UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549







FORM
10-Q





[X]
            Quarterly
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934For the quarterly
      period ended June 30, 2008[  ]
            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
              (State
      or other jurisdiction of incorporation or
    organization)
            86-0907471
              (IRS
      Employer Identification No.)








11990
      San Vicente Blvd, Suite 300, Los Angeles, California
      90049(Address
      of principal executive offices)





310-827-0800(Issuer’s
      telephone number)4223
      Glencoe Avenue, Suite 130, Marina Del Rey, California
  90292(Former
      name, former address and former fiscal year, if changed since last
      report)





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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.




Large
      accelerated filer [  ]
            Accelerated
      filer [  ]Non-accelerated
      filer   [  ] (Do not check if a smaller reporting
      company)
            Smaller  reporting
      company [x]





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





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.  The number of shares of
common stock, no par value, outstanding at August 18, 2008, was 51,473,668
shares.




1


TABLE OF
CONTENTS


PART
      I – FINANCIAL INFORMATIONPageItem
      1.
            Financial
      Statements
            3Balance
      Sheet – June 30, 2008 (unaudited) and December 31, 2007Statements
      of Operations – For the Three Months and Six Months Ended June 30,
      2008Statements
      of Cash Flows – For the Six Months Ended June 30, 2008 and 2007
      (unaudited)Notes
      to Financial StatementsForward-
      Looking Statements
            4Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            4Item
      3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            15Item
      4T.
            Controls
      and Procedures
            15PART
      II – OTHER INFORMATIONItem
      1.
            Legal
      Proceedings
            16Item
      1A
            Risk
      Factors
            18Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            19Item
      3.
            Defaults
      Upon Senior Securities
            19Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            19Item
      5.
            Other
      Information
            19Item
      6.
            Exhibits
            19Signatures
            20




2




PART
I - FINANCIAL INFORMATION





Item
1. Financial
Statements





Our
      unaudited financial statements included in this Form 10-Q are as
      follows:F-1
            Balance
      Sheet as of June 30, 2008 (unaudited) and December 31,
    2007;F-2
            Statements
      of Operations for the six and three months ended June 30, 2008 and 2007
      and for the period from inception (March 21, 2004) through June 30,
      2008;F-3
            Statements
      of Cash Flows for the six months ended June 30, 2008 and 2007 and for the
      period from inception (March 21, 2004) through June 30,
    2008;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-Q.  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, 2008 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
SHEETS






As
      of
                June
      30,
                2008
              
              
              As
      of
                  December
      31,
                  2007(Unaudited)
              
              
              (Audited)ASSETSCurrent
      AssetsCash
      and cash equilavents
              
              
              22,548
              
              
              
              46,558Certificate
      of deposit
              
              
              -
              
              
              
              7,342Accounts
      receivable, net of allowances for $-0- forJune
      30, 2008 and December 31, 2007
              
              
              2,737
              
              
              
              2,580Inventory
              
              
              532,073
              
              
              
              593,913Prepaid
      expenses
              
              
              28,102
              
              
              
              10,849Total
      Current Assets
              
              
              585,460
              
              
              
              661,242Fixed
      assets net of accumulated depreciation of $11,027and
      $10,264 at June 30, 2008 and December 31, 2007
              
              
              10,725
              
              
              
              28,488Deposits
              
              
              21,505
              
              
              
              24,570TOTAL
      ASSETS
              
              
              617,690
              
              
              
              714,300LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable & accrued expenses
              
              
              572,452
              
              
              
              395,842Accrued
      interest payable
              
              
              14,004
              
              
              
              18,230Notes
      payable, current
              
              
              100,000
              
              
              
              200,000Unissued
      shares
              
              
              19,800
              
              
              
              19,800Total
      Current Liabilities
              
              
              706,256
              
              
              
              633,872Long-Term
      LiabilitiesNotes
      payable, net of discount
              
              
              471,584
              
              
              
              447,958Equity
      warrant liability
              
              
              8,434
              
              
              
              -TOTAL
      LIABILITIES
              
              
              1,186,274
              
              
              
              1,081,830Preferred
      stock; $0.001 par value; 10,000,000 sharesauthorized
      and 250,000 shares issued and outstanding
              
              
              250,000
              
              
              
              -Less:
      discount
              
              
              (194,602
              )
              
              
              -55,398Stockholders'
      EquityCommon
      stock: $0.001 par value; 90,000,000 sharesauthorized,
      51,473,668 shares issued and outstanding
              
              
              51,474
              
              
              
              17,061Additional
      paid in capital
              
              
              12,524,843
              
              
              
              11,504,694Accumulated
      deficit during development stage
              
              
              (11,889,285
              )
              
              
              (8,944,327
              )Net
      Loss
              
              
              (1,311,014
              )
              
              
              (2,944,958
              )Total
      Stockholders' Equity
              
              
              (623,982
              )
              
              
              (367,530
              )TOTAL
      LIABILITIES & STOCKHOLDERS' EQUITY
              
              
              617,690
              
              
              
              714,300




See
accompanying notes to these financial statements.




F-1


DAVI SKIN, Inc.
 (formerly MW Medical, Inc.) (A Developmental Stage Company) STATEMENTS OF OPERATIONS (Unaudited)


From
      inception(March
      21, 2004)Six
      Months Ended June 30
              
              
              Three
      Months Ended June 30
              
              
              through2008
              
              
              2007
              
              
              2008
              
              
              2007
              
              
              June
      30,2008Sales
              
              
              20,559
              
              
              
              45,881
              
              
              
              8,085
              
              
              
              18,662
              
              
              
              111,615Cost
      of goods sold, net of reserve
              
              
              (57,010
              )
              
              
              (4,741
              )
              
              
              (33,147
              )
              
              
              (2,553
              )
              
              
              (92,729
              )Gross
      profit
              
              
              (36,451
              )
              
              
              41,140
              
              
              
              (25,062
              )
              
              
              16,109
              
              
              
              18,886Operating
      ExpensesSelling,
      general and administrative
              
              
              251,793
              
              
              
              718,114
              
              
              
              154,056
              
              
              
              392,780
              
              
              
              4,155,726Depreciation
              
              
              4,046
              
              
              
              3,500
              
              
              
              2,076
              
              
              
              1,750
              
              
              
              43,738Consulting
      fees
              
              
              841,635
              
              
              
              392,629
              
              
              
              54,000
              
              
              
              237,512
              
              
              
              2,868,543Employee
      stock options
              
              
              -
              
              
              
              747,342
              
              
              
              -
              
              
              
              44,856
              
              
              
              4,809,215Professional
      fees
              
              
              107,195
              
              
              
              530,121
              
              
              
              64,140
              
              
              
              272,298
              
              
              
              1,303,033Total
      operating expenses
              
              
              1,204,669
              
              
              
              2,391,706
              
              
              
              274,272
              
              
              
              949,196
              
              
              
              13,180,255Loss
      from operations
              
              
              (1,241,120
              )
              
              
              (2,350,566
              )
              
              
              (299,334
              )
              
              
              (933,087
              )
              
              
              (13,161,369
              )Other
      income (expenses)Royalty
      income
              
              
              55,954
              
              
              
              27,056
              
              
              
              30,709
              
              
              
              -
              
              
              
              157,493Interest
      income
              
              
              224
              
              
              
              6,295
              
              
              
              224
              
              
              
              2,852
              
              
              
              117,197Interest
      expense
              
              
              (126,072
              )
              
              
              (8,132
              )
              
              
              (103,028
              )
              
              
              (1,727
              )
              
              
              (254,307
              )Other
      expenses
              
              
              -
              
              
              
              (3,915
              )
              
              
              -
              
              
              
              (10,954
              )
              
              
              (20,613
              )Loss
      on disposal of assets
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (38,700
              )Total
      other income (expenses)
              
              
              (69,894
              )
              
              
              21,304
              
              
              
              (72,095
              )
              
              
              (9,829
              )
              
              
              (38,930
              )Net
      Loss
              
              
              (1,311,014
              )
              
              
              (2,329,262
              )
              
              
              (371,429
              )
              
              
              (942,916
              )
              
              
              (13,200,299
              )Basic
      loss per commonshare
              
              
              (0.04
              )
              
              
              (0.17
              )
              
              
              (0.01
              )
              
              
              (0.06
              )Diluted
      loss per commonshare
              
              
              (0.04
              )
              
              
              (0.17
              )
              
              
              (0.01
              )
              
              
              (0.06
              )Basic
      and diluted weighted averagecommon
      share outstanding
              
              
              32,664,307
              
              
              
              13,388,746
              
              
              
              43,368,884
              
              
              
              14,535,536




See
accompanying notes to these financial statements.




