UNITED STATES


SECURITIES
AND EXCHANGE COMMISSION
 Washington, D.C.
20549
  FORM
10-Q
  [X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
1934:
  For
the Quarterly Period ended June 30, 2008
  [  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE
ACT
  For the
transition period from __________________ to __________________
 
 Commission
File Number: 000-53272
 
 MURALS BY MAURICE,
INC.
  (Exact
name of registrant as specified in its charter)
 
 Florida
              20-8565429(State
      or other jurisdiction of
              (IRS
      Employer Identification No.)incorporation
      or organization)
  295
Northwest 89th Avenue
 Coral Springs, Florida
33071
 (Address
of principal executive offices)
 
 (954)
701-1132
 (Issuer's
telephone number)
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act 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
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
  Large
accelerated filer [
]                                                                           Accelerated
filer   [ ]
  Non-accelerated
filer  [
]                                                                           Smaller
Reporting Company [X]
 
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [  ] No [X]
 
 Number of
shares of common stock outstanding as of August 14, 2008: 8,892,500
 Number of
shares of preferred stock outstanding as of August 14, 2008: None
  CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION
  The
discussion contained in this 10-Q under the Securities Exchange Act of 1934, as
amended, contains forward-looking statements that involve risks and
uncertainties. The issuer's actual results could differ significantly from those
discussed herein. These include statements about our expectations, beliefs,
intentions or strategies for the future, which we indicate by words or phrases
such as "anticipate," "expect," "intend," "plan," "will," "we believe," "the
Company believes," "management believes" and similar language, including those
set forth in the discussions under "Notes to Financial Statements" and
"Management's Discussion and Analysis or Plan of Operation" as well as those
discussed elsewhere in this Form 10-Q. We base our forward-looking statements on
information currently available to us, and we assume no obligation to update
them. Statements contained in this Form 10-Q that are not historical facts are
forward-looking statements that are subject to the "safe harbor" created by the
Private Securities Litigation Reform Act of 1995.
 
 
  1
  TABLE OF
      CONTENTSPART
      I. FINANCIAL INFORMATIONITEM 1.FINANCIAL
      STATEMENTS
              3ITEM 2.MANAGEMENT'S DISCUSSION AND
      ANALYSIS OR PLAN OF OPERATION
              9ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUTMARKET
RISK
              
              
              12ITEM 4.CONTROLS AND
      PROCEDURES
              12PART
      II. OTHER INFORMATIONITEM 1.LEGAL
      PROCEEDINGS
              14ITEM 2.CHANGES IN SECURITIES AND USE OF
      PROCEEDS
              14ITEM
      3. DEFAULTS UPON SENIOR SECURITIES
              14ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              14ITEM 5.OTHER
      INFORMATION
              14ITEM 6.EXHIBITS AND REPORTS ON FORM
      8-K
              14SIGNATURES
              15INDEX TO
      EXHIBITS
              22
  2
 Table
of Contents
 
 ITEM 1. FINANCIAL STATEMENTS
 
 
 INDEX
      TO INTERIM FINANCIAL STATEMENTSPageUnaudited
      Condensed Consolidated Balance Sheets as of June 30, 2008 and December 31,
      2007
              F-4Unaudited
      Condensed Consolidated Statements of Operations - For the Three and Six
      Months Ended June 30, 2008 and 2007
              F-5Unaudited
      Condensed Consolidated Statements of Cash Flows - For the Six
                Months
      Ended June 30, 2008 and 2007
              F-6Notes
      to Unaudited Condensed Consolidated Financial Statements
              F-7-8
  3
 Table
of Contents
  Murals by Maurice, Inc.Balance
      SheetsAs
      of June 30, 2008 (unaudited) and December 31, 20072008
              
              
              2007ASSETSCURRENT
      ASSETS:Cash
              
              $
              327
              
              
              $
              944TOTAL
      CURRENT ASSETS
              
              
              327
              
              
              
              944FIXED
      ASSETS:Equipment
              
              
              9,720
              
              
              
              9,720Accumulated
      depreciation
              
              
              (2,592
              )
              
              
              (1,620
              )TOTAL
      FIXED ASSETS
              
              
              7,128
              
              
              
              8,100TOTAL
      ASSETS
              
              $
              7,455
              
              
              $
              9,044LIABILITIESANDSTOCKHOLDERS'
      DEFICITAccounts
      payable
              
              $
              6,000
              
              
              $
              0TOTAL
      LIABILITIES
              
              $
              6,000
              
              
              $
              0STOCKHOLDERS'
      DEFICITPreferred
      stock ($0.001 par value; 5,000,000 shares authorized:none
      issued and outstanding )
              
              $
              0
              
              
              $
              0Common
      stock ($0.001 par value; 100,000,000 shares authorized;8,892,500
      shares issued and outstanding)
              
              
              8,893
              
              
              
              8,893Paid
      in Capital
              
              
              147,527
              
              
              
              147,527Shareholder
      Distribution
              
              
              0
              
              
              
              (5,892
              )Retained
      Deficit
              
              
              (154,965
              )
              
              
              (141,484
              )TOTAL
      STOCKHOLDERS' DEFICIT
              
              
              1,455
              
              
              
              9,044TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              7,455
              
              
              $
              9,044
  The
accompanying notes are an integral part of these financial
statements.
 
