SECURITIES
AND EXCHANGE COMMISSION





WASHINGTON,
D.C.  20549





FORM
10-KSB





[X]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
fiscal year ended December 31, 2007


or


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







For the
transition period from _______________ to __________________





Commission
file number: 000-52692





DON
      MARCOS TRADING CO.(Name
      of Small Business Issuer as specific in its
  Charter)





Florida
            
            65-0921319(State
      or Other Jurisdiction of
            
            (I.R.S.
      EmployerIncorporation
      or Organization)
            
            Identification
      No.)





1850 Southeast 17thStreet, Suite 300, Ft. Lauderdale,
      Florida
            
            33316(Address
      of Principal Executive Offices)
            
            (Zip
      Code)





Issuer's
telephone number, including area code: (954)
356-8111





Securities
registered pursuant to Section 12(b) of the Act:  None





Securities
registered pursuant to Section 12(g) of the Act:





Common Stock, no par
  value(Title
      of Class)





Indicate
by check mark whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes  XNo
__





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained herein, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  Yes __  No   X





Indicate
by check mark whether the registrant is a shell company. Yes __  No
X





For the
year ended December 31, 2007, our revenue was $0.





As of
March 27, 2008, the number of shares of common stock outstanding was
37,100,000.  As of March 27, 2008, the aggregate market value of our
common stock held by non-affiliates was approximately $1,520,000(based upon
15,200,000 shares at $0.10 per share).





DOCUMENTS
INCORPORATED BY REFERENCE





The
following documents are incorporated herein by reference: (i) Registration
Statement on Form SB-2, filed on May 17, 2007, as amended (Registration No.
333-142976); and (ii) Form 8-K, filed on December 14, 2007, are incorporated in
Part III, Item 13.
















TABLE OF
CONTENTS


PageITEM
      1
            DESCRIPTION
      OF BUSINESS
            1ITEM
      2
            DESCRIPTION
      OF PROPERTY
            4ITEM
      3
            LEGAL
      PROCEEDINGS
            4ITEM
      4
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
            4ITEM
      5
            MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
            4ITEM
      6
            PLAN
      OF OPERATION
            5ITEM
      7
            FINANCIAL
      STATEMENTS
            11ITEM
      8
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
            11ITEM
      8A
            CONTROLS
      AND PROCEDURES
            11ITEM
      8B
            OTHER
      INFORMATION
            11ITEM
      9
            DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(A) OF THE EXCHANGE ACT
            12ITEM
      10
            EXECUTIVE
      COMPENSATION
            14ITEM
      11
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
            15ITEM
      12
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS
            15ITEM
      13
            EXHIBITS
            16ITEM
      14
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
            16SIGNATURES
            18














PART
I





ITEM
1.      DESCRIPTION OF BUSINESS.





Development
of Business





We were incorporated on May 11, 1999 in
the state ofFloridato be the sole importer and distributor
of Don Marcos Coffee.  We prepared to conduct business by: (i)
applying for our trademark in 1999 and processing our trademark registration
application through 2002; (ii) establishing our merchant account in 2000; (iii)
establishing our website in 2000; and (iv) entering into a Distribution
Agreement with Don Marcos Coffee Company, S.A. in 2003.  From 2004
through 2006, our operations were limited.  In 2007, we designed our
packaging for the coffee.  However, we have not yet made any sales of
coffee nor generated any revenues from operations.





Business
of Issuer





Don Marcos Coffee is grown, roasted and
packaged inCosta
Ricaby the Don Marcos
Coffee Company, S.A., aCosta Ricacompany.  Since its inception
on March 27, 2000, Mark E. Tupper has been and continues to be the founder,
Chief Executive Officer and principal shareholder of Don Marcos Coffee Company,
S.A.  Mr. Tupper became a member of our board of directors on February
1, 2007.Mr. Tupper isthe uncle ofour President and director, Earl T.
Shannon.  Don Marcos Coffee Company, S.A. is not our
subsidiary.On
January 23, 2003, we entered into a Distributorship Agreement withDon Marcos Coffee Company,
S.A.  Don Marcos Coffee Company, S.A. is a licensed coffee
exporter.  Coffee exports are regulated by the National Costa Rican
Coffee Institute (INCAFE).





Don Marcos Coffee is a specialty grade
coffee, sometimes called gourmet or premium coffee.  Specialty coffees
are made from exceptional beans grown only in ideal coffee-producing climates.
They tend to feature distinctive flavors, which are shaped by the unique
characteristics of the soil that produces them.





Don Marcos Coffee is designated Strictly
Hard Bean (SHB) by the grower, Don Marcos Coffee Company, S.A.  SHB is
part of a classification system for Costa Rican coffees, with the characteristic
of being cultivated at an altitude higher than 3,900 feet above sea level. InCosta Rica, coffee trees that grow at this
altitude produce higher quality beans that have a high density that holds in the
nutrients and flavor the beans during roasting.





The coffee is not roasted until the time
of order for maximum freshness.  It can be packaged ground or whole
bean.





We order coffee in quantities of 69
kilograms.  This is the standard size export bag.  For
wholesale orders, the coffee is shipped to us in a 69 kilogram bulk
pack.








For retail sales, we use a custom
printed, 12-ounce foil side gusseted bag.  There are approximately 202
bags per order (69 kilograms x 2.2 = 151.80lbs. = 2,480.8 oz.
/12).  The bags are dropped shipped by the bag manufacturer directly
toCosta Rica.  The bags are machine filled
and machine sealed inCosta
Rica.  The filled
bags are then shipped directly to our offices by United Parcel Service (UPS),
Federal Express, or DHL courier.





In addition, we offer custom packaging
for both resale and business promotion.





We entered into an exclusive importer
and distributor agreement with Don Marcos Coffee on January 23,
2003.  We plan to distribute to specialty coffee stores and select
restaurants as well as sell it directly on our e-commerce website,www.donmarcos.com.  Our website is listed with
the major search engines: Yahoo, Google, MSN, Ask, Dogpile,
etc.





Competition





Although we face intense competition
from numerous other coffee distributors, we believe that we can compete on the
basis of the quality and uniqueness of our products.  We believe our
products are unique because:





·
            Our coffee is specialty
      coffee.  Specialty coffee is defined as a coffee that has no
      defects and has a distinctive flavor in the cup.  Like wine and
      honey, specialty coffee has a unique flavor thanks to the micro-climates
      that produce it.  Our coffee is full bodied with a sweet caramel
      taste.


·
            Our coffee is Strictly Hard
      Bean.  Strictly Hard Bean is part of a classification system for
      coffees, with the characteristic of being cultivated above 3,900 feet
      above sea level.  In Costa Rica, coffee trees that grow at this
      altitude produce higher quality beans that have a high density that holds
      in the nutrients and flavor the beans during
    roasting.


·
            Our packaging is unique in that
      our bag incorporates a one-way degassing valve to protect the freshness of
      the coffee.


·
            Our coffee is processed under the
      highest quality standards, using the latest and most environmentally
      friendly machinery available.  We maintain the strictest
      environmental standards concerning water quality, recycling and
      reforestation.





