UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q




x QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
quarterly period endedJune 30,
2010




 ̈ TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE EXCHANGE ACT




For the
transition period from _______to _______




Commission
File Number:000-52994




THE
OLB GROUP, INC.


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




DELAWARE
              13-4188568(State
      or other jurisdiction of incorporation or
              (IRS
      Employer Identification No.)organization)




1120
Avenue of the Americas, 4th flr New York, NY 10036


(Address
of principal executive offices)




(212)
278-0900


(Registrant's
telephone number)







(Former
name, 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. Yes  x
 No   ̈




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




Large
      accelerated filer ̈
              Accelerated
      filer ̈Non-accelerated
      filer ̈
              Smaller
      reporting companyx





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


Yes   ̈ No  x





As of
July 12, 2010, the Company had outstanding 87,071,456 shares of its common
stock, par value $0.01.














THE
OLB GROUP, INC.




FORM
10-Q




For
the Quarterly Period Ended June 30, 2010




INDEX




PART
      I
                  
                  Financial
      Information
                  
                  3Item
      1.
                  
                  Financial
      Statements (unaudited)
                  
                  3Item
      2.
                  
                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  
                  12Item
      3.
                  
                  Quantitative
      and Qualitative Disclosures about Market Risk
                  
                  16Item
      4.
                  
                  Controls
      and Procedures
                  
                  16PART
      II
                  
                  Other
      Information
                  
                  17Item
      1.
                  
                  Legal
      Proceedings
                  
                  17Item
      1A.
                  
                  Risk
      Factors
                  
                  17Item
      2.
                  
                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                  
                  17Item
      3.
                  
                  Defaults
      Upon Senior Securities
                  
                  17Item
      4.
                  
                  Submission
      of Matters to a Vote of Security Holders
                  
                  17Item
      5.
                  
                  Other
      Information
                  
                  17Item
      6.
                  
                  Exhibits
                  
                  18Signatures
                  
                  19




2




PART
I - FINANCIAL INFORMATION




Item
1.     Financial Statements




The
OLB Group, Inc.




FINANCIAL
STATEMENTS





June 30,
2010 and December 31, 2009


3




CONTENTS




Balance
      Sheets
                5Statements
      of Operations
                6Statements
      of Stockholders’ Equity (Deficit)
                7Statements
      of Cash Flows
                8Notes
      to the Financial Statements
                9




4




The
OLB Group, Inc.





Balance
Sheets












June 30,
                  2010
                
                
                December 31,
                  2009(Unaudited)ASSETSCURRENT
      ASSETSCash
                
                $
                43,096
                
                
                $
                555Total
      Current Assets
                
                
                43,096
                
                
                
                555OTHER
      ASSETSInternet
      domain
                
                
                4,965
                
                
                
                4,965Intangible
      assets, net
                
                
                650,050
                
                
                
                -TOTAL
      ASSETS
                
                $
                698,111
                
                
                $
                5,520LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable and accrued expenses
                
                $
                56,872
                
                
                $
                85,769Accrued
      salary
                
                
                95,890
                
                
                
                -Total
      Current Liabilities
                
                
                152,762
                
                
                
                85,769TOTAL
      LIABILITIES
                
                
                152,762
                
                
                
                85,769STOCKHOLDERS’
      EQUITY (DEFICIT)Preferred
      stock, $0.01 par value, 50,000,000 shares authorized, no shares
      outstanding
                
                
                -
                
                
                
                -Common
      stock, $0.01 par value; 200,000,000 shares authorized, 87,071,456 and
      71,943,192 shares issued and outstanding, respectively
                
                
                870,716
                
                
                
                719,434Additional
      paid-in capital
                
                
                11,668,503
                
                
                
                11,069,735Accumulated
      deficit
                
                
                (11,993,870)
                
                
                
                (11,869,418)Total
      Stockholders’ Equity (Deficit)
                
                
                545,349
                
                
                
                (80,249)TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                
                $
                698,111
                
                
                $
                5,520





The
accompanying notes are an integral part of these financial
statements.


5





The
OLB Group, Inc.





