UNITED
STATES


SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549







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


For the quarterly period ended
September 30, 2009




OR


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


For the transition period from
___________ to ___________




Commission
file number 0-53439




DRAGON’S
LAIR HOLDINGS, INC.


(Exact
name of registrant as specified in its charter)


Florida
            
            26-1427633(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      Number)


785
      NE 83rd
      Terrace
              Miami,
      Florida
            
            33138(Address
      of principal executive offices)
            
            (Zip
      Code)




(786)
554-2771


(Issuer’s
telephone number, including area code)





Not
applicable


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





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes þNo o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).  Yes oNo þ





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





Large
accelerated filer        o                                                                             Accelerated
filer                             
o


Non-accelerated
filer          o                                                                            
Smaller reporting
company           x


(Do not
check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes þNo o




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




Class
            
            Outstanding
      at November 16, 2009Common
      Stock, no par value per share
            
            8,001,078
      shares


-1-


DRAGON’S LAIR HOLDINGS,
INC.




TABLE OF CONTENTS


PAGEPart I Financial Information
            
            
            3Item 1. Financial Statements
    (unaudited)
            
            
            3Balance Sheets
            
            
            3Statements of Operations
            
            
            4Statements of Cash Flows
            
            
            5Notes to Financial Statements
            
            
            6Item 2. Management’s Discussion and Analysis of Financial
      Condition and Results of Operations
            
            
            12Item 3. Quantitative and Qualitative Disclosures About
      Market Risk
            
            
            17Item 4. Controls and Procedures
            
            
            17Part II Other Information
            
            
            19Item 2. Unregistered Sales of Equity Securities and Use of
      Proceeds19Item 6. ExhibitsSignatures
            
            
            20Exhibit 31.1Exhibit 32.1





-2-


PART
I FINANCIAL INFORMATION





Item
1.  Financial Statements





DRAGON'S LAIR HOLDINGS, INC.(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      BALANCE SHEETSASSETSSeptember
      30, 2009
            
            
            December
      31, 2008(unaudited)
            
            
            (audited)CURRENT
      ASSETS:Cash
      and equivalents
            
            $
            26,339
            
            
            $
            66,613Inventory
            
            
            402
            
            
            
            402Total
      Current Assets
            
            
            26,741
            
            
            
            67,015FIXED
      ASSETS:Equipment,
      net
            
            
            370
            
            
            
            445OTHER
      ASSETS:License,
      net
            
            
            720
            
            
            
            900Total
      Assets
            
            $
            27,831
            
            
            $
            68,360LIABILITIES AND SHAREHOLDERS'
      EQUITYCURRENT
      LIABILITIES:Accounts
      payable & accrued expenses
            
            $
            450
            
            
            $
            6,051Total
      Liabilities
            
            
            450
            
            
            
            6,051SHAREHOLDERS'
      EQUITY:Preferred
      stock (15,000,000 authorized;par
      value $.001; none issued and outstanding)
            
            $
            -
            
            
            
            -Common
      stock (100,000,000 shares authorized;no
      par value; 8,001,078 and 8,001,078 issued and outstanding,
      respectively)
            
            
            88,587
            
            
            
            84,741Deficit
      accumulated during the development stage
            
            
            (61,206
            )
            
            
            (22,432
            )Total
      Shareholders' Equity
            
            
            27,381
            
            
            
            62,309Total
      Liabilities and Shareholders' Equity
            
            $
            27,831
            
            
            $
            68,360





-3-





DRAGON'S LAIR HOLDINGS, INC.(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      STATEMENTSOF OPERATIONS(Unaudited)Cumulative
      from October
      4, 2007 (Inception) through September
      30, 2009For
      the three months ended
      September 30, 2009
            
            
            For
      the three months ended
      September 30, 2008
            
            
            For
      the nine months ended
      September 30, 2009
            
            
            For
      the nine months ended
      September 30, 2008Net
      Sales
            
            $
            -
            
            
            $
            1,242
            
            
            $
            -
            
            
            $
            1,242
            
            
            $
            1,242Cost
      of Sales
            
            
            -
            
            
            
            131
            
            
            
            -
            
            
            
            131
            
            
            
            131Gross
      Profit
            
            
            -
            
            
            
            1,111
            
            
            
            -
            
            
            
            1,111
            
            
            
            1,111Expenses:General
      and Administrative
            
            
            6,812
            
            
            
            8,815
            
            
            
            38,774
            
            
            
            18,206
            
            
            
            62,317Total
      Expenses
            
            
            (6,812
            )
            
            
            (8,815
            )
            
            
            (38,774
            )
            
            
            (18,206
            )
            
            
            (62,317
            )Net
      (loss) before Income Taxes
            
            
            (6,812
            )
            
            
            (7,704
            )
            
            
            (38,774
            )
            
            
            (17,095
            )
            
            
            (61,206
            )Provision
      for Income Taxes
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Net
      (loss)
            
            $
            (6,812
            )
            
            $
            (7,704
            )
            
            $
            (38,774
            )
            
            $
            (17,095
            )
            
            $
            (61,206
            )Basic
      and diluted net loss per common share
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Weighted
      average number of common shares outstanding
            
            
            8,001,078
            
            
            
            6,138,278
            
            
            
            8,001,078
            
            
            
            8,001,078








-4-


DRAGON'S
      LAIR HOLDINGS, INC.(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      STATEMENTS OF CASH FLOWS(Unaudited)Cumulative
      from October
      4, 2007 (Inception) through
      September 30, 2009For
      the nine months ended
      September 30, 2009
            
            
            For
      the nine months ended
      September 30, 2008OPERATING
      ACTIVITIES:Net
      loss
            
            $
            (38,774
            )
            
            $
            (17,096
            )
            
            $
            (61,206
            )Issuance
      of common stock for services
            
            
            3,846
            
            
            
            4,008
            
            
            
            7,854Increase
      in amortization
            
            
            180
            
            
            
