was $6,724 . The Company incurred a net loss of $9,724and at
      September 30 2008 , the Company had a Stockholders’ (Deficit) of approximately
      $4,000.





These
      factors raise substantial doubt about the Company’s ability to continue as a
      going concern. The Company anticipates that in order to fulfill its plan of
      operations, it will need to seek financing from outside sources.  To this
      end, the Company is constantly pursuing private debt and equity sources.




**Results
      of Operations:**


**For
      the Nine Months Ended September 30, 2008**




For
      the Nine
      Months Ended September 30, 2008 ,
      the
      Company had $0 in sales and cost of sales of $0. .




General
      and administrative expenses , also the net loss amounted to $9,724.





We
      have,
      in our history, generated limited income from operations, have incurred
      substantial expenses and have sustained losses. In addition, we expect to
      continue to incur significant operating expenses. As a result, we will need
      to
      generate significant revenues to achieve profitability, which may not occur.
      We
      expect our operating expenses to increase as a result of our planned expansion.
      Even if we do achieve profitability, we may be unable to sustain or increase
      profitability on a quarterly or annual basis in the future. We expect to have
      quarter-to-quarter fluctuations in revenues, expenses, losses and cash flow,
      some of which could be significant. Results of operations will depend upon
      numerous factors, some beyond our control, including regulatory actions, market
      acceptance of our products and services, new products and service introductions,
      and competition.




9




**Inflation:**




The
      amounts presented in the financial statements do not provide for the effect
      of
      inflation on the Company’s operations or its financial position. Amounts shown
      for machinery, equipment and leasehold improvements and for costs and expenses
      reflect historical cost and do not necessarily represent replacement cost.
      The
      net operating losses shown would be greater than reported if the effects of
      inflation were reflected either by charging operations with amounts that
      represent replacement costs or by using other inflation
      adjustments.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that are material to investors.





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





Evaluation
      and Disclosure Controls and Procedures





As
      of the
      end of the period covered by this report, our management conducted an
      evaluation, under the supervision and with the participation of our chief
      executive officer and chief financial officer of the effectiveness of our
      disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
      under the Securities Exchange Act of 1934). Based on this evaluation, the
      officers concluded that our disclosure controls and procedures are effective
      to
      ensure that information required to be disclosed by our company in reports
      that
      we file or submit under the Securities Exchange Act of 1934 is recorded,
      processed, summarized and reported within the time periods specified in
      Commission rules and forms.





**Changes
      in Internal Controls over Financial Reporting**





Based
      on
      their evaluation as of the end of the period covered by this annual report
      on
      Form 10-KSB, our principal executive officer and principal financial officer
      concluded that our disclosure controls and procedures, as defined in Rule
      13a-15(e) promulgated under the Securities Exchange Act of 1924, were effective
      in design and operation. There have been no changes in our system of internal
      control over financial reporting in connection with the evaluation by our
      principal executive officer and principal financial officer during our most
      recent fiscal quarter that have materially affected, or are reasonably likely
      to
      materially affect, our internal control over financial reporting.





10




**Part
      II. Other Information**





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





Other
      than as set forth herein, we are not aware of any pending or threatened
      litigation against us that we expect will have a material adverse effect on
      our
      business, financial condition, liquidity, or operating results. However, legal
      claims are inherently uncertain and we cannot assure you that we will not be
      adversely affected in the future by legal proceedings.





**Item
      2.** **Changes
      In Securities**





None





**Item
      3.**  **Defaults
      Upon Senior Securities**





None





**Item
      4.**  **Submission
      of Matters To A Vote Of Security Holders**





None





**Item
      5.**  **Other
      Information**





None


11


**Item
      6.**  **Exhibits**





a.  Exhibits:


EXHIBIT
              NUMBER
            DESCRIPTION3.1*
            Articles
                of Incorporation of the Company3.2*
            By-Laws
                of the Company3.3*
            Form
                of Common Stock Certificate of the Company10.1*
            Invention
                Technology Assignment10.2
                *
            US
                Patent Application31.1
            Certification
                of Principal Executive Officer Pursuant to Exchange Act Rule
                13A-14(A)/15D-14(A) as Adopted Pursuant to Section 302 of the
                Sarbanes-Oxley Act of 200231.2
            Certification
                of Principal Financial Officer Pursuant to Exchange Act Rule
                13A-14(A)/15D-14(A) as Adopted Pursuant to Section 302 of the
                Sarbanes-Oxley Act of 200232.1
            Certification
                of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350,
                as
                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2
            Certification
                of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350,
                as
                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002





*  Previously
      filed as an exhibit to the Company’s Form S-1 filed on August 12, 2008, and
      subsequent filings


12


**Signatures**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, THE MOBILE STAR CORP. has duly caused this Report to be signed on behalf
      of the undersigned thereunto duly authorized on October 16, 2008.





**THE
                MOBILE STAR CORP.**By:
            /s/
                Danny ElbazDanny
                Elbaz, President and CEO





Pursuant
      to the requirements of the Securities Exchange Act of 1934, this Report has
      been
      signed by the following persons in the capacities indicated and on February
      28,
      2008.





Signature
            
            Title
            
            Date/s/
                Danny Elbaz
            
            President
                and CEO
            
            October
                16, 2008Danny
                Elbaz
            
            and
                Director/s/
                Eran Gronich
            
            Secretary
                and Director
            
            October
                16, 2008Eran
                Gronich
            
            (Chief
                Financial Officer)


13