Statements
of Operations


(Unaudited)


For the Six Months
                                    Ended June 30
                                  
                                  
                                  For the Three Months
                                    Ended June 30,2010
                                  
                                  
                                  2009
                                  
                                  
                                  2010
                                  
                                  
                                  2009Net
      revenues
                                  
                                  $
                                  103,281
                                  
                                  
                                  $
                                  178,256
                                  
                                  
                                  $
                                  45,377
                                  
                                  
                                  $
                                  82,766Cost
      of sales
                                  
                                  
                                  83,163
                                  
                                  
                                  
                                  108,310
                                  
                                  
                                  
                                  26,333
                                  
                                  
                                  
                                  35,991Gross
      profit
                                  
                                  
                                  20,118
                                  
                                  
                                  
                                  69,946
                                  
                                  
                                  
                                  19,044
                                  
                                  
                                  
                                  46,775OPERATING
      EXPENSESOfficer’s
      salary
                                  
                                  
                                  137,500
                                  
                                  
                                  
                                  137,500
                                  
                                  
                                  
                                  68,750
                                  
                                  
                                  
                                  68,750Other
      general & administrative expenses
                                  
                                  
                                  93,957
                                  
                                  
                                  
                                  60,343
                                  
                                  
                                  
                                  51,617
                                  
                                  
                                  
                                  34,721Total
      operating expenses
                                  
                                  
                                  231,457
                                  
                                  
                                  
                                  197,843
                                  
                                  
                                  
                                  120,367
                                  
                                  
                                  
                                  103,471Loss
      from operations
                                  
                                  
                                  (211,339
                                  )
                                  
                                  
                                  (127,897
                                  )
                                  
                                  
                                  (101,323
                                  )
                                  
                                  
                                  (56,696
                                  )OTHER
      INCOME (EXPENSE)Interest
      expense
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (4,618
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (2,309
                                  )Gain
      on/Settlement of a lawsuit
                                  
                                  
                                  86,887
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Total
      Other Income (Expense)
                                  
                                  
                                  86,887
                                  
                                  
                                  
                                  (4,618
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (2,309
                                  )NET
      LOSS
                                  
                                  $
                                  (124,452
                                  )
                                  
                                  $
                                  (132,515
                                  )
                                  
                                  $
                                  (101,323
                                  )
                                  
                                  $
                                  (59,005
                                  )BASIC
      LOSS PER SHARE
                                  
                                  $
                                  (0.00
                                  )
                                  
                                  $
                                  (0.00
                                  )
                                  
                                  $
                                  (0.00
                                  )
                                  
                                  $
                                  (0.00
                                  )BASIC
      WEIGHTED AVERAGE SHARES
                                  
                                  
                                  73,113,334
                                  
                                  
                                  
                                  56,782,832
                                  
                                  
                                  
                                  74,270,617
                                  
                                  
                                  
                                  56,782,832




The
accompanying notes are an integral part of these financial
statements.


6




The
OLB Group, Inc.





Statements of Shareholders’ Equity
(Deficit)







Common Stock
                  
                  
                  Additional Paid
                  
                  
                  AccumulatedShares
                  
                  
                  Amount
                  
                  
                  In Capital
                  
                  
                  DeficitBalance
      at  December 31, 2008
                  
                  
                  56,782,832
                  
                  
                  $
                  567,830
                  
                  
                  $
                  10,473,321
                  
                  
                  $
                  (11,546,349
                  )Issuance
      of common stock  for services
                  
                  
                  1,000,000
                  
                  
                  
                  10,000
                  
                  
                  
                  30,000
                  
                  
                  
                  -Issuance
      of common stock to convert accrued salaries and loans to
      equity
                  
                  
                  8,438,160
                  
                  
                  
                  84,382
                  
                  
                  
                  337,526
                  
                  
                  
                  -Issuance
      of common stock to convert debt assumed by officer
                  
                  
                  5,722,200
                  
                  
                  
                  57,222
                  
                  
                  
                  228,888
                  
                  
                  
                  -Net
      loss for the year ended December 31, 2009
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (323,069
                  )Balance
      at  December 31, 2009
                  
                  
                  71,943,192
                  
                  
                  
                  719,434
                  
                  
                  
                  11,069,735
                  
                  
                  
                  (11,869,418
                  )Issuance
      of common stock for the purchase of  intangible assets
      (unaudited)
                  
                  
                  11,556,835
                  
                  
                  
                  115,568
                  
                  
                  
                  208,023
                  
                  
                  
                  -Issuance
      of warrants for the purchase of  intangible assets
      (unaudited)
                  
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  326,459
                  
                  
                  
                  -Issuance
      of common stock for cash (unaudited)
                  
                  
                  3,571,429
                  
                  
                  
                  35,714
                  
                  
                  
                  64,286
                  
                  
                  
                  -Net
      loss for the period endedJune
      30, 2010 (unaudited)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (124,452)Balance
      at June 30, 2010 (unaudited)
                  
                  
                  87,071,456
                  
                  
                  $
                  870,716
                  
                  
                  $
                  11,668,503
                  
                  
                  $
                  (11,993,870)





The
accompanying notes are an integral part of these financial
statements.