 4
 Table
of Contents
  Murals
      By Maurice, Inc.Statements
      of Operations (Unaudited)For
      the Three and Six Months Ended June 30, 2008 and 2007*Three
      months
              
              
              Three
      months
              
              
              Six
      months
              
              
              Six
      months2008
              
              
              2007
              
              
              2008
              
              
              2007REVENUES:Income
              
              $
              2,625
              
              
              $
              3,750
              
              
              $
              7,245
              
              
              $
              9,870Cost
      of sales
              
              
              (974
              )
              
              
              0
              
              
              
              (974
              )
              
              
              0Gross
      profit
              
              
              1,651
              
              
              
              3,750
              
              
              $
              6,271
              
              
              $
              9,870EXPENSES:Professional
      Fees
              
              $
              3,000
              
              
              
              0
              
              
              $
              6,000
              
              
              
              0Stock
      Issued for Services
              
              
              0
              
              
              
              118,200
              
              
              
              0
              
              
              
              118,200Selling,
      General, and Administrative
              
              
              2,214
              
              
              
              4,200
              
              
              
              7,860
              
              
              
              8,900Total
      Expenses
              
              
              5,214
              
              
              
              122,400
              
              
              
              13,860
              
              
              
              127,100Loss
      from operations
              
              $
              (3,563
              )
              
              $
              (118,650
              )
              
              $
              (7,589
              )
              
              $
              (117,230
              )Provision
      for income taxes
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0NET
      LOSS
              
              $
              (3,563
              )
              
              $
              (118,650
              )
              
              $
              (7,589
              )
              
              $
              (117,230
              )Basic
      and fully diluted net loss per common share:
              
              $
              
              **
              
              $
              
              **
              
              $
              
              **
              
              $
              
              **Weighted
      average common shares outstanding
              
              
              8,892,500
              
              
              
              8,200,000
              
              
              
              8,892,500
              
              
              
              8,200,000
 
 *
Inception was January 11, 2007
 
 ** Less
than $.01 per share
  The
accompanying notes are an integral part of these financial
statements.
  5
 Table
of Contents
  Murals by Maurice, Inc.Statement
      of Cash Flows (Unaudited)For
      Six Months Ended June 30, 2008 and 2007*2008
              
              
              2007CASHFLOWS FROM
      OPERATING ACTIVITIES:Net
      loss
              
              $
              (7,589
              )
              
              $
              (117,230
              )Adjustments
      to reconcile net loss to net cash provided
                by
      (used in)  operating activities:Depreciation
              
              
              972
              
              
              
              285Value
      of Shares Issued for consulting services
              
              
              -
              
              
              
              118,200Increase
      in accounts payable
              
              
              6,000
              
              
              
              1,000NET CASH
      PROVIDED BY (USED IN)
                OPERATING
      ACTIVITIES
              
              
              (617
              )
              
              
              2,255NET
      INCREASE (DECREASE) IN CASH AND
                CASH
      EQUIVALENTS
              
              
              (617
              )
              
              
              2,255CASH AND CASH
      EQUIVALENTS,BEGINNING
      BALANCE
              
              
              944
              
              
              
              -ENDING
      BALANCE
              
              $
              327
              
              
              $
              2,255SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW
                INFORMATION:CASH
      PAID DURING THE PERIOD FOR:Interest
              
              $
              -
              
              
              $
              -Taxes
              
              $
              -
              
              
              $
              -NON
      CASH PAID DURING THE PERIOD FOR:Stock
      Issued for Consulting Services
              
              $
              -
              
              
              $
              118,200
 
 *
Inception was January 11, 2007
  The
accompanying notes are an integral part of these financial
statements.
  6
 Table
of Contents
 
  MURALS
BY MAURICE, INC.
 NOTES
TO THE FINANCIAL STATEMENTS
  June
30, 2008
  NOTE A—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Business
Activity—Murals by Maurice, Inc. (“The Company”) was organized under the
laws of the State of Florida on January 11, 2007 as a
corporation.  The Company’s business is to create artwork in the form
of murals, canvas painting, trompe l’oeil, faux and various other media in
churches, businesses, temples, schools, and private homes.  The
Company’s objective is to transform the owner’s passion and creative talent into
a completed project that will meet or beat the client’s greatest
expectation.
 