            180
            
            
            
            480Increase
      in prepaid printing
            
            
            -
            
            
            
            -Increase
      in depreciation
            
            
            75
            
            
            
            25
            
            
            
            125Increase
      in inventory
            
            
            -
            
            
            
            131
            
            
            
            (402
            )Increase
      (decrease) in accounts payable
            
            
            (5,601
            )
            
            
            2,956
            
            
            
            450Net
      cash used in operating activities
            
            
            (40,274
            )
            
            
            (9,796
            )
            
            
            (52,699
            )INVESTING
      ACTIVITIES:Increase
      in Equipment
            
            
            -
            
            
            
            (495
            )
            
            
            (495
            )FINANCING
      ACTIVITIES:Proceeds
      from issuance of common stock
            
            
            -
            
            
            
            -
            
            
            
            79,533NET
      INCREASE (DECREASE) IN CASH
            
            
            (40,274
            )
            
            
            (10,291
            )
            
            
            26,339CASH
      BEGINNING BALANCE
            
            
            66,613
            
            
            
            11,200
            
            
            
            -CASH
      ENDING BALANCE
            
            $
            26,339
            
            
            $
            909
            
            
            $
            26,339SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Taxes
      paid
            
            $
            -
            
            
            $
            -
            
            
            $
            -Interest
      paid
            
            $
            -
            
            
            $
            -
            
            
            $
            -CASH
      TRANSACTIONS AFFECTING OPERATING, INVESTINGAND
      FINANCING ACTIVITIES:Issuance
      of common stock for license
            
            $
            -
            
            
            $
            -
            
            
            $
            1,200





-5-


DRAGON’S
LAIR HOLDINGS, INC.


(A
DEVELOPMENT STAGE COMPANY)





NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS





SEPTEMBER
30, 2009





NOTE
1 – BASIS OF PRESENTATION





The
accompanying unaudited interim financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission for the presentation of interim financial information, but do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements.  The audited
financial statements for the period October 4, 2007 (Inception) through December
31, 2007 and the year ended December 31, 2008 were filed on March 31, 2009 with
the Securities and Exchange Commission and are hereby referenced.  In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included.  Operating results for the three and nine month periods
ended September 30, 2009 and for the period October 4, 2007 (Inception) through
September 30, 2009 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2009.





NOTE
2 - DESCRIPTION OF BUSINESS AND DEVELOPMENT STAGE RISK





Description of
Business





Dragon’s
Lair Holdings, Inc., a Florida corporation (the “Company”, “we”, “us” and
“our”), was incorporated on October 4, 2007, and conducts is operations through
its sole operating subsidiary, Dragon’s Lair Health Products, Inc., a Florida
corporation, which was incorporated on October 5, 2007.  Our company
structure is set forth in the following chart:


DRAGON’S
      LAIR HOLDINGS, INC.
                a
      Florida corporation
 
 DRAGON’S
      LAIR HEALTH PRODUCTS, INC.
                a
      Florida corporation
                (100%
      Owned Subsidiary)


Our
Company is a provider of personal care products by means of a network of direct
sales consultants, which is in the development stage.  Our business
strategy is to provide quality products, operate at a profit and enable our
direct sales consultants to operate at a profit.  In July, 2008, we
commenced providing our first product, the Sore-EezÔ Chinese herbal body
liniment.





Our
principal executive office is located at 785 N.E. 83rd
Terrace, Miami, FL  33138.  Our telephone number is
(786) 554-2771, and our company website is www.sore-eez.com.  Our
fiscal year ends on December 31st.





Basis of
Presentation





The
accompanying consolidated financial statements have been prepared by the
Company. The Company’s consolidated financial statements are prepared in
accordance with generally accepted accounting principals in the United States of
America (“US GAAP”). The consolidated financial statements of the Company
include the Company and its sole subsidiary. All material inter-company balances
and transactions have been eliminated.





-6-


Going
Concern





The
Company’s financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business.  The Company has not yet established an
ongoing source of revenues sufficient to cover its operating costs and allow it
to continue as a going concern.  The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable.  If the
Company is unable to obtain adequate capital, it could be forced to cease
operations.  The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.





Management’s Plan to
Continue as a Going Concern





The
Company has met its historical working capital requirements from the sale of its
capital shares.  In order to continue as a going concern, the Company
will need, among other things, additional capital
resources.  Management’s plans to obtain such resources for the
Company include (1) obtaining capital from the sale of shares of shares of
common stock of the Company, (2) the sale of the Sore-EezÔ Chinese herbal body
liniment and other product candidates, and (3) seeking out and completing a
merger with an existing operating company.  However, management cannot
provide any assurance that the Company will be successful in accomplishing any
of its plans.





Development Stage
Risk





Since its
inception, the Company has been dependent upon the receipt of capital investment
to fund its continuing activities. In addition to the normal risks associated
with a new business venture, there can be no assurance that the Company's
business plan will be successfully executed. Our ability to execute our business
plan will depend on our ability to obtain additional financing and achieve a
profitable level of operations. There can be no assurance that sufficient
financing will be obtained.  Further, we cannot give any assurance
that we will generate substantial revenues or that our business operations will
prove to be profitable.





NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Cash and Cash
Equivalents





The
Company considers all highly liquid debt instruments with original maturities of
three months or less to be cash equivalents. The Company has no cash
equivalents.





Use of
Estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.





Inventories





Inventories
are valued at the lower of cost or market on a first-in, first-out (FIFO) basis,
and include finished goods.





Revenue
Recognition





The
Company recognizes revenue when:





·
            Persuasive
      evidence of an arrangement exists;





·
            Shipment
      has occurred;





·
            Price
      is fixed or determinable; and





·
            Collectibility
      is reasonably assured.