7




The
OLB Group, Inc.





Statements
of Cash Flows


(Unaudited)







For the Six Months Ended
                  June 30,2010
                
                
                2009CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                
                $
                (124,452)
                
                
                $
                (132,515)Adjustments
      to reconcile net loss to net cash used in operating
    activitiesChanges
      in assets and liabilities:Increase
      in accounts payable and accrued expenses
                
                
                66,993
                
                
                
                155,683Net
      Cash Provided (Used) by Operating Activities
                
                
                (57,459)
                
                
                
                23,168CASH
      FLOWS FROM INVESTING ACTIVITIES
                
                
                -
                
                
                
                -CASH
      FLOWS FROM FINANCING ACTIVITIESIncrease
      in cash overdraft
                
                
                -
                
                
                
                869Sale
      of common stock
                
                
                100,000
                
                
                
                -Repayment
      of loan- officer
                
                
                (3,700)
                
                
                
                (47,950)Proceeds
      from loan - officer
                
                
                3,700
                
                
                
                23,945Net
      Cash Provided (Used) by Financing Activities
                
                
                100,000
                
                
                
                (23,136)NET
      CHANGE IN CASH
                
                
                42,541
                
                
                
                32CASH
      – BEGINNING OF YEAR
                
                
                555
                
                
                
                670CASH
      – END OF YEAR
                
                $
                43,096
                
                
                $
                702CASH
      PAID FORInterest
                
                $
                -
                
                
                $
                -Taxes
                
                $
                -
                
                
                $
                418SUPPLEMENTAL
      DISCLOSURE OF NON-CASH ACTIVITIESStock
      issued in conversion of accrued expenses & other debt
                
                $
                -
                
                
                $
                -Stock
      issued for intangible assets
                
                $
                323,591
                
                
                $
                -Warrants  issued
      for intangible assets
                
                $
                326,459
                
                
                $
                -





The
accompanying notes are an integral part of these financial
statements.


8





The
OLB Group, Inc.


Notes
to the Financial Statements


June 30,
2010 and December 31, 2009





NOTE
      1
            BACKGROUND





The
unaudited financial statements have been prepared by The OLB Group, Inc. (the
“Company”), pursuant to the rules and regulations of the Securities and Exchange
Commission. The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments), which are, in the
opinion of management, necessary to fairly present the operating results for the
respective periods. Certain information and footnote disclosures normally
present in annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted
pursuant to such rules and regulations. These financial statements should be
read in conjunction with the audited financial statements and footnotes for the
year ended December 31, 2009 included on the Company’s Form 10-K.  The
results of the six months ended June 30, 2010 are not necessarily indicative of
the results to be expected for the full year ending December 31,
2010.




NOTE
      2
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES




Cash
and Cash Equivalents




The
Company considers all highly liquid investments purchased with an original
maturity date of three months or less from the date of purchase to be a cash
equivalent.




Concentration
of Credit Risk




Financial
instruments, which potentially subject the Company to concentration of credit
risk, consist of accounts receivable and cash deposits.  The Company
maintains cash with various major financial institutions.  The Company
performs periodic evaluations of the relative credit standing of these
institutions.  To reduce risk, the Company performs credit evaluations
of its customers and maintains reserves for potential credit
losses.




Use
of Estimates




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





Income
Taxes





Deferred
income taxes are provided using the liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carry forwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of the changes in tax laws and rates of the date of
enactment.





Intangible
Assets





Intangible
assets are carried at cost and amortized over their estimated useful lives,
generally on a straight-line basis over two years. The Company reviews
identifiable amortizable intangible assets to be held and used for impairment
whenever events or changes in circumstances indicate that the carrying value of
the assets may not be recoverable. Determination of recoverability is based on
the lowest level of identifiable estimated undiscounted cash flows resulting
from use of the asset and its eventual disposition. Measurement of any
impairment loss is based on the excess of the carrying value of the asset over
its fair value.


9





The
OLB Group, Inc.


