**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      DC 20549





**FORM
      10-QSB**





x
            Quarterly
                Report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934For
                the quarterly period ended**June
                30, 2007**o
            Transition
                Report pursuant to 13 or 15(d) of the Securities Exchange Act of
                1934For
                the transition period __________to__________Commission
                File Number:**001-14297**





**Davi
      Skin, Inc.**


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





**Nevada**
            **86-0907471**(State
                or other jurisdiction of incorporation or organization)
            (IRS
                Employer Identification No.)








**4223
                Glencoe Ave Suite B130, Marina Del Rey, California
                90292**(Address
                of principal executive offices)





**310-827-0800**(Issuer’s
                telephone number)_______________________________________________________________(Former
                name, former address and former fiscal year, if changed since last
                report)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
      (or
      for such shorter period that the issuer was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days **x** **Yes o
      No**





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





State
      the
      number of shares outstanding of each of the issuer’s classes of common stock, as
      of the latest practicable date: **16,661,208
      common shares as of August 17, 2007.**





Transitional
      Small Business Disclosure Format (check one): **Yes o
      No x**









TABLE
                OF CONTENTS
            PagePART
                I - FINANCIAL INFORMATIONItem
                1.
            Financial
                Statements
            3Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation
            4Item
                3.
            Controls
                and Procedures
            15PART
                II - OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            16Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            16Item
                3.
            Defaults
                Upon Senior Securities
            16Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            16Item
                5.
            Other
                Information
            17Item
                6.
            Exhibits
            18









**PART
      I - FINANCIAL INFORMATION**





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





Our
                unaudited financial statements included in this Form 10-QSB are as
                follows:F-1
            Balance
                Sheet as of June 30, 2007;F-2
            Statements
                of Operations for the threeand
                six months ended June 30, 2007 and 2006 and for the period from inception
                (March 21, 2004) through June 30, 2007;F-3
            Statements
                of Cash Flows for the six months ended June 30, 2007 and 2006 and
                for the
                period from inception (March 21, 2004) through June 30,
                2007;F-4
            Notes
                to Financial Statements;




These
      unaudited financial statements have been prepared in accordance with accounting
      principles generally accepted in the United States of America for interim
      financial information and the SEC instructions to Form 10-QSB. In the opinion
      of
      management, all adjustments considered necessary for a fair presentation have
      been included. Operating results for the interim period ended June 30, 2007
      are
      not necessarily indicative of the results that can be expected for the full
      year.




3




DAVI
                  SKIN, Inc.(formerly
                  MW Medical, Inc.)(A
                  Developmental Stage Company)BALANCE
                  SHEET(Unaudited)**ASSETS****Current
                  Assets**Certificate
                  of deposit
              
              
              75,989Accounts
                  receivable
              
              
              26,472Inventory
              
              
              644,327Prepaid
                  expenses
              
              
              12,928**Total
                  Current Assets**
              
              
              759,716Fixed
                  assets net of accumulated depreciation of $7,019
              
              
              28,671Deposits
              
              
              44,505**TOTAL
                  ASSETS**
              
              
              832,892**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities**Bank
                  overdraft
              
              
              20,155Accounts
                  payable & accrued expenses
              
              
              589,378Accrued
                  stock compensation
              
              
              169,000Accrued
                  interest
              
              
              2,576**Total
                  Current Liabilities**
              
              
              781,109Convertible
                  debenture
              
              
              200,000**TOTAL
                  LIABILITIES**
              
              
              981,109**Stockholders'
                  Equity**Preferred
                  stock; $0.001 par value; 10,000,000 sharesauthorized
                  and no shares issued and outstanding
              
              
              -Common
                  stock: $0.001 par value; 90,000,000 sharesauthorized,
                  14,611,204 shares issued and outstanding
              
              
              14,612Additional
                  paid in capital
              
              
              11,110,761Accumulated
                  deficit during development stage
              
              
              (8,944,328
              )Net
                  Loss
              
              
              (2,329,262
              )**Total
                  Stockholders' Equity**
              
              
              (148,217
              )**TOTAL
                  LIABILITIES & STOCKHOLDERS' EQUITY**
              
              
              832,892




F-1
  DAVI
                      SKIN, Inc.(formerly
                      MW Medical, Inc.)(A
                      Developmental Stage Company)STATEMENT
                      OF OPERATIONS(Unaudited)
  Six
                      Months Ended June 30
                  
                  
                  Three
                      Months Ended June 30From
                      inception(March
                      21, 2004)through2007
                  
                  
                  2006
                  
                  
                  2007
                  
                  
                  2006
                  
                  
                  June
                      30,2007Sales
                  
                  
                  45,881
                  
                  
                  -
                  
                  
                  18,662
                  
                  
                  -
                  
                  
                  68,690Cost
                      of goods sold
                  
                  
                  (4,741
                  )
                  
                  -
                  
                  
                  (2,553
                  )
                  
                  -
                  
                  
                  (6,535
                  )Gross
                      profit
                  
                  
                  41,140
                  
                  
                  -
                  
                  
                  16,109
                  
                  
                  -
                  
                  
                  62,155Operating
                      ExpensesSelling,
                      general and administrative
                  
                  
                  718,114
                  
                  
                  436,070
                  
                  
                  392,780
                  
                  
                  197,224
                  
                  
                  3,449,109Depreciation
                  
                  
                  3,500
                  
                  
                  10,969
                  
                  
                  1,750
                  
                  
                  5,947
                  
                  
                  35,752Consulting
                      fees
                  
                  
                  392,629
                  
                  
                  122,277
                  
                  
                  237,512
                  
                  
                  92,574
                  
                  
                  1,662,764Employee
                      stock options
                  
                  
                  747,342
                  
                  
                  2,099,949
                  
                  
                  44,856
                  
                  
                  241,805
                  
                  
                  4,809,215Professional
                      fees
                  
                  
                  530,121
                  
                  
                  166,817
                  
                  
                  272,298
                  
                  
                  140,275
                  
                  
                  1,200,314Total
                      operating expenses
                  
                  
                  2,391,706
                  
                  
                  2,836,082
                  
                  
                  949,196
                  
                  
                  677,825
                  
                  
                  11,157,154Loss
                      from operations
                  
                  
                  (2,350,566
                  )
                  
                  (2,836,082
                  )
                  
                  (933,087
                  )
                  
                  (677,825
                  )
                  
                  (11,094,999
                  )Other
                      income (expenses)Royalty
                      income
                  
                  
                  27,056
                  
                  
                  25,000
                  
                  
                  -
                  
                  
                  -
                  
                  
                  52,056Interest
                      income
                  
                  
                  6,295
                  
                  
                  37,678
                  
                  
                  2,852
                  
                  
                  22,920
                  
                  
                  115,620Interest
                      expense
                  
                  
                  (8,132
                  )
                  
                  (10,000
                  )
                  
                  (1,727
                  )
                  
                  (5,000
                  )
                  
                  (88,990
                  )Other
                      expenses
                  
                  
                  (3,915
                  )
                  
                  -
                  
                  
                  (10,954
                  )
                  
                  -
                  
                  
                  (20,613
                  )Loss
                      on disposal of assets
                  
                  
                  -
                  
                  
                  (38,075
                  )
                  
                  -
                  
                  
                  (38,075
                  )
                  
                  (38,609
                  )Total
                      other income
                  
                  
                  21,304
                  
                  
                  14,603
                  
                  
                  (9,829
                  )
                  
                  (20,155
                  )
                  
                  19,464Net
                      Loss
                  
                  
                  (2,329,262
                  )
                  
                  (2,821,479
                  )
                  
                  (942,916
                  )
                  
                  (697,980
                  )
                  
                  (11,075,535
                  )Basic
                      loss per common share
                  
                  
                  (0.17
                  )
                  
                  (0.24
                  )
                  
                  (0.06
                  )
                  
                  (0.06
                  )Diluted
                      loss per common share
                  
                  
                  (0.17
                  )
                  
                  (0.24
                  )
                  
                  (0.06
                  )
                  
                  (0.06
                  )Basic
                      and diluted weighted averagecommon
                      share outstanding
                  
                  
                  13,388,746
                  
                  
                  11,568,042
                  
                  
                  14,535,536
                  
                  
                  12,115,820


F-2




DAVI
                  SKIN, Inc(formerly
                  MW Medical, Inc.)(A
                  Development Stage Company)STATEMENT
                  OF CASH FLOWS(Unaudited)
  From
                  inception(March
                  21, 2004)Six
                  Months Ended June 30
              
              
              through2007
              
              
              2006
              
              
              June
                  30, 2007OPERATING
                  ACTIVITIESNet
                  Loss
              
              
              (2,329,262
              )
              
              (2,821,480
              )
              
              (11,075,535
              )Adjustments
                  to reconcile net loss tonet
                  cash used in operating activities:Prepaid
                  consulting expense
              
              
              34,376
              
              
              -
              
              
              114,584Stock
                  based compensation & expenses
              
              
              916,342
              
              
              2,122,865
              
              
              5,918,606Depreciation
                  and amortization
              
              
              3,500
              
              
              10,969
              
              
              35,752Accrued
                  interest
              
              
              6,304
              
              
              -
              
              
              6,304Loss
                  on sale of fixed assets
              
              
              -
              
              
              38,075
              
              
              38,609Non
                  cash consulting fee
              
              
              57,993
              
              
              -
              
              
              107,688Changes
                  in operating assets and liabilities:Accounts
                  Receivable
              
              
              (3,833
              )
              
              6,000
              
              
              (52,855
              )Inventory
              
              
              34,941
              
              
              -
              
              
              (644,328
              )Prepaid
                  expenses
              
              
              (10,903
              )
              
              5,000
              
              
              (12,928
              )Deposits
              
              
              -
              
              
              (33,025
              )
              
              (44,505
              )Contingent
                liabilities
              
              
              -
              
              
              -
              
              
              26,383Accrued
                  Interest
              
              
              2,576
              
              
              10,000
              
              
              83,195Accounts
                  payable and accrued liabilities
              
              
              446,542
              
              
              22,031
              
              
              589,422Net
                  cash used in operating activities
              
              
              (841,424
              )
              
              (639,565
              )
              
              (4,909,608
              )INVESTING
                  ACTIVITIESCash
                  flow from investing activities:Change
                  in certificates of deposit
              
              
              758,705
              
              
              (835,413
              )
              
              (75,989
              )Sale
                  of fixed assets
              
              
              -
              
              
              -
              
              
              1,739Purchase
                  of fixed assets
              
              
              -
              
              
              (7,401
              )
              
              (116,187
              )Net
                  cash provided by (used in) investing activities
              
              
              758,705
              
              
              (842,814
              )
              
              (190,437
              )FINANCING
                  ACTIVITIESCash
                  flows from financing activities:Bank
                  overdraft
              
              
              (117,281
              )
              
              -
              
              
              20,155Proceeds
                  from stock transactions
              
              
              -
              
              
              1,496,000
              
              
              4,679,890Notes
                  payable
              
              
              200,000
              
              
              -
              
              
              200,000Notes
                  payable-related party
              
              
              -
              
              
              -
              
              
              200,000Net
                  cash provided by (used in) financing activities
              
              
              82,719
              
              
              1,496,000
              
              
              5,100,045Net
                  change in cash and cash equivalents
              
              
              -
              
              
              13,621
              
              
              -Cash
                  at beginning of period
              
              
              -
              
              
              3,617
              
              
              -Cash
                  at end of period
              
              
              -
              
              
              17,238
              
              
              -




F-3




DAVI
        SKIN, INC
 (Formerly
        MW Medical, Inc.)
 A
        Development Stage Company
 June
        30,
        2007
 NOTES
        TO
        FINANCIAL STATEMENTS