-7-


The
Company closely follows the provisions of Staff Accounting Bulletin No. 104 as
described above. For the period from October 4, 2007 (inception) to December 31,
2007 the Company recognized no revenues.  In July, 2008, the Company
commenced providing our first product, the Sore-EezÔ Chinese herbal body
liniment.  For the period from October 4, 2007 (inception) to
September 30, 2009, the Company recognized revenues in the amount of
$1,242.





Earnings (Loss) Per
Share





The
Company computes earnings per share in accordance with the Accounting Standards
Codification (“ASC”) 260 “Earnings Per Share” which was previously Statement of
Accounting Standards No. 128, “Earnings per Share”  (“SFAS No. 128”).
Under the provisions of SFAS No. 128, basic earnings per share is computed by
dividing the net income (loss) for the period by the weighted average number of
common shares outstanding during the period. Diluted earnings per share is
computed by dividing the net income (loss) for the period by the weighted
average number of common and potentially dilutive common shares outstanding
during the period.  There were no potentially dilutive common shares
outstanding during the period.





Intangible
Assets





Intangible
assets consist of a license agreement which is recorded at cost and amortized
over a straight-line basis.  The amortization expense for the periods
from January 1, 2009 to September 30, 2009 and from October 4, 2007 (inception)
to September 30, 2009 was $180 and $480, respectively.  The value of
the license was determined to be the legal costs to create the license, which
was $1,200, as there were no other out-of-pocket costs for the license or the
development of the recipe.





The
Company evaluates the recoverability of identifiable intangible assets whenever
events or changes in circumstances indicate that an intangible asset’s carrying
amount may not be recoverable. There was no impairment loss for the periods from
January 1, 2009 to September 30, 2009 and from October 4, 2007 (inception) to
September 30, 2009.





Income
Taxes





The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, “Accounting for Income Taxes.” Under the asset and
liability method of Statement 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.





Fair Value of Financial
Instruments





The
Company considers that the carrying amount of financial instruments, including
accounts payable, approximates fair value because of the short maturity of these
instruments.





Share Based
Payments





In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which
replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R),
companies are required to measure the compensation costs of share-based
compensation arrangements based on the grant-date fair value and recognize the
costs in the financial statements over the period during which employees or
independent contractors are required to provide services. Share-based
compensation arrangements include stock options and warrants, restricted share
plans, performance-based awards, share appreciation rights and employee share
purchase plans. In March 2005, the SEC issued Staff Accounting Bulletin No. 107,
or “SAB 107”. SAB 107 expresses views of the staff regarding the interaction
between SFAS No. 123(R) and certain SEC rules and regulations and provides the
staff's views regarding the valuation of share-based payment arrangements for
public companies. SFAS No. 123(R) permits public companies to adopt its
requirements using one of two methods. On April 14, 2005, the SEC adopted a new
rule amending the compliance dates for SFAS 123(R). Companies may elect to apply
this statement either prospectively, or on a modified version of retrospective
application under which financial statements for prior periods are adjusted 1on
a basis consistent with the pro forma disclosures required for those periods
under SFAS 123.





Effective
commencing on the year ended December 31, 2007, the Company has fully adopted
the provisions of SFAS No. 123(R) and related interpretations as provided by SAB
107. As such, compensation cost is measured on the date of grant as the fair
value of the share-based payments. Such compensation amounts, if any, are
amortized over the respective vesting periods of the option grant.





Recent Accounting
Pronouncements





FASB
Accounting Standards Codification





-8-


(Accounting
Standards Update (“ASU”) 2009-01)





In
June 2009, FASB approved the FASB Accounting Standards Codification (“the
Codification”) as the single source of authoritative nongovernmental GAAP. All
existing accounting standard documents, such as FASB, American Institute of
Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the Securities and Exchange Commission
(“SEC”), have been superseded by the Codification. All other non-grandfathered,
non-SEC accounting literature not included in the Codification has become
nonauthoritative. The Codification did not change GAAP, but instead introduced a
new structure that combines all authoritative standards into a comprehensive,
topically organized online database. The Codification is effective for interim
or annual periods ending after September 15, 2009, and impacts the
Company’s financial statements as all future references to authoritative
accounting literature will be referenced in accordance with the Codification.
There have been no changes to the content of the Company’s financial statements
or disclosures as a result of implementing the Codification during the quarter
ended September 30, 2009.   As a result of the Company’s
implementation of the Codification during the quarter ended September 30, 2009,
previous references to new accounting standards and literature are no longer
applicable. In the current quarter financial statements, the Company will
provide reference to both new and old guidance to assist in understanding the
impacts of recently adopted accounting literature, particularly for guidance
adopted since the beginning of the current fiscal year but prior to the
Codification.





Subsequent
Events





(Included
in Accounting Standards Codification (“ASC”) 855 “Subsequent Events”, previously
SFAS No. 165 “Subsequent Events”)





SFAS
No. 165 established general standards of accounting for and disclosure of
events that occur after the balance sheet date, but before the financial
statements are issued or available to be issued (“subsequent events”). An entity
is required to disclose the date through which subsequent events have been
evaluated and the basis for that date. For public entities, this is the date the
financial statements are issued. SFAS No. 165 does not apply to subsequent
events or transactions that are within the scope of other GAAP and did not
result in significant changes in the subsequent events reported by the Company.
SFAS No. 165 became effective for interim or annual periods ending after
June 15, 2009 and did not impact the Company’s financial statements. The
Company evaluated for subsequent events through the issuance date of the
Company’s financial statements. No recognized or non-recognized subsequent
events were noted.





Determination
of the Useful Life of Intangible Assets





(Included
in ASC 350 “Intangibles – Goodwill and Other”, previously FSP SFAS No. 142-3
“Determination of the Useful Lives of Intangible Assets”)





FSP SFAS
No. 142-3 amended the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under previously issued goodwill and intangible
assets topics. This change was intended to improve the consistency between the
useful life of a recognized intangible asset and the period of expected cash
flows used to measure the fair value of the asset under topics related to
business combinations and other GAAP. The requirement for determining useful
lives must be applied prospectively to intangible assets acquired after the
effective date and the disclosure requirements must be applied prospectively to
all intangible assets recognized as of, and subsequent to, the effective date.
FSP SFAS No. 142-3 became effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the
Company’s financial statements.