F-2




DAVI SKIN, Inc (formerly MW Medical, Inc.) (A Development Stage Company) STATEMENTS OF CASH FLOWS (Unaudited)


From
      inception(March
      21, 2004)Six
      Months Ended June 30
              
              
              through2008
              
              
              2007
              
              
              June
      30, 2008OPERATING
      ACTIVITIESNet
      Loss
              
              
              (1,311,014
              )
              
              
              (2,329,262
              )
              
              
              (13,200,299
              )Adjustments
      to reconcile net loss tonet
      cash used in operating activities:Prepaid
      consulting expense
              
              
              
              
              
              
              34,376
              
              
              
              114,584Stock
      based compensation & expenses
              
              
              33,495
              
              
              
              916,342
              
              
              
              6,101,601Non
      cash consulting fee
              
              
              724,500
              
              
              
              57,993
              
              
              
              1,046,083Depreciation
      and amortization
              
              
              4,046
              
              
              
              3,500
              
              
              
              43,738Loss
      on sale/disposal of fixed assets
              
              
              13,717
              
              
              
              -
              
              
              
              52,417Loan
      discount - interest expense
              
              
              33,000
              
              
              
              
              
              
              
              43,000Changes
      in operating assets andliabilities:Accounts
      Receivable
              
              
              (157
              )
              
              
              (3,833
              )
              
              
              (29,120
              )Inventory
              
              
              61,840
              
              
              
              34,941
              
              
              
              (532,074
              )Prepaid
      expenses
              
              
              (17,253
              )
              
              
              (10,903
              )
              
              
              (28,102
              )Deposits
              
              
              3,065
              
              
              
              -
              
              
              
              (21,505
              )Contingent
      liabilities
              
              
              -
              
              
              
              -
              
              
              
              26,383Accrued
      Interest
              
              
              19,336
              
              
              
              8,880
              
              
              
              124,489Accounts
      payable and accrued liabilities
              
              
              176,610
              
              
              
              446,542
              
              
              
              572,496Net
      cash used in operating activities
              
              
              (258,815
              )
              
              
              (841,424
              )
              
              
              (5,686,309
              )INVESTING
      ACTIVITIESCash
      flow from investing activities:Change
      in certificates of deposit
              
              
              7,342
              
              
              
              758,705
              
              
              
              -Sale
      of fixed assets
              
              
              -
              
              
              
              -
              
              
              
              2,739Purchase
      of fixed assets
              
              
              -
              
              
              
              -
              
              
              
              (121,035
              )Net
      cash provided by investing activities
              
              
              7,342
              
              
              
              758,705
              
              
              
              (118,296
              )FINANCING
      ACTIVITIESCash
      flows from financing activities:Bank
      overdraft
              
              
              -
              
              
              
              (117,281
              )
              
              
              -Proceeds
      from stock transactions
              
              
              250,000
              
              
              
              -
              
              
              
              4,929,890Advance
      on future issuance of stock
              
              
              -
              
              
              
              -
              
              
              
              19,800Payments
      on notes payable
              
              
              (22,537
              )
              
              
              
              
              
              
              (22,537
              )Proceeds
      from notes payable
              
              
              -
              
              
              
              -
              
              
              
              700,000Proceeds
      from note payable - related party
              
              
              -
              
              
              
              -
              
              
              
              200,000Net
      cash provided by (used in) financing activities
              
              
              227,463
              
              
              
              (117,281
              )
              
              
              5,827,153Net
      change in cash and cash equivalents
              
              
              (24,010
              )
              
              
              -
              
              
              
              22,548Cash
      at beginning of period
              
              
              46,558
              
              
              
              -
              
              
              
              -Cash
      at end of period
              
              
              22,548
              
              
              
              -
              
              
              
              22,548SUPLEMENTAL
      DISCLOSURESInterest
      paid
              
              
              14,636
              
              
              
              -
              
              
              
              53,788Taxes
      paid
              
              
              1,625
              
              
              
              -
              
              
              
              1,625




See
accompanying notes to these financial statements.




F-3


DAVI
SKIN, INC
 (Formerly
MW Medical, Inc,)
 (A
Development Stage Company)
 June
30, 2008
 NOTES
TO FINANCIAL STATEMENTS
 (Unaudited)


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, 2007. In the opinion of management, all
normally recurring adjustments necessary to present fairly the financial
position as of June 30, 2008, 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 principles, which contemplate continuation of the
Company as a going concern. The Company has incurred net losses of $1,311,014
for the six month period ended June 30, 2008, and has incurred cumulative net
losses of $13,200,299 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. Additionally, the
Company is in the process of finalizing the development of additional product
lines. The Company believes that these endeavors will result in increased sales.
However, as of June 30, 2008, the Company has insufficient cash to operate its
business for the next twelve months. The Company has experienced revenues since
the fourth quarter of 2006 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 has not established a
stabilized source of revenues sufficient to cover operating costs over an
extended period of time.
 
 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. While to
date the Company has demonstrated the ability to do so, there are no assurances
that it will succeed in raising additional capital. 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 in October 2006.
  F-4
 DAVI
SKIN, INC
 (Formerly
MW Medical, Inc,)
 (A
Development Stage Company)
 June
30, 2008
 NOTES
TO FINANCIAL STATEMENTS
 (Unaudited)
 3. RECENTLY ISSUED ACCOUNTING
PRONOUNCEMENTS
 
 In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations
 (SFAS 141(R)),
which replaces SFAS 141, Business Combinations, requires an acquirer to
recognize the assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions. This Statement also requires the acquirer in a business combination
achieved in stages to recognize the identifiable assets and liabilities, as well
as the non-controlling interest in the acquiree, at the full amounts of their
fair values. SFAS 141(R) makes various other amendments to authoritative
literature intended to provide additional guidance or to confirm the guidance in
that literature to that provided in this Statement. This Statement applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008.  SFAS 141 (R) will be effective for the
Company on January 1, 2009.  We do not expect adoption of SFAS 141(R)
to have a significant impact on our consolidated financial
statements.
 
 In
December 2007, the Emerging Issues Task Force (EITF) of the FASB reached a
consensus on Issue No. 07-1, Accounting for Collaborative Arrangements
(EITF 07-1). The EITF concluded on the definition of a collaborative arrangement
and that revenues and costs incurred with third parties in connection with
collaborative arrangements would be presented gross or net based on the criteria
in EITF 99-19 and other accounting literature. Based on the nature of the
arrangement, payments to or from collaborators would be evaluated and its terms,
the nature of the entity’s business, and whether those payments are within the
scope of other accounting literature would be presented. Companies are also
required to disclose the nature and purpose of collaborative arrangements along
with the accounting policies and the classification and amounts of significant
financial-statement amounts related to the arrangements. Activities in the
arrangement conducted in a separate legal entity should be accounted for under
other accounting literature; however required disclosure under EITF 07-1 applies
to the entire collaborative agreement. This Issue is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years, and is to be applied retrospectively
to all periods presented for all collaborative arrangements existing as of the
effective date. EITF 07-1 will be effective for the Company on January 1,
2009.  We do not expect Adoption of EITF 17-1 to have a significant
impact on our consolidated financial statements.
 