1. BASIS
        OF PRESENTATION:
 
 The
        accompanying unaudited financial statements have been prepared in accordance
        with the rules and regulations of the Securities and Exchange Commission
        for
        interim financial statements. The interim financial statements present the
        balance sheet, statement of operations, and cash flows of the Company. The
        financial statements should be read in conjunction with the Form 10-KSB of
        the
        Company for the year ended December 31, 2006. In the opinion of management
        all
        normally recurring adjustments necessary to present fairly the financial
        position as of June 30, 2007 have been included in the financial statements.
        Interim results are not necessarily indicative of operations for the full
        year.
        Therefore, they do not include all of the information and footnotes required
        by
        accounting principles generally accepted in the United States for complete
        financial statements.
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States 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 period.
        Actual results could differ from those estimates.
  *Going
        concern:*
  The
              accompanying financial statements have been prepared in conformity
              with
              generally accepted accounting principle, which contemplate continuation
              of the
              Company as a going concern. The Company has incurred net losses of
              $2,329,262
              for the six month period ended June 30, 2007, and has incurred cumulative
              net
              losses of $11,075,635 since its inception and will require additional
              capital
              for its operational activities. The Company has successfully developed
              and
              established a line of men’s and women’s skin care products. The Company has and
              is aggressively launching its products with several luxury retailers.
              While the
              Company has already invested substantial funds in developing, promoting,
              and
              marketing activities, additional funds will be required to continue
              these
              efforts to establish market presence and gain market shares. The Company
              believes that these endeavors will result in increased sales. However,
              as of
              June 30, 2007, the Company has insufficient cash to operate its business
              for the
              next twelve months. The Company generated minimal revenues during the
              current quarter and believes that while revenues will increase, they
              will not be
              sufficient to absorb expenses to maintain the Company as a going concern.
              As
              such, the Company must raise additional capital to achieve its business
              goals
              and to continue operations. The Company’s ability to raise additional capital
              through the future issuances of the common stock is unknown. The ability
              to
              successfully resolve these factors raise substantial doubt about the
              Company’s
              ability to continue as a going concern. The financial statements of
              the Company
              do not include any adjustments that may result from the outcome of
              these
              aforementioned uncertainties. The Company currently has positive working
              capital, but has not established a stabilized source of revenues sufficient
              to
              cover operating costs over an extended period of time. Additionally,
              the Company
              is involved in litigation with several parties. While the Company is
              attempting
              to settle this litigation the outcome may adversely affect the liquidity
              of the
              Company and the ability to raise additional
              funds.
  Notwithstanding,
            the Company and an unrelated third party have entered into an agreement
            whereby
            the third party is willing to provide, subject to the terms and conditions
            of
            the agreement, certain financing for the Company’s ongoing and proposed business
            operations and activities. The agreement provides for a 9% Senior Secured
            Convertible Note in the stated amount of $2,200,000. The initial advance,
            defined as a preliminary advance of $200,000 combined with an additional
            advance
            of $300,000, is to be secured by funds received in connection with certain
            licensing agreements of the Company. In consideration for the initial
            advance
            the unrelated third party will receive an invitation to join the Board
            of
            Directors and receive options to purchase 125,000 shares of the Company’s stock,
            and warrants to purchase up to 4,000,000 shares of the Company’s common stock
            proportionate to the actual amount advanced. To date, the Company has
            received
            $500,000; however, there are no assurances that the Company will receive
            the
            balance.
  Management
        anticipates that the Company will be dependent, for the near future, on
        additional investment capital to fund operating expenses before achieving
        operating profitability. The Company intends to further position itself so
        that
        it may be able to raise additional funds through the capital markets which
        to
        date it has demonstrated the ability to do so. Management is currently pursuing
        several alternatives to raise additional capital. While the management believes
        it will be successful in raising the necessary funds for its immediate needs,
        there are no assurances that in the future the Company will be successful
        in
        this or any of its endeavors or become financially viable and continue as
        a
        going concern.
  2. DESCRIPTION
        OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
 
 Description
        of business - Davi Skin, Inc., formerly MW Medical, Inc., (referred to as
        the
“Company”) is involved in the establishment and development of an all
        natural grape-based skin care line. The Company launched the sale of its
        products, which are currently being sold in New York, during the year ended
        December 31, 2006.
  F-4
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
  History - On
        June 21, 2004, the Company completed and closed a Plan of Merger and
        Reorganization Agreement (“Merger Transaction”) with Davi Skin, Inc. (“Davi”),
        a privately owned company, whereby both parties agreed that a subsidiary of
        the Company would merge into and with Davi and become a wholly-owned subsidiary
        of the Company. As consideration for this merger transaction, the Company
        issued
        9,768,327 shares of its common stock in exchange for all the outstanding
        common
        stock of Davi on a one-for-one share exchange basis. The Agreement further
        provided for the Company’s officers and directors were to resign and the
        board of directors of Davi would become the board of directors for the Company.
        This transaction has been accounted for as a recapitalization or reverse
        merger
        whereby Davi would be considered the accounting acquirer, and the accounting
        history of the acquirer would be carried forward as the history for the Company
        and no goodwill would be recorded. Accordingly, the accompanying financial
        statements reflect the history of Davi from its date incorporation of March
        21,
        2004 (incorporated in the State of Nevada). Prior to the merger transaction,
        the
        Company had 645,033 shares of its common stock outstanding, $1,922 in accounts
        payable, $200,000 in a note payable to a related party and no
        assets.
 
 3. SIGNIFICANT
        ACCOUNTING POLICIES
 
 Development
        stage company. The
        accompanying financial statements have been prepared in accordance with the
        Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by
        Development-Stage Enterprises”. A development-stage enterprise is one in which
        planned principal operations have not commenced or if its operations have
        commenced, there has been no significant revenue there from.
 
 Definition
        of fiscal year. The
        Company’s fiscal year end is December 31.
 
 Use
        of
        estimates .
        The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States 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 consolidated
        financial statements and the reported amounts of revenue and expenses during
        the
        reporting period. Actual results could differ from those estimates.
  Revenue
        recognition .  Revenues are recognized when services are rendered and/or products
        are delivered. Costs and expenses are recognized during the period in which
        they
        are incurred.
  Cash
        and cash equivalents .  We consider all highly liquid short-term investments, with original
        maturities of three months or less, to be cash equivalents. Such cash
        equivalents generally are part of our cash management activities rather than
        part of its operating, investing, and financing activities. Changes in the
        market value of cash equivalents result in gains or losses that are recognized
        in the income statement in the period in which they occur.
  Receivables.
        The
        Company’s accounts receivables represent financial instruments with a potential
        risk. We offer, and reserve the right to deny, credit terms with credit limits
        to customers based on their creditworthiness. We retain the right to place
        approved accounts on credit hold should these accounts become delinquent.
        We
        will maintain an allowance for doubtful accounts for estimated losses should
        customers fail to make required payments. In addition, we monitor the accounts
        for aging, historical account balances, payment patterns, history of
        collectibility, and customer creditworthiness when determining the
        collectibility of bad debt. Accounts receivables are written off when all
        collection attempts have failed. Allowance for doubtful accounts may increase
        if
        circumstances warrant. We believe that our current account receivables are
        collectible.
  Credit
        and concentration risk.**.**The
        Company maintains deposit accounts in a single financial institution. From
        time
        to time, cash deposits may exceed Federal Deposit Insurance Corporation limits.
        The Company maintains certificates of deposit in excess of federal deposit
        insurance limits and, at times, the Company’s general operating account will
        exceed federal deposit insurance limits.
  Inventory . The
        Company’s inventory consists of finished goods and raw materials, is stated at
        the lower of cost or market and cost is determined by the first-in, first-out
        method. The Company regularly monitors inventory quantities on hand and records
        write-downs for excess and obsolete inventories based primarily on the Company’s
        estimated forecast of product demand and production requirements. Such write
        downs establish a new cost basis of accounting for the related inventory.
        Actual
        inventory losses may differ from management’s estimates, and such differences
        could be material to the Company’s financial position, results of operations and
        cash flows.
  F-5
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
  Fixed
        assets  **.** Property
        and equipment are depreciated over the estimated useful lives of the related
        assets, generally 3-5 years. Leasehold improvements are amortized over the
        lesser of the lease term or the estimated life of the asset. Depreciation
        and
        amortization is computed on the straight-line method. Repairs and maintenance
        are expensed as incurred.
  Fair
        value of financial instruments .  Statement of Financial Accounting Standards (“SFAS”) No. 107,
“Disclosure About Fair Value of Financial Instruments,” requires us to disclose,
        when reasonably attainable, the fair market values of its assets and liabilities
        which are deemed to be financial instruments. The carrying amounts and estimated
        fair values of our financial instruments approximate their fair value due
        to
        their short-term nature.
  Earnings
        (loss) per share .  Basic
        earnings (loss) per share exclude any dilutive effects of options, warrants
        and
        convertible securities. Basic earnings (loss) per share are computed using
        the
        weighted-average number of outstanding common shares during the applicable
        period. Diluted earnings (loss) per share are computed using the
        weighted-average number of common and common stock equivalent shares outstanding
        during the period. Common stock equivalent shares are excluded from the
        computation if their effect is anti-dilutive. Stock options are anti-dilutive
        when the results from operations are a net loss, as is the case for the for
        the
        six months ended June 30, 2007 and 2006 or when the exercise price of the
        options is greater than the average market price of the common stock for
        the
        period.
  Income
        taxes. The Company accounts for its income taxes in accordance with Statement of
        Financial Accounting Standards No. 109 “Accounting for Income Taxes”, which
        requires recognition of deferred tax assets and liabilities for future tax
        consequences attributable to differences between the financial statement
        carrying amounts of existing assets and liabilities and their respective
        tax
        bases and tax credit carry-forwards. Deferred tax assets and liabilities
        are
        measured using enacted tax rates expected to apply to taxable income in the
        years in which those temporary differences are expected to be recovered or
        settled. The effect on deferred tax assets and liabilities of a change in
        tax
        rates is recognized in income in the period that includes the enactment date.
        We
        established a valuation allowance for the full tax benefit of the operating
        loss
        carry forward due to the uncertainty regarding realization. As of June 30,
        2007,
        the Company has cumulative net losses of $11,075,535. The available net
        operating loss carry forwards are still being determined. Such losses may
        not be
        fully deductible due to the significant amounts of non-cash service
        costs.
  Comprehensive
        income (loss) . The
        Company has no components of other comprehensive income. Accordingly, net
        loss
        equals comprehensive loss for all periods.
  Advertising
          costs . Advertising
          costs incurred in the normal course of operations are expensed as incurred.
          Advertising costs incurred for the six months ended June 30, 2007 and 2006,
          and
          for the period from inception (March 21, 2004) through June 30, 2007 was
          $44,975, and $0, and $44,975, respectively.
  Stock-based
        compensation - The
        Company accounts for its stock options under SFAS 123(R).
  In
        order
        to determine compensation on options issued to consultants, and employees’
options, the fair value of each option granted is estimated on the date of
        grant
        using the Black-Scholes option-pricing model. The Company estimates the
        requisite service period used in the Black-Scholes calculation based on an
        analysis of vesting and exercisability conditions, explicit, implicit, and/or
        derived service periods, and the probability of the satisfaction of any
        performance or service conditions. The Company also considers whether the
        requisite service has been rendered when recognizing compensation costs. The
        Company does not consider market conditions to be vesting conditions and
        an
        award is not deemed to be forfeited solely because a market condition is
        not
        satisfied.
 