Noncontrolling
Interests





(Included
in ASC 810 “Consolidation”, previously SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements an amendment of ARB No. 51”)





SFAS
No. 160 changed the accounting and reporting for minority interests such
that they will be recharacterized as noncontrolling interests and classified as
a component of equity. SFAS No. 160 became effective for fiscal years
beginning after December 15, 2008 with early application prohibited. The
Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer
records an intangible asset when the purchase price of a noncontrolling interest
exceeds the book value at the time of buyout. Any excess or shortfall for
buyouts of noncontrolling interests in mature restaurants is recognized as an
adjustment to additional paid-in capital in stockholders’ equity. Any shortfall
resulting from the early buyout of noncontrolling interests will continue to be
recognized as a benefit in partner investment expense up to the initial amount
recognized at the time of buy-in. Additionally, operating losses can be
allocated to noncontrolling interests even when such allocation results in a
deficit balance (i.e.,
book value can go negative).  The Company presents noncontrolling
interests (previously shown as minority interest) as a component of equity on
its consolidated balance sheets. Minority interest expense is no longer
separately reported as a reduction to net income on the consolidated income
statement, but is instead shown below net income under the heading “net income
attributable to noncontrolling interests.” The adoption of SFAS No. 160 did
not have any other material impact on the Company’s financial
statements.





-9-


Consolidation
of Variable Interest Entities – Amended





(To be
included in ASC 810 “Consolidation”, SFAS No. 167 “Amendments to FASB
Interpretation No. 46(R)”)





SFAS
No. 167 amends FASB Interpretation No. 46(R) “Consolidation of
Variable Interest Entities regarding certain guidance for determining whether an
entity is a variable interest entity and modifies the methods allowed for
determining the primary beneficiary of a variable interest entity. The
amendments include: (1) the elimination of the exemption for qualifying
special purpose entities, (2) a new approach for determining who should
consolidate a variable-interest entity, and (3) changes to when it is
necessary to reassess who should consolidate a variable-interest entity. SFAS
No. 167 is effective for the first annual reporting period beginning after
November 15, 2009, with earlier adoption prohibited. The Company will adopt
SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on
the Company’s financial statements.





Management
does not believe that any other recently issued, but not yet effective,
accounting standards or pronouncements, if currently adopted, would have a
material effect on the Company’s financial statements.





NOTE
4 - EQUITY TRANSACTIONS





On
October 4, 2007 (inception), the Company issued 975,000 shares of common stock
for the purchase of the license to manufacture, distribute and sell, the
Sore-EezÔ
Chinese herbal liniment, its initial product, from Yamit Lemoine.  The
value of the license was determined to be the legal costs to create the license,
which was $1,200, as there were no other out-of-pocket costs for the license or
the development of the recipe.





On
November 4, 2007, the Company issued 5,000,000 shares of common stock to an
investor for cash in the amount of $11,100.





On
December 31, 2007, the Company issued 63,278 shares of common stock to an
investor for cash in the amount of $633.




On March
27, 2008, the Company issued 100,000 shares of common stock to directors for
services rendered at a value of $4,008.






On
December 11, 2008, the Company completed its public offering pursuant to its
Form S-1 Registration Statement of 6,780 shares of Series A Convertible
Preferred Stock, which were converted into 1,762,800 shares of common stock and
provided aggregate offering proceeds in the amount of $67,800.




On April
1, 2009, the Company issued 100,000 shares of common stock to its transfer agent
for services rendered at a value of $3,846.








NOTE
5 - CONCENTRATION OF CREDIT RISK





Financial
instruments that potentially subject the Company to concentrations of credit
risk consist principally of cash deposits. Accounts at each institution are
insured by the Federal Deposit Insurance Corporation (“FDIC”). At September 30,
2009, the Company had no amounts in excess of the FDIC insured
limit.





NOTE
6 - LICENSE AGREEMENT





We have
entered into a license agreement with Yamit Lemoine, a significant shareholder
and the wife of our chief executive officer, which grants us a license for a
term five (5) years until at least October 4, 2012 for the exclusive worldwide
use of the Sore-EezÔ Chinese herbal
liniment recipe and, perpetually, thereafter, if we have generated at least
$400,000 from the sale of products based on the Sore-EezÔ Chinese herbal
liniment recipe on or prior to such date.  Pursuant to this license
agreement, we are required to exercise our best efforts to undertake and
maintain the commercial scale production, marketing and distribution of products
embodying the subject matter of the Sore-EezÔ Chinese herbal
liniment recipe.  We may not sublicense or assign any of our rights
under the license agreement.





-10-


On
October 4, 2007, the date of our inception, we issued 975,000 shares of our
restricted common stock to Yamit Lemoine, for a purchase price of $0.0012308 per
share, for the license to the Sore-EezÔ Chinese herbal
liniment recipe.  The value of the license was determined to be the
legal costs to create the license, which was $1,200, as there were no other
out-of-pocket costs for the license or the development of the
recipe.  We do not have any future payments obligations to Yamit
Lemoine under the license agreement.





The
license will be amortized over five years using the straight line
method.  Yamit Lemoine may
terminate this license agreement in the event that we have not recognized
revenues of at least $400,000 from the sale of products based on the
Sore-EezÔChinese herbal liniment
recipe by October 4, 2012.We have not achieved this level of sales as of
September 30, 2009, so the license remains subject to termination by the
licensor at the end of such period.