Notes
to the Financial Statements


June 30,
2010 and December 31, 2009





Recent Accounting
Pronouncements





During
the quarter ended June 30, 2010 and the year ended December 31, 2009, the
Company adopted the following accounting pronouncements:





In
October 2009, the FASB issued ASU 2009-13,Multiple-Deliverable Revenue
Arrangements, which amends FASB Accounting Standards Codification (“ASC”)
Topic 605,Revenue
Recognition,   and ASU 2009-14,Certain Arrangements
That Include Software Elements, which amends FASB ASC Topic 985,Software. ASU
2009-13 requires entities to allocate revenue in an arrangement using estimated
selling prices of the delivered goods and services based on a selling price
hierarchy.





In
February 2010, the FASB amended Subsequent Events, Topic 855. It defines
subsequent events as those events or transactions that occur after the balance
sheet date, but before the financial statements are issued or available to be
issued. The adoption of this standard did not have a material impact on our
financial statements.





In
September 2009, the Company adopted the Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”). The FASB established
the ASC as the single source of authoritative non-governmental United States
Generally Accepted Accounting Principles (“GAAP”), superseding various existing
authoritative accounting pronouncements.





NOTE
      3
            RELATED
      PARTY TRANSACTIONS





In
February 2008, the Company renewed the employment agreement with its founder and
President that expires on February 28, 2013. The agreement provides for an
annual salary of $275,000, fringe benefits and an incentive bonus based on
achievement of certain performance targets.




On
December 31, 2009, the Company issued 8,438,160 shares of common stock in
conversion of $421,908 of accrued salaries and related party loans. Shares were
valued at $0.05. On December 31, 2009, the Company issued 5,722,200 shares of
common stock in conversion of $286,110 of company debt that was assumed by an
officer. Shares were valued at $0.05.





NOTE
      4
            SIGNIFICANT
      EVENTS





In
February 2010 the Company received $175,000, less $88,113 in attorney fees, as
settlement of a lawsuit that was filed in a previous year. The proceedings were
initiated due to non-performance of a consulting agreement between the Company
and the plaintiff. With receipt of the settlement all further legal action has
been dismissed.





On June
17, 2010 the Company completed an asset purchase agreement with Retailer
Networks, Inc. (RNI). Pursuant to the terms of that agreement the Company
purchased a number of intangible assets from RNI, including but not limited to
customer information, trademarks, domain names, and educational resources for
e-commerce. The purchase price that was paid to RNI for the assets consisted of
11,556,835 shares of OLB common stock and 13,316,835 warrants exercisable for
the purchase of common stock, at the purchase price of $0.40. The fair value of
the common stock was determined using the quoted market price on the date of
issuance of $0.028 and the fair value of the purchase warrants were determined
using the Black-Scholes option pricing model, for a total purchase price of
$650,050. The warrants are valid to exercise for 24 months from the closing
date.





On June
17, 2010 the Company sold 3,571,429 shares of common stock to RNI at a purchase
price of $0.028 for total proceeds of $100,000.


10





The
OLB Group, Inc.


Notes
to the Financial Statements


June 30,
2010 and December 31, 2009





NOTE
5 -     INTANGIBLE ASSETS





The
following table summarizes the Company’s carrying amount of intangible
assets





Amortizable
      Intangible AssetsCustomer
      and Product Information
                  
                  $
                  390,030Trademarks,
      Domain names, & other intangibles
                  
                  
                  97,507Educational
      Resource
                  
                  
                  162,513Total
      Intangible Assets
                  
                  $
                  650,050





The
amortizable intangible assets have useful lives not exceeding two years and a
weighted average useful life of two  years.





NOTE
6-  STOCK WARRANTS





A summary
of the status of the Company’s outstanding stock warrants as of June 30, 2010
and December 31, 2009 and changes during the periods is presented
below:


Warrant
                  
                  
                  Weighted
                    Average
                    Price
                  
                  
                  Weighted
                    Average
                    Fair ValueOutstanding,
      December 31, 2009
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Issued
                  
                  
                  13,316,835
                  
                  
                  
                  0.40
                  
                  
                  
                  0.40Exercised
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Forfeited
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Expired
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Outstanding,
      June 30, 2010
                  
                  
                  13,316,835
                  
                  
                  $
                  0.40
                  
                  
                  $
                  0.40Exercisable,
      June 30, 2010
                  
                  
                  13,316,835
                  
                  
                  $
                  0.40
                  
                  
                  $
                  0.40




Outstanding
                    
                    
                    ExercisableRange of
                      Exercise
                      Prices
                    
                    Number
                      Outstanding
                      at
                      6/30/2010
                    