 In
December 2007, FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements (SFAS 160), which amends Accounting Research
Bulletin No. 51, Consolidated Financial Statements, to improve the
relevance, comparability, and transparency of the financial information that a
reporting entity provides in its consolidated financial statements. SFAS 160
establishes accounting and reporting standards that require the ownership
interests in subsidiaries not held by the parent to be clearly identified,
labelled and presented in the consolidated statement of financial position
within equity, but separate from the parent’s equity. This statement also
requires the amount of consolidated net income attributable to the parent and to
the non-controlling interest to be clearly identified and presented on the face
of the consolidated statement of income. Changes in a parent’s ownership
interest while the parent retains its controlling financial interest must be
accounted for consistently, and when a subsidiary is deconsolidated, any
retained non-controlling equity investment in the former subsidiary must be
initially measured at fair value. The gain or loss on the deconsolidation of the
subsidiary is measured using the fair value of any non-controlling equity
investment. The Statement also requires entities to provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the non-controlling owners. This Statement applies
prospectively to all entities that prepare consolidated financial statements and
applies prospectively for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. SFAS 160 will be effective
for the Company on January 1, 2009.  We do not expect adoption of SFAS
160 to have a significant impact on our consolidated financial
statements.
 
 In
March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative
Instruments and Hedging Activities – An Amendment of FASB Statement No. 133
(SFAS 133). This statement is intended to improve financial
reporting of derivative instruments and hedging activities by requiring enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under SFAS 133
and its related interpretations and (c) how derivative instruments and related
hedged items affect an entity’s financial position, financial performance and
cash flows. The provisions of SFAS 161 are effective for fiscal years beginning
after November 15, 2008.  SFAS 161 will be effective for us
on January 1, 2009.  We do not expect adoption of SFAS No. 161 to have
a material effect on our consolidated financial statements.
 
 In May,
2008, FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS 162). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). SFAS 162 is effective 60 days following
the U.S. Securities and Exchange Commission’s approval of the Public Company
Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles. We are
currently reviewing the effect, if any; the proposed guidance will have on our
consolidated financial statement disclosures.
  F-5
  DAVI
SKIN, INC
 (Formerly
MW Medical, Inc,)
 (A
Development Stage Company)
 June
30, 2008
 NOTES
TO FINANCIAL STATEMENTS
 (Unaudited)
 In May,
2008, FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts—an interpretation of FASB Statement No.
60”.  Diversity exists in practice in accounting for financial
guarantee insurance contracts by insurance enterprises under FASB Statement No.
60, Accounting and Reporting
by Insurance Enterprises. That diversity results in inconsistencies in
the recognition and measurement of claim liabilities because of differing views
about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies.
This Statement requires that an insurance enterprise recognize a claim liability
prior to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Statement
also clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities. Those clarifications will increase
comparability in financial reporting of financial guarantee insurance contracts
by insurance enterprises. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years; disclosure requirements in paragraphs
30(g) and 31 are effective for the first period (including interim periods)
beginning after May 23, 2008. We do not expect the adoption of SFAS 163 to have
a significant impact on our consolidated financial statements.
  4. RELATED PARTY
TRANSACTIONS
 
 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 an officer who is also a member of our Board of
Directors.  The Company was not required to make any payments for this
service.
 
 5. NOTES
PAYABLE
 
 On
or about April 1, 2008, the Company entered into a First Amended and Restated
Agreement for Convertible Note with Amin S. Lakha (“Lakha”). The basic terms of
the agreement are: The Parties entered into an Amended and Restated Secured
Convertible Promissory Note in the amount of $536,163 due and payable on May 15,
2010 ; The Parties entered into an Amended and Restated Security Agreement,
whereby all sums due under the Letter Agreement between the Company and
Constellation Wines, U.S., Inc. shall be assigned directly to Lakha until the
Restated Convertible Note is fully extinguished and such funds shall be applied
directly to the principal sum owe; In addition Ten Thousand Dollars ($10,000)
shall be payable to Lakha as a full and complete release of any and all payments
that may have been due to Lakha pursuant to the terms of the original Assignment
Agreement; The Parties have entered into a restatement and replacement of the
Stock Option Agreement and Stock Purchase Warrant Agreement, Company shall issue
to Lakha 600,000 warrants to purchase shares of Common Stock at an exercise
price of $0.20 with an expiration date of   May 14, 2012 and 125,000
warrants to purchase shares of Common Stock at an exercise price of $0.25 with
an expiration date of May 14, 2012 and the Parties entered into a Rescission of
Assignment and Security Agreement for the Gilchrist & Soames
Agreement.
 
 On or
about April 14, 2008 the Company entered into a First Amended and Restated Loan
Agreement with Gisela Brinkhaus (“Brinkhaus”) the terms of which are: The
Parties entered into an Amended and Restated Convertible Promissory Note in the
principal amount of $100,000 and interest of 13% per annum, due and payable on
January 14, 2009 ; The Parties entered into a restatement and complete
replacement of the Original Warrants, Company shall issue Restated Warrants up
to 300,000 shares of common stock at an exercise price of $.35 per share which
shall expire on November 14, 2010 . As consideration for the difference between
the Debt and the principal amount of the Restated Convertible Note the Company
shall issue Brinkhaus 2, 207,960 shares of common stock. Brinkhaus has released
any and all collateral rights to Company’s Inventory Collateral and the right to
file any UCC-1 Financing Statement in connection with the Inventory Collateral.
In the Original Agreement, the Company pledged as a security against default all
payments that may become due and owing to the Company under the Memorandum of
Understanding between the Company and deSter N.V., Brinkhaus shall retain these
collateral rights and under acknowledges that at this time no final agreement
has been executed between deSter and the Company.
 
 On or
about April 17, 2008 the Company entered into a Securities Purchase Agreement
with Noctua Fund, LP ("Noctua").  Noctua purchased 250,000 shares of Series
A Preferred Stock par value $.001 per share of the Company's Preferred Stock at
a purchase price of $1.00 per share and Series A-1 Warrants to purchase common
stock, par value $0.001 of the Company at an exercise price of $.15 per share.
Company as part of the transaction delivered a Registration of Rights Agreement,
Stock Escrow Agreement and a Certificate of Designation. The Company's management
issued Irrevocable Voting Proxy and Trust Agreements.  Noctua has the
right but not the obligation to acquire an additional 350,000 shares of
Preferred Stock at the Purchase Price listed above. Company granted a right of
first offer and registration rights to Noctua with respect to all transactions
consummated within 12 months of the Initial Closing of the sale of Preferred
Stock.
  F-6
 
 DAVI
SKIN, INC
 (Formerly
MW Medical, Inc,)
 (A
Development Stage Company)
 June
30, 2008
 NOTES
TO FINANCIAL STATEMENTS
 (Unaudited)
 In March
2008, the Company entered into agreements with AudioStocks, Inc., and BCGU, LLC
for various services including but not
limited to public relations services, making recommendations and offering advice
to the Company’s management regarding funding and
financing. With the assistance of BCGU, LLC, the Company entered into a
Securities Purchase  Agreement with Noctua Fund, LP. Noctua
Fund, LP purchased 250,000 shares of Series A-1 Preferred Stock at a price of
$1.00 per share and
Series A-1 Warrants to purchase common
stock, par value $0.001 of the Company at an exercise price of $.15 per share.
Company as part of the transaction delivered a
Registration of Rights Agreement, Stock Escrow Agreement and a Certificate of
Designation.  Noctua has the right but not the obligation to
acquire an additional 350,000 shares of Preferred Stock at the Purchase Price
listed above. Company granted a right of first offer and registration
rights to Noctua with respect to all transactions consummated within 12 months
of the Initial Closing of the sale of Preferred Stock.
 