 Basis of
Presentation—The financial statements included herein were prepared under
the accrual basis of accounting.
 
 Cash and Cash
Equivalents—For purposes of the Statement of Cash Flows, the Company
considers liquid investments with an original maturity of three months or less
to be cash equivalents.
 
 Management’s Use of
Estimates—The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results
could differ from those estimates.  The financial statements above
reflect all of the costs of doing business.
 
 Revenue Recognition—
We recognize revenue when it is earned which occurs when (i) the product is
physically received by the customer, (ii) an invoice is generated which
evidences an arrangement between the customer and us, (iii) a fixed sales price
has been included in such invoice and (iv) collection from such customer is
probable.
 
 Comprehensive Income
(Loss)—The Company adopted Financial Accounting Standards Board Statement
of Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income”, which establishes standards for the reporting and display of
comprehensive income and its components in the  financial
statements.  There were no items of comprehensive income (loss)
applicable to the Company during the period covered in the financial
statements.
 
 Net Income per Common
Share—Statement of Financial Accounting Standard (SFAS) No. 128 requires
dual presentation of basic and diluted earnings per share (EPS) with a
reconciliation of the numerator and denominator of the EPS
computations.  Basic earnings per share amounts are based on the
weighted average shares of common stock outstanding.  If applicable,
diluted earnings per share would assume the conversion, exercise or issuance of
all potential common stock instruments such as options, warrants and convertible
securities, unless the effect is to reduce a loss or increase earnings per
share.  Accordingly, this presentation has been adopted for the period
presented.  There were no adjustments required to net income for the
period presented in the computation of diluted earnings per share.
 
 Deferred Taxes—Income
taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS No. 109), “Accounting for Income
Taxes.” A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating loss-carry
forwards.
 
 Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that, some portion or all of the deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
 
 Fair Value of Financial
Instruments—The carrying amounts reported in the balance sheet for cash,
accounts receivable and payable approximate fair value based on the short-term
maturity of these instruments.
 
 Accounts
Receivable—Accounts deemed uncollectible are written off in the year they
become uncollectible.  As of June 30, 2008 the balance in Accounts
Receivable was $0.
 
 Impairment of Long-Lived
Assets—The Company evaluates the recoverability of its fixed assets and
other assets in accordance with Statement of Financial Accounting Standards No.
144, “Accounting for the
Impairment or Disposal of Long-Lived Assets” (“SFAS 144’). SFAS 144
requires recognition of impairment of long-lived assets in the event the net
book value of such assets exceeds its expected cash flows, it is considered to
be impaired and is written down to fair value, which is determined based on
either discounted future cash flows or appraised values. The Company adopted the
statement on inception. No impairments of these types of assets were recognized
during the period ended March 31, 2008.
 
 Stock-Based
Compensation—The Company accounts for stock-based compensation using the
fair value method of Financial Accounting Standard No. 123R.  This
Statement requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments based on the grant-date
fair value of the award (with limited exceptions).  That cost will be
recognized over the period during which an employee is required to provide
service in exchange for the award—the requisite service period (usually the
vesting period).  No compensation cost is recognized for equity
instruments for which employees do not render the requisite
service.
 
 Recent Accounting
Pronouncements—In February 2007, the FASB issued Statement of Financial
Accounting Standards No. 159, “The Fair Value for Financial Assets and Financial
Liabilities—including an amendment of FASB Statement No. 115”.  This
statement permits entities to choose to measure many financial instruments and
certain other items at value.  The objective is to improve financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions.  This
Statement is expected to expand the use of fair value measurement, which is
consistent with the Board’s long-term measurement objectives for accounting for
financial instruments.  Effective as of the beginning of an entity’s
first fiscal year that begins after November 15, 2007. Early adoption is
permitted as of the beginning of a fiscal year that begins on or before November
15, 2007, provided the entity also elects to apply the provisions of FASB
Statement No. 157, Fair Value
Measurements. No entity is permitted to apply the Statement
retrospectively to fiscal years preceding the effective date unless the entity
chooses early adoption. The choice to adopt early should be made after issuance
of the Statement but within 120 days of the beginning of the fiscal year of
adoption, provided the entity has not yet issued financial statements, including
required notes to those financial statements, for any interim period of the
fiscal year of adoption.
  Early
adoption of this standard is not expected to have a material effect on the
Company’s results of operations or its financial position, but the Company is
evaluating the Statement to determine what impact, if any, it will have on the
Company.
 