                    
                    Weighted
                      Average
                      Remaining
                      Contractual
                      Life
                    
                    
                    Weighted
                      Average
                      Exercise
                      Price
                    
                    
                    Number
                      Exercisable
                      at
                      6/30/2010
                    
                    
                    Weighted
                      Average
                      Exercise
                      Price$
                    0.40
                    
                    
                    13,316,835
                    
                    
                    
                    2
                    
                    
                    $
                    0.40
                    
                    
                    
                    13,316,835
                    
                    
                    $
                    0.40




NOTE
7 -     GOING CONCERN





The
financial statements are presented on the basis that the Company is a going
concern.  A going concern contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business over a
reasonable length of time. The Company has incurred significant losses from
operations, and has a working capital deficit of approximately $109,666 which
together raise substantial doubt about its ability to continue as a going
concern. Management is presently pursuing financing and investment opportunities
with investment bankers and private investors. The ability of the Company to
achieve its operating goals and to obtain such additional finances, however, is
uncertain.  The financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might result from the outcome
of this uncertainty.


11





ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION




Forward-Looking
Statements





The
information in this report contains forward-looking statements. All statements
other than statements of historical fact made in report are forward looking. In
particular, the statements herein regarding industry prospects and future
results of operations or financial position are forward-looking statements.
These forward-looking statements can be identified by the use of words such as
“believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,”
“projects,” “expects,” “may,” “will,” or “should” or other variations or similar
words. No assurances can be given that the future results anticipated by the
forward-looking statements will be achieved. Forward-looking statements reflect
management’s current expectations and are inherently uncertain. Our actual
results may differ significantly from management’s expectations.





The
following discussion and analysis should be read in conjunction with our
financial statements, included herewith. This discussion should not be construed
to imply that the results discussed herein will necessarily continue into the
future, or that any conclusion reached herein will necessarily be indicative of
actual operating results in the future. Such discussion represents only the best
present assessment of our management.





Overview





We are an
e-commerce service provider, which enables a business desiring to sell goods and
services on the internet to utilize our e-commerce resources and support
services, thus creating economies of scale and cost efficiencies for e-commerce
sellers throughout the entire e-commerce process.




The
products that we plan to distribute over the next year which will account for
most of our business are as follows:





·
            ShopFast
      PC





·
            ShopFast
      DSD





There are
a number of trends in the e-commerce/direct response marketing industry, the
most significant of which is the trend toward integrated marketing strategies.
Integrated marketing campaigns involve not only advertising, but also sales
promotions, internal communications, public relations, social networking, and
other disciplines. The objective of integrated marketing is to promote our
products and services.





Price is
no longer the sole motivator of purchasing behavior for our potential customers.
With the availability of similar products from multiple sources, customers are
increasingly looking for distributors who provide a tangible value-added service
to their products. As a result, we provide a broad range of products and related
services. Specifically, we will provide research and consultancy services,
artwork and design services, and fulfillment services to our customers. These
services will be provided in-house as well as outsourced by our current
suppliers.





We can
provide no assurances that our expectations described above will be
realized.





Our plan
of operation is to launch the marketing of the software component of our
ShopFast PC product in the fourth quarter of 2010, to produce a 30 minute
infomercial to promote this product, as well as a short form two minute
commercial after completing the longer infomercial, depending on the funds
available to the Company for such purposes. We intend to run the advertisements
for a period of time and to use focus groups to determine the prices at which we
can obtain the highest level of reseller ordersand then to launch a
full scale media campaign. If the ratio of media spending to product orders is
at least $1.50 return in orders on $1.00 spent on advertising, we would continue
such advertising. Otherwise, we would consider alternatives to the advertising
methods tried. After adjustments to the marketing plan and getting a
satisfactory return rate on the media expenditures, we intend to launch a
nationwide television distribution campaign.





The
purchase of the intangible assets in the second quarter fits into the company's
overall e-commerce strategy and future revenue growth.


12


Over the
next twelve months, we do not expect to purchase or sell any significant
equipment. We are currently redesigning ShopFast PC so that the Internet
Storefront can be created by a client having limited computer expertise without
our assistance. In previous versions of ShopFast DSD, the Internet Storefront
would have had to have been created by an administrator employed by us. We are
redesigning ShopFast PC so that the client can create the Internet Storefront on
the client’s own, in the following five steps:




Step 1: Choose the categories
of items to be sold on the store.




Step 2: Design the store by
choosing layouts, fonts, colors and a logo.