 Pursuant
to the terms of the Securities Purchase Agreement and the recommendation of
BCGU, LLC, in order to raise the necessary funds to
complete the year end audit and filing of the Form 10KSB and thefirst quarter
2008 review and Form 10-Q filing, the Company's management agreed to
issue Irrevocable Voting Proxy and Trust
Agreements.  Additionally, prior to Noctua Fund, LP agreeingto its
investment, BCGU, LLC conducted
negotiations with existing investors and shareholders to restructure their
positions.
 
 The
Company has recently learned that AudioStocks, Inc., BCGU, LLC, Noctua Fund, LP,
may be related parties.  As a result, the Company and
management is concerned that these related parties gained firsthand knowledge of
the Company including direct access to its shareholders. While
still under review, it appears that such information may have been used to craft
agreements to the benefit ofthe related parties and the
determent of the Company and its shareholders.
 
 Finally,
the investment was received from Black Forest International, LLC, but the
250,000 shares of preferred stock with convertible
rights and possible directorship were granted to Noctua Fund, LP.  The
Company has no documentation that explains why Black
Forest capitalized the Company and the beneficial equity went to Noctua Fund,
LP.  Black Forest has requested to take its seats on the
Board of Directors.  Subsequently, Noctua Fund, LP has also elected to
exercise its directorships.  Therefore,at this time the Company cannot
honor any requests from Noctua Fund, LP or its related parties since the Company
may be open to liability from Black Forest for an
alleged claim of its beneficial rights.
  At June 30, 2008, maturities of notes payable are as
follows:
 
 Year
      ended December 31
              
              Amount2008
              
              $100,0002009
              
              -2010
              
              490,000$590,000
 
 6. 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.
 
 On June
30, 2008, the Company defaulted on the terms of the lease by being unable to
extend the letter of credit.  The Company and the Landlord agreed to
terminate the lease at a cost of $36,940.
 
 The
Company is currently subleasing premises at 11990 San Vicente Blvd, Suite 300,
Los Angeles, California 90049.  The terms of the lease are month to
month beginning September 1, 2008.  The Company will not be required
to pay rent for July or August 2008.
  F-7
 DAVI
SKIN, INC
 (Formerly
MW Medical, Inc,)
 (A
Development Stage Company)
 June
30, 2008
 NOTES
TO FINANCIAL STATEMENTS
 (Unaudited)
 Total
rent expenses were $79,495, $27,990, and $231,445 for the six month period ended
June 30, 2008 and 2007, and the period from inception (March 21, 2004) through
June 30, 2008, respectively.  Total rent expenses were $64,448,
$15,047, and $231,445 for the three month period ended June 30, 2008 and 2007,
and the period from inception (March 21, 2004) through June 30, 2008,
respectively.
 
 7. CONCENTRATIONS
 
 The
Company’s sales to three customers during the six month period ended June 30,
2008 accounted for 36.9% of total sales for the period.
 
 8. CAPITAL STOCK
TRANSACTIONS
  Preferred
stock- The authorized preferred stock is 10,000,000 shares at $0.001 par
value. As of June 30, 2008 there were 250,000 preferred shares issued or
outstanding.  The shares were issued to the Noctua Fund, LP (“Noctua”)
at a price of $1.00 per share and received Series A-1 Warrants to purchase
common stock, par value $0.001 of the Company at an exercise price of $.15 per
share. Series A Preferred Stock shall have dividends accrue and be payable
quarterly, at the rate per annum of $.09 per share. Company as part of the
transaction delivered a Registration of Rights Agreement, Stock Escrow Agreement
and a Certificate of Designation. The Company's management
issued Irrevocable Voting Proxy and Trust Agreements.  Noctua has the
right but not the obligation to acquire an additional 350,000 shares of
Preferred Stock at the Purchase Price listed above. Noctua has voting rights of
one vote per share and is entitled to elect up to two (2) directors of the
Corporation. Noctua has the right to convert its preferred shares into 25,
000,000 shares of Common Stock of Company. Company granted a right of first
offer and registration rights to Noctua with respect to all transactions
consummated within 12 months of the Initial Closing of the sale of Preferred
Stock (see
Note – 5).
  Common
Stock- The authorized common stock is 90,000,000 shares at $0.001 par
value. As of June 30, 2008, there were 51,473,668 shares of common stock
outstanding.
 
 During
the quarter ended March 31, 2008, the Company issued 6,900,000 shares of common
stock to its director and officers.  The Company expensed $724,500 for
the 6,900,000 shares issued at a price of $0.105 per share.
 
 On April
14, 2008, the Company issued 2,207,960 shares of common stock to Geisla
Brinkhaus in exchange for converting $100,000 of debt plus $10,398 of accrued
interest, to shares common stock (see Note – 5).
 
 On April
17, 2008, in connection with the issuance of 250,000 shares of preferred stock,
the Company issued 25,000,000 shares of the Company’s restricted stock which was
placed in escrow.  These shares were placed in escrow as a condition
of the preferred share holder if they wished to convert the preferred shares to
common shares (see Note –
5).
 
 9. WARRANTS
 
 On or
about April 14, 2008 the Company entered into a First Amended and Restated Loan
Agreement with Gisela Brinkhaus (“Brinkhaus”) amending the original agreement
dated November 17, 2007 (see
Note 6 – Notes Payable).  The Parties entered into a
restatement and complete replacement of the Original Warrants, Company shall
issue Restated Warrants up to 300,000 shares of common stock at an exercise
price of $.35 per share which shall expire on November 14, 2010.  The
warrants issued with the First Amended and Restated Loan Agreement was valued
at $2,960 using the
Black-Scholes option pricing model.  The following table
summarizes the assumption used in arriving at the valuation:
 
 Number
      of warrants issued
              
              
              300,000Market
      price at grant date
              
              $
              0.050Exercise
      price
              
              $
              0.35Term
              
              2.5
      yearsVolatility
              
              
              100
              %Annual
      rate of quarterly dividends
              
              
              0.00
              %Discount
      rate-bond equivalent yield
              
              
              2.31
              %
  F-8
 DAVI
SKIN, INC
 (Formerly
MW Medical, Inc,)
 (A
Development Stage Company)
 June
30, 2008
 NOTES
TO FINANCIAL STATEMENTS
 (Unaudited)
 On April
17, 2008, the Company and an unrelated third party 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
(see
Note 5 – Notes Payable).On April 25, 2008, the Company
received $245,000 less fees.  The warrants issued in accordance with
the financing were valued at $179,920using the
Black-Scholes option pricing model.  The following table summarizes
the assumptions used in arriving at the valuation:
  Number
      of warrants issued
              
              
              4,750,000Market
      price at grant date
              
              $
              0.05Exercise
      price
              
              $
              0.15Term
              
              7
      yearsVolitility
              
              
              77
              %Annual
      rate of quarterly dividends
              
              
              0.00
              %Discount
      rate-bond equivalent yield
              
              
              3.55
              %
  10. COMMON
STOCK OPTIONS
  The
following is a summary of the stock option activity for the three months ended
June 30, 2008:
  Number
                of
      Shares
              
              Weighted
                Average
                ExercisePriceOutstanding
      at January 1, 2008
              835,000
              