The
estimated amortization expense over the next five years is as
follows:





Year
Ending December 31


2007
............. $  60


2008
............. $240


2009
.............   240


2010
.............   240


2011                240


2012                180


$1,200





-11-


Item
2.  Management’s Discussion and Analysis of Financial
Condition and Results of Operations





The
following discussion and analysis should be read in conjunction with our
consolidated financial statements, including the notes thereto, appearing in
this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2008 filed on March 31, 2009 with the Securities and Exchange
Commission and are hereby referenced.




The
statements in this report include forward-looking statements.  These
forward-looking statements are based on our management’s current expectations
and beliefs and involve numerous risks and uncertainties that could cause actual
results to differ materially from expectations.  You should not rely
upon these forward-looking statements as predictions of future events because we
cannot assure you that the events or circumstances reflected in these statements
will be achieved or will occur.  You can identify a forward-looking
statement by the use of the forward-terminology, including words such as “may”,
“will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”,
“should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the
negative of these words and phrases or other variations of these words and
phrases or comparable terminology.  These forward-looking statements
relate to, among other things: our sales, results of operations and anticipated
cash flows; capital expenditures; depreciation and amortization expenses; sales,
general and administrative expenses; our ability to maintain and develop
relationship with our existing and potential future customers;  and,
our ability to maintain a level of investment that is required to remain
competitive.  Many factors could cause our actual results to differ
materially from those projected in these forward-looking statements, including,
but not limited to: variability of our revenues and financial performance; risks
associated with technological changes; the acceptance of our products in the
marketplace by existing and potential customers; disruption of operations or
increases in expenses due to our involvement with litigation or caused by civil
or political unrest or other catastrophic events; general economic conditions,
government mandates and conditions in the gaming/entertainment industry in
particular; and, the continued employment of our key personnel and other risks
associated with competition.




For
      a discussion of the factors that could cause actual results to differ
      materially from the forward-looking statements see the “Liquidity and
      Capital Resources” section under “Management’s Discussion and Analysis of
      Financial Condition and Results of Operations” in this item of this report
      and the other risks and uncertainties that are set forth elsewhere in this
      report or detailed in our other Securities and Exchange Commission reports
      and filings.  We believe it is important to communicate our
      expectations. However, our management disclaims any obligation to update
      any forward-looking statements whether as a result of new information,
      future events or otherwise.




Overview




Our
Company is a provider of personal care products by means of a network of direct
sales consultants, which is in the development stage.  Our business
strategy is to provide quality products, operate at a profit and enable our
direct sales consultants to operate at a profit.  In July, 2008, we
commenced providing to the marketplace our first product, the
Sore-Eez Chinese herbal body liniment.  Our primary focus over
the course of the next 12 months will be to concentrate our efforts on
introducing the Sore-Eez Chinese herbal liniment and other product candidates to
the marketplace, producing inventory for sale and implementing our business
plan, including recruiting and training a network of direct sales
consultants.




Going
Concern




Our
financial statements have been prepared on the basis of accounting principles
applicable to a going concern. As a result, they do not include adjustments that
would be necessary if we were unable to continue as a going concern and would
therefore be obligated to realize assets and discharge our liabilities other
than in the normal course of operations.  As reflected in the
accompanying financial statements, the Company is in the development stage with
limited revenues, has used cash flows in operations of $52,699 from inception of
October 4, 2007 to September 30, 2009 and has an accumulated deficit of $61,206
through September 30, 2009. This raises substantial doubt about our ability to
continue as a going concern, as expressed by our auditors in its opinion on our
financial statements included in this report. The ability of the Company to
continue as a going concern is dependent on the Company’s ability to raise
additional capital and implement its business plan.





We have
not yet established an ongoing source of revenues sufficient to cover our
operating costs and allow us to continue as a going concern.  Our ability
to continue as a going concern is dependent on us obtaining adequate capital to
fund operating losses until we become profitable.  If we are unable to
obtain adequate capital, we could be forced to cease operations.  There can
be no assurance that we will operate at a profit or additional debt or equity
financing will be available, or if available, can be obtained on satisfactory
terms.




Critical
Accounting Policies




Our
financial statements and accompanying notes have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis.  The preparation of financial statements requires
management to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues, expenses and related disclosures. On an
on-going basis, management evaluates these estimates and assumptions, including
but not limited to those related to revenue recognition and the impairment of
long-lived assets, goodwill and other intangible assets. Management bases
its estimates on historical experience and various other assumptions that it
believes to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions.





-12-


Stock
Compensation




The
Company adopted SFAS No. 123R, Share-Based Payment(“SFAS 123R”), which requires all stock-based payments to employees,
including grants of employee stock options, to be recognized in the financial
statements based on their fair values. The Company accounts for
stock-based compensation arrangements with nonemployees in accordance with the
Emerging Issues Task Force Abstract No. 96-18,Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling Goods or Services. The Company records the expense of such
services to employees and non employees based on the estimated fair value of the
equity instrument using the Black-Scholes pricing model.




Revenue
Recognition




The
Company recognizes revenue on arrangements in accordance with Securities and
Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition
in Financial Statements’ and No. 104, “Revenue Recognition”. In all cases,
revenue is recognized only when the price is fixed or determinable, persuasive
evidence of an arrangement exists, the service is performed and collectability
of the resulting receivable is reasonably assured.




Product
sales and shipping revenues, net of promotional discounts, rebates, and return
allowances, are recorded when the products are shipped and title passes to
customers. Retail sales to customers are made pursuant to a sales contract that
provides for transfer of both title and risk of loss upon our delivery to the
carrier. Return allowances, which reduce product revenue, are estimated using
historical experience. Revenue from product sales and services rendered is
recorded net of sales taxes. Amounts received in advance for subscription
services, are deferred and recognized as revenue over the subscription
term.




Outlook




The most
important metric by which we judge the Company’s performance now and in the near
term is top line sales growth. Our current commitment to develop and deliver
quality products means that, for the near future, bottom line profitability will
be a poor indicator of our success. We do not expect our development investment
rate to decline meaningfully in the near future. Since investors are certain to
be the primary, near term source of liquidity to support our development and
marketing efforts, our liquidity will be driven by our ability to attract repeat
investments from current shareholders and to find new ones. This in turn may be
materially impacted by the general investment climate.