 4. RECENTLY
        ISSUED ACCOUNTING PRONOUNCEMENTS
  F-6
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
  In
        February 2006, the FASB issued SFAS No. 155 entitled “Accounting *for
        Certain Hybrid Financial Instruments* ,” an
        amendment of SFAS No. 133 (“Accounting *for
        Derivative Instruments and Hedging Activities* ”)
        and
        SFAS No. 140 (“Accounting *for
        Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities* ”).
        In
        this context, a hybrid financial instrument refers to certain derivatives
        embedded in other financial instruments. SFAS No. 155 permits fair value
        re-measurement of any hybrid financial instrument which contains an embedded
        derivative that otherwise would require bifurcation under SFAS No. 133. SFAS
        No.
        155 also establishes a requirement to evaluate interests in securitized
        financial assets in order to identify interests that are either freestanding
        derivatives or “hybrids” which contain an embedded derivative requiring
        bifurcation. In addition, SFAS No. 155 clarifies which interest/principal
        strips
        are subject to SFAS No. 133, and provides that concentrations of credit risk
        in
        the form of subordination are not embedded derivatives. SFAS No. 155 amends
        SFAS
        No. 140 to eliminate the prohibition on a qualifying special-purpose entity
        from
        holding a derivative financial instrument that pertains to a beneficial interest
        other than another derivative. Any difference between the total carrying
        amount
        of the components of a bifurcated hybrid financial instrument and the fair
        value
        of the combined “hybrid” must be recognized as a cumulative-effect adjustment of
        beginning deficit/retained earnings.
  SFAS
        No.
        155 is effective for all financial instruments acquired or issued after the
        beginning of an entity’s first fiscal year that begins after September 15, 2006.
        Earlier adoption is permitted only as of the beginning of a fiscal year,
        provided that the entity has not yet issued any annual or interim financial
        statements for such year. Restatement of prior periods is
        prohibited.
  In
        March
        2006 FASB issued SFAS 156 ‘Accounting for Servicing of Financial Assets’ this
        Statement amends FASB Statement No. 140, *Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities,* with
        respect to the accounting for separately recognized servicing assets and
        servicing liabilities. This Statement:
  1.
              Requires
                  an entity to recognize a servicing asset or servicing liability
                  each time
                  it undertakes an obligation to service a financial
                asset
                  by entering into a servicing
                  contract.
  2.
              Requires
                  all separately recognized servicing assets and servicing liabilities
                  to be
                  initially measured at fair value, if
                  practicable.
  3.
              Permits
                  an entity to choose ‘amortization method’ or ‘fair value measurement
                  method’ for each class of separately recognized
                servicing
                  assets and servicing liabilities.
  4.
              At
                  its initial adoption, permits a one-time reclassification of
                  available-for-sale securities to trading securities by entities
                  with
                recognized
                  servicing rights, without calling into question the treatment of
                  other
                  available-for-sale securities under Statement
                115,
                  provided that the available-for-sale securities are identified
                  in some
                  manner as offsetting the entity’s exposure to changes
                in
                  fair value of servicing assets or servicing liabilities that a
                  servicer
                  elects to subsequently measure at fair
                  value.
  5.
              Requires
                  separate presentation of servicing assets and servicing liabilities
                  subsequently measured at fair value in the statement
                of
                  financial position and additional disclosures for all separately
                  recognized servicing assets and servicing
                  liabilities.
  This
        Statement is effective as of the beginning of the Company’s first fiscal year
        that begins after September 15, 2006.
  The
          Company adopted SPAS 155 and 156 effective January 1, 2007, and the adoption
          has
          not had a material effect on the Company’s financial statements. In
          July
          2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
          Income Taxes” (FIN No. 48).  This interpretation requires recognition
          and measurement of uncertain income tax positions using a "more-likely-than-not"
          approach. The provisions of FIN No. 48 are effective for fiscal years beginning
          after December 15, 2006. The Company does not anticipate that the adoption
          of
          this accounting pronouncement will have a material effect on its consolidated
          financial statements.
 
 In
          September 2006, the FASB issued FAS 157, “Fair Value Measurements.” This
          standard defines fair value, establishes a framework for measuring fair
          value in
          generally accepted accounting principles, and expands disclosures about
          fair
          value measurements.  This statement is effective for financial
          statements issued for fiscal years beginning after November 15, 2007. The
          Company does not anticipate that the adoption of this accounting pronouncement
          will have a material effect on its consolidated financial
          statements.
 
 In
          September 2006, the SEC released Staff Accounting Bulletin No. 108, “Considering
          the Effects of Prior Year Misstatements when Quantifying Misstatements
          in
          Current Year Financial Statements" (SAB 108). SAB 108 provides interpretive
          guidance on the SEC's views regarding the process of quantifying materiality
          of
          financial statement misstatements. SAB 108 is effective for fiscal years
          ending
          after November 15, 2006. The Company does not anticipate that the adoption
          of
          this accounting pronouncement will have a material effect on its consolidated
          financial statements.
 
 In
          February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
          Financial Assets and Financial Liabilities - Including an amendment of
          FASB
          Statement No. 115 ("SFAS 159").  SFAS 159 provides companies with an
          option to report selected financial assets and liabilities at fair
          value.  SFAS 159's objective is to reduce both complexity in
          accounting for financial instruments and the volatility in earnings caused
          by
          measuring related assets and liabilities differently.  SFAS 159 is
          effective as of the beginning of an entity's first fiscal year beginning
          after
          November 15, 2007.   The Company is currently evaluating the
          potential impact, if any, that the adoption of SFAS 159 will have on its
          condensed consolidated financial statements .
  Other
          recent accounting pronouncements issued by the FASB (including its Emerging
          Issues Task Force), the American Institute of Certified Public Accountants,
          and
          the SEC did not or are not believed by management to have a material impact
          on
          our present or future financial statements included elsewhere
          herein.
  5. RELATED
        PARTY TRANSACTIONS
  The
          former President of our predecessor entity, MW Medical, Inc. loaned the
          Company
          $200,000 under a promissory note dated June 15, 2003, and was originally
          due
          December 31, 2004 bearing an interest rate of 10% per annum. The note plus
          the
          balance of the accrued interest was converted by an unrelated party into
          2,295,388 shares of common stock of the Company at a price of $0.125 per
          share
          at the time of conversion in accordance with the agreement.
 
 F-7
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
 We
        outsource a portion of our operational activities to companies with greater
        expertise in certain areas in order to keep our overhead expenditures to
        a
        minimum. Currently our payroll function is outsourced to an accounting firm
        with
        one of its partners being both a member of our Executive Advisory Board and
        a
        relative of a member of our Board of Directors.
 
 6. CONVERTIBLE
        DEBENTURE
  The
            Company and an unrelated third party have entered into an agreement whereby
            the
            third party is willing to provide, subject to the terms and conditions
            of the
            agreement; certain financing for the Company’s ongoing and proposed business
            operations and activities. The agreement provides for a 9% Senior Secured
            Convertible Note in the stated amount of $2,200,000. The initial advance
            (consisting of a $200,000 preliminary advance and an additional advance
            of
            $300,000) is to be secured by funds received in connection with a certain
            license agreement by and between the Company, Constellation Wines U.S.,
            and
            Robert Mondavi Corporation. In consideration for the initial advance
            the
            unrelated third party will receive an invitation to join the Board of
            Directors
            and receive options to purchase 125,000 shares of the Company’s stock, and
            warrants to purchase up to 4,000,000 shares of the Company’s common stock
            depending on the amount actually advanced. As of June 30, 2007, the Company
            has
            received the preliminary advance of $200,000 on May 17 th ,
            2007.
            Accrued interest at June 30, 2007 is $2,576.
  7. FIXED
        ASSETS
 
 Fixed
        assets consist of the following as of June 30, 2007:
 
 Furniture
                  and fixtures
              
              $
              6,972Computer
                  equipment
              
              
              11,718Leasehold
                  improvements
              
              
              17,00035,690Less:
                  accumulated depreciation
              
              
              (7,019
              )Fixed
                  assets, net
              
              $
              28,671
  8. DEPOSIT
 
 The
        Company has booked $44,505 in deposits. The deposit is related to the Company’s
        prior leasing of office space located at 301 North Canon, Suite 207 Beverly
        Hills, CA 90292. It is management’s opinion that this amount will be
        recovered.
 
 9. COMMITMENTS
        AND CONTINGENCIES
  Lease
        agreements . On May
        18, 2006, the Company entered into a 3-year lease agreement with Marina Glencoe,
        LLC, a California limited liability company, to lease approximately 1,980
        square
        feet of office space located at 4223 Glencoe Ave, Suite B130 Marina Del Rey,
        CA
        90292. The lease provides for monthly rental payments, including parking
        and
        utilities of $ 4,643 for the first 12 months, $ 4,775.54 for months 13 -
        24 and
        $4,912.05 for months 24 - 36. The Company provided a letter of credit in
        the
        amount of $49,896 as a security deposit.
 
 Future
        minimum annual lease payments and principal payments under existing agreements
        are as follows:
  12
                  months ending
                June
                  30,2008
              
              $
              57,4332009
              
              
              54,033Total
              
              $
              111,476
  F-8
 DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
  Total
        rental expenses under non-cancelable lease terms in excess of one year was
        $27,990, $46,421, and $121,031 for the six month period ended June 30, 2007
        and
        2006, and the period from inception (March 21, 2004) through June, 30, 2007,
        respectively.
 
 10. CONCENTRATIONS
 
 The
        majority of the Company’s sales during the six month period ended June 30, 2007
        were to three customers which made up 88% of total sales. All
        purchases of inventory were from one supplier.
 
 At
        June
        30, 2007, the Company did not maintain certificates of deposit at any one
        major
        financial institution in excess of the federally insured limits pursuant
        to
        Federal Deposit Insurance Corporation. The Company had certificates of deposit
        in the amount $75,989.
 
 11. CAPITAL
        STOCK TRANSACTIONS
 
 Preferred
        stock- The
        authorized preferred stock is 10,000,000 shares at $0.001 par value. As of
        June
        30, 2007 there were no preferred shares issued or outstanding.
  Common
        Stock- The
        authorized common stock is 90,000,000 shares at $0.001 par value. As of June
        30,
        2007, there were 14,611,208 shares of common stock outstanding.
  As
          of
          June 30, 2007, the Company owed 150,000 shares of common stock to each
          of its
          non-founding directors and 500,000 shares to its Chief Financial Officer
          under
          the terms of his employment agreement. Additionally, the Company owed 500,000
          shares to Mr. Spellman. The Company expensed $169,000 for the 1,300,000
          shares
          to be issued at a price of $0.13 per share.
 