              $
              0.28Options
      Granted
              -
              
              $
              -Options
      Cancelled
              -
              
              $
              -Options
      Exercised
              -
              
              $
              -Outstanding
      at June 30, 2008
              835,000
              
              $
              0.28Exercisable
      at June 30, 2008
              835,000
              
              $
              0.28
  The
details of the vested stock options outstanding as of June 30, 2008 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
              
              
              835,000
              
              
              
              
              
              1.20
              
              $
              0.28
              
              
              835,000
              
              $
              0.28
 
 
 F-9
 DAVI
SKIN, INC
 (Formerly
MW Medical, Inc,)
 (A
Development Stage Company)
 June
30, 2008
 NOTES
TO FINANCIAL STATEMENTS
 (Unaudited)
 11. 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, 2007. There have been no
material developments in the ongoing legal proceedings previously reported in
which we are a party except as follows:
 
 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.
  On July
9, 2008, the Company, Carlo Mondavi, Joshua Levine and Joseph Spellman
(hereinafter "Davi") and Timothy Mondavi, entered into a Settlement Agreement
with Artist House Holdings, Inc. to resolve litigation in the matter of Artist
House Holdings, Inc. vs. Davi Skin, Inc., et al., (Case No. 2:06-CV-893-RLH-LRL)
in the United States District Court for the District of Nevada.  In
consideration of the terms and conditions set forth in this agreement, the
settling parties agree that a) Davi shall make a payment to Artist House in the
amount of $650,000; b) Artist House shall cause to deliver certificates
representing 566,667 shares of Davi common stock to Davi; c) Artist House shall
cancel all warrants to purchase 283,333 shares of Davi common stock; and d)
Timothy Mondavi shall make a payment to Artist House in the amount of
$25,000.  In addition, the Settlement Agreement provides for a mutual
release of claims between all parties, forbearance of prosecution, and dismissal
of the lawsuit with prejudice.  This Agreement does not constitute an
admission by any of the Releases of any liability or wrongdoing whatsoever,
including, but not limited to, any liability or wrongdoing with respect to any
allegation in the dispute.  A dismissal with prejudice was entered on
July 21, 2008.  The settlement amount to be paid by Davi is covered by
the insurance carrier.
  In March
2008, the Company entered into agreements with AudioStocks, Inc., and BCGU, LLC
for various services including but not limited to public relations services,
making recommendations and offering advice to the Company’s management regarding
funding and financing.  With the assistance of BCGU, LLC, the Company
entered into a Securities Purchase Agreement with Noctua Fund,
LP.  Noctua Fund, LP purchased 250,000 shares of Series A-1 Preferred
Stock at a price of $1.00 per share and Series A-1 Warrants to purchase common
stock, par value $0.001 of the Company at an exercise price of $.15 per share.
Company as part of the transaction delivered a Registration of Rights Agreement,
Stock Escrow Agreement and a Certificate of Designation.  Noctua has the
right but not the obligation to acquire an additional 350,000 shares of
Preferred Stock at the Purchase Price listed above. Company granted a right of
first offer and registration rights to Noctua with respect to all transactions
consummated within 12 months of the Initial Closing of the sale of Preferred
Stock.
  Pursuant
to the terms of the Securities Purchase Agreement and the recommendation of
BCGU, LLC, in order to raise the necessary funds to complete the year end audit
and filing of the Form 10KSB and the first quarter 2008 review and Form 10-Q
filing, the Company’s management  agreed to issue Irrevocable
Voting Proxy and Trust Agreements. Additionally, prior to Noctua Fund, LP
agreeing to its investment, BCGU, LLC conducted negotiations with existing
investors and shareholders to restructure their positions.
  F-10
 DAVI
SKIN, INC
 (Formerly
MW Medical, Inc,)
 (A
Development Stage Company)
 June
30, 2008
 NOTES
TO FINANCIAL STATEMENTS
 (Unaudited)
 The
Company has recently learned that AudioStocks, Inc., BCGU, LLC, Noctua Fund, LP,
may be related parties.  As a result, the Company and management is
concerned that these related parties gained first hand knowledge of the Company
including direct access to its shareholders.  While still under
review, it appears that such information may have been used to craft agreements
to the benefit of the related parties and the determent of the Company and its
shareholders.
  Finally,
the investment was received from Black Forest International, LLC, but the
250,000 shares of preferred stock with convertible rights and possible
directorship were granted to Noctua Fund, LP.  The Company has no
documentation that explains why Black Forest capitalized the Company and the
beneficial equity went to Noctua Fund, LP.  Black Forest has requested
to take its seats on the Board of Directors.  Subsequently, Noctua
Fund, LP has also elected to exercise its directorships.  Therefore,
at this time the Company cannot honor any requests from Noctua Fund, LP or its
related parties since the Company may be open to liability from Black Forest for
an alleged claim of its beneficial rights.
 12.
SUBSEQUENT
EVENT
 
 On July
9, 2008, the Company, Carlo Mondavi, Joshua Levine and Joseph Spellman
(hereinafter “Davi”) and Timothy Mondavi, entered into a Settlement Agreement
with Artist House Holdings, Inc. to resolve litigation in the matter of Artist
House Holdings, Inc. vs. Davi Skin, Inc., et al., (Case No. 2:06-CV-893-RLH-LRL)
in the United States District Court for the District of Nevada.  In
consideration of the terms and conditions set forth in this agreement, the
settling parties agree that a) Davi shall make a payment to Artist House in the
amount of $650,000;
 b) Artist
House shall cause to deliver certificates representing 566,667 shares of Davi
common stock to Davi; c) Artist House shall cancel all warrants to purchase
283,333 shares of Davi common stock; and d) Timothy Mondavi shall make a payment
to Artist House in the amount of
 $25,000.  In
addition, the Settlement Agreement provides for a mutual release of claims
between all parties, forbearance of prosecution, and dismissal of the lawsuit
with prejudice.  This Agreement does not constitute an admission by
any of the Releases of any liability or wrongdoing whatsoever, including, but
not limited to, any liability or wrongdoing with respect to any allegation in
the dispute.  A dismissal with prejudice was entered on July 21,
2008.  The settlement amount to be paid by Davi is covered by the
insurance carrier.
 
 In July
2008, the Company entered into employment agreements with its Chief Executive
Officer and Chief Financial Officer.
 
 On August
1, 2008 the Company entered into a personal services and business development
agreement with Mr. Jack Scalia. Mr .Scalia will act as spokesperson for the
Company and consultant on various business development including new product
lines and new business partners for the Company.
 
 On August
4, 2008, the Company entered into a Letter of Intent with Angel Entertainment
Group to establish a joint venture with a new subsidiary of the Company to
develop a Davi Wine brand and Davi Wine Boutiques.  The parties are
finalizing the definitive agreement.


F-11




FORWARD
– LOOKING STATEMENTS





This
Quarterly Report on Form 10-Q filed by Davi Skin, Inc. (referred to as “the
company”, “we”, “us” or “our”) contains forward-looking
statements.  These are statements regarding financial and operating
performance and results and other statements that are not historical
facts.  The words “expect,” “project,” “estimate,” “believe,”
“anticipate,” “intend,” “plan,” “forecast,” and similar expressions are intended
to identify forward-looking statements.  Certain important risks could
cause results to differ materially from those anticipated by some of the
forward-looking statements.  Some, but not all, of these risks
include, among other things:





·
            whether
      we will be able to find financing as and when we need
  it;





·
            whether
      there are changes in regulatory requirements that adversely affect our
      business;





·
            whether
      we are successful in promoting our
products;





·
            whether
      we can protect our intellectual property and operate our business without
      infringing on the intellectual property rights of
  others;





·
            whether
      we will continue to receive the services of certain officers and
      directors; and





·
            other
      uncertainties, all of which are difficult to predict and many of which are
      beyond our control.