Our
primary marketing challenge for the coming 12 months is to achieve greater and
greater market awareness through hiring new direct marketing
consultants.  Our primary developmental and operational challenge is
to increase the amount of products we can offer and the amount of products can
produce and make available for sale.




Revenues




As our
revenues increase, we plan to continue to invest in marketing and sales by
increasing the number of direct sales consultants and management personnel,
expand our selling and marketing activities, building brand awareness and
sponsoring additional marketing events. We expect that in the future, marketing
and sales expenses will increase in absolute dollars. We do not expect our
revenues to increase significantly until 2010.





General and Administrative
Expenses





We expect
that general and administrative expenses associated with executive compensation
will increase in the future. Although our current chief executive,
president, secretary and treasurer has foregone full salary payments during the
initial stages of the business, during 2009 such person began to receive
compensation. In addition, we believe in the 2010 fiscal year that the
compensation packages required to attract the senior executives the Company
requires to execute against its business plan will increase our total general
and administrative expenses.





Summary of Consolidated
Condensed Results of Operations





Any
measurement and comparison of revenues and expenses from continuing operations
should not be considered necessarily indicative or interpolated as the trend to
forecast our future revenues and results of operations.





Results
for the Nine Months Ended September 30, 2009 Compared to September 30,
2008





Revenues. The Company’s
revenues for the nine months ended September 30, 2009 were $0. The Company’s
revenues for the nine months ended September 30, 2008 were $0.  No
revenues occurred during these periods, because no there were no product
sales.




-13-


Cost of
Revenues.The Company’s cost of revenues for the nine months
ended September 30, 2009 were $0. The Company’s cost of revenues for the nine
months ended September 30, 2008 were $0.  There was not cost of
revenues, because no product sales were made by the Company.




Gross Profit/Loss. The
Company’s gross profit/loss for the nine months ended September 30, 2009 was $0.
The Company’s gross profit/loss for the nine months ended September 30, 2008 was
$0.  No gross profit/loss occurred during these periods, because no
there were no product sales.




Executive, Marketing and Promotion
Expenses.  Executive, marketing and promotion expenses for the
nine months ended September 30, 2009 were $3,080 compared to $0 for the nine
months ended September 30, 2008.  Executive, marketing and promotional
expenses consist of salary expense in 2009.  We expect our executive,
selling and marketing expenses to increase in the future due to an increase in
direct expenses related to executive compensation, sales and marketing,
including increases to salaries to personnel in marketing and business
development, as well as increased bonus payments and sales commissions on our
revenues.




General and Administrative
Expenses. General and administrative expenses for the nine months ended
September 30, 2009 were $38,774 compared to $18,206 for the nine months ended
September 30, 2008.  General and administrative expenses consisted
primarily of professional service fees associated with the Company’s initial
public offering, stock compensation expense and amortization of a
license.




Net Loss. Net loss for the
nine months ended September 30, 2009 was $38,774 as compared to $18,206 for the
nine months ended September 30, 2008.  The net loss for the nine
months ended September 30, 2009 and September 30, 2008 was primarily related to
general and administrative expenses and no revenues for the periods
indicated.





As of
nine months ended September 30, 2009, we had an accumulated deficit of
$61,206.





Results
for the Quarter Ended September 30, 2009 Compared to September 30,
2008






Revenues. The Company’s
revenues for the three months ended September 30, 2009 were $0. The Company’s
revenues for the three months ended September 30, 2008 were $0.  No
revenues occurred during these periods, because no there were no product
sales.




Cost of
Revenues.The Company’s cost of revenues for the three months
ended September 30, 2009 were $0. The Company’s cost of revenues for the three
months ended September 30, 2008 were $0.  There was not cost of
revenues, because no product sales were made by the Company.




Gross Profit/Loss. The
Company’s gross profit/loss for the three months ended September 30, 2009 was
$0. The Company’s gross profit/loss for the three months ended September 30,
2008 was $0.  No gross profit/loss occurred during these periods,
because no there were no product sales.




Executive, Marketing and Promotion
Expenses.  Executive, marketing and promotion expenses for the
three months ended September 30, 2009 were $2,000 compared to $0 for the three
months ended September 30, 2008.  Executive, marketing and promotional
expenses consist of salary expense in 2009.  We expect our executive,
selling and marketing expenses to increase in the future due to an increase in
direct expenses related to executive compensation, sales and marketing,
including increases to salaries to personnel in marketing and business
development, as well as increased bonus payments and sales commissions on our
revenues.




General and Administrative
Expenses. General and administrative expenses for the three months ended
September 30, 2009 were $6,812 compared to $8,815 for the three months ended
September 30, 2008. General and administrative expenses consisted primarily of
professional service fees associated with the Company its initial public
offering, stock compensation expense and amortization of a license.




Net Loss. Net loss for the
three months ended September 30, 2009 was $6,812 as compared to $7,704 for the
three months ended September 30, 2008.  The net loss for the three
months ended September 30, 2009 and September 30, 2008 was primarily related to
general and administrative expenses and no revenues for the periods
indicated.





-14-


Impact
of Inflation




We
believe that the rate of inflation has had negligible effect on our
operations.  We believe we can absorb most, if not all, increased
non-controlled operating costs by increasing sales prices, whenever deemed
necessary and by operating our Company in the most efficient manner
possible.





Liquidity
and Capital Resources


The
ability of the Company to continue as a going concern is dependent on the
Company’s ability to raise additional capital and implement its business plan.
Since its inception, the Company has been funded by its founders and through its
initial public offering.





As of
September 30, 2009, total current assets were $26,741 which consisted of $26,339
of cash and $402 of inventory.  As of December 31, 2008, total current
assets were $67,015 which consisted of $66,613 of cash and $402 of
inventory.