However, many of our competitors are
substantially larger, better financed and have superior resources compared to
us.  Therefore, there is no guarantee that we will be able to
successfully compete with them.





We have numerous
competitors.  Some of our competitors are large companies selling a
large variety of products, including products that compete with our
coffee.  Competitors include Kraft General Foods, Inc., The KrogerCo., The Procter & Gamble Company and
Sara Lee Corporation.  Our noteworthy competitors for specialty coffee
include:





1.          Caf Britt


2.          Triangulo de Oro


3.          Caf 1820


4.          Volio


5.          Caf Rey





2


These are five popular coffee companies
fromCosta Rica.  Other coffee companies,
such as Peets and Starbucks, offer coffee from several regions of the
world.  The five competitors listed above are direct competitors of
our company because they all produce only Costa Rican coffee like Don Marcos
Coffee.





Sources and Availability of Raw Material and Principal
Suppliers





Don Marcos Coffee is grown, roasted and
packaged inCosta
Ricaby the Don Marcos
Coffee Company, S.A., aCosta Ricacompany.  On January 23,
2003, we entered into a Distributorship Agreement with Don Marcos Coffee
Company, S.A.  The material terms of our Distributorship Agreement
with Don MarcosCoffee
Company, S.A. are:





·
            We have exclusive worldwide rights
      to distribute all coffee products of Don Marcos Coffee Company,
      S.A.


·
            We have the right to appoint
      subdistributors, but have not done so
  yet.


·
            We must place a minimum order of
      $200 with payment terms of net 30
days.


·
            We have a 30 day right of
      inspection of the coffee.


·
            The agreement has an initial term
      of five years with automatic five year renewals unless either party
      terminates in writing at least 90 days prior to the end of any
      term.


·
            We pay the current market price
      for coffee when we place an order for coffee from Don Marcos Coffee
      Company, S.A.





IfDon Marcos Coffee Company,
S.A.terminated the
Distributorship Agreement, it would be difficult to find a replacement
distributor and our operations would suffer.





Dependence
on Major Customers





We are
not dependent on any one customer for a substantial portion of our sales of any
product.





Intellectual
Property





We own the registered trademark, Don
Marcos, registration number 2559462, registered on April 9, 2002 with the U.S.
Patent and Trademark Office.  At this time, we do not have any other
trademark, copyright or patent protection.





Government
Approval





None.





Research
and Development Costs





We spent
$0 on research and development during the year ended December 31, 2007 as
compared to $0 spent on research and development during the year ended December
31, 2006.





3


Cost
and Effects of Compliance with Environmental Laws and Regulations





None.





Employees





As of the
date hereof, we have three full-time employees.  We plan to hire
independent contractors on an “as needed” basis only.  We have no
collective bargaining agreements with our employees.  We believe that
our employee relationships are satisfactory.





ITEM
2.     DESCRIPTION OF PROPERTY





Our office encompasses 800 square feet
located in downtownFt.
Lauderdale,Floridain a building owned by Hudson Capital
Group.  Our management believes these premises are in good
condition.  Hudson Capital Group allows us to use this space free of
charge.  Although Hudson Capital Group can revoke our right to use
this space at any time, we have been informed by its principal, Steven W.
Hudson, that Hudson Capital Group intends to allow us to continue using the
space free of charge for the foreseeable future.  However, should we
be evicted from the space, we would need to relocate to new facilities and may
lack the funds to do so.





ITEM
3.     LEGAL PROCEEDINGS





To the best knowledge of management,
there are no litigation matters pending or threatened against
us.





ITEM
4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS





None.





PART II




ITEM
5. MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.




Market
for Common Equity




Our
common stock is currently quoted on the Over-The-Counter Bulletin Board under
the Symbol “DNMO.”  Our common stock was first eligible for quotation
on the Over-the-Counter Bulletin Board on March 5, 2008.  The only
price of our common stock has been $0.10 per share on March 7, 2008, without
retail mark-up, mark-down or commissions.




The above
quotations are inter-dealer quotations from market makers of our common
stock.  At certain times the actual closing or opening quotations may
not represent actual trades that took place.




4


Holders




As of
March 27, 2008, there were 85 shareholders holding certificated
securities.  Our transfer agent is Transfer Online, Inc., 317 SW Alder
Street, 2nd Floor, Portland, Oregon  97204.





Dividends




We have paid no dividends on our common
stock since inception and do not anticipate or contemplate paying cash dividends
in the foreseeable future.




Securities
Authorized for Issuance Under Equity Compensation Plans




None.




Recent
Sales of Unregistered Securities




None.




ITEM 6. PLAN OF
OPERATION.




The
following discussion and analysis should be read in conjunction with our
financial statements, including the notes thereto, appearing elsewhere in this
Report.




THE
FOLLOWING INFORMATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS OF OUR
MANAGEMENT.  FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE
THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL
FACT.  FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING TERMINOLOGY, SUCH AS “MAY,” “COULD,” “EXPECT,” “ESTIMATE,”
“ANTICIPATE,” “PLAN,” “PREDICT,” “PROBABLE,” “POSSIBLE,” “SHOULD,” “CONTINUE,”
OR SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE
TERMS.  THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING
INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS
MADE BY MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE REASONABLE.  OUR
FUTURE OPERATING RESULTS, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO
REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE
FORWARD-LOOKING STATEMENTS.





Overview





We were
incorporated on May 11, 1999 in the state of Florida to be the sole importer and
distributor of Don Marcos® Coffee.





Critical
Accounting Policies





Our
discussion and analysis of our plan of operation are based upon our financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America.  The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and
expenses.  In consultation with our Board of Directors, we have
identified several accounting principles that we believe are key to
understanding of our financial statements.  These important accounting
policies require management's most difficult, subjective judgments.





5


Use
of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires our management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.





Net
Loss Per Share





We
adopted Statement of Financial Accounting Standards No. 128 that requires the
reporting of both basic and diluted earnings (loss) per share. Basic earnings
(loss) per share is computed by dividing net income (loss) available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted earnings (loss) per share reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. In accordance with FASB 128, any
anti-dilutive effects on net income (loss) per share are excluded.





Stock
Issued for Non-Cash Transactions





It is our
policy to value stock issued for non-cash transactions, such as services, at the
fair market value of the goods or services received or the consideration
granted, whichever is more readily determinable, at the date the transaction is
negotiated.





There
were no shares of common stock issued for services during the year ended
December 31, 2007.





Going
Concern





Our
financial statements are prepared using generally accepted accounting principles
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.  Our
ability to continue as a going concern is dependent upon the ability in our
endeavors to seek sources of capital, and in attaining future profitable
operations. Our management is currently initiating their business
plan.  The accompanying financial statements do not include any
adjustments that might be necessary should we be unable to continue as a going
concern.