 12. WARRANTS
 
 On
        March
        27, 2006, we closed a Stock Purchase Agreement (“SPA”) with Artist House
        Holdings, Inc. (“Artist House.”) Under the Stock Purchase Agreement, Artist
        House agreed to purchase 283,333 of our Securities Units (“Securities Units,”)
        consisting of 566,667 shares of common stock and a warrant to purchase an
        additional 283,333 shares of common stock at $4.50 per share exercisable
        in 24
        months, in exchange for gross proceeds of $1,700,000 (less $204,000 in fees)
        for
        net proceeds of $1,496,000, an effective price of $2.65 per share. We filed
        the
        Registration Statement, however did not pursue the registration process due
        to
        legal proceedings. The warrants issued in accordance with the above mentioned
        SPA were valued at $275,737 using the Black-Scholes option pricing model.
        The
        following table summarizes the assumptions used in arriving at the valuation:
 
 Number
                  of warrants issued
              
              
              283,333Market
                  price at grant date
              
              $
              1.50Exercise
                  price
              
              $
              4.50Term
              
              
              24
                  monthsVolitility
              
              
              66
              %Annual
                  rate of quarterly dividends
              
              
              0.00
              %Discount
                  Rate-Bond Equivalent Yield
              
              
              4.61
              %
 
 13. COMMON
        STOCK OPTIONS
  F-9
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
  In
        order
        to determine compensation on options issued to consultants, as well as fair
        value disclosures for employees’ options, the fair value of each option granted
        is estimated on the date of grant using the Black-Scholes option-pricing
        model.
        The Company estimates the requisite service period used in the Black-Scholes
        calculation based on an analysis of vesting and exercisability conditions,
        explicit, implicit, and/or derived service periods, and the probability of
        the
        satisfaction of any performance or service conditions. The Company also
        considers whether the requisite service has been rendered when recognizing
        compensation costs. The Company does not consider market conditions to be
        vesting conditions and an award is not deemed to be forfeited solely because
        a
        market condition is not satisfied.
  On
        November 1, 2005, we entered into an employment agreement (“Agreement”) with our
        President. The term of the Agreement is for two years with an annual salary
        of
        $120,000. The Agreement provides for bonuses to our President based upon
        our
        financial performance to be determined at the sole discretion of our Board
        of
        Directors after consultation with our President. The Agreement also provides
        for
        equity based compensation to purchase up to 1,250,000 shares of our common
        stock
        (“Stock Options”) at a purchase price of $0.25 per share. The Stock Options vest
        as follows: 250,000 shares upon execution of the Agreement; 500,000 shares
        on
        March 1, 2006; and 500,000 shares on March 1, 2007. During the three months
        ended March 31, 2007, the President agreed to forfeit options to purchase
        750,000 shares of the Company’s common stock. The estimated fair value of the
        Stock Options has been determined using Black-Scholes option pricing model
        using
        the following assumptions:
 
 exercise
                  price of
              
              $
              0.25closing
                  stock price on date of the Agreement of
              
              $
              3.50historical
                  stock price volatility of
              
              
              77
              %risk
                  free interest rate of
              
              
              3.50
              %dividend
                  yield of
              
              
              0%
                  and 3 year term.
  The
        estimated fair value of the Stock Options was expensed over the vesting
        period. During the six months ended June 30, 2007, 2006, and during the period
        from inception (March 21, 2004) through June 30, 2007 we recorded an expense
        related to the Stock Options of $702,486, $1,582,407, and $4,764,157,
        respectively. The Company recorded no expense for the three month period
        ended
        June 30, 2007
  In
        February 2006, we employed Patrick Pflipsen and the Company agreed to provide
        equity based compensation to purchase up to 50,000 shares of our common stock
        (“Stock Options”) at a purchase price of $0.26 per share.  The estimated
        fair value of the Stock Options has been determined using Black-Scholes option
        pricing model using the following assumptions:
  exercise
                  price of
              
              $
              0.26closing
                  stock price on date of the Agreement of
              
              $
              0.26historical
                  stock price volatility of
              
              
              66
              %risk
                  free interest rate of
              
              
              4.56
              %dividend
                  yield of
              
              
              0%
                  and
                1year
                  term.
  The
        estimated fair value of the Stock Options totaled $6,166, which was expensed
        over the vesting period. During the six months ended June 30, 2007 and 2006,
        and
        during the inception period from inception (March 21, 2004) through June
        30,2007, we recorded an expense related to the Stock Options of $0, $0, $6,166,
        respectively. There was no related expense for the three month period ended
        June
        30, 2007.
  On
        June
        8, 2006, we entered into an employment agreement (“Agreement”) with our Chief
        Financial Officer. The term of the Agreement is for two years with an annual
        salary of $120,000. The Agreement provides for bonuses to our Chief Financial
        Officer based upon our financial performance to be determined at the sole
        discretion of our Board of Directors, and quarterly bonuses tied to the accurate
        and timely filing of all required SEC filings. The Agreement also provides
        for
        equity based compensation to purchase up to 370,000 shares of our common
        stock
        (“Stock Options”) at a purchase price of $1.00 per share. The Stock Options vest
        as follows: 10,000 shares upon execution of the Agreement; 30,000 shares
        at the
        end of each quarter during the term that the Executive remains employed.
        This
        executive resigned on September 15, 2006, and accordingly, the options to
        purchase 360,000 shares were forfeited during the year ended December 31,
        2006.
        The estimated fair value of the Stock Options has been determined using
        Black-Scholes option pricing model using the following assumptions:
  F-10
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
 
 exercise
                  price of
              
              $
              1.00closing
                  stock price on date of the Agreement of
              
              $
              1.01historical
                  stock price volatility of
              
              
              107
              %risk
                  free interest rate of
              
              
              4.99
              %dividend
                  yield of
              
              
              0%
                  and 3
                year
                  term.
 The
          estimated fair value of the Stock Options totaled $8,696, which was
          expensed over the vesting period. During the six months ended June 30,
          2007 and
          2006 and during the period from inception (March 21, 2004) through June
          30,
          2007, we recorded an expense related to the Stock Options of $0, $0, $8,696,
          respectively. There was no related expense for the three month period ended
          June
          30, 2007.
 On
        November 28, 2006, Davi Skin, Inc. (the “Company”) executed and delivered a
        severance agreement with Patrick Pflipsen (“Pflipsen”) by which the Company
        terminated Pflipsen’s employment with the Company.  In consideration for
        Pflipsen’s obligations under the agreement, the agreement provides that the
        Company shall issue 50,000 options to purchase common stock of the Company
        with
        an exercise price of $0.50 per share.  Under the agreement, the Company
        also retained the option to engage Pflipsen as a consultant to assist in
        various
        projects, including capital raises for the Company. The estimated fair value
        of
        the Stock Options has been determined using Black-Scholes option pricing
        model
        using the following assumptions:
 
 F-11
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
 exercise
                  price of
              
              $
              0.49closing
                  stock price on date of the Agreement of
              
              $
              0.25historical
                  stock price volatility of
              
              
              152
              %risk
                  free interest rate of
              
              
              4.56
              %dividend
                  yield of
              
              
              0%
                  and 6
                mth
                  term.
  The
        estimated fair value of the Stock Options totaled $9,740, which was expensed
        over the vesting period., During the six months ended June 30, 2007 and 2006,
        and during the period from inception (March 21, 2004) through June 30, 2007,
        we
        recorded an expense related to the Stock Options totaling $0, $0, and $9,740
        respectively.
  In
          April
          2007, the Company agreed to provide Lloyd & Co. with payment for services
          that were previously provided at a reduced cost with the purchase up to
          75,000
          share of our common stock (“stock options”) at a purchase price of $0.41 per
          share. The estimated fair value of the stock options has been determined
          using
          Black-Scholes option pricing model using the following assumptions:
 
 Exercise
                    price of
                
                $
                0.41Closing
                    stock price on date of Agreement
                
                $
                0.41Historical
                    stock price volatility of
                
                
                100
                %Risk
                    free interest rate of
                
                
                4.685
                %Dividend
                    yield of
                
                
                0%
                    and 10 year term.
 
 
 The
          estimated fair value of the stock options totaled $27,993, which will be
          expended over the vesting period. During the six months ended June 30,
          2007 and
          2006, and during the inception period from inception (March 21, 2004) through
          June 30, 2007, we recorded an expense related to the stock options of $27,993,
          $-0-, and $27,993, respectively. The company recorded on expense of $27,993
          for
          the three months ended June 30, 2007.
  In
          April
          2007 the Company agreed to provide equity based compensation to Carlo Mondavi,
          Josh LeVine, and Elliot Smith to purchase up to 125,000 shares each of
          our
          common stock (“stock options”) at a purchase price of $0.25 per share. The
          estimated fair value of the stock options has been determined using
          Black-Scholes option pricing model using the following assumptions:
 
 Exercise
                    price of
                
                $
                0.25Closing
                    stock price on date of Agreement
                
                $
                0.25Historical
                    stock price volatility of
                
                
                100
                %Risk
                    free interest rate of
                
                
                4.685
                %Dividend
                    yield of
                
                
                0%
                    and 1 1/2 year term.
 
 
 The
          estimated fair value of the stock options totaled $44,856, which will be
          expended over the vesting period. During the six months ended June 30,
          2007 and
          2006, and during the inception period from inception (March 21, 2004) through
          June 30, 2007, we recorded an expense related to the stock options of $44,856,
          $-0-, and $44,856, respectively. The company recorded on expense of $44,856
          for
          the three months ended June 30, 2007.
  The
        following is a summary of the stock option activity:
  Number
                of
                  Shares
              
              Weighted
                Average
                Exercise
                  PriceOutstanding
                  at January 1, 2007
              
              
              1,360,000
              
              $
              0.26Options
                  Granted
              
              
              450,000
              
              $
              0.28Options
                  Canceled
              
              
              (750,000
              )
              $
              (0.25
              )Options
                  Exercised
              
              
              -
              
              $
              -Outstanding
                  at June 30, 2007
              
              
              1,060,00
              
              $
              0.26Exercisable
                  at June 30, 2007
              
              
              1,060,000
              
              $
              0.26
 
 The
        details of the vested stock options outstanding as of June 30, 2007 are as
        follows:
  Options
                    Outstanding
                
                Options
                    ExercisableRange
                    of
                  Exercisable
                    Prices
                
                Number
                  Outstanding
                
                Weighted
                  Average
                  Remaining
                  Contractual
                  Life
                    (in years)
                
                Weighted
                  Average
                  Exercise
                    Price
                
                Number
                  Exercisable
                
                Weighted
                  Average
                  Exercise
                    Price$0.25
                    - $1.00
                
                
                1,060,000
                
                
                5.15
                
                $
                0.26
                
                
                1,060,000
                
                $
                0.26
 Options
                  Outstanding & Unvested at
                June
                  30, 2007Number
                Outstanding
              
              Weighted
                Average
                Exercise
                  PriceNon
                  Vested at January 1, 2007
              
              
              500,000
              
              $
              0.25Granted
              
              
              450,000
              
              $
              0.28Forfeited
              
              
              -
              
              $
              -Vested
              
              
              (950,000
              )
              $
              0.25Non
                  Vested at June 30, 2007
              
              
              -
              
              $
              -
  F-12
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
  14. EQUITY
        SECURITIES OFFERINGS
 