As of
September 30, 2009, total current liabilities were $450, which consisted of
accounts payable.  As of December 31, 2008, total current liabilities
were $6,051, which consisted of accounts payable.  We had net working
capital of $26,291 as of September 30, 2009, compared to net working capital of
$60,964 as of December 31, 2008.





During
the nine months ended September 30, 2009, operating activities used cash of
$40,274 as compared to the nine months ended September 30, 2008, where we used
cash of $9,796 in operating activities.  The cash used by operating
activities for the nine months ended September 30, 2009 and September 30, 2008
was due primarily to general and administrative expenses.





For the
nine months ended September 30, 2009, we had a net decrease in cash of $(40,274)
as compared to $(10,291) for the nine months ended September 30, 2008. Cash
flows from financing activities represented the Company’s principal source of
cash since October 4, 2007 (inception) through September 30, 2009.




We
acquired certain equipment during the nine month period ended September 30, 2008
in the amount of $495.





Intangible
Assets





Intangible
assets consist of a license agreement, which is recorded at cost and amortized
over a straight-line basis.  The amortization expense for the nine
month period ended September 30, 2009 and December 31, 2008 was $180 and $240,
respectively.  The value of the license was determined to be the legal
costs to create the license, which was $1,200 and less amortization expense, it
was valued at $720 as of September 30, 2009 and $900 as of December 31,
2008.





The
Company evaluates the recoverability of identifiable intangible assets whenever
events or changes in circumstances indicate that an intangible asset’s carrying
amount may not be recoverable. There was no impairment loss for the nine month
periods ended September 30, 2009 and September 30, 2008.





Material
Commitments





There
were no material commitments during the nine month periods ended September 30,
2009 and September 30, 2008.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements or any anticipate entering into any
off-balance 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.




Recent
Accounting Pronouncements





FASB
Accounting Standards Codification





-15-


(Accounting
Standards Update (“ASU”) 2009-01)





In
June 2009, FASB approved the FASB Accounting Standards Codification (“the
Codification”) as the single source of authoritative nongovernmental GAAP. All
existing accounting standard documents, such as FASB, American Institute of
Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the Securities and Exchange Commission
(“SEC”), have been superseded by the Codification. All other non-grandfathered,
non-SEC accounting literature not included in the Codification has become
nonauthoritative. The Codification did not change GAAP, but instead introduced a
new structure that combines all authoritative standards into a comprehensive,
topically organized online database. The Codification is effective for interim
or annual periods ending after September 15, 2009, and impacts the
Company’s financial statements as all future references to authoritative
accounting literature will be referenced in accordance with the Codification.
There have been no changes to the content of the Company’s financial statements
or disclosures as a result of implementing the Codification during the quarter
ended September 30, 2009.   As a result of the Company’s
implementation of the Codification during the quarter ended September 30, 2009,
previous references to new accounting standards and literature are no longer
applicable. In the current quarter financial statements, the Company will
provide reference to both new and old guidance to assist in understanding the
impacts of recently adopted accounting literature, particularly for guidance
adopted since the beginning of the current fiscal year but prior to the
Codification.





Subsequent
Events





(Included
in Accounting Standards Codification (“ASC”) 855 “Subsequent Events”, previously
SFAS No. 165 “Subsequent Events”)





SFAS
No. 165 established general standards of accounting for and disclosure of
events that occur after the balance sheet date, but before the financial
statements are issued or available to be issued (“subsequent events”). An entity
is required to disclose the date through which subsequent events have been
evaluated and the basis for that date. For public entities, this is the date the
financial statements are issued. SFAS No. 165 does not apply to subsequent
events or transactions that are within the scope of other GAAP and did not
result in significant changes in the subsequent events reported by the Company.
SFAS No. 165 became effective for interim or annual periods ending after
June 15, 2009 and did not impact the Company’s financial statements. The
Company evaluated for subsequent events through the issuance date of the
Company’s financial statements. No recognized or non-recognized subsequent
events were noted.





Determination
of the Useful Life of Intangible Assets





(Included
in ASC 350 “Intangibles – Goodwill and Other”, previously FSP SFAS No. 142-3
“Determination of the Useful Lives of Intangible Assets”)





FSP SFAS
No. 142-3 amended the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under previously issued goodwill and intangible
assets topics. This change was intended to improve the consistency between the
useful life of a recognized intangible asset and the period of expected cash
flows used to measure the fair value of the asset under topics related to
business combinations and other GAAP. The requirement for determining useful
lives must be applied prospectively to intangible assets acquired after the
effective date and the disclosure requirements must be applied prospectively to
all intangible assets recognized as of, and subsequent to, the effective date.
FSP SFAS No. 142-3 became effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the
Company’s financial statements.





Noncontrolling
Interests





(Included
in ASC 810 “Consolidation”, previously SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements an amendment of ARB No. 51”)





SFAS
No. 160 changed the accounting and reporting for minority interests such
that they will be recharacterized as noncontrolling interests and classified as
a component of equity. SFAS No. 160 became effective for fiscal years
beginning after December 15, 2008 with early application prohibited. The
Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer
records an intangible asset when the purchase price of a noncontrolling interest
exceeds the book value at the time of buyout. Any excess or shortfall for
buyouts of noncontrolling interests in mature restaurants is recognized as an
adjustment to additional paid-in capital in stockholders’ equity. Any shortfall
resulting from the early buyout of noncontrolling interests will continue to be
recognized as a benefit in partner investment expense up to the initial amount
recognized at the time of buy-in. Additionally, operating losses can be
allocated to noncontrolling interests even when such allocation results in a
deficit balance (i.e.,
book value can go negative).  The Company presents noncontrolling
interests (previously shown as minority interest) as a component of equity on
its consolidated balance sheets. Minority interest expense is no longer
separately reported as a reduction to net income on the consolidated income
statement, but is instead shown below net income under the heading “net income
attributable to noncontrolling interests.” The adoption of SFAS No. 160 did
not have any other material impact on the Company’s financial
statements.