 In
December 2007, the FASB revised Statement of Financial Accounting Standards No.
141, “Business Combinations”.  The objective of this Statement is to
improve the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial reports about a
business combination and its effects.  The Statement establishes
principles and requirements for how the acquirer:
  a.
              Recognizes
      and measures in its financial statements the identifiable assets acquired,
      the liabilities assumed, and any noncontrolling interest in the
      acquiree.
  b.
              Recognizes
      and measures the goodwill acquired in the business combination or a gain
      from a bargain purchase.
  c.
              Determines
      what information to disclose to enable users of the financial statements
      to evaluate the nature and financial effects of the business
      combination.
 
 This
Statement is effective for business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008.  The adoption of this standard is not
expected to have a material effect on the Company’s results of operations or
financial position.
  7
 Table
of Contents
 MURALS
BY MAURICE, INC.
 NOTES
TO THE FINANCIAL STATEMENTS
  June
30, 2008
 
 Recent Accounting
Pronouncements (cont’d)
  In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment
of ARB No. 51”.  The objective of this Statement is to improve the
relevance, comparability, and transparency of the financial information that a
reporting entity provides in its consolidated financial statements by
establishing accounting and reporting standards that require:
 
 Ø
              The
      ownership interests in subsidiaries held by parties other than the parent
      be clearly identified, labeled, and presented in the consolidated
      statement of financial position within equity, but separate from the
      parent’s equity.
  Ø
              The
      amount of consolidated net income attributable to the parent and to the
      noncontrolling interest be clearly identified and presented on the face of
      the consolidated statement of
income.
  Ø
              Changes
      in a parent’s ownership interest while the parent retains its controlling
      financial interest in its subsidiary are accounted for
      consistently.
  Ø
              The
      gain or loss on the deconsolidation of the subsidiary is measured using
      the fair value of any noncontroling equity investment rather than the
      carrying amount of that retained
investment.
  Ø
              Entities
      provide sufficient disclosures that clearly identify and distinguish
      between the interests of the parent and the interests of the
      noncontrolling owners.
 
 This
statement is effective for annual periods beginning after December 15,
2008.  The adoption of this standard is not expected to have a
material effect on the Company’s results of operations or financial
position.
 
 NOTE B—SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the year ended June 30, 2008 are
summarized as follows:
 
 Cash paid
during the year ended June 30, 2008 for interest and income taxes:
 
 
 Income
Taxes                            $
---
 Interest                               
      $ ---
 
 NOTE C—SEGMENT
REPORTING
 
 In June
1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 131, “Disclosures about Segments of an
Enterprise and Related Information.”  This statement requires
companies to report information about operating segments in interim and annual
financial statements.  It also requires segment disclosures about
products and services, geographic areas and major customers.  The
Company determined that it did not have any separately reportable operating
segments as of June 30, 2008.
 
 NOTE D—INCOME
TAXES
 
 Due to
the operating loss and the inability to recognize an income tax benefit, there
is no provision for current or deferred federal or state income taxes for year
ended June 30, 2008.
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.
 
 The
Company’s total deferred tax asset, calculated using federal and state effective
tax rates, as of June 30, 2008 is as follows:
  Total
      Deferred Tax Asset
              
              $
              (56,577
              )Valuation
      Allowance
              
              
              56,577Net
      Deferred Tax Asset
              
              $
              -
 
 The
reconciliation of income taxes computed at the federal statutory income tax rate
to total income taxes for year ended June 30, 2008 is as follows:
 
 
 2008Income
      tax computed at the federal statutory rate
              
              
              34.0
              %State
      income tax, net of federal tax benefit
              
              
              5.5
              %Total
              
              
              39.5
              %Valuation
      allowance
              
              
              -39.5
              %Total
      deferred tax asset
              
              
              0.0
              %
 
 Because
of the Company’s lack of earnings history, the deferred tax asset has been fully
offset by a valuation allowance.  The valuation allowance increased
(decreased) by approximately $1,434.
 
 As of
December 31, 2007, the Company had a federal and state net operating loss carry
forward in the amount of approximately $141,484, which expires in the year
2027.
  NOTE E—GOING
CONCERN
 
 As shown
in the accompanying audited financial statements, the Company has suffered a
loss from operations to date. It has experienced a loss of $154,965 since
inception and has a negative working of capital. These factors raise substantial
doubt about the Company’s ability to continue as a going concern.
 
 Management’s
plans in regard to this matter are to raise equity capital and seek strategic
relationships and alliances in order to increase sales in an effort to generate
positive cash flow.  Additionally, the Company must continue to rely
upon equity infusions from investors in order to improve liquidity and sustain
operations.  The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
 
 NOTE
F—COMMITMENTS
 
 As of
June 30, 2008, the Company had no commitments.
 
 NOTE G—CAPITAL
STOCK
 
 The
Company is authorized to issue 100,000,000 common shares at $.001 par value per
share. The Company did not issue any common stock during the
period.
 
 The
Company is authorized to issue 5,000,000 preferred shares at $.001 par value per
share.  The Company did not issue any preferred stock during the
period.
 