 On
        January 3, 2007, the Company entered into an agreement with Donald B. Schwall,
        Jr. (“Mr. Schwall”).  Pursuant to the agreement, Mr. Schwall is obligated
        to act as a consultant and advisor to the Company on various promotional
        and
        marketing campaigns, including developing online promotional concepts, events
        and materials to increase website awareness, service membership, and eCommerce
        product sales.  Mr. Schwall will also provide consulting services relating
        to endorsements, co-operative promotions, and other forms of strategic
        alliances.  The agreement provides that the Company shall compensate Mr.
        Schwall for his services with 400,000 shares of Company common stock issued
        under the Company’s stock compensation plan as follows:  200,000 shares
        upon execution of the Agreement, and 200,000 shares on April 1, 2007 so long
        as
        the agreement is in effect on such date.
  The
          Company filed a Registration Statement on Form S-8 relating to 200,000
          shares of its common stock, par value $0.001 per share (the “Common Stock”)
          issued to Donald B. Schwall, Jr. (“Consultant”), an eligible consultant to the
          Corporation under that certain Consulting Agreement between the Company
          and
          Consultant dated as of January 3, 2007. The consulting agreement was cancelled
          and 150,000 shares of common stock were returned. During the three month
          period
          ended June 30, 2007, non cash consulting fees of $30,000 were recorded
          relating
          to this agreement.
  15. LEGAL
        PROCEEDINGS
 
 An
        action
        entitled Rowe D. Nelson, et al. vs. Davi Skin, Inc., et al., Los Angeles
        Superior Court Case No. SC091146 (the “Complaint”) was filed on September 20,
        2006. The plaintiffs filed an amended complaint on or about October 6, 2006,
        to
        which the defendants filed a demurrer, which was sustained in part. The
        plaintiffs filed a second amended complaint ("SAC") on or about February
        23,
        2007, and defendants have demurred in part to that pleading. The demurrer
        is
        pending. The Complaint makes a number of allegations, principally that (a)
        certain individual members of the Mondavi family, including our
        Chairman, Carlo
        Mondavi, made intentional misrepresentations or fraudulent omissions about
        the
        physical and financial involvement of the Mondavi family in the Company,
        the
        enforceability of certain agreements between the Company and Opus One and
        the
        Robert Mondavi Corporation, and the acquisition of the Robert Mondavi
        Corporation by Constellation Brands, to induce the plaintiffs to invest in
        the
        Company, (b) certain individual members of the Mondavi family, including
        our
        Chairman, Carlo Mondavi, made intentional misrepresentations to induce plaintiff
        Sam Medley and his son and business associate (the “Medleys”) to merge MW
        Medical, Inc., a company the Medleys allegedly contracted to buy, into Davi
        Skin, Inc., at the time a privately held company, and (c) Carlo Mondavi,
        our
        Chairman and a director, Joe Spellman, our President and CEO and a director,
        and
        Josh LeVine, an executive vice president and director, misused corporate
        assets
        for their personal benefit by voting to increase their own salaries, issuing
        themselves stock options and approving large expense reimbursements. Based
        on
        these factual allegations, the Complaint states fifteen (15) causes of action
        against some or all of the named defendants, including, among others, breach
        of
        fiduciary duty of loyalty, breach of fiduciary duty of care, unjust enrichment,
        conversion, waste of corporate assets, fraudulent misrepresentation, fraud
        in
        the inducement, state law securities fraud, intentional interference with
        contract and promissory estoppel. We do not believe that the claims are
        meritorious and dispute the underlying facts alleged. We intend to defend
        the
        matter vigorously.
  On
        May 4,
        2006 we received a letter from legal counsel representing Artist House in
        which
        Artist House purportedly terminated the SPA dated March 27, 2006, and demanded
        the unconditional return of $1,700,000 million, representing Artist House’s
        purchase price under the SPA for 566,667 shares of our common stock plus
        warrants exercisable into 283,333 shares of our common stock. In this demand
        letter, Artist House alleged that we failed to timely perform certain conditions
        and obligations under the SPA, including (a) appointing certain individuals
        affiliated with Artist House to our board of directors, (b) obtaining directors
        and officers liability insurance, (c) modifying rights related to stock options
        issued to our CEO, Joe Spellman, (d) appointing Artist House as our licensing
        agent in Japan, and (e) requiring board approval for any salary increases
        to our
        officers. On July 6, 2006, counsel for the Company received written notice
        from
        another attorney representing Artist House, demanding rescission of the SPA,
        based on the similar claims and allegations of breach and non-performance
        by the
        Company and allegations that the alleged “finder” of the investment was acting
        as an unlicensed broker and therefore the transaction is subject to rescission.
        The Company denies the allegations.
  F-13
  DAVI
          SKIN, INC
 (Formerly
          MW Medical, Inc.)
 A
          Development Stage Company
 June
          30,
          2007
 NOTES
          TO
          FINANCIAL STATEMENTS
 On
        or
        about August 2, 2006, a lawsuit entitled Artist House Holdings, Inc. vs Davi
        Skin, Inc. et. al., United States District Court, District of Nevada, Case
        No.
        2:06-CV-893-RLH-LRL, was filed in federal district court in Nevada against
        the
        Company, its directors, and other individuals. The plaintiff, Artist House
        Holdings, Inc., is a shareholder in the Company. The complaint alleged
        violations of federal securities law and Nevada securities law, breach of
        contract, and related claims arising from the plaintiff's investment in Company.
        A First Amended Complaint was filed on July 31, 2006, and a Second Amended
        Complaint on January 8, 2007. On December 22, 2006, the plaintiffs filed
        an
        emergency motion for a preliminary injunction, which the District Court denied
        on January 12, 2007. On January 26, 2007, the Company and its directors filed
        a
        motion to dismiss the federal securities law claim. That motion was granted
        on
        March 27, 2007. The Court gave the plaintiff leave to amend, and plaintiff
        subsequently filed an amended complaint to restate the claims not dismissed
        and
        to add a party defendant.  We filed an answer to the amended complaint on
        May 17, 2007.  We intend to defend the matter vigorously.
 The
          financial statements do not reflect any adjustments that could result from
          an
          unfavorable outcome with respect to any of the above legal proceedings.
          At this
          juncture we cannot determine the outcome nor range of any such loss. We
          do
          believe, however, that the above litigation is without merit, and are currently
          evaluating strategic and legal options best suited for our future
          growth.
  16. SUBSEQUENT
        EVENTS
 
 On
          July
          3, 2007, the Company received additional funds in the amount of $300,000
          pursuant to the agreement for convertible debenture.
 On
        July
        24, 2007, the Company issued to its shareholders of record as of June 21,
        2007,
        a Notice of Proposed Settlement of Derivative Action in the matter of Rowe
        D.
        Nelson, et al vs. Davi Skin, Inc., et al., Los Angeles Superior Court Case
        No.
        SC091146. A settlement hearing will be held on September 17, 2007.
  On
        July
        31, 2007, the Company issued 1,150,000 shares to its new Chief Executive
        Officer
        and President and 150,000 shares to one newly elected directors. Also, the
        1,300,000 shares were expensed at of June 30, 2007, were issued to the two
        nonfoundnig directors and the Chief Financial Office (see footnote
        11).
  F-14


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





**Forward-Looking
      Statements**





Certain
      statements, other than purely historical information, including estimates,
      projections, statements relating to our business plans, objectives, and expected
      operating results, and the assumptions upon which those statements are based,
      are “forward-looking statements” within the meaning of the Private Securities
      Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
      and Section 21E of the Securities Exchange Act of 1934. These
      forward-looking statements generally are identified by the words “believes,”
“project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and
      similar expressions. We
      intend
      such forward-looking statements to be covered by the safe-harbor provisions
      for
      forward-looking statements contained in the Private Securities Litigation Reform
      Act of 1995, and are including this statement for purposes of complying with
      those safe-harbor provisions. Forward-looking
      statements are based on current expectations and assumptions that are subject
      to
      risks and uncertainties which may cause actual results to differ materially
      from
      the forward-looking statements. Our
      ability to predict results or the actual effect of future plans or strategies
      is
      inherently uncertain. Factors which could have a material adverse affect on
      our
      operations and future prospects on a consolidated basis include, but are not
      limited to: changes in economic conditions, legislative/regulatory changes,
      availability of capital, interest rates, competition, and generally accepted
      accounting principles. These risks and uncertainties should also be considered
      in evaluating forward-looking statements and undue reliance should not be placed
      on such statements. We
      undertake no obligation to update or revise publicly any forward-looking
      statements, whether as a result of new information, future events or otherwise. Further
      information concerning our business, including additional factors that could
      materially affect our financial results is included herein and in our other
      filings with the SEC.





**Overview**





We
      are
      principally engaged in the development, manufacturing and distribution of luxury
      branded skincare products for men and women that encompass the anti-oxidant
      rich
      by-products of the winemaking process coupled with the latest innovations in
      modern technology. We also function as a licensing agent to entities interested
      in associating their products with our luxury brand names. The development
      of
      the luxury branded skincare product line and its related packaging is now
      complete. We are now selling the initial nine (9) SKUs, four (4) products in
      the
      women’s line and five (5) products in the men’s line, which are described in
      more detail below. All the products are now available pursuant to our retail
      launch in October 2006 with luxury retailer Bergdorf Goodman in New York City.
      Since the launch, the products are now available at Bergdorf Goodman and through
      their website; Bliss World Catalogs and their corresponding website; the luxury
      hotel and spa, Meadow Wood, located in the Napa Valley; and the Living Beauty
      section of Selfridges department store in London, England. These select upscale
      retailers submit purchase orders for quantities of our branded products, which
      we fulfill from our distribution center.




4




***Skin
      Care Products***





The
      initial nine (9) SKUs include four (4) products for women and five (5) for
      men
      described in detail below.





Women’s
      Line :




§
            Le
                Grand Cru for Women — An ultra-luxurious cream designed for women to
                provide a unique, long lasting, slow released infusion of anti-oxidants
                and moisture to the skin in order to make it smoother, softer and
                more
                supple;





§
            Vine
                Fresh SPF 30 Lotion — Oil free everyday moisturizer with UVB/UVA
                protection of an SPF 30. Formulated as a light, non-greasy formula,
                which
                is perfect for any type of skin, to moisturize and protect against
                oxidative damage such as pollution and stress;





§
            Moscato
                Purifying Cleanser — A gentle, luxurious, creamy product designed to
                cleanse and condition at the same time;





§
            Harvest
                Mist Toner — A super hydrating mist, formulated to tone, hydrate and
                refresh dull complexion.





Men’s
      Line :




§
            Le
                Grand Cru for Men — An ultra-luxurious cream designed for men to provide a
                unique, long lasting, slow released infusion of anti-oxidants and
                moisture
                to the skin in order to make it smoother, softer and more supple;





§
            Vine
                Fresh SPF 15 Lotion — Oil free everyday moisturizer with UVB/UVA
                protection of an SPF 15. Formulated as a light, non-greasy formula,
                which
                is perfect for any type of skin, to moisturize and protect against
                oxidative damage such as pollution and stress;





§
            Reserve
                Shave Cream — A luxurious shave cream designed to provide an
                extraordinarily close yet comfortable shave;





§
            Coastal
                Vine After Shave — An aftershave elixir /tonic used to soothe freshly
                shaved skin, reduce irritation, and provide moisturizing properties;





§
            Crushed
                Grape Seed Exfoliating Cleanser —Infused with crushed grape seeds this
                product is designed to cleanse, exfoliate, and condition at the same
                time.