We do not
intend to update forward-looking statements.  You should refer to and
carefully review the information in future documents we file with the Securities
and Exchange Commission.





ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





Overview





We are
principally engaged in the development, manufacturing and distribution of Davi
luxury branded products including the Davi luxury line of skincare 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
licensor and licensing agent to entities interested in associating their
products with our luxury brand names.




4




Skin
Care Products





The
development of the Davi Skin luxury branded skincare product line is now
complete. We are 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 available since to our retail launch in
October 2006. The products are now available through Bliss World Catalogs and
their corresponding website; the luxury hotel and spa, Meadow Wood, located in
the Napa Valley; the Living Beauty section of Selfridges department store in
London, England: and Lane Crawford in Hong Kong. We are finalizing distribution
agreements with several retailers located throughout Europe, Asia, the United
States and Canada. We anticipate that our products will be available through
these retailers by year end 2008. These select upscale retailers submit purchase
orders for quantities of our branded products, which we fulfill from our
distribution center. Planned distribution will continue to expand into 2008
through the utilization of select distribution companies throughout the world to
help oversee the growth and development of the brand.





The
initial nine (9) SKUs include four (4) products for women and five (5) for men
are 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;
  5
  ·
              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.





Licensing
Agent





In order
to further our success and to leverage the 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.





Since 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 received $182,738 in royalty payments.





Licensor





We
entered into a relationship with Gilchrist and Soames, an industry leader in
fine toiletries manufacturing, on the development of a Davi branded line of
hotel amenity kits. The initial line of amenity products consists of shampoo,
conditioner, bath gel, body lotion and soaps, with additional products to be
developed in the future. The range of Davi amenity products will feature the
same Meritage complex of antioxidants that is found in the Davi men and women's
retail product lines.




6





Plan
of Operation in the Next Twelve Months





Skin
Care Line





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 now also become available at 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. We are also finalizing distribution agreements with several
select retailers located throughout Europe, Asia, and across the United States
and Canada. We expect to have agreements finalized and to be able to make our
products available for purchase through these retailers commencing in the 3rd
quarter of this year. These select upscale retailers submit purchase orders for
quantities of our branded products, which we fulfill from our distribution
center. Planned distribution will continue to expand into 2010 through the
utilization of select Distribution Companies throughout the world to help
oversee the growth and development of the brand.





Product
Development





We have
developed 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. The initial line of amenity products will
consist of shampoo, conditioner, bath gel, body lotion and soaps, with
additional products to be developed in the future.





These
amenity products 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.
  7




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.




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 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.





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.





New
product development will commence as we further expand the Davi portfolio of
branded products. It is our intent to create an international lifestyle brand
consisting of several lifestyle products bearing the Davi name. These products
will be made available through our developing network of retail
distributors.





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.




8





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.





Critical
Accounting Policies and Estimates





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.





Cost of
Sales. Cost of sales includes freight-in, the actual cost of merchandise
sold, cost of shipping billed to customers, inventory shrinkage, obsolete
inventory write-offs, and warehouse inventory receiving costs





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 unused
units and packagingis statedat 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 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 our financial
position, results of operations and cash flows.




9





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.





Recent
Accounting Pronouncements




Refer to
Note 2 of our Notes to Consolidated Financial Statements included in our Form
10-KSB for the fiscal year ended December 31, 2007 for a discussion of recent
accounting standards and pronouncements.  Accounting pronouncements
that have been issued or adopted subsequent to December 31, 2007 are described
below:




In
February 2008 the FASB staff issued Staff Position No. 157-2 (FSP FAS 157-2)
Effective date of FASB
Statement No.157.FSP FAS 157-2 delayed the effective date of
SFAS 157 for non-financial assets and non-financial liabilities, except for
items that are recognized or disclosed at fair value in the financial statements
on a recurring basis.  The provisions of FSP FAS 157-2 will be
effective for us on January 1, 2009.




In
March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative
Instruments and Hedging Activities – An Amendment of FASB Statement No. 133
(SFAS 133). This statement is intended to improve financial
reporting of derivative instruments and hedging activities by requiring enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under SFAS 133
and its related interpretations and (c) how derivative instruments and related
hedged items affect an entity’s financial position, financial performance and
cash flows. The provisions of SFAS 161 are effective for fiscal years beginning
after November 15, 2008.  SFAS 161 will be effective for us
on January 1, 2009.  We are currently evaluating the impact that
adoption of SFAS 161 may have on our financial statement
disclosures.





In May,
2008, FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS 162). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). SFAS 162 is effective 60 days following
the U.S. Securities and Exchange Commission’s approval of the Public Company
Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles. We are
currently reviewing the effect, if any; the proposed guidance will have on our
consolidated financial statement disclosures.




10




In May,
2008, FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts—an interpretation of FASB Statement No.
60”.  Diversity exists in practice in accounting for financial
guarantee insurance contracts by insurance enterprises under FASB Statement No.
60, Accounting and Reporting
by Insurance Enterprises. That diversity results in inconsistencies in
the recognition and measurement of claim liabilities because of differing views
about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies.
This Statement requires that an insurance enterprise recognize a claim liability
prior to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Statement
also clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities. Those clarifications will increase
comparability in financial reporting of financial guarantee insurance contracts
by insurance enterprises. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years; disclosure requirements in paragraphs
30(g) and 31 are effective for the first period (including interim periods)
beginning after May 23, 2008. We do not expect the adoption of SFAS 163 to have
a significant impact on our consolidated financial statements.




Contractual
Obligations





The
Company has employment agreements with members of management.





Off
Balance Sheet Arrangements




As of
June 30, 2008, there were no off balance sheet arrangements.





Indemnities





During
the normal course of business, we have agreed to certain
indemnifications.  In the future, we may be required to make payments
in relation to these commitments. These indemnities include agreements with our
officers and directors which may require us to indemnify these individuals for
liabilities arising by reason of the fact that they were or are officers or
directors. The duration of these indemnities varies and, in certain cases, is
indefinite. There is no limit on the maximum potential future payments we could
be obligated to make pursuant to these indemnities.  We hedge some of
the risk associated with these potential obligations by carrying general
liability insurance. Historically, we have not been obligated to make any
payments for these obligations and no liabilities have been recorded for these
indemnities in our financial statements.
  11





Trends,
Events and Uncertainties





We sell
products that are purchased with discretionary income. As of this filing,
the Company has generated limited sales to smaller vendors, and on the
internet.  The amount of the sales is not significant enough to
determine trends.  The Company has also generated some royalty
income. Due to the downturn in the U.S. economy, consumers may have less
discretionary income to spend on non-essential items.  The economic
downturn may also make it harder for us to raise capital if we need
it.  Therefore, in the future, the economic downturn may have a
material adverse effect on our ability to raise operating capital as well as on
our revenues and results of operations.  Other than as discussed in
this quarterly report, we know of no other trends, events or uncertainties that
have or are reasonably likely to have a material impact on our short-term or
long-term liquidity.





In order
to further market our product, the Company is currently involved in a market
test.  We are awaiting the results of the test.





Challenges
and Risks





During
the last quarter of 2006, we began selling men’s and women’s skincare
products.  We have accumulated a deficit of approximately $13,200,299
from inception to June 30, 2008.  Our expenses exceed our revenues,
and we anticipate that this will continue during the next 12
months.  Therefore, we will require additional capital to support our
operations while we attempt to increase our sales, increase our product lines
and expand our sales.  We have no committed sources of
capital.  We plan to continue to fund our expansion and operations for
at least the next twelve months primarily through debt or equity financings,
although we cannot guarantee you that we will be successful in raising
funds.  We expect to reduce our reliance on these sources of financing
if our sales revenues increase.  We plan to mitigate our operating
losses through increasing sales, controlling our operating costs and expanding
our market.  However, failure to generate sufficient revenues or raise
working capital will adversely affect our ability to achieve these
objectives.  Our financial statements do not include any adjustments
that might result from the outcome of these uncertainties or be necessary if we
are unable to continue as a going concern.