 8
 Table
of Contents
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
  GENERAL DESCRIPTION OF
BUSINESS
 
 Murals By Maurice, Inc.
(www.muralsbymaurice.com)
is an existing business in Coral Springs, Florida.  Since the Company
began full-time operations in 1999, it has been providing mural painting
services that cater to customer needs and budgets. The Company was incorporated
under the laws of the state of Florida on January 11, 2007, and it continues to
specialize in mural painting.  Its primary focus is to increase its
sales growth in the Coral Springs area and beyond through the sale of custom
murals and art designs.
 
 The
company will strive in the art industry to nurture the best practices, talent of
personnel, and customer service and share them broadly to create value for our
customers, shareholders, partners and employees. We continue to explore
opportunities that will result in continued growth including new potential
ventures of selling art online and offering art classes.
  Murals
By Maurice, Inc. will promote our products and services primarily through print
and online advertisements, word-of-mouth advertisements, and referrals, and will
concentrate on building a distribution network for internet sales. Our target
market includes homeowners, organizations, businesses, schools, medical offices,
hospitals, and churches. Our industry experience has allowed us to identify
target markets that will be receptive to our proprietary products and concepts
while allowing the quickest market penetration with as minimal competition as
possible.
 
 Business
of Issuer
  Products
and Services
  Creative, skilled
craftsman.With
eight years of mural painting experience and over six years of experience in the
mural painting industry, Maurice Katz is a talented artist capable of turning a
client’s imagination into a work of art.
 
 Mural size variations from small to
large.Mr.
Katz has successfully painted a wide variety of works from small canvas projects
to projects as large as 2,000 square feet.  No job is too small or too
large.
 
 Wide array of mural options and
choices. With a large portfolio of completed murals to pursue,
customers have a wide array of mural options and choices.
  Our
Business Model
 
 The
Company plans to attract new customers in a variety of ways.  These
include aggressively advertising through newspaper ads and a variety of
magazines; building relationships with local interior design businesses,
architects and builders; building relationships with local painting contractors;
building relationships with local businesses and medical facilities;
word-of-mouth advertising through quality workmanship and personalized customer
service; and focused advertising on the Internet to allow the Company to gain
exposure on a larger scale.
 
 Strategy
and Implementation Summary
 
 We will
watch our results very carefully. Believing that a business opportunity exists
is important. However, we will not pursue a business model if we cannot afford
to be in that business. We will strategically focus on developing relationships
with customers and other businesses as well as aggressively advertising. Our
business strategy is to  quickly and aggressively build our brand
awareness, expand our growth, and provide unmatchable high quality craftsmanship
and service.
 
 Sales
Strategy
 
 Our
strategy focuses first on establishing relationships with customers and other
professionals.  By maintaining strong relationships fostered from
previous business relationships, we have an existing list of prominent contacts
that we can continually approach with new and innovative ideas. We will focus on
capitalizing the relationships and industry contacts we have established in the
past.
 
 Promotion
and Marketing Strategy
 
 Murals By
Maurice, Inc. will sell its products through print and online marketing
campaigns. The personnel will interact with customers and other businesses to
foster relationships that will lead to referrals. Murals By Maurice,
Inc. will pursue a growth strategy, which includes expanding the product
line to include art classes and expanding the geographic boundaries of the
Company beyond the Coral Springs, Florida area through the use of Internet
marketing.
 
 Strengthen Our Customer
Relationships. We plan to strengthen our existing customer
relationships and build new customer relationships through a personalized
service approach.  By maintaining 100% customer satisfaction, we will
position ourselves for word-of-mouth advertising and referrals.
 
 Strengthen Our Business
Relationships. We plan to strengthen our existing business
relationships and build new relationships with interior architects, designers,
and builders.  We will establish a network for referral business and
reach a larger customer base. Where appropriate, we intend to enter new markets
to leverage our expertise, brand, and portfolio.
  Expand Use of Alternative Sales and
Marketing Channels. We intend to expand our use of alternative
channels to market and sell our products and services. For example, we plan to
continuously improve and update our website to provide customers with the latest
information and to provide an avenue for online sales. Our own Internet sites,
portals, and online brands will enable us to market and sell our products
directly to online consumers.
 
 Expand Our Global
Presence.By
selling art online, we will expand beyond the Coral Springs, Florida
area.
 
 Experienced Management.Our
President and CEO has eight years of mural painting experience and over six
years of experience in the mural painting industry. We believe his expertise,
high quality craftsmanship, and continuity are significant competitive
advantages in the mural painting industry.
  9
 Table
of Contents
  Strategy
 
 In
order to maximize market share and increase profitability, we believe it is
important to offer a broad portfolio of artwork for all customer segments that
are adaptable to individual client needs. We intend to do this by executing on
the following strategies:
  Expand
market share
  We
believe that we can grow overall market share in our industry by updating and
expanding our website to sell art online. By selling art online, we expand our
customer base.
 