Stock
Based Compensation





We
adopted SFAS No. 123 (Revised 2004), Share Based Payment (“SFAS
No. 123R”), under the modified-prospective transition method on
January 1, 2006. SFAS No. 123R requires companies to measure and
recognize the cost of employee services received in exchange for an award of
equity instruments based on the grant-date fair-value. Share-based compensation
recognized under the modified-prospective transition method of SFAS
No. 123R includes share-based compensation based on the grant-date
fair-value determined in accordance with the original provisions of SFAS
No. 123, Accounting for Stock-Based Compensation, for all share-based
payments granted prior to and not yet vested as of January 1, 2006 and
share-based compensation based on the grant-date fair-value determined in
accordance with SFAS No. 123R for all share-based payments granted after
January 1, 2006. SFAS No. 123R eliminates the ability to account for
the award of these instruments under the intrinsic value method prescribed by
Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock
Issued to Employees, and allowed under the original provisions of SFAS
No. 123. Prior to the adoption of SFAS No. 123R, we accounted for our
stock option plans using the intrinsic value method in accordance with the
provisions of APB Opinion No. 25 and related interpretations.





6


Stock-based
compensation represents the cost related to stock-based awards granted to
employees.  We measure stock-based compensation cost at grant date,
based on the estimated fair value of the award, and recognizes the cost as
expense on a straight-line basis (net of estimated forfeitures over the employee
requisite service period.  We estimate the fair value of stock options
using a Black-Scholes valuation model.  The expense is recorded in
operating expenses in the condensed statements of operations.





Selected
Financial Data




You
should read the selected financial data set forth below along with our
discussion of our plan of operation and our financial statements and the related
notes. We have derived the financial data from our audited financial
statements.  We believe the financial data shown in the table below
include all adjustments consisting only of normal recurring adjustments, that we
consider necessary for a fair presentation of such
information.  Operating results for the period are not necessarily
indicative of the results that may be expected in the future.





Year
            
            
            YearEnded
            
            
            EndedDecember
      31,
              2007
            
            
            December
      31,
              2006(Audited)
            
            
            (Audited)Revenue
            
            $
            -
            
            
            $
            -Operating
      expenses
            
            
            132,650
            
            
            
            14,664Net
      (loss)
            
            $
            (132,650
            )
            
            $
            (14,664
            )Net
      (loss) per share
            
            $
            (.00
            )
            
            $
            (.00
            )





Results
for the year ended December 31, 2007 compared to the year ended December 31,
2006.





Revenues





There
were no revenues from operations for the years ended December 31, 2007 and
2006.





7


Operating
Expenses





Operating
expenses increased by $117,986 to $132,650 for the year ended December 30, 2007
as compared to $14,664 for the year ended December 31, 2006.





During
the year ended December 31, 2007, we incurred accounting, legal and professional
services of $86,381 associated with our filing to become a public company,
salaries, expense of $45,474 associated with the issuance of stock options to
employees, and other expenses of $795.  For the year ended December
31, 2006, we incurred $14,184 of professional services, and $480 of other
expenses.





Net
Loss





Primarily
as a result of our operating expenses, we had a net loss of $132,650 for the
year ended December 31, 2007 compared to a net loss of $14,664 for the same
period in the prior year.





Liquidity
and Capital Resources





We
currently have no material commitments for capital expenditures and have no
fixed expenses.





Working
capital is summarized and compared as follows:





December
      31,
            
            
            December
      31,2007
            
            
            2006Current
      assets
            
            $
            15,421
            
            
            $
            131Current
      liabilities
            
            
            9,466
            
            
            
            10,000Working
      capital (deficit)
            
            $
            5,955
            
            
            $
            (9,869)





The
changes in our working capital are primarily due to the issuance of common stock
for cash less payments of legal and accounting fees for our public
filings.





Changes
in cash flows is summarized as follows:





Our net
cash used by operations was $91,965 for the year ended December 31, 2007 as
compared to net cash used of $1,029 for the year ended December 31,
2006.  During the year ended December 31, 2007, we experienced a net
loss of $132,650, an increase in inventory of $4,255, and a decrease in accrued
accounting and legal expenses of $534.  This was offset by non-cash
stock options issued to employees in the amount of $45,474.  During
the year ended December 31, 2006, we experienced a net loss of $1,029, which was
offset by common stock issued for services in the amount of $3,635.





There was
no net cash used or provided from investing activities for the year ended
December 31, 2007 and 2006.





8


Our net
cash provided from financing activities was $103,000 during the year ended
December 31, 2007, due to the issuance of a private placement of common stock of
$82,000, and stock sold for cash in the amount of $21,000 to three of our
shareholders.  For the year ended December 31, 2006, cash was provided
from financing activities amounted to $1,000, which was a capital contribution
by a stockholder.





Plan
of Operation





The
followingplan of operation provides information which our
management believes is relevant to an assessment and understanding of our
business, operations, and financial condition.  You should read the
following discussion together with our financial statements and related notes
appearing elsewhere in this Report.  Thisplan of
operation contains forward-looking statements that involve risks, uncertainties,
and assumptions.  Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including, but not limited to, our ability to market and distribute our
product.





Current
Activities and Plans





Beginning
on February 14, 2007 and concluding on March 10, 2007, we conducted a private
offering of our common stock to 82 accredited investors.  We raised a
total of $82,000 gross in our private offering.  The purpose of this
offering was to raise capital to begin marketing and distribution of Don Marcos®
Coffee.





We had a
graphic artist design the layout for our new bag for the coffee.  The
bag is a foil gusseted bag printed on four sides that has the ability to be
machine filled and sealed.  This bag incorporates a one-way degassing
valve to protect the freshness of the coffee.  The one-way degassing
valve was originally developed for coffee.  Coffee is unique as it is
the only food product that needs to be completely protected from oxygen (O2)
while at the same time gives off relatively large volumes of another gas, carbon
dioxide (CO2).  This valve protects the coffee from O2 and release the
CO2 gas from the package.





Our
“cuppers” have been evaluating different roasts for several
months.  Cupping is a method of systematically evaluating the aroma
and taste of coffee beans. It is often used by growers, buyers and roasters to
assess the quality of a particular coffee sample.  Proper cupping
requires the adherence to an exacting set of brewing standards and a formal
step-by-step evaluation process.  A trained cupper generally looks at
six characteristics:





1.      Fragrance
- the smell of beans after grinding;


2.      Aroma
- the smell of ground-up beans after being steeped in water;


3.      Taste
- the flavor of the coffee;


4.      Nose
- the vapors released by the coffee in the mouth;


5.      Aftertaste
- the vapors and flavors that remain after swallowing; and


6.      Body
- the feel of the coffee in the mouth.





9


Our
cuppers have agreed on a roast.  Our custom designed bags have been
designed and delivered to us.  We are in the process of bagging the
coffee now and we expect to have the completed product available for sale within
two weeks.





We
believe a majority of our sales may be generated online through our e-commerce
website, www.donmarcos.com.  We believe online advertising and
customer ratings can drive traffic to our website.





We also
believe that a portion of our sales may come from custom
packaging.  We have the ability to custom package as little as 69
kilos per custom order.  In most cases, customers use custom packing
for business promotion or charity events.





We also
offer bulk pack coffee for restaurants and coffee shops.  This coffee
is offered in commercial packs of whole bean only.