Consolidation
of Variable Interest Entities – Amended





-16-


(To be
included in ASC 810 “Consolidation”, SFAS No. 167 “Amendments to FASB
Interpretation No. 46(R)”)





SFAS
No. 167 amends FASB Interpretation No. 46(R) “Consolidation of
Variable Interest Entities regarding certain guidance for determining whether an
entity is a variable interest entity and modifies the methods allowed for
determining the primary beneficiary of a variable interest entity. The
amendments include: (1) the elimination of the exemption for qualifying
special purpose entities, (2) a new approach for determining who should
consolidate a variable-interest entity, and (3) changes to when it is
necessary to reassess who should consolidate a variable-interest entity. SFAS
No. 167 is effective for the first annual reporting period beginning after
November 15, 2009, with earlier adoption prohibited. The Company will adopt
SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on
the Company’s financial statements.





Management
does not believe that any other recently issued, but not yet effective,
accounting standards or pronouncements, if currently adopted, would have a
material effect on the Company’s financial statements.





Item 3. Quantitative and
Qualitative Disclosures About Market Risk




We are
not subject to risks related to foreign currency exchange rate
fluctuations.  Our functional currency is the United States dollar. We
do not transact our business in other currencies. As a result, we are not
subject to exposure from movements in foreign currency exchange rates. We do not
use derivative financial instruments for speculative trading
purposes.




Item
4.  Controls and Procedures





We
maintain disclosure controls and procedures that are designed to ensure that the
information required to be disclosed in the reports that we file under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms,
and that such information is accumulated and communicated to our management,
including our President and Treasurer, as appropriate, to allow timely decisions
regarding required disclosures.  In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can only provide
reasonable assurance of achieving the desired control objectives, and in
reaching a reasonable level of assurance, management necessarily was required to
apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures.





As
required by SEC Rule 13a-15(b), we carried out an evaluation, under the
supervision and with the participation of our management, including our
President and Treasurer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of our first fiscal quarter
covered by this report. Based on the foregoing, our President and Treasurer
concluded that our disclosure controls and procedures were effective at the
reasonable assurance level.





There has
been no change in our internal controls over financial reporting during our
first fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.





Management’s
Report on Internal Control over Financial Reporting





The
management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting.  Internal control
over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated
under the Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the Company’s principal executive and financial officers and
effected by the Company’s board of directors, management and other personnel, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and
procedures that:





·
            Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;





·
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the Company
      are being made only in accordance with authorizations of management and
      directors of the Company; and





·
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.


-17-





The
Company’s management assessed the effectiveness of the Company’s internal
control over financial reporting as of September 30, 2009.  In making
this assessment, the Company’s management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in
Internal Control-Integrated Framework.  The COSO framework is based
upon five integrated components of control: control environment, risk
assessment, control activities, information and communications and ongoing
monitoring.





Based on
the assessment performed, management has concluded that the Company’s internal
control over financial reporting is effective and provides reasonable assurance
regarding the reliability of its financial reporting and the preparation of its
financial statements as of September 30, 2009 in accordance with generally
accepted accounting principles.  Further, management has not
identified any material weaknesses in internal control over financial reporting
as of September 30, 2009.





This
quarterly report does not include an attestation report of the Company’s
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management’s report in this annual report.





/s/
Michel Lemoine


President,
Secretary, Treasurer and Director


-18-











PART
II OTHER INFORMATION





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





Unregistered
Sales of Equity Securities





There were no
unregistered sales of equity securities by us during the three months endedSeptember 30,
2009.





Use
of Proceeds from Initial Public Offering





On
October 2, 2008, we commenced an initial public offering of 50,000 shares of our
Series A Convertible Preferred Stock pursuant to our Form S-1 Registration
Statement ( No. 333-150751), which was declared effective by the SEC on such
date.  Each share of Series A Convertible Preferred Stock was
convertible into 260 shares of Common Stock.  Of the 50,000 shares of
Series A Convertible Preferred Stock that were offered, 6,780 shares were sold
at an offering price of $10.00 per share and generated gross proceeds of
$67,800.  Such offering was made directly to the public by us without
the assistance of any underwriters, brokers or dealers.  The proceeds
of the offering in the amount of $67,800 were deposited in our non-interest
bearing bank account, and have been used by us in the business, as of September
30, 2009, as follows:


Marketing,
      Promotion and Advertising
            
            $
            4,256Printing
      expenses
            
            
            7,133Executive
      Compensation
            
            
            3,080Legal
      fees and expenses
            
            
            16,382Accounting
      fees and expenses
            
            
            9,100Blue
      sky fees and expenses
            
            
            1,292Transfer
      Agent fees
            
            
            5,461Miscellaneous
            
            
            1,385Total
            
            $
            48,089


Other
than executive compensation paid to our Chief Executive Officer, President,
Secretary and Treasurer in the amount of $3,080, no cash payments were made to
the directors or officers of the Company or associates or affiliates of the
Company from the proceeds of our initial public offering.





Item
6.  Exhibits




(a)                 Exhibits




Exhibit
31.1      302
Certification – Michel Lemoine


Exhibit
32.1      906
Certification – Michel Lemoine
 -19-





SIGNATURES







Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.








DRAGON’S
LAIR HOLDINGS, INC.








DATE:  November
16,
2009                                                                 By:/s/ Michel
Lemoine


Michel
Lemoine


President,
Secretary and Treasurer


(Principal
Accounting Officer and Authorized Officer)


-20-


Dragon’s
Lair Holdings, Inc.





Index to
Exhibits





Exhibit


Number             Description


Exhibit
31.1      302
Certification – Michel Lemoine
 Exhibit
32.1      906
Certification – Michel Lemoine
 -21-