 We also
believe that we can expand our market share by building our brand
awareness.
  Increase
sales and profits from current mass-market opportunities
  We have
worked to grow and diversify our products and services targeted at the
mass-market by offering a wide array of quality mural selections, which will
allow us to continue to leverage our brand with both new products and through
the catalog of existing products. In order to increase sales and profits from
current pieces, our goal is to continue painting high quality pieces and market
them aggressively.
  Product
Development
 
 We
develop our products using a variety of techniques. We make the decision as to
which technique to use based upon the needs and imaginations of the
clients.  We offer both mural and canvas paintings.  In addition,
we are skilled in the techniques of trompe l’oeil and faux.  For
clients whose needs and imaginations include a three dimensional rendering in a
two dimensional plane, using realistic imagery that is the object of trompe
l’oeil provides that feeling.  For clients who need and imagine an
appearance of texture such as marble, wood, or simply some other decorative
finish on their paintings, faux painting creates that effect.  We
develop our murals with the appropriate techniques to fit the unique visions of
each individual customer
  Marketing
and Sales
 
 We plan
to attract new customers through a marketing strategy that consists of various
forms of aggressive advertising.  The strategy includes aggressive
advertisements in newspapers and various magazines as well as at trade and home
shows.  By aggressively advertising in these arenas, we will promote
and build our brand name.
 
 In
addition, the strategy includes building relationships with interior design
businesses, architects, builders, and painting contractors.  By
building these relationships, we are creating awareness about the Company and
pursuing referrals.  We also aim to build relationships with local
businesses and medical facilities for referrals.  In addition to
referrals, these relationships could lead to doing business with these
individuals and businesses personally.
 
 Part of
our marketing strategy also includes providing quality workmanship and customer
service within client budgets.  In doing this, we aim to increase
word-of-mouth advertising, which further promotes brand awareness and the
likelihood of receiving referrals.
 
 Finally,
the strategy includes doing focused advertising on the Internet.  This
will allow the Company to gain exposure on a larger scale, further promoting
brand awareness and also reaching out to a much larger population and
demographic.
 
 We will
strive to create brand awareness for our products and
services.  Consistent with our strategy to build and maintain our
appeal, our marketing efforts include customization of products to conform to
consumer preferences and in individual customer localities.  We also
strive to identify new opportunities.  This structure is designed to
maximize market performance.
 
 Distribution
Methods
  Our
services are currently provided through personal contracting and
delivery.  In the near future, we plan on enabling our website to make
it possible for customers to order our artwork through the
Internet.  Upon receipt of orders, the requested artwork can be
shipped to the appropriate customer.  This will further expand our
customer base and increase revenues.
  Competitive
Business Conditions
  The mural
painting industry is highly competitive.  Customers are seeking pieces
of art that will bring their imaginations to life, and they want this done
within their budgets.  There are several mural painting companies
located in the Florida area.  However, most do not specialize
exclusively in mural and portrait painting. Nevertheless, many of our
competitors have been in business for many years, have established customer
bases, are larger, and will be able to handle larger investment in
resources.
 
 As demand
for murals increases, we expect new competitors to enter the market and existing
competitors to allocate more resources to mural and portrait painting. As a
result, we expect competition in the mural painting industry to
intensify.  The Company’s ability to be profitable will depend largely
on the abilities of management, its Board of Directors, consultants and the
ability of Murals By Maurice, Inc. to attract, retain, and grow its brand name,
customer base, and personnel as well as its ability to control
expenses.
 
 We
generally differentiate ourselves from our competitors in several key respects.
Our focus on mural and portrait painting allows us to specialize in an area of
expertise where many existing companies do not.  In addition, our
large array of options available to customers and our ability to provide our
services within customer budgets also gives us a competitive
advantage.
 
 We
believe we compete favorably in the principal competitive factors in our market,
which consist of the following:
 
 Offering
a wide array of mural selections
 
 Offering
variations in mural sizes
  Being
skilled in several areas of art such as mural painting, canvas painting, trompe
l’oeil, and faux painting.
 
 Although
we feel our experience and personal relationships will bring in revenues, there
is no guarantee that our company will be able to compete in this market
successfully overall.
 
 10
 Table
of Contents
  Source
and Availability of Raw Materials
  Our raw
materials consist of paints, canvases, brushes, and other art
supplies.  We obtain these materials from local suppliers and art
stores.  We believe that these materials will continue to remain
readily available to us.
 
 Dependence
on One or a Few Customers
  We do not
depend on one or a few major customers.
 
 Patents,
Trademarks, Royalties, Etc.
  We do not
currently hold any patents, trademarks, licenses, or concessions and are not a
party to any royalty agreements or labor contracts.
 