We plan
to scale our expenditures based upon the amount of revenues
generated.  However, our ability to continue as a going concern is
dependent on obtaining additional capital and financing and operating at a
profitable level.  We may have to seek additional capital either
through debt or equity offerings and to increase sales volume and operating
margins to achieve profitability.  Our working capital and other
capital requirements during the next fiscal year and thereafter will vary based
on the sales revenue generated by our products and the distribution and sales
network we are currently creating.  We will consider both the public
and private sale of securities and/or debt instruments for expansion of our
operations if such expansion would benefit our overall growth and income
objectives.  Should sales growth not materialize, we may look to these
public and private sources of financing.  There can be no assurance,
however, that we can obtain sufficient capital on acceptable terms, if at
all.  Under such conditions, failure to obtain such capital likely
would at a minimum negatively impact our ability to timely meet our business
objectives.





We can
satisfy our cash requirements for the foreseeable future without raising any
additional financing.  However, if we do not generate revenues within
the next 12 months, we will be unable to market or distribute our products and
we will have to raise additional funds for planned marketing and distribution
expenses.





We do not
plan to purchase any plant or significant equipment in the foreseeable
future.





We do not
expect any significant changes in our number of
employees.





Off-Balance
Sheet Arrangements





None.





10


ITEM
7.      FINANCIAL
STATEMENTS.





The financial statements required to be
filed pursuant to this Item 7 begin on page F-1 of this
report.




ITEM
8. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.




Effective
October 31, 2007, we dismissed Kabani & Company, Inc. (“Kabani”) as our
independent auditors for the fiscal year ended December 31, 2007 and approved
the engagement of Weaver & Martin, LLC as Kabani’s
replacement.  The decision to change auditors was approved by our
Board of Directors.





For the
last two fiscal years, Kabani’s reports on the financial statements of our
company did not contain an adverse opinion or a disclaimer of opinion, nor were
the reports qualified or modified as to uncertainty, audit scope, or accounting
principles.  For the last two fiscal years and any subsequent interim
period preceding the dismissal, there were no disagreements with Kabani on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which, if not resolved to the satisfaction of Kabani
would have caused Kabani to make reference to the matter in their
reports.





ITEM
8A.  CONTROLS AND PROCEDURES





Our
President and Chief Financial Officer (the “Certifying Officers”) are
responsible for establishing and maintaining our disclosure controls and
procedures.  The Certifying Officers have designed such disclosure
controls and procedures to ensure that material information is made known to
them, particularly during the period in which this report was
prepared.  The Certifying Officers have evaluated the effectiveness of
our disclosure controls and procedures as of the end of the period covered by
this report and believe that our disclosure controls and procedures are
effective based on the required evaluation.  During the period covered
by this report, there were no changes in internal controls that materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.





ITEM
8B.  OTHER INFORMATION





None.


11





PART III





ITEM 9.
            DIRECTORS, EXECUTIVE OFFICERS,
      PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
      EXCHANGE ACT.




Directors, Executive Officers,
Promoters, and Control Persons




Our directors and executive officers are
as follows:




Name
            Age
            PositionEarl T.
    Shannon
            40
            Director,
      PresidentSteven
      W. Hudson
            38
            Directors,
      Executive Vice PresidentScott
      W. Bodenweber
            37
            Director,
      Chief Financial OfficerPeter
      Wright
            56
            Director,
      SecretaryMark
      E. Tupper
            61
            Director





Earl T. Shannon,
Director.Mr. Shannon has been an officer and director of Don Marcos since our
inception.  Mr. Shannon was an officer and director of
Salty's Warehouse, Inc. from its
inception on July 16, 1998 through its sale on December 11, 2006.  Mr.
Shannon was an officer and director of Nucotec, Inc. from its inception on
October 8, 2001 through its sale on March 19,
2004.  Additionally, Mr. Shannon was an officer and director of
PageActive Holdings, Inc. from June 8, 1999 to July 11, 2001,
during which time PageActive Holdings, Inc. was a blank check company- a
development stage company that has no specific business plan or purpose or has
indicated its business plan is to engage in a merger or acquisition with an
unidentified company or companies.  From January 1997 and continuing
through the present, Mr. Shannon has been the President of Winthrop Venture
Management, Inc., an investment management company based in Fort
Lauderdale, Florida.





Steven W. Hudson,
Executive Vice President, Director.Mr. Hudson has been with us since
February 1, 2007.  Mr. Hudson was an officer and director of
Salty’s Warehouse, Inc. from April 20, 2004 through its sale on December
11, 2006.  Mr. Hudson was an officer and director of
Nucotec, Inc. from its inception on October 8, 2001 through its sale
on March 19, 2004.  Additionally, Mr. Hudson has served as
President and CEO of International Yacht Construction since
May 1999.  International Yacht Construction specializes in new
construction, brokerage, charter, crew placement and yacht management for
vessels 80 feet long and over.  Since June 1997, Mr. Hudson
also has served as President and CEO of Hudson Capital Group, a private
investment firm.  From August 1995 through May 1999,
Mr. Hudson served as Division Vice President for Republic
Services, Inc., a leading provider of environmental services for
commercial, industrial, municipal and residential customers.  From
September 1991 through August 1995, Mr. Hudson held various
positions with Hudson Management Corp, a holding company for several solid waste
services companies located inFlorida.  Mr. Hudson graduated
from Southern Methodist University with a Bachelor of Arts degree in Business
Economics.





12


Scott W. Bodenweber,
Chief Financial Officer, Director.Mr. Bodenweber joined us January
21, 2003.  Mr. Bodenweber was an officer and director of Salty’s
Warehouse, Inc. from April 20, 2004 through its sale on December 11,
2006.  Mr. Bodenweber was an officer and director of
Nucotec, Inc. from its inception on October 8, 2001 through its sale
on March 19, 2004.  From June 1997 and continuing through
the present, Mr. Bodenweber has been the Controller of Hudson Capital
Group, an investment firm in Fort Lauderdale, Florida.  From
February 1995 through May 1997, he was employed with Keefe,
McCullough & Co., a CPA firm inFt. Lauderdale,Florida.  Mr. Bodenweber
graduated fromFloridaStateUniversityin 1994 with Bachelor of Science
Degrees in both Accounting and Finance.  He is a licensed Certified
Public Accountant in the State ofFlorida.





Peter Wright,
Secretary, Director.Mr. Wright joined us on January 21,
2003.  Mr. Wright has been the Chief Financial Officer of Hudson
Capital Group, an investment firm inFort Lauderdale,Floridafrom May 1998 continuing through the
present.  From August 1995 to May 1998, Mr. Wright was Vice President
of Autonation, Inc. inFort
Lauderdale,Florida.  From February 1986 to
August 1995, Mr. Wright was the Chief Financial Officer of Hudson Management
Corporation, a regional waste collection and recycling firm.  Mr.
Wright graduatedfromStetsonUniversityin 1975, with a Bachelor of Science
degree in Accounting.