RESULTS
OF OPERATIONS





Three
and Six months Ended June 30, 2008 Compared to Three and Six Months Ended June
30, 2007





Assets.
Our total assets as of June 30, 2008 were $617,690.  Our total assets
largely consist of inventory in the amount of $532,073 of which approximately is
$489,401 is unused units and packaging. Our total assets as of June 30, 2007,
were $832,892 consisting primarily of a certificate of deposit in the amount of
$75,989 and inventory in the amount of $644,327. The decrease in cash and
investments, our primary assets, are attributable to our administrative costs
and our cost of promoting and developing our product lines, which were launched
in October 2006.





Our total
liabilities as of June 30, 2008 were $1,186,274 consisting primarily of accounts
payable and accrued expenses in the amount of $572,452, and $571,584 in notes
payable compared to total liabilities of $981,109 as of June 30, 2007 consisting
primarily of accounts payable of $589,378 and $200,000 in a convertible
debenture.




12





Sales.  Sales
consist of revenues from the sale of products from our skin care line. We
reported sales of $20,559 for the six month period ended June 30, 2008, compared
with revenue of $45,881 for the same period ended June 30, 2007.  Our
cost of goods sold for the six period month ended June 30, 2008 totalled $57,010
resulting in a negative gross profits of $(36,451). The cost of goods for the
same period in 2007 was $4,741 resulting in a gross profit of
$41,140.  The increase in the cost of goods sold was attributable to
establishing a reserve for obsolete inventory.





For the
three months ended June 30, 2008, we reported total revenues of $8,085 compared
with revenue of $18,662 for the same period ended June 30, 2007.  Our
cost of goods sold for the three months ended June 30, 2008 totalled $33,147
resulting in negative gross profit of $25,062. The cost of goods for the same
period in 2007 was $2,553 resulting in a gross profit of $16,109.





Operating
Expenses.  Our operating expenses decreased by $1,187,037 to
$1,204,669 for the six month period ended June 30, 2008, compared to $2,391,706
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, administrative expenses, and professional fees. Our
operating expenses for the six months ended June 30, 2008 consisted of selling,
general and administrative expenses of $251,793, depreciation of $4,046,
consulting fees of $841,635 and professional fees of $107,195. In comparison,
our operating expenses for the six months ended June 30, 2007 consisted of
selling, general and administrative expenses of $718,114, depreciation of
$3,500, consulting fees of $392,629, employee stock options of $702,486, and
professional fees of $530,121.





For the
three months ended June 30, 2008, we reported operating expenses of $274,272
compared to $949,196 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, administrative expenses, and
professional fees. Our operating expenses for the three months June 30, 2008
consisted of selling, general and administrative expenses of $154,056,
depreciation of $2,076, consulting fees of $54,000 and professional fees of
$64,140. In comparison, our operating expenses for the three months ended June
30, 2007 consisted of selling, general and administrative expenses of $392,780,
depreciation of $1,750, consulting fees of $237,512, employee stock options of
$44,856, and professional fees of $272,298.





Other Income
(Expenses).  Other income (expenses) consists mainly of royalty
income from our licensing agreements and interest and interest expense on the
notes payable.  We reported Royalty income of $55,954 for the six
month period ended June 30, 2008, compared to $27,056 for the same period ended
June 30, 2007.  Interest expense for the six month period ended June
30, 2008, totalled $126,072 compared to $8,132 for the same period in
2007.  The increase in interest expense was attributable to additional
note payable agreements entered into during 2008.





For the
three months ended June 30, 2008, we reported royalty income of $30,709 compared
to $-0- for the same period ended June 30, 2007.  Interest expense for
the three month period ended June 30, 2008, totalled $103,028 compared to $1,727
for the same period in 2007.  The increase in interest expense was
attributable to additional note payable agreements entered into during
2008.





Net Loss.
We reported a net loss of $1,311,014 or $0.04 per share for six months ended
June 30, 2008, compared to a net loss of $2,329,262 or $0.17 per share for six
months ended June 30, 2007.




13





For the
three month period ended June 30, 2008, we reported a net loss of $371,429 or
$0.01 per share compared to a net loss of $942,916 or $0.06 per share for three
months ended June 30, 2007





Liquidity
and Capital Resources





As of
June 30, 2008, our total current assets of $585,460 consisted
of  $532,073 of inventory, $2,737 of accounts receivable, and $28,102
of prepaid expenses. As of June 30, 2008, our total current liabilities of
$691,256 consisted of $512,452 in accounts payable and accrued expenses,
interest payable of $59,004, and a note payable of $100,000. We thus had
negative working capital of $105,796 at June 30, 2008.





Net cash
used in operating activities was $258,815 for the six months ended June 30, 2008
compared to net cash used in operating activities of $841,424 for the six months
ended June 30, 2007. Net cash flow provided by investing activities amounted to
$7,342 for the six months ended June 30, 2008 compared to net cash provided by
investing activities of $758,705 for the six months ended June 30, 2007. Net
cash flow provided by financing activities amounted to $227,463 for the six
month period ended June 30, 2008,  compared to net cash used in
financing activities of $117,281 for the six month period ended June 30,
2007.





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.  As part of this agreement the Company received
$500,000 during 2007.




On
or about April 1, 2008, the Company entered into a First Amended and Restated
Agreement for Convertible Note with Amin S. Lakha (“Lakha”). The basic terms of
the agreement are: The Parties entered into an Amended and Restated Secured
Convertible Promissory Note in the amount of $536,163 due and payable on May 15,
2010 ; The Parties entered into an Amended and Restated Security Agreement,
whereby all sums due under the Letter Agreement between the Company and
Constellation Wines, U.S., Inc. shall be assigned directly to Lakha until the
Restated Convertible Note is fully extinguished and such funds shall be applied
directly to the principal sum owed; In addition Ten Thousand Dollars ($10,000)
shall be payable to Lakha as a full and complete release of any and all payments
that may have been due to Lakha pursuant to the terms of the original Assignment
Agreement; The Parties have entered into a restatement and replacement of the
Stock Option Agreement and Stock Purchase Warrant Agreement, Company shall issue
to Lakha 600,000 warrants to purchase shares of Common Stock at an exercise
price of $0.20 with an expiration date of   May 14, 2012 and 125,000
warrants to purchase shares of Common Stock at an exercise price of $0.25 with
an expiration date of May 14, 2012 and the Parties entered into a Rescission of
Assignment and Security Agreement for the Gilchrist & Soames
Agreement.




14





On
November 16, 2007, the Company and an existing shareholder (less than 1%
shareholder) entered into an agreement whereby the shareholder was willing to
provide financing for the Company’s proposed business operations and activities.
The agreement provides for a six-month note for $200,000 at an annual interest
rate of 13 percent payable quarterly.  The note is due May 2008 and
may be converted at the option of the holder, to common shares of the Company at
a price of $0.55 per share. The shareholder also received warrants to purchase
125,000 common shares at a price of $0.85.  The Company has pledged
its future revenues from a three year exclusivity agreement and inventory in the
amount of the loan plus accrued accrued interest as collateral for the
loan.