At
      the
      core of all our products is a proprietary microencapsulated anti-aging
      antioxidant complex called Meritage that was created in collaboration with
      laboratories in Lyon, France. Meritage is a blend of grape and fermented wine
      extracts, green tea, raspberry, blackcurrant, and bilberry extracts amongst
      other select key ingredients. The Meritage complex is created through a unique
      double fermentation process, which allows for the select high-level antioxidants
      to remain active on the skin longer than conventionally created
      products.




5




***Licensing
      Agent***





In
      order
      to further our success and to leverage our Board Chairman’s highly visible and
      well-respected Mondavi name into other market categories, we entered into an
      agreement with Constellation Brands Group (“CBG”), the parent entity of The
      Robert Mondavi Corporation (“RMC”). RMC has retained us to act as their
      licensing agent in agreements with Waterford Wedgewood USA, Inc. (“Waterford”)
      on the development of a Robert Mondavi stemware line. CBG owns certain
      intellectual property rights held in RMC, including the valued Robert-Mondavi
      licensed marks (the “Intellectual Property”), and we have been engaged to: (1)
      negotiate opportunities with Waterford to license the Intellectual Property
      with
      Waterford’s stemware products, (2) develop and implement strategic plans for
      branding Waterford’s products, and (3) facilitate the terms and conditions of
      any agreements with Waterford. In exchange, CBG has agreed to compensate us
      with
      a revenue share of thirty three and one-third percent (33 -1/3%) of the gross
      revenues collected in any agreement we establish with Waterford. Gross revenues
      means the gross receipts actually received from any agreement with Waterford,
      including without limitation advance payments, minimum guarantees, royalty
      payments and other license fees.





We
      received a one-time $25,000 signing bonus during the first quarter of 2007
      for
      the successful negotiation and execution of the Constellation licensing
      arrangement. We have begun to receive royalty payments per the terms set forth
      in the agreement during the current reporting period.





**Plan
      of Operation in the Next Twelve Months**





***Skin
      Care Line***





We
      have
      completed the research and development of our initial line of luxury branded
      skincare products for men and women that harness the substantial antioxidant
      powers of fermented grape extracts. Production of the initial nine (9) SKUs
      commenced with our contract manufacturer last September ahead of our October
      2006 retail launch with Bergdorf Goodman.





The
      initial nine (9) SKUs include four (4) products for women and five (5) for
      men.
      All the products are now available pursuant to our retail launch in October
      2006
      with luxury retailer Bergdorf Goodman in New York City. Subsequent to the
      launch, the products have become available at Bergdorf Goodman and through
      their
      website; at Bliss World Catalogs and their corresponding website; at Meadow
      Wood, the luxury hotel and spa located in the Napa Valley; and the Living Beauty
      section of Selfridges department store in London, England. These select upscale
      retailers submit purchase orders for quantities of our branded products, which
      we fulfill from our distribution center. We intend to continue our plan to
      position our products in this high-end retail market.





***Product
      Development***





We
      have
      recently begun the development of a hotel amenity line of products for
      distribution into luxury hotel rooms worldwide in conjunction with Gilchrist
      & Soames, an industry leader in fine toiletries manufacturing. We expect the
      initial line of amenity products to consist of shampoo, conditioner, bath gel,
      body lotion and soaps, with additional products to be developed in the
      future.




6




These
      amenity products will feature the same Meritage complex of antioxidants that
      is
      found in our men’s and women’s retail line. Meritage is a microencapsulated
      blend of select antioxidants, including fermented grape extracts, which remain
      pure within the formula until application. Meritage's sustained time-release
      technology provides a slow infusion of antioxidant health benefits to the
      skin.





***Manufacturer***





Prior
      to
      our product launch in October 2006, we completed the research and development
      necessary to finalize the product designs and technical aspects needed to
      commence production of our products with our contract manufacturer. We completed
      the process of choosing all peripheral items involved in the manufacturing
      and
      marketing process, including:





§
            the
                final shape and size of the product containers;





§
            the
                final selection of caps;





§
            the
                final packaging design;





§
            the
                logo and label designs; and





§
            the
                final unit carton design and construction.





Upon
      final selection of the packaging directions and the completion of technical
      drawings of the packaging itself, production of our initial nine (9) SKUs
      commenced. Upon the completion of production, finished goods were then shipped
      to our distribution warehouse to await distribution to our retail channels.
      We
      intend to continue working with our contract manufacturer to ensure that our
      product orders are responsive to the needs of our customers.





***Distribution
      / Expansion***





We
      are in
      the process of exploring the expansion of our retail distribution. Our current
      plan is to begin supplying upscale retailers with our products in several select
      cities in the United States including Los Angeles, as well as to expand
      overseas, beginning with Europe and ultimately into Asia.





***Luxury
      Branding and Acquisitions***




During
      the normal course of business, our management team has been searching for other
      business opportunities that would allow us to diversify our sources of
      revenue.




In
      order
      to accomplish this new portion of our business plan, our board of directors
      will
      focus more on becoming a luxury brands headquarters. It is our intent to
      leverage our co- founder’s highly visible and well-respected Mondavi name into
      other market categories as well as to acquire new brands and intellectual
      properties to own, develop and license in the luxury category, while continuing
      to develop our original luxury skin care products.




7




It
      is our
intent that our company will become a holding company that will maintain the
      intellectual properties, trademarks, copyrights and licenses of the various
      operating businesses we are able to acquire or partner with. We plan to own
      anywhere from 0% to 100% of these operational companies. Depending on the
      circumstances surrounding each opportunity, management anticipates it will
      choose to fund these operational companies or enter into joint ventures with
      them. The holding companies will generate revenues from all licenses it issues
      to use the Mondavi and Davi names.





As
      our
      first step to further our new objective, we entered into an agreement with
      Constellation Brands Group, the parent entity of The Robert Mondavi Corporation.
      RMC has retained us to act as their licensing agent in agreements with Waterford
      Wedgewood USA, Inc. on the development of a Robert Mondavi stemware line. CBG
      owns certain intellectual property rights held in RMC, including the valued
      Robert-Mondavi licensed marks, and we have been engaged to (1) negotiate
      opportunities with Waterford to license the Intellectual Property with
      Waterford’s stemware products, (2) develop and implement strategic plans for
      branding Waterford’s products, and (3) facilitate the terms and conditions of
      any agreements with Waterford. In exchange, CBG has agreed to compensate us
      with
      a revenue share of thirty three and one-third percent (33 - 1/3%) of the gross
      revenues collected in any agreement we establish with Waterford. Gross revenues
      means the gross receipts actually received from any agreement with Waterford,
      including without limitation advance payments, minimum guarantees, royalty
      payments and other license fees.





On
      February 7, 2006, we successfully established the first license agreement (the
      “License Agreement”) with Waterford. RMC granted to Waterford the exclusive
      right to use the Intellectual Property in connection with the manufacture and
      worldwide distribution of Waterford’s stemware, barware, decanters, and other
      related products (the “Licensed Products”). Pursuant to the terms of the License
      Agreement, we have been retained to facilitate promotional efforts of the
      Licensed Products. Specifically, we have been retained to provide Waterford
      the
      services of Carlo Mondavi, our Chairman and Founder, to act as spokesman for
      the
      Licensed Products and to make personal appearances at scheduled promotional
      events. In exchange, Waterford agreed to provide percentage royalties to RMC
      on
      net sales of the Licensed Products. Since we negotiated the terms and conditions
      of the License Agreement with Waterford and will provide promotional services
      to
      Waterford, we will share thirty three and one-third percent (33 -1/3%) in any
      proceeds received from the License Agreement.





**Results
      of Operations for the three and six months ended June 30, 2007 and
      2006**





*Assets* .
      Our
      total assets as of June 30, 2007 were $832,892.  Our total assets largely
      consist of certificates of deposit in the amount of $75,989 and inventory in
      the
      amount of $644,327. Our total assets as of June 30, 2006, were $2,614,639,
      consisting primarily of cash in the amount of $17,238 and a certificate of
      deposit in the amount of $2,534,369. The decrease in cash and investments,
      our
      primary assets, are attributable to our administrative costs as the Company
      has
      been promoting and developing its product lines, which were launched in October
      2006.




8




Our
      total
      liabilities as of June 30, 2007 were $981,109, consisting primarily of accounts
      payable and accrued expenses in the amount of $589,378, accrued stock
      compensation in the amount of $169,000, and $200,000 in a convertible
      debenture compared to total liabilities of $339,833 as of June 30, 2006,
      consisting primarily of accounts payable of $89,833 and $240,000 in a note
      payable-related party.




*Sales* . 
      Sales consist of revenues from the sale of products from our skin care
      line. We reported sales of $45,881 for the six months period ended June 30,
      2007, compared with sales of $-0- for the same period ended June 30,
      2006.  This increase is a result of the skin care line launch in October
      2006.  Our cost of goods sold for the six months ended June 30, 2007 was
      $4,741 resulting in gross profits of $41,140.





For
      the
      three months ended June 30, 2007, sales amounted to $18,662 compared to sales
      of
      $-0- for the same period ended June 30, 2006. Our cost of goods for the three
      month period ended June 30, 2007 was $2,553 resulting in a gross profit
      $16,109.




*Operating
      Expenses* . 
      Our operating expenses decreased by $444,376 to $2,391,706 for the six months
      ended June 30, 2007, compared to $2,836,082 for the same reporting period in
      the
      prior year. The decrease in expenses was largely attributable to a decrease
      in
      stock based compensation paid to our executive officers. Our operating expenses
      consisted of selling, general and administrative expenses of $718,114,
      depreciation of $3,500, consulting fees of $392,629, employee stock options
      of
      $747,342, and professional fees of $530,120. In comparison, our operating
      expenses for the six months ended June 30, 2006 consisted of selling, general
      and administrative expenses of $436,070, depreciation of $10,969, consulting
      fees of $122,277, employee stock options of $2,099,949, and professional fees
      of
      $166,817.




Our
      operating expenses increased by $271,371 to $949,196 for the three months ended
      June 30, 2007, compared to $677,825 for the same reporting period in the prior
      year. The increase was attributable to consulting and professional fees;
      marketing and promotional expenses, and travel expenses. Our operating expenses
      consisted of selling, general and administrative expenses of $392,780,
      depreciation of $1,750, consulting fees of $237,512, and professional fees
      of
      $272,298. In comparison, our operating expenses for the three months ended
      June
      30, 2006 amounted to $677,825 consisting of selling, general and administrative
      expenses of $197,224, depreciation of $5,947, employee stock options of
      $241,805, and professional fees of $140,275.




*Other
      Income (Expenses)* . 
      We reported other income (expense) of $21,304 and $(9,829) for the six
      month and three month periods ended June 30, 2007, respectively, compared to
      $14,603 and $(20,155) for the same periods ended June 30, 2006, respectively.
      Other income during the three months ended June 30, 2007 consisted of royalty
      income in connection with our licensing agent agreement, interest income and
      other income.