Mark E. Tupper,
Director.Mr. Tupper joined us on February 1,
2007.  Mr. Tupper has been the founder, Chief Executive Officer and
principal shareholder of Don Marcos Coffee Company, S.A. since its inception on
March 27, 2000.  Mr. Tupper has been the founder, Chief Executive
Officer and principal shareholder of Tupper Centroamerica, S.A. since its
inception on July 9, 1982.  Mr. Tupper was the Chief Executive Officer
and principal shareholder of Marina Ocotal, S.A. from October 1984 to August
1993.  Mr. Tupper graduated from the American School in Switzerland
with studies in World & European History, the University of Aix-en-Provence
in France in European Politics & French Literature, and the Lewisham
Technical College of London, England in Mechanical Engineering.





Directors
serve until the next annual meeting or until their successors are qualified and
elected.  Officers serve at the discretion of the Board of
Directors.




Family Relationships





Mark E. Tupper, one of our directors, isthe uncle ofEarl T. Shannon, who isour President and one of our
directors.





Compliance
with Section 16(a) of the Exchange Act




Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our directors
and certain officers, as well as persons who own more than 10% of a registered
class of our equity securities, (“Reporting Persons”) to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission.





Based
solely upon a review of the copies of such forms, we believe that all Reporting
Persons have complied on a timely basis with all filing requirements applicable
to them, except that our president and director, Earl T. Shannon, our chief
financial officer and director, Scott W. Bodenweber, our executive vice
president and director, Steven W. Hudson, our secretary and director, Peter W.
Wright, and our director, Mark E. Tupper each, filed one latereport on Form 3 disclosing their
ownership interest in our company.





13


ITEM 10.   EXECUTIVE
COMPENSATION.





Summary Compensation
Table





None of our officers or directors is
currently receiving any cash compensation for their
services.





Outstanding
Equity Awards at Fiscal Year-End





In order to compensate our officers and
directors, we enacted an Incentive and Nonstatutory Stock Option Plan on
February 1, 2007.  Our stock option plan has a total of 5,000,000
shares reserved for issuance as stock options. All issued options are 100%
vested.  Other than our stock option plan, we do not currently have
any arrangements or contracts pursuant to which our officers and directors are
compensated for any services, including any additional amounts payable for
committee participation or special assignments.   No such
arrangements were in effect between us and our officers and directors for the
last completed fiscal year, either.  As of the date of thisreport, we have issued the following stock
options:








Option
    AwardsName
            Number of
              securities
              underlying
              unexercised options
      (#)
              exercisable
            Number of
              securities
              underlying
              unexercised
              options (#)
              unexercisable
            Equity
      incentive
              plan awards:
              Number of
              securities
      underlying
              unexercised
              unearned
              options(#)
            Option
              exercise
              price ($)
            Option
              expiration
              dateEarl T.
    Shannon
            1,000,000
            -0-
            -0-
            $0.005
            02/01/17Steven W.
      Hudson
            1,000,000
            -0-
            -0-
            $0.005
            02/01/17Scott W.
      Bodenweber
            1,000,000
            -0-
            -0-
            $0.005
            02/01/17Peter
Wright
            1,000,000
            -0-
            -0-
            $0.005
            02/01/17Mark E.
    Tupper
            1,000,000
            -0-
            -0-
            $0.005
            02/01/17TOTAL
            5,000,000
            -0-
            -0-





Compensation
of Directors





Our
Directors do not receive any cash compensation, but are entitled to
reimbursement of their reasonable expenses incurred in attending directors’
meetings.





We do not
have any audit, nominating, compensation or other committee of our Board of
Directors.





14


ITEM
11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.




The
following table sets forth certain information regarding our shares of
outstanding common stock beneficially owned as of the date hereof by (i) each of
our directors and executive officers, (ii) all directors and executive officers
as a group, and (iii) each other person who is known by us to own beneficially
more than 5% of our common stock based upon 37,100,000 issued shares of common
stock.





Name
      and Address of Beneficial Owners1
            Amount
      and Nature
              of
      Beneficial
              Ownership
            Percent
              Ownership2Earl
      T. Shannon, Director, President
            9,825,0003
            25.8%Steven
      W. Hudson, Director, Executive Vice President
            7,337,5004
            19.3%Scott
      W. Bodenweber, Director, Chief Financial Officer
            7,537,5005
            19.8%Peter
      Wright, Director, Secretary
            1,200,0006
            3.1%Mark
      E. Tupper, Director
            1,000,0007
            2.6%All
      executive officers and directors as a group (five persons)
            26,900,000
            63.9%





ITEM
12.   CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.





Earl T. Shannon is a promoter of Don
Marcos as defined by Rule 405 of the Act.The only item of value received by Mr.
Shannon from Don Marcos is the stock he was issued by Don Marcos.  Mr.
Shannon currently owns8,825,000 shares of common stock and1,000,000 options to purchase shares of
common stock of Don Marcos representing in the aggregate25.8% ofour outstanding shares.





Steven W. Hudson is a principal of
Hudson Capital Group, which furnishes us with office space, a value of
approximately $400 per month, on a rent-free basis.








1  C/o
our address, 1850 Southeast
17thStreet, Suite 300,Ft. Lauderdale,FL33316.


2   Except
as otherwise indicated, we believe that the beneficial owners of common stock
listed above, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable.  Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or investment
power with respect to securities.  Shares of common stock subject to
options or warrants currently exercisable, or exercisable within 60 days, are
deemed outstanding for purposes of computing the percentage of the person
holding such options or warrants, but are not deemed outstanding for purposes of
computing the percentage of any other person.


3   Includes 1,000,000 options to purchase
shares of common stock at $0.005 per share until February 1,
2017.


4   Includes 1,000,000 options to purchase
shares of common stock at $0.005 per share until February 1, 2017 and 400,000
shares of common stock owned by family members.


5  Includes 1,000,000 options to purchase
shares of common stock at $0.005 per share until February 1, 2017 and 600,000
shares owned by family members.


6   Consists of 1,000,000 options to
purchase shares of common stock at $0.005 per share until February 1,
2017and 200,000 shares owned by family
members.


7   Consists of 1,000,000 options to
purchase shares of common stock at $0.005 per share until February 1,
2017.


15


Don Marcos Coffee is grown, roasted and
packaged inCosta
Ricaby the Don Marcos
Coffee Company, S.A., aCosta Ricacompany owned and operated by Mark E.
Tupper.  Mark E. Tupper is the uncle of Earl T. Shannon, our President
and one of our directors.  We have an exclusive distributorship
agreement with Don Marcos Coffee Company, S.A., the material terms of which are
described inPart I, Item
1, Description ofBusiness—Sources and Availability of Raw
Materials and Principal Suppliers.