On or
about April 14, 2008 the Company entered into a First Amended and Restated Loan
Agreement with Gisela Brinkhaus (“Brinkhaus”) the terms of which are: The
Parties entered into an Amended and Restated Convertible Promissory Note in the
principal amount of $100,000 and interest of 13% per annum, due and payable on
January 14, 2009 ; The Parties entered into a restatement and complete
replacement of the Original Warrants, Company shall issue Restated Warrants up
to 300,000 shares of common stock at an exercise price of $.35 per share which
shall expire on November 14, 2010 . As consideration for the difference between
the Debt and the principal amount of the Restated Convertible Note the Company
shall issue Brinkhaus 2, 207,960 shares of common stock. Brinkhaus has released
any and all collateral rights to Company’s Inventory Collateral and the right to
file any UCC-1 Financing Statement in connection with the Inventory Collateral.
In the Original Agreement, the Company pledged as a security against default all
payments that may become due and owing to the Company under the Memorandum of
Understanding between the Company and deSter N.V., Brinkhaus shall retain these
collateral rights and under acknowledges that at this time no final agreement
has been executed between deSter and the Company.





ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





As a smaller reporting company, we are
not required to provide this information.





ITEM
4T. 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, 2008.  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, 2008, 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,
2008.




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.




15





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.





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, 2007. There have been no
material developments in the ongoing legal proceedings previously reported in
which we are a party except as follows:





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.




16




On July
9, 2008, the Company, Carlo Mondavi, Joshua Levine and Joseph Spellman
(hereinafter ÒDaviÓ) and Timothy Mondavi, entered into a Settlement Agreement
with Artist House Holdings, Inc. to resolve litigation in the matter of Artist
House Holdings, Inc. vs. Davi Skin, Inc., et al., (Case No. 2:06-CV-893-RLH-LRL)
in the United States District Court for the District of Nevada.  In
consideration of the terms and conditions set forth in this agreement, the
settling parties agree that a) Davi shall make a payment to Artist House in the
amount of $650,000; b) Artist House shall cause to deliver certificates
representing 566,667 shares of Davi common stock to Davi; c) Artist House shall
cancel all warrants to purchase 283,333 shares of Davi common stock; and d)
Timothy Mondavi shall make a payment to Artist House in the amount of
$25,000.  In addition, the Settlement Agreement provides for a mutual
release of claims between all parties, forbearance of prosecution, and dismissal
of the lawsuit with prejudice.  This Agreement does not constitute an
admission by any of the Releases of any liability or wrongdoing whatsoever,
including, but not limited to, any liability or wrongdoing with respect to any
allegation in the dispute.  A dismissal with prejudice was entered on
July 21, 2008.  The settlement amount to be paid by Davi is covered by
the insurance carrier.
  In March
2008, the Company entered into agreements with AudioStocks, Inc., and BCGU, LLC
for various services including but not limited to public relations services,
making recommendations and offering advice to the Company’s management regarding
funding and financing.  With the assistance of BCGU, LLC, the Company
entered into a Securities Purchase Agreement with Noctua Fund,
LP.  Noctua Fund, LP purchased 250,000 shares of Series A-1 Preferred
Stock at a price of $1.00 per share and Series A-1 Warrants to purchase common
stock, par value $0.001 of the Company at an exercise price of $.15 per share.
Company as part of the transaction delivered a Registration of Rights Agreement,
Stock Escrow Agreement and a Certificate of Designation.  Noctua has the
right but not the obligation to acquire an additional 350,000 shares of
Preferred Stock at the Purchase Price listed above. Company granted a right of
first offer and registration rights to Noctua with respect to all transactions
consummated within 12 months of the Initial Closing of the sale of Preferred
Stock.
  Pursuant
to the terms of the Securities Purchase Agreement and the recommendation of
BCGU, LLC, in order to raise the necessary funds to complete the year end audit
and filing of the Form 10KSB and the first quarter 2008 review and Form 10-Q
filing, the Company’s management  agreed to issue Irrevocable
Voting Proxy and Trust Agreements.  Additionally, prior to Noctua
Fund, LP agreeing to its investment, BCGU, LLC conducted negotiations with
existing investors and shareholders to restructure their positions.
  The
Company has recently learned that AudioStocks, Inc., BCGU, LLC, Noctua Fund, LP,
may be related parties.  As a result, the Company and management is
concerned that these related parties gained first hand knowledge of the Company
including direct access to its shareholders.  While still under
review, it appears that such information may have been used to craft agreements
to the benefit of the related parties and the determent of the Company and its
shareholders.
  17
  Finally,
the investment was received from Black Forest International, LLC, but the
250,000 shares of preferred stock with convertible rights and possible
directorship were granted to Noctua Fund, LP.  The Company has no
documentation that explains why Black Forest capitalized the Company and the
beneficial equity went to Noctua Fund, LP.  Black Forest has requested
to take its seats on the Board of Directors.  Subsequently, Noctua
Fund, LP has also elected to exercise its directorships.  Therefore,
at this time the Company cannot honor any requests from Noctua Fund, LP or its
related parties since the Company may be open to liability from Black Forest for
an alleged claim of its beneficial rights.


ITEM
1A.  RISK FACTORS





Refer to
our Annual Report on Form 10-K, which we filed with Securities and Exchange
Commission on May 14, 2008




Going
Concern




The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of our
company as a going concern. We have incurred net losses of $1,311,014 for the
six month period ended June 30, 2008, and have incurred cumulative net losses of
$13,162,299 since our inception and 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.  Additionally, we are in the process of
finalizing the development of additional product lines. We believe that these
endeavors will result in increased sales. However, as of June 30, 2008, we have
insufficient cash to operate our business for the next twelve months. We have
experienced revenues since the fourth quarter of 2006 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 have not established a stabilized source of revenues
sufficient to cover operating costs over an extended period of
time.





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 we may be able
to raise additional funds through the capital markets. While to date we have
demonstrated the ability to do so there are no assurances that we will succeed
in raising additional capital. 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.




18


ITEM
2. UNREGISTERED SALES OF
EQUITY SECURITIES AND USE OF PROCEEDS
  Preferred stock- The
authorized preferred stock is 10,000,000 shares at $0.001 par value. As of June
30, 2008 there were 250,000 preferred shares issued or
outstanding.  The shares were issued to the Noctua Fund at a price of
$1.00 per share on April 17, 2008 (see Note – 5).
  Common Stock- The
authorized common stock is 90,000,000 shares at $0.001 par value. As of June 30,
2008, there were 51,473,668 shares of common stock outstanding.
  During
the six months ended June 30, 2008, the Company issued 6,900,000 shares of
common stock to its director and officers.  The Company expensed
$724,500 for the 6,900,000 shares issued at a price of $0.105 per
share.
  On April
14, 2008, the Company issued 2,207,960 shares of common stock to Geisla
Brinkhaus in exchange for converting $100,000 of debt to shares common stock
(see Note –
5).
  On April
17, 2008, in connection with the issuance of 250,000 shares of preferred stock,
the Company Issued 25,000,000 shares of the Company’s restricted stock that was
placed in escrow.  These shares are placed in escrow as a condition of
the preferred share holder if they wished to convert the preferred shares to
common shares (see Note –
5).


ITEM
3. DEFAULTS UPON SENIOR
SECURITIES





None





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





No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended June 30,
2008.





ITEM
5. OTHER
INFORMATION




ITEM
6. EXHIBITS





Exhibit
              Number
            Description
      of Exhibit10.1
            BCGU
      Advisory Services Agreement dated March _, 200810.2
            Munjit
      Johal's Employment Agreement dated July 1, 200810.3
            Savannah
      Corp. Consultant Agreement dated July 1, 200831.1
            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 pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  200232.2
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002





19




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.Dated: August
      19, 2008
              By:
              /s/ Jan
      WallaceJan
      WallaceChief
      Executive Officer and Director