 Government
Approvals
 
 We do not
depend on government approval for our principal products and
services.
  Existing
or Probable Governmental Regulations
  Changes
in federal and state legislation and regulations applicable to Murals By
Maurice, Inc. may have the effect of increasing or decreasing the cost of doing
business, modifying permissible activities, or enhancing the competitive
position of other mural painting companies.  Changes in applicable
laws or regulations may have an adverse effect on the business and prospects of
the company.  Many of these regulations are intended to protect the
public, not shareholders.
 
 Few
changes in the mural painting industry have resulted from federal legislation
intended to protect consumers.
  Number
of Employees
  We
currently have one full-time employee, Maurice Katz, our President and
CEO.
  RESULTS
OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008
 
 FORWARD
LOOKING STATEMENTS
  Certain
statements in this report, including statements of our expectations, intentions,
plans and beliefs, including those contained in or implied by "Management's
Discussion and Analysis" and the Notes to Consolidated Financial Statements, are
"forward-looking statements", within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
subject to certain events, risks and uncertainties that may be outside our
control. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”,
“will”, and similar expressions identify forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date on which they are made. We undertake no obligation to
update or revise any forward-looking statements. These forward-looking
statements include statements of management's plans and objectives for our
future operations and statements of future economic performance, information
regarding our expansion and possible results from expansion, our expected
growth, our capital budget and future capital requirements, the availability of
funds and our ability to meet future capital needs, the realization of our
deferred tax assets, and the assumptions described in this report underlying
such forward-looking statements. Actual results and developments could differ
materially from those expressed in or implied by such statements due to a number
of factors, including, without limitation, those described in the context of
such forward-looking statements, our expansion and acquisition strategy, our
ability to achieve operating efficiencies, our dependence on network
infrastructure, capacity, industry pricing and technology trends, evolving
industry standards, domestic and international regulatory matters, general
economic and business conditions, the strength and financial resources of our
competitors, our ability to find and retain skilled personnel, the political and
economic climate in which we conduct operations and the risk factors described
from time to time in our other documents and reports filed with the Securities
and Exchange Commission (the "Commission"). Additional factors that could cause
actual results to differ materially from the forward-looking statements include,
but are not limited to: 1) our ability to successfully expand our business; 2)
general economic factors that affect middle-income households; 3) our ability to
raise sufficient capital in order to effectuate our business plan; and 4) our
ability to retain our key executives.
 
 Income /
Loss
 
 We had a
net loss of $3,563 and $7,589 for the three and six months ended June 30, 2008,
compared to net loss of $118,650 and $117,230 for the same period ended June 30,
2007, due primarily to non-cash expenses incurred during the 2007 period in
connection with common stock issuer for services in the amount of $118,200. The
non-cash consulting expenses were in connection with general management
consulting and advisory services including, but not limited to, the
following:
  -
              Filing
      Form 10;-
              Assistance
      with Blue Sky filings;-
              Selection
      of an independent transfer agent;-
              EDGAR
      services-
              Advise
      on procedures, regulations, and compliance of a public listed
      company;
  The shares were valued based on the
approximate fair value of our common stock on the date of issuance, or $0.20 per
share.
 
 We expect to incur losses at least
through fiscal year 2008 due to the implementation of our business plan and
general compliance costs with being a reporting company with the Securities and
Exchange Commission. However, there can be no assurance that we will achieve or
maintain profitability, or that any revenue growth will take place in the
future.
  Expenses
  Operating
expenses for the three and six months ended June 30, 2008 were $5,214 and
$13,860, respectively, decreasing by $117,186 and $113,695 compared to the
operating expenses of $122,400 and $113,240 during the same periods ended June
30, 2007, respectively. The prior year expenses were due primarily to non-cash
expenses incurred during the period in connection with common stock issuer for
services in the amount of $118,200. The non-cash consulting expenses were in
connection with general management consulting and advisory services including,
but not limited to, the following:
  -
              Filing
      Form 10;-
              Assistance
      with Blue Sky filings;-
              Selection
      of an independent transfer agent;-
              EDGAR
      services-
              Advise
      on procedures, regulations, and compliance of a public listed
      company;
  The shares were valued based on the
approximate fair value of our common stock on the date of issuance, or $0.20 per
share.
 
 11
 Table
of Contents
  Cost of
Revenue
  Cost
of revenue included certain supplies directly related to producing a mural. For
the three and six months ended June 31, 2008, we had $974 in cost of revenue.
All the cost of revenue was from non-related parties in both
periods.
 
 Impact of
Inflation
 
 We believe that inflation has had a
negligible effect on operations during this period. We believe that we can
offset inflationary increases in the cost of sales by increasing sales and
improving operating efficiencies.
 