ITEM
13. EXHIBITS





3.1
            Articles
      of Incorporation of Don Marcos Trading Co., filed May 11, 199983.2
            Amendment
      to Articles of Incorporation of Don Marcos Trading Co., filed February 6,
      200383.3
            Amendment
      to Articles of Incorporation of Don Marcos Trading Co., filed February 14,
      200783.4
            Amendment
      to Articles of Incorporation of Don Marcos Trading Co., filed May 4,
      200783.5
            Amended
      and Restated Bylaws of Don Marcos Trading Co., dated February 2, 2007810.1
            Form of
      Stock Purchase Agreement Used in Private Offering810.2
            2007
      Incentive and Nonstatutory Stock Option Plan, dated February 1, 2007810.3
            Distributorship
      Agreement dated January 23, 2003810.4
            Stock
      Purchase Agreement with Earl T. Shannon, dated December 12, 2007910.5
            Stock
      Purchase Agreement with Steven W. Hudson, dated December 12, 2007910.6
            Stock
      Purchase Agreement with Scott W. Bodenweber, dated December 12, 2007914
            Code
      of Ethics31.1
            Certification
      of Chief Executive Officer Pursuant to the Securities Exchange Act of
      1934, Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
            Certification
      of Chief Financial Officer Pursuant to the Securities Exchange Act of
      1934, Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232
            Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes Oxley Act of 2002





ITEM
14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES.





Weaver
& Martin, LLC (“Weaver”)





Weaver
was our independent auditor and examined our financial statements for the year
ended December 31, 2007.  Weaver performed the services listed below
and was paid the fees listed below for the year ended December 31,
2007.








8  Incorporated
by reference from our Registration Statement on Form SB-2, filed on May 17,
2007, as amended (Registration No. 333-142976).


9  Incorporated
by reference from our Current Report on Form 8-K, filed on December 14,
2007.


16


Audit
Fees





Weaver
was paid aggregate fees of approximately $900 for the year ended December 31,
2007 for professional services rendered for the audit of our annual financial
statements and for the reviews of the financial statements included in our
quarterly reports on Form 10-QSB during the third quarter of 2007.





Audit
Related Fees





Weaver
was not paid additional fees for the year ended December 31, 2007 for assurance
and related services reasonably related to the performance of the audit or
review of our financial statements.





Tax
Fees





Weaver
was not paid fees for the year ended December 31, 2007 or professional services
rendered for tax compliance, tax advice and tax planning during this fiscal year
period.





All
Other Fees





Weaver
was not paid any other fees for professional services during the year ended
December 31, 2007.





Kabani
& Company, Inc. (“Kabani”)





Kabani
was our independent auditor and examined our financial statements for the year
ended December 31, 2006.  Kabani performed the services listed below
and was paid the fees listed below for the year ended December 31,
2006.





Audit
Fees





Kabani
was paid aggregate fees of approximately $19,000 for the year ended December 31,
2006 for professional services rendered for the audit of our annual financial
statements and for the reviews of the financial statements included in our
quarterly reports on Form 10-QSB during 2006 and the first two quarters of
2007.





Audit
Related Fees





Kabani
was not paid additional fees for the year ended December 31, 2006 for assurance
and related services reasonably related to the performance of the audit or
review of our financial statements.





Tax
Fees





Kabani
was not paid fees for the year ended December 31, 2006 or professional services
rendered for tax compliance, tax advice and tax planning during this fiscal year
period.





All
Other Fees





Kabani
was not paid any other fees for professional services during the year ended
December 31, 2006.


17


SIGNATURES







In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, duly
authorized.




DON
      MARCOS TRADING CO.DATED:
      March 31, 2008
            By:  /s/ Earl
      T.
      ShannonEarl
      T. ShannonDirector,
      President(Principal
      Executive Officer)By: 
      /s/ Scott
      W.
      BodenweberScott
      W. BodenweberDirector,
      Chief Financial Officer(Principal
      Financial Officer and Principal Accounting
  Officer)








18




WEAVER
& MARTIN
  Report of Independent
Registered Public Accounting Firm
  To the
Board of Directors and Stockholders
 Don
Marcos Trading Co.
  We have
audited the accompanying balance sheet of Don Marcos Trading Co. as of December
31, 2007, and the related statements of operations, changes in shareholders'
equity and cash flows for the year then ended. These financial statements are
the responsibility of Don Marcos Trading Co.'s management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
  We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Don Marcos Trading Co. as of
December 31, 2007, and the results of their operations and their cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States.
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses and had negative cash
flows from operations that raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are also described in the Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
  /S/
Weaver & Martin LLC
  Weaver
& Martin LLC
 Kansas
City, Missouri
 March 31,
2008
   Certified
      Public Accountants & Consultants
                411
      Valentine, Suite 300
                Kansas
      City, Missouri 64111
                Phone:
      (816) 756-5525
                Fax:
      (816) 756-2252
   F-1


DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 BALANCE
SHEET
 DECEMBER
31, 2007
 
 
 
 ASSETSCURRENT
      ASSETSCash
              
              $
              11,166Inventory
              
              
              4,255TOTAL CURRENT
      ASSETS
              
              $
              15,421LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIESAccrued
      accounting and legal expenses
              
              $
              9,466STOCKHOLDERS’
      EQUITY (DEFICIT)Preferred
      stock, no stated valueAuthorized
      10,000,000 sharesIssued
      and outstanding -0- shares
              
              
              -Common
      stock, no par valueAuthorized
      100,000,000 sharesIssued
      and outstanding – 37,100,000 shares
              
              
              187,454Deficit
      accumulated during the development stage
              
              
              ( 181,499
              )TOTAL STOCKHOLDERS’
      EQUITY
              
              
              5,955TOTAL LIABILITIES AND
      STOCKHOLDERS’ EQUITY
              
              $
              15,421
 
 
 The
accompanying notes are an integral part of these financial
statements.
 F-2
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF OPERATIONS
 FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 AND
FOR THE PERIOD FROM MAY 11, 1999 TO DECEMBER 31, 2007
 
 
 May
      11, 1999(Date
      of Inception)To2007
              
              
              2006
              
              
              December 31, 2007REVENUES
              
              $
              -
              
              
              $
              -
              
              
              $
              -OPERATING
      EXPENSES
              
              
              132,650
              
              
              
              14,664
              
              
              
              181,499NET
    (LOSS)
              
              $
              ( 132,650
              )
              
              $
              ( 14,664
              )
              
              $
              ( 181,499
              )NET
      (LOSS) PER COMMON SHAREBasic
      and diluted
              
              $
              (0.00
              )
              
              $
              (0.00
              )WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES OUTSTANDINGBasic
      and diluted
              
              
              29,872,055
              
              
              
              9,404,890
 
 
 The
accompanying notes are an integral part of these financial
statements
 F-3
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENT
OF STOCKHOLDERS’ EQUITY
 FOR
THE PERIOD FROM MAY 11, 1999
 (INCEPTION)
TO DECEMBER 31, 2007
  
 DeficitAccumulatedCommon Stock
              
              
              During
      TheShares
              
              
              Amount
              
              
              DevelopmentStage
              
              
              TotalMAY
      11, 1999 (DATE OF INCEPTION)
                Issuance
      of common stock for cash
              
              
              5,000
              
              
              $
              5,000
              
              
              $
              -
              
              
              $
              5,000Net
      loss from inception to December 31, 1999
              
              
              -
              
              
              
              -
              
              
              
              ( 4,487
              )
              
              
              ( 4,487
              )BALANCE,   DECEMBER
      31, 1999
              
              
              5,000
              
              
              
              5,000
              
              
              
              (
      4,487
              )
              
              
              513Cash
      contribution by stockholder
              
              
              -
              
              
              
              10,000
              
              
              
              -
              
              
              