*Net Loss*.
      We
      reported a net loss of $2,329,262 or $0.17 per share and a net loss of $942,916
      or $0.06 for the six and three months ended June 30, 2007, respectively,
      compared to a net loss of $2,821,479 or $0.24 per share and $697,980 or $0.06
      per share for the six and three months ended June 30, 2006,
      respectively.




9


**Liquidity
      and Capital Resources**




As
        of
        June 30, 2007, our total current assets of $759,716 consisted of $75,989
        of certificates of deposit, $644,327 of inventory, $26,472 of accounts
        receivable, and $12,928 of prepaid expenses. As of June 30, 2006, our total
        current assets of $2,553,632 consisted of $17,238 of cash, $2,534,369 of
        certificates of deposit, and $2,025 of prepaid expenses. As of June 30, 2007,
        our total liabilities of $610,481 consisted of $20,155 in bank overdrafts,
        $582,988 in accounts payable and accrued expenses, $949 in interest payable,
        and
        $6,389 in leasehold improvement allowance. We thus had working capital of
        $(21,393) at June 30, 2007 compared to $2,213,799 at June 30, 2006.
 
 Net
        cash
        used in operating activities was $841,424 for the six months ended June 30,
        2007
        compared to net cash used in operating activities of $639,565 for the six
        months
        ended June 30, 2006. Net cash flow provided by investing activities amounted
        to
        $758,705 for the six months ended June 30, 2007 compared to net cash used
        in
        investing activities of $842,814 for the six months ended June 30, 2006.
        Net
        cash flow used in financing activities amounted to $82,719 for the six
        month period ended June 30, 2007, compared to net cash provided by
        financing activities of $1,496,000 for the six month period ended June 30,
        2006.




We
      anticipate that we will be dependent, for the
      immediate future, upon additional investment capital to fund operating expenses.




In
        connection with our need for additional financing, we entered into an Agreement
        for Convertible Note with an unrelated third party, Mr. Amin S. Lakha, whereby
        Mr. Lakha is willing to provide, subject to the terms and conditions of the
        Agreement for Convertible Note and accompanying documents (the “Agreement”),
        certain financing for our ongoing and proposed business operations and
        activities. The Agreement provides for a 9% Senior Secured Convertible Note
        (the
“Note”) in the stated amount of $2,200,000. Interest is payable in six month
        intervals and the note matures on May 15, 2010. The Note allows Mr. Lakha
        to
        convert a part or all of the outstanding balance under the Note into shares
        of
        our common stock at a conversion price of $0.55 per share, which is subject
        to
        adjustment in the event of certain dilutive issuances, including stock dividends
        and reorganizations.
 
 Under
        the
        Agreement and the accompanying Assignment and Security Agreement, the “Initial
        Advance,” defined as a $200,000 preliminary advance and an additional advance of
        $300,000, is to be secured by funds received in connection with a certain
        license agreement by and between the Company, Constellation Wines U.S., and
        Robert Mondavi Corporation. As of the date of this filing, we received the
        entire Initial Advance of $500,000 from Mr. Lakha. As such, under the Agreement
        and accompanying documents, we are bound to provide each of the following
        to Mr.
        Lakha:
 
 1.
            Invite
                Mr. Lakha to serve on our board of
                directors; 2.
            Grant
                Mr. Lakka options to purchase 125,000 shares of our common stock
                with an
                exercise price of $0.25 per share; 3.
            Grant
                Mr. Lakha warrants to purchase up to 4,000,000 shares of our common
                stock
                proportionate to the amount of funds advanced by Mr. Lakha; and 4.
            Upon
                receipt and exercise of all derivative securities, provide Mr. Lakha
                a
                constant equity position of at least 32.9% of the total outstanding
                equity
                in our company.  10
  We
        are
        also required under the Agreement to facilitate the transfer of additional
        shares and options held by our existing shareholders to Mr. Lakha.
 
 Mr.
        Lakha
        is not required to advance additional funds under the Note beyond the $500,000
        that we already received. If we call upon Mr. Lakha to advance additional
        funds
        up to a total of $2,200,000 and Mr. Lakha refuses to do so, the Note will
        be
        amended to reflect the amounts actually advanced to us.
 
 The
        foregoing is not a complete summary of the terms of the financing as described
        above, and reference is made to the complete text of the Agreement attached
        hereto as Exhibit 10.1.




**Off
      Balance Sheet Arrangements**





As
      of
      June 30, 2007, there were no off balance sheet arrangements.





**Going
      Concern**




The
        accompanying financial statements have been prepared in conformity with
        generally accepted accounting principles, which contemplate our continuation
        as
        a going concern. We have incurred net losses of $2,329,262 for the six months
        ended June 30, 2007, and have incurred cumulative net losses of $11,075,535
        since our inception to June 30, 2007. We will require additional capital
        for our
        operational activities. We have successfully developed and established a
        line of
        men’s and women’s skin care products. We have and are aggressively launching our
        products with several luxury retailers. While we have already invested
        substantial funds in developing, promoting, and marketing activities, additional
        funds will be required to continue these efforts to establish market presence
        and gain market shares. We believe that these endeavors will result in increased
        sales. However, as of June 30, 2007, we have insufficient cash to operate
        our
        business for the next twelve months. We experienced revenues during the current
        quarter and believe that while revenues will increase, they will not be
        sufficient to absorb expenses to maintain us as a going concern. As such,
        we
        must raise additional capital to achieve our business goals and to continue
        operations. Our ability to raise additional capital through the future issuances
        of the common stock is unknown. The ability to successfully resolve these
        factors raise substantial doubt about our ability to continue as a going
        concern. The financial statements do not include any adjustments that may
        result
        from the outcome of these aforementioned uncertainties. We currently have
        positive working capital, but have not established a stabilized source of
        revenues sufficient to cover operating costs over an extended period of
        time.


11




Management
      anticipates that we will be dependent, for the near future, on additional
      investment capital to fund operating expenses before achieving operating
      profitability. We intend to further position the company so that it may be
      able
      to raise additional funds through the capital markets which to date it has
      demonstrated the ability to do so. Management is currently pursuing several
      alternatives to raise additional capital. While the management believes it
      will
      be successful in raising the necessary funds for its immediate needs, there
      are
      no assurances that in the future we will be successful in this or any of our
      endeavors or become financially viable and continue as a going
      concern.




**Critical
      Accounting Policies**





In
      December 2001, the SEC requested that all registrants list their most “critical
      accounting polices” in the Management Discussion and Analysis. The SEC indicated
      that a “critical accounting policy” is one which is both important to the
      portrayal of a company’s financial condition and results, and requires
      management’s most difficult, subjective or complex judgments, often as a result
      of the need to make estimates about the effect of matters that are inherently
      uncertain. We believe that the following accounting policies fit this
      definition.





Revenue
      recognition .
      We
      recognize revenues when services are rendered and/or products are delivered.
      Costs and expenses are recognized during the period in which they are
      incurred.




Receivables .
      Our
      accounts receivables represent financial instruments with a potential risk.
      We
      offer, and reserve the right to deny, credit terms with credit limits to
      customers based on their creditworthiness. We retain the right to place approved
      accounts on credit hold should these accounts become delinquent. We will
      maintain an allowance for doubtful accounts for estimated losses should
      customers fail to make required payments. In addition, we monitor the accounts
      for aging, historical account balances, payment patterns, history of
      collectibility, and customer creditworthiness when determining the
      collectibility of bad debt. Accounts receivables are written off when all
      collection attempts have failed. Allowance for doubtful accounts may increase
      if
      circumstances warrant.




Inventory .
      Our
      inventory consists of finished goods and raw materials, is stated at the lower
      of cost or market and cost is determined by the first-in, first-out method. We
      regularly monitor inventory quantities on hand and records write-downs for
      excess and obsolete inventories based primarily on our estimated forecast of
      product demand and production requirements. Such writedowns establish a new
      cost
      basis of accounting for the related inventory. Actual inventory losses may
      differ from management’s estimates, and such differences could be material to
      our financial position, results of operations and cash flows.




Stock-based
      compensation .
      We
      account for stock options under SFAS 123(R).




In
      order
      to determine compensation on options issued to consultants, and employees’
options, the fair value of each option granted is estimated on the date of
      grant
      using the Black-Scholes option-pricing model. We estimate the requisite service
      period used in the Black-Scholes calculation based on an analysis of vesting
      and
      exercisability conditions, explicit, implicit, and/or derived service periods,
      and the probability of the satisfaction of any performance or service
      conditions. We also consider whether the requisite service has been rendered
      when recognizing compensation costs. We do not consider market conditions to
      be
      vesting conditions and an award is not deemed to be forfeited solely because
      a
      market condition is not satisfied.




12




**Recently
      Issued Accounting Pronouncements**





In
      February 2006, the FASB issued SFAS No. 155 entitled “Accounting for Certain
      Hybrid Financial Instruments,” an amendment of SFAS No. 133 (“Accounting for
      Derivative Instruments and Hedging Activities”) and SFAS No. 140 (“Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities”). In this context, a hybrid financial instrument refers to certain
      derivatives embedded in other financial instruments. SFAS No. 155 permits fair
      value re-measurement of any hybrid financial instrument which contains an
      embedded derivative that otherwise would require bifurcation under SFAS No.
      133.
      SFAS No. 155 also establishes a requirement to evaluate interests in securitized
      financial assets in order to identify interests that are either freestanding
      derivatives or “hybrids” which contain an embedded derivative requiring
      bifurcation. In addition, SFAS No. 155 clarifies which interest/principal strips
      are subject to SFAS No. 133, and provides that concentrations of credit risk
      in
      the form of subordination are not embedded derivatives. SFAS No. 155 amends
      SFAS
      No. 140 to eliminate the prohibition on a qualifying special-purpose entity
      from
      holding a derivative financial instrument that pertains to a beneficial interest
      other than another derivative. When SFAS No. 155 is adopted, any difference
      between the total carrying amount of the components of a bifurcated hybrid
      financial instrument and the fair value of the combined “hybrid” must be
      recognized as a cumulative-effect adjustment of beginning deficit/retained
      earnings.




SFAS
      No.
      155 is effective for all financial instruments acquired or issued after the
      beginning of an entity’s first fiscal year that begins after September 15, 2006.
      Earlier adoption is permitted only as of the beginning of a fiscal year,
      provided that the entity has not yet issued any annual or interim financial
      statements for such year. Restatement of prior periods is
      prohibited.




In
      March
      2006 FASB issued SFAS 156 ‘Accounting for Servicing of Financial Assets’ this
      Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing
      of Financial Assets and Extinguishments of Liabilities, with respect to the
      accounting for separately recognized servicing assets and servicing liabilities.
      This Statement:





1.
            Requires
                an entity to recognize a servicing asset or servicing liability each
                time
                it undertakes an obligation to service a financial asset by entering
                into
                a servicing contract.





2.
            Requires
                all separately recognized servicing assets and servicing liabilities
                to be
                initially measured at fair value, if practicable.





3.
            Permits
                an entity to choose ‘amortization method’ or ‘fair value measurement
                method’ for each class of separately recognized servicing assets and
                servicing liabilities.




4.
            At
                its initial adoption, permits a one-time reclassification of
                available-for-sale securities to trading securities by entities with
                recognized servicing rights, without calling into question the treatment
                of other available-for-sale securities under Statement 115, provided
                that
                the available-for-sale securities are identified in some manner as
                offsetting the entity’s exposure to changes in fair value of servicing
                assets or servicing liabilities that a servicer elects to subsequently
                measure at fair value.