 Liquidity and Capital
Resources
 
 Cash flows provided by (used in)
operating activities were $617 and 2,255 for the six months ended June 30, 2008
and 2007, respectively. Positive cash flows from operations for the six months
ended June 30, 2007 were due primarily to the common stock issued for services
of $118,200, partially offset by the net loss of $117,230 for the
period.
 
 We project that we will need additional
capital to fund operations over the next 12 months. We anticipate we will need
an additional $25,000 in working capital during 2008 and $30,000 for the two
years thereafter, primarily to comply with being a reporting company. We have
recently secured a $20,000 bank credit line to help fund our operations. The
credit line is interest free for the first year under the applicable bank
promotion. Thereafter, interest accrues at the prevailing market rate which is
approximately 12-18%.
  Overall,
we have funded our cash needs from inception through June 30, 2008 with a series
of debt and equity transactions, primarily with related parties. If we are
unable to receive additional cash from our related parties, we may need to rely
on financing from outside sources through debt or equity transactions. Our
related parties are under no legal obligation to provide us with capital
infusions. Failure to obtain such financing could have a material adverse effect
on operations and financial condition.
 
 We
had cash of $327 on hand and a working capital deficit of $5,673 as of June 30,
2008. Currently, we have enough cash to fund our operations for about six
months. This is based on current cash flows from financing activities and
projected revenues. Also, if the projected revenues fall short of needed capital
we may not be able to sustain our capital needs. We will then need to obtain
additional capital through equity or debt financing to sustain operations for an
additional year.
  On
a long-term basis, liquidity is dependent on continuation and expansion of
operations, receipt of revenues, and additional infusions of capital and debt
financing.
 
 Demand
for the products and services will be dependent on, among other things, market
acceptance of our products, the home improvement market in general, and general
economic conditions, which are cyclical in nature. Inasmuch as a major portion
of our activities is the receipt of revenues from the sales of our products, our
business operations may be adversely affected by our competitors and prolonged
recession periods.
 
 Our
success will be dependent upon implementing our plan of operations and the risks
associated with our business plans. We provide murals and custom painting
services to residential and commercial customers. We plan to strengthen our
position in these markets. We also plan to expand our operations through
aggressively marketing our products and our concept.
  ITEM 3. QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUTMARKET RISK
 
 The
information to be reported under this item is not required of smaller reporting
companies.
  ITEM
4. CONTROLS AND PROCEDURES.
  We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of
1934 (“Exchange Act”) is recorded, processed, summarized and reported within the
specified time periods. Our Chief Executive Officer and our Chief Financial
Officer (collectively, the “Certifying Officers”) are responsible for
maintaining our disclosure controls and procedures. The controls and procedures
established by us are designed to provide reasonable assurance that information
required to be disclosed by the issuer in the reports that it files or submits
under the Exchange Act are recorded, processed, summarized and reported within
the time periods specified in the Commission’s rules and forms.
  During the six months ended June 30, 2008, our Certifying Officers
evaluated the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this report. Based on the evaluation, the
Certifying Officers concluded that our disclosure controls and procedures were
effective to provide reasonable assurance that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the applicable rules and forms, and that it is accumulated and communicated
to our management, including the Certifying Officers, as appropriate to allow
timely decisions regarding required disclosure. These conclusions
notwithstanding you are advised that no system is 100%
foolproof.
 
 Changes
in Internal Control over Financial Reporting
  There
were no changes in the our internal control over financial reporting that
occurred during the period covered by this report that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.
 
 12
 Table
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  PART
II. OTHER INFORMATION
 
 ITEM
1.      LEGAL PROCEEDINGS
 
 None.
 
 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.
 
 ITEM
6. EXHIBITS AND REPORTS ON FORM 8-K
 
 (1)
              Exhibits: Exhibits required to be attached
      by Item 601 of Regulation S-B are listed in the Index to Exhibits
      Beginning on page 8 of this Form 10-Q, which is incorporated herein by
      reference.
  Reports on Form 8-K filed in
the second quarter of 2008
 
 None.
 
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 Table
of Contents
  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, there
unto duly authorized.
  
 CHINA
      FRUITS CORP.Date:
      August 14, 2008
              By:
              /s/ Maurice
      KatzMaurice
      Katz
                President
      and Chief Executive Officer, Chief Financial
  Officer
  14
  INDEX
TO EXHIBITS
  Exhibit
      No.
              
              Description31.1
              
              Certification of Chief Executive
    Officer31.2
              
              Certification of Chief Financial
    Officer32.1
              
              Statement required by 18 U.S.C. Section 1350, as adopted
      pursuant to section 906 of the Sarbanes-Oxley Act of
2002.32.2
              
              Statement required by 18 U.S.C. Section 1350, as adopted
      pursuant to section 906 of the Sarbanes-Oxley Act of
    2002