              10,000Net
      (loss) for the year ended December 31, 2000
              
              
              -
              
              
              
              -
              
              
              
              ( 7,781
              )
              
              
              ( 7,781
              )BALANCE,   DECEMBER
      31, 2000
              
              
              5,000
              
              
              
              15,000
              
              
              
              (
      12,268
              )
              
              
              2,732Net
      (loss)for the year ended December 31, 2001
              
              
              -
              
              
              
              -
              
              
              
              ( 1,565
              )
              
              
              ( 1,565
              )BALANCE,
      DECEMBER 31, 2001
              
              
              5,000
              
              
              
              15,000
              
              
              
              (
      13,833
              )
              
              
              1,167Cash
      contribution by stockholder
              
              
              -
              
              
              
              2,000
              
              
              
              -
              
              
              
              2,000Net
      (loss) for the year ended December 31, 2002
              
              
              -
              
              
              
              -
              
              
              
              ( 2,901
              )
              
              
              ( 2,901
              )BALANCE,
      DECEMBER 31, 2002
              
              
              5,000
              
              
              
              17,000
              
              
              
              (
      16,734
              )
              
              
              266Cash
      contribution by stockholder
              
              
              -
              
              
              
              12,000
              
              
              
              -
              
              
              
              12,000Net
      (loss) for the year ended December 31, 2003
              
              
              -
              
              
              
              -
              
              
              
              ( 12,580
              )
              
              
              ( 12,580
              )BALANCE,
      DECEMBER 31, 2003
              
              
              5,000
              
              
              
              29,000
              
              
              
              (
      29,314
              )
              
              
              (
      314
              )Cash
      contribution by stockholder
              
              
              -
              
              
              
              4,000
              
              
              
              -
              
              
              
              4,000Net
      (loss) for the year ended December 31, 2004
              
              
              -
              
              
              
              -
              
              
              
              ( 3,845
              )
              
              
              ( 3,845
              )BALANCE,
      DECEMBER 31, 2004
              
              
              5,000
              
              
              
              33,000
              
              
              
              (
      33,159
              )
              
              
              (
      159
              )Cash
      contribution by stockholder
              
              
              -
              
              
              
              1,345
              
              
              
              -
              
              
              
              1,345Net
      (loss) for the year ended December 31, 2005
              
              
              -
              
              
              
              -
              
              
              
              ( 1,026
              )
              
              
              ( 1,026
              )BALANCE,
      DECEMBER 31, 2005
              
              
              5,000
              
              
              
              34,345
              
              
              
              (
      34,185
              )
              
              
              160
 
 
 The
accompanying notes are an integral part of these financial
statements
 F-4
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENT
OF STOCKHOLDERS’ EQUITY (CONTINUED)
 FOR
THE PERIOD FROM MAY 11, 1999
 (INCEPTION)
TO DECEMBER 31, 2007
 
 
 DeficitAccumulatedCommon Stock
              
              
              During
      TheShares
              
              
              Amount
              
              
              DevelopmentStage
              
              
              TotalIssuance
      of common stock for services
              
              
              16,495,000
              
              
              $
              3,635
              
              
              $
              -
              
              
              $
              3,635Cash
      contribution by stockholder
              
              
              -
              
              
              
              1,000
              
              
              
              -
              
              
              
              1,000Net
      (loss) for the year ended December 31, 2006
              
              
              -
              
              
              
              -
              
              
              
              ( 14,664
              )
              
              
              ( 14,664
              )BALANCE,
      DECEMBER 31, 2006
              
              
              16,500,000
              
              
              
              38,980
              
              
              
              (
      48,849
              )
              
              
              (
      9,869
              )Common
      stock issued for cash
              
              
              20,600,000
              
              
              
              103,000
              
              
              
              -
              
              
              
              103,000Stock
      based compensation
              
              
              -
              
              
              
              45,474
              
              
              
              -
              
              
              
              45,474Net
      (loss) for the year ended December 31, 2007
              
              
              -
              
              
              
              -
              
              
              
              ( 132,650
              )
              
              
              ( 132,650
              )BALANCE,
      DECEMBER 31, 2007
              
              
              37,100,000
              
              
              $
              187,454
              
              
              $
              (181,499
              )
              
              $
              5,955
 
 
 The
accompanying notes are an integral part of these financial
statements
 F-5
 
 DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CASH FLOWS
 FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 AND
FOR THE PERIOD FROM MAY 11, 1999 TO DECEMBER 31, 2007
 
 
 May
      11, 1999(Date
      of Inception)To2007
              
              
              2006
              
              
              December 31, 2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss)
              
              $
              (
      132,650
              )
              
              $
              (
      14,664
              )
              
              $
              (
      181,499
              )Adjustments
      to reconcile net (loss) to net cash used by operating
      activities:Common
      stock issuedfor
      services
              
              
              -
              
              
              
              3,635
              
              
              
              3,635Stock
      based compensation
              
              
              45,474
              
              
              
              -
              
              
              
              45,474Changes
      in operating assets and liabilities:Inventory
              
              
              (
      4,255
              )
              
              
              -
              
              
              
              (
      4,255
              )Accrued
      accounting and legal expenses
              
              
              ( 534
              )
              
              
              10,000
              
              
              
              9,466NET
      CASH USED BY OPERATING ACTIVITIES
              
              
              ( 91,965
              )
              
              
              ( 1,029
              )
              
              
              ( 127,179
              )CASH
      FLOWS FROM INVESTING ACTIVITIES
              
              
              -
              
              
              
              -
              
              
              
              -CASH
      FLOWS FROM FINANCING ACTIVIITESIssuance
      of common stock for cash
              
              
              103,000
              
              
              
              -
              
              
              
              136,000Cash
      contributed by stockholder
              
              
              -
              
              
              
              1,000
              
              
              
              2,345NET
      CASH PROVIDED BY FINANCING ACTIVITIES
              
              
              103,000
              
              
              
              1,000
              
              
              
              138,345NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
              
              
              11,035
              
              
              
              (
      29
              )
              
              
              11,166CASH
      AND CASH EQUIVALENTS,BEGINNING
      OF PERIOD
              
              
              131
              
              
              
              160
              
              
              
              -CASH
      AND CASH EQUIVALENTS,END
      OF PERIOD
              
              $
              11,166
              
              
              $
              131
              
              
              $
              11,166
 
 
 The
accompanying notes are an integral part of these financial
statements
 F-6
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CASH FLOWS (CONTINUED)
 FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 AND
FOR THE PERIOD FROM MAY 11, 1999 TO DECEMBER 31, 2007
  
 May
      11, 1999(Date
      of Inception)To2007
              
              
              2006
              
              
              December 31, 2007SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATIONCASH
      PAID DURING THE YEAR FOR:Interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -NON-CASH
      INVESTING ACTIVITIESStock-based
      compensation
              
              $
              45,474
              
              
              $
              -
              
              
              $
              45,474Issuance
      of common stock for services
              
              $
              -
              
              
              $
              3,635
              
              
              $
              3,635
 
 
 The
accompanying notes are an integral part of these financial
statements
 F-7
 
 DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 
 NOTE
1            
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Nature of
Operations
 
 Don
Marcos Trading Co. (“the Company”) is a development stage enterprise
incorporated on May 11, 1999 in the state of Florida. The Company has had no
significant operations since its inception. The Company’s only activities have
been organizational, directed at raising its initial capital and developing its
business plan.
 