13




5.
            Requires
                separate presentation of servicing assets and servicing liabilities
                subsequently measured at fair value in the statement of financial
                position
                and additional disclosures for all separately recognized servicing
                assets
                and servicing liabilities.





This
      Statement is effective as of the beginning of the Company’s first fiscal year
      that begins after September 15, 2006.




Management
      does not believe that SFAS No. 155 and No. 156 will have an impact on our
      consolidated financial statements. Other recent accounting pronouncements issued
      by the FASB (including its Emerging Issues Task Force), the American Institute
      of Certified Public Accountants, and the SEC did not or are not believed by
      management to have a material impact on our present or future consolidated
      financial statements included elsewhere herein.




In
        July
        2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
        Income Taxes” (FIN No. 48). This interpretation requires recognition and
        measurement of uncertain income tax positions using a "more-likely-than-not"
        approach. The provisions of FIN No. 48 are effective for fiscal years beginning
        after December 15, 2006. The Company does not anticipate that the adoption
        of
        this accounting pronouncement will have a material effect on its consolidated
        financial statements.
 
 In
        September 2006, the FASB issued FAS 157, “Fair Value Measurements.” This
        standard defines fair value, establishes a framework for measuring fair value
        in
        generally accepted accounting principles, and expands disclosures about fair
        value measurements. This statement is effective for financial statements
        issued
        for fiscal years beginning after November 15, 2007. The Company does not
        anticipate that the adoption of this accounting pronouncement will have a
        material effect on its consolidated financial statements.
 
 In
        September 2006, the SEC released Staff Accounting Bulletin No. 108, “Considering
        the Effects of Prior Year Misstatements when Quantifying Misstatements in
        Current Year Financial Statements" (SAB 108). SAB 108 provides interpretive
        guidance on the SEC's views regarding the process of quantifying materiality
        of
        financial statement misstatements. SAB 108 is effective for fiscal years
        ending
        after November 15, 2006. The Company does not anticipate that the adoption
        of
        this accounting pronouncement will have a material effect on its consolidated
        financial statements.
 
 In
        February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
        Financial Assets and Financial Liabilities - Including an amendment of FASB
        Statement No. 115 ("SFAS 159"). SFAS 159 provides companies with an option
        to
        report selected financial assets and liabilities at fair value. SFAS 159's
        objective is to reduce both complexity in accounting for financial instruments
        and the volatility in earnings caused by measuring related assets and
        liabilities differently. SFAS 159 is effective as of the beginning of an
        entity's first fiscal year beginning after November 15, 2007. The Company
        is
        currently evaluating the potential impact, if any, that the adoption of SFAS
        159
        will have on its condensed consolidated financial statements.




14




**Item
      3.     Controls and Procedures**





We
      carried out an evaluation of the effectiveness of the design and operation
      of
      our disclosure controls and procedures (as defined in Exchange Act Rules
      13a-15(e) and 15d-15(e)) as of June 30, 2007. This evaluation was carried out
      under the supervision and with the participation of our Chief Executive Officer,
      Ms. Jan Wallace, and our Chief Financial Officer, Mr. Munjit Johal. Based upon
      that evaluation, our Chief Executive Officer and Chief Financial Officer
      concluded that, as of June 30, 2007, our disclosure controls and procedures
      are
      effective. There have been no changes in our internal controls over financial
      reporting during the quarter ended June 30, 2007.





Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in our reports filed or
      submitted under the Exchange Act are recorded, processed, summarized and
      reported, within the time periods specified in the SEC's rules and forms.
      Disclosure controls and procedures include, without limitation, controls and
      procedures designed to ensure that information required to be disclosed in
      our
      reports filed under the Exchange Act is accumulated and communicated to
      management, including our Chief Executive Officer and Chief Financial Officer,
      to allow timely decisions regarding required disclosure.





Limitations
      on the Effectiveness of Internal Controls





Our
      management does not expect that our disclosure controls and procedures or our
      internal control over financial reporting will necessarily prevent all fraud
      and
      material error. Our disclosure controls and procedures are designed to provide
      reasonable assurance of achieving our objectives and our Chief Executive Officer
      and Chief Financial Officer concluded that our disclosure controls and
      procedures are effective at that reasonable assurance level. Further, the design
      of a control system must reflect the fact that there are resource constraints,
      and the benefits of controls must be considered relative to their costs. Because
      of the inherent limitations in all control systems, no evaluation of controls
      can provide absolute assurance that all control issues and instances of fraud,
      if any, within the Company have been detected. These inherent limitations
      include the realities that judgments in decision-making can be faulty, and
      that
      breakdowns can occur because of simple error or mistake. Additionally, controls
      can be circumvented by the individual acts of some persons, by collusion of
      two
      or more people, or by management override of the internal control. The design
      of
      any system of controls also is based in part upon certain assumptions about
      the
      likelihood of future events, and there can be no assurance that any design
      will
      succeed in achieving its stated goals under all potential future conditions.
      Over time, control may become inadequate because of changes in conditions,
      or
      the degree of compliance with the policies or procedures may deteriorate.





15




**PART
      II - OTHER INFORMATION**





**Item
      1.     Legal Proceedings**





A
      complete discussion of our ongoing legal proceedings is discussed in our annual
      report on Form 10-KSB for the year ended December 31, 2006. There have been
      no
      material developments in the ongoing legal proceedings previously reported
      in
      which we are a party except as follows:





On
      July
      24, 2007, the Company issued to its shareholders of record as June 21, 2007,
      a
      Notice of Proposed Settlement of Derivative Action in the matter of Rowe D.
      Nelson, et al vs. Davi Skin, Inc., et al., Los Angeles Superior Court Case
      No.
      SC091146. A settlement hearing will be held on September 17, 2007.





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




In
        April
        2007, we granted to Lloyd & Co. the option to purchase up to 75,000 shares
        of our common stock at a exercise price of $0.41 per share. Also we granted
        options to purchase 125,000 shares of our common stock to each Messrs. Carlo
        Mondavi, Josh LeVine, and Elliot Smith at an exercise price of $0.25 per
        share.
        Pursuant to 9% Senior Secured Convertible Note, an unrelated third party
        is
        entitled to purchase up to 125,000 shares of our common stock at a price
        of
        $0.25 per share.
 
 On
        April
        3, 2007, 2,295,388 shares of the Company’s common stock were issued to unrelated
        third parties in exchange for extinguishment of debt.
 
 On
        July
        31, 2007, we issued shares of our common stock to officers and directors
        of our
        company as follows:
 
 **Officer/Director**
              **Number
                  of Shares of Common Stock**Munjit
                  Johal - CFO
              500,000Joseph
                  Spellman - Director
              650,000Elliot
                  Smith - Director
              150,000Mark
                  Phillips - Director
              150,000Jan
                  Wallace - President, CEO and Director
              1,000,000


**Item
      3.     Defaults upon Senior
      Securities**





None





**Item
      4.     Submission of Matters to a Vote of Security
      Holders**




On
      June
      15, 2007, we held the annual meeting of our security holders. The meeting was
      called for the purpose of electing four directors and to confirm the appointment
      of Rose, Snyder & Jacobs as our independent certified public accountants for
      the fiscal year ended December 31, 2007. The total number of shares of common
      stock outstanding at the record date, April 30, 2007, was 14,611,208 shares.
      The
      number of votes represented at this meeting was 8,530,412 shares, or 58.4%
      of
      shares eligible to vote.




16




The
      results for the election of directors were as follows:





*Director*
            *Votes
                Cast For*
            *Votes
                Cast Against*
            *Abstentions*Joseph
                Spellman
            8,420,109
            0
            110,303Carlo
                Mondavi
            8,489,942
            0
            40,470Josh
                Levine
            8,425,942
            0
            104,470Elliot
                Smith
            8,489,942
            0
            40,470




The
      security holders confirmed the appointment of Rose, Snyder & Jacobs as our
      independent certified public accountants for the fiscal year ended December
      31,
      2007, and the results were as follows:




*Votes
                Cast For*
            *Votes
                Cast Against*
            *Abstentions*8,493,442
            36,970
            0





No
      other
      matters were acted upon by our security holders at our annual meeting.





**Item
      5.     Other Information**




On
        May
        14, 2007, we entered into an Agreement for Convertible Note with an unrelated
        third party, Mr. Amin S. Lakha, whereby Mr. Lakha is willing to provide,
        subject
        to the terms and conditions of the Agreement for Convertible Note and
        accompanying documents (the “Agreement”), certain financing for our ongoing and
        proposed business operations and activities. The Agreement provides for a
        9%
        Senior Secured Convertible Note (the “Note”) in the stated amount of $2,200,000.
        Interest is payable in six month intervals and the note matures on May 15,
        2010.
        The Note allows Mr. Lakha to convert a part or all of the outstanding balance
        under the Note into shares of our common stock at a conversion price of $0.55
        per share, which is subject to adjustment in the event of certain dilutive
        issuances, including stock dividends and reorganizations.
 
 Under
        the
        Agreement and the accompanying Assignment and Security Agreement, the initial
        advance of the stated amount, consisting of a $200,000 preliminary advance
        and
        an additional advance of $300,000, is to be secured by funds received in
        connection with a certain license agreement by and between the Company,
        Constellation Wines U.S., and Robert Mondavi Corporation. As of the date
        of this
        filing, we received the entire Initial Advance of $500,000 from Mr. Lakha.
        As
        such, under the Agreement and accompanying documents, we are bound to provide
        each of the following to Mr. Lakha:
 
 1.
            Invite
                Mr. Lakha to serve on our board of
                directors; 2.
            Grant
                options to purchase 125,000 shares of our common stock with an exercise
                price of $0.25 per share; 3.
            Grant
                warrants to purchase up to 4,000,000 shares of our common stock
                proportionate to the amount of funds advanced by Mr. Lakha; and 4.
            Upon
                receipt and exercise of all derivative securities, provide Mr. Lakha
                a
                constant equity position of at least 32.9% of the total outstanding
                equity
                in our company.




17




We
        are
        also required under the Agreement and accompanying documents to facilitate
        the
        transfer of additional shares and options held by our existing shareholders
        to
        Mr. Lakha.
 
 Mr.
        Lakha
        is not required to advance additional funds under the Note beyond the $500,000
        that we already received. If we call upon Mr. Lakha to advance additional
        funds
        up to a total of $2,200,000 and Mr. Lakha refuses to do so, the Note will
        be
        amended to reflect the amount actually advanced to us.
 
 The
        foregoing is not a complete summary of the terms of the financing as described
        above, and reference is made to the complete text of the Agreement attached
        hereto as Exhibit 10.1.




**Item
      6.      Exhibits**




**Exhibit**
                **Number**
              **Description
                  of Exhibit**10.1
              Agreement
                  for Convertible Note31.1
              Certification
                  of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 302 of the Sarbanes-Oxley Act of
                  200231.2
              Certification
                  of Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 302 of the Sarbanes-Oxley Act of
                  200232.1
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002




18




**SIGNATURES**





In
      accordance with the requirements of the Securities and Exchange Act of 1934,
      the
      Registrant has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.




**Davi
                Skin, Inc.**Date:
            August
                20, 2007By:
              
              Jan
                WallaceTitle:**Chief
                Executive Officer**




19