 The
original purpose of the Company was to be the sole importer and distributor of
Don Marcos coffee.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
 Cash and cash
equivalents
 
 The
Company considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
 
 Fair value of financial
instruments
 
 For
certain of the Company’s instruments, including cash and accounts payable and
accrued expenses, the carrying amounts approximate fair value due to their short
maturities.
 
 Net (Loss) Per
Share
 
 The
Company adopted Statement of Financial Accounting Standards No. 128 that
requires the reporting of both basic and diluted earnings (loss) per share.
Basic earnings (loss) per share is computed by dividing net income (loss)
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted earnings (loss) per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock. In accordance with
FASB 128, any anti-dilutive effects on net income (loss) per share are
excluded.
  F-8
 
 DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
  NOTE
1             
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Revenue
Recognition
 
 The
Company will recognize revenue from product sales when shipment of product to
the customer has been made, which is when title passes. The Company will
estimate and record provisions for rebates, sales returns and allowances in the
period the sale is recorded. Shipping and handling charges will be included in
gross sales, with the related costs included in selling, general and
administrative expenses. For the years ended December 31, 2007 and 2006, the
Company had not generated any significant revenue.
 
 Inventory
 
 Inventory
is stated at the lower of cost (determined by the first-in, first-out method, or
market.  Inventories are adjusted for estimated obsolescence and
written down to net realizable value based upon estimates of future demand,
technology developments, and market conditions.
 
 Stock Based
Compensation
 
 Effective
November 1, 2005, the Company adopted Statement of Financial Accounting
Standards (“SFAS”) No. 123(R), “Share-Based Payment: An Amendment of FASB
Statements No. 123 and 95” using the modified prospective method. Under this
method, compensation cost is recognized on or after the effective date for the
portion of outstanding awards, for which the requisite service has not yet been
rendered, based on the grant date fair value of those awards. For stock-based
awards issued on or after November 1, 2005, the Company recognizes the
compensation cost on a straight-line basis over the requisite service period for
the entire award. Measurement and attribution of compensation cost for awards
that are unvested as of the effective date of SFAS No. 123(R) are based on the
same estimate of the grant-date or modification-date fair value and the same
attribution method used previously under SFAS No. 12.
 
 Advertising
 
 Advertising
costs are expensed as incurred and included in operating expenses. There were no
advertising expenses for the years ended December 31, 2007 and 2006 and for the
period from May 11, 1999 (inception) to December 31, 2007.
 
 Development Stage
Enterprise
 
 The
Company is a development stage enterprise, as defined in Financial Accounting
Standards Board No.7. The Company‘s planned principal operations have not
commenced, and, accordingly, no revenue has been derived during this
period.
  F-9
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 
 NOTE
1            
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recently Issued Accounting
Pronouncements
 
 In July
2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes” (“FIN 48”).  FIN 48 clarifies the accounting for
uncertainty in income taxes recognized in enterprises’ financial statements in
accordance with SFAS No. 109, “Accounting for Income Taxes”.  FIN 48
prescribes a recognition threshold and measurement attributable for the
financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return.  FIN 48 also provides guidance
on derecognizing, classification, interest and penalties, accounting in interim
periods, disclosures and transitions.  FIN 48 is effective for fiscal
yeas beginning after December 15, 2006.  The Company is currently
reviewing the effect, if any, FIN 48 will have on its financial position and
operations.
 
 In
September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’ (“SFAS No. 157”).
SFAS No. 157 defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles (GAAP), expands disclosures
about fair value measurements, and applies under other accounting pronouncements
that require or permit fair value measurements.  SFAS No. 157 does not
require any new fair value measurements, however the current FASB anticipates
that for some entities, the application of SFAS No. 157 will change current
practice.  SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007.  The Company is
currently reviewing the effect, if any SFAS No. 157 will have on its financial
position and operations.
 
 In
September 2006, FASB issued SFAS 158 ‘Employers' Accounting for Defined Benefit
Pension and Other Postretirement Plans--an amendment of FASB Statements No. 87,
88, 106, and 132(R)’ This Statement requires employers to recognize the
overfunded or underfunded status of a defined benefit postretirement plan (other
than a multiemployer plan) as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income of a business entity or
changes in unrestricted net assets of a not-for-profit organization. This
Statement also requires an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited
exceptions. The provisions of SFAS No. 158 are effective for employers with
publicly traded equity securities is required to initially recognize the funded
status of a defined benefit postretirement plan and to provide the required
disclosures as of the end of the fiscal year ending after December 15,
2006.   The adoption of this statement is not expected to have a
material effect on the Company’s future reported financial position or results
of operations.
 
  F-10
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 
 NOTE
1            
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 In
February 2007, FASB issued FASB Statement No. 159 (“SFAS 159) - The Fair Value
Option for Financial Assets and Financial Liabilities including an amendment of
SFAS 115.  This statement permits entities to choose to measure many
financial instruments and certain other items at fair value.  The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions.  This statement is expected to expand the use
of fair value measurement objectives for accounting for financial
instruments.  This statement is effective for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years. Early
adoption is permitted subject 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.  The
Company is currently evaluating the impact of SFAS 159 on its financial
statements
 
 NOTE
2 GOING
CONCERN
 
 The
accompanying financial statement have been prepared assuming that the Company
will continue as a going concern, which contemplates the recoverability of
assets and the satisfaction of liabilities in the normal course of
business.
 
 The
Company’s development activities since inception have been financially sustained
through stockholder contribution to the Company and issuance of common stock.
The Company may raise additional funding to continue its operations, through
contributions from the current shareholders and stock issuance to other
investors.
 
 The
ability of the Company to continue as a going concern is dependent upon its
ability to raise additional capital from the sale of common stock and,
ultimately, the achievement of significant operating revenues. The accompanying
financial statements do not include any adjustments that might be required
should the Company be unable to recover the value of its assets or satisfy its
liabilities.
 
 NOTE
3 INVENTORY
 
 The
balance of $4,255 at December 31, 2007 consists of bags purchased for future
packaging of coffee products.
 
 NOTE
4 PREFERRED
STOCK
 
 The
Company has not assigned any preference rights to the preferred
stock.
  F-11
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 
 NOTE
5 COMMON
STOCK
 
 The
Company effected a 1:5 forward split of the stock in February, 2007. All per
share amounts and number of shares outstanding have been retroactively restated
for this adjustment.
 
 On March
14, 2007, the Company offered a private placement of 16,400,000 shares of common
stock, no par value, with an aggregate value of $82,000.
 
 The
Company effected a 1:10 forward split of the stock on March 30, 2007. All per
share amounts and number of shares outstanding have been retroactively restated
for this adjustment.
 
 On
December 14, 2007, the Company sold 4,200,000 shares of common stock, no par
value, with an aggregate value of $21,000 to three shareholders of the
Company.