Step 3: Personalize the store
by adding descriptive text




Step 4:Account information to
facilitate payments for the store subscription as well as payment of
commissions




Step 5: Final store
confirmation and immediate store generation.




If we
successfully test our ShopFast PC product, we are planning to develop or acquire
additional products to complement our e-commerce products. We anticipate
that we will also need to make expenditures in the following areas: to expand
our existing ecommerce platform and replace some of the existing hardware and
servers to service the volume of transactions we anticipate and to add more
marketing and administrative personnel, although our initial plan is to
outsource significant services to third party providers. The additional products
to be developed and/or acquired have not yet been identified, but are expected
to be the result of requests by clients and/or their customers for additional
functionality, services, payment methods and/or product
availability.




We are
currently in the final stages of our quality assurance  phase for our
re-developed ShopFast DSD software, which is based on a different design
platform than the prior versions, allowing it to operate faster and under all
computer operating systems that can fully support Internet Explorer 5.0 or
higher. ShopFast DSD will have be a customized product to the needs of the
particular clients. The immediately prior paragraph is also applicable to the
successful testing of our re-developed ShopFast DSD product.





RESULTS
OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2010 AS COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 2009




REVENUE





Revenue
from operations for the six months ended June 30, 2010 decreased $74,975 or 42%,
to $103,281 from $178,256 for the six months ended June 30, 2009. The decrease
is mainly attributed to a decrease in the number of subscribers for the sales of
health-related discount benefit plans as earned as part of the ShopFast
program.





GROSS
PROFIT





Gross
profit from operations for the six months ended June 30, 2010 decreased $49,828
or 71% to $20,118 from $69,946 for the six months ended June 30, 2009. The
decrease is mainly attributed to a decrease in the number of subscribers for the
sales of health-related discount benefit plans as earned as part of the ShopFast
program, and an increase in software development expenses.





GENERAL
AND ADMINISTRATIVE EXPENSES




General
and administrative  ("G&A") expenses increased $33,614 or 56% to
$93,957 from $60,343 for the six months ended June 30, 2010 as compared to the
six months ended June 30, 2009. This increase in expense was attributable mainly
to travel and entertainment expense.




NET
LOSS




Net loss
decreased by $8,063 to $124,452 from $132,515 for the six months ended June 30,
2010 as compared to the six months ended June 30, 2009.  This decrease
in net loss was the result of $86,887 of other income received as settlement of
a lawsuit that was filed in a previous year.




LIQUIDITY
AND CAPITAL RESOURCES





During
the six months ended June 30, 2010, the Company used $57,459 of cash for
operating activities, as compared to providing $23,168 of cash through the six
months ended June 30, 2009. The increase in the use of cash was related to
expenditures for software development and travel.





During
the six months ended June 30, 2010, the Company received $100,000 of cash for
the sale of common stock.


13


RESULTS
OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2010 AS COMPARED TO THE THREE MONTHS
ENDED JUNE 30, 2009




REVENUE





Revenue
from operations for the three months ended June 30, 2010 decreased $37,389 or
45%, to $45,377 from $82,766 for the three months ended June 30, 2009. The
decrease is mainly attributed to a decrease in the number of subscribers for the
sales of health-related discount benefit plans as earned as part of the ShopFast
program.





GROSS
PROFIT





Gross
profit from operations for the three months ended June 30, 2010 decreased
$27,730 or 59% to $19,044 from $46,775 for the three months ended June 30, 2009.
The decrease is mainly attributed to a decrease in the number of subscribers for
the sales of health-related discount benefit plans as earned as part of the
ShopFast program..





GENERAL
AND ADMINISTRATIVE EXPENSES




General
and administrative  ("G&A") expenses increased $16,896 or 49% to
$51,617 from $34,721 for the three months ended June 30, 2010 as compared to the
three months ended June 30, 2009. This increase in expense was attributable
mainly to travel and entertainment expense.




NET
LOSS




Net loss
increased by $42,318 to $101,323 from $59,005 for the three months ended June
30, 2010 as compared to the three months ended June 30, 2009.  This
increase in net loss was the result of the combination of the decreased revenue
and the increase in general and administrative expenses.




LIQUIDITY
AND CAPITAL RESOURCES





During
the three months ended June 30, 2010, the Company received $100,000 of cash for
the sale of common stock.





Our
financial statements as of the six months ended June 30, 2010 have been prepared
under the assumption that we will continue as a going concern through December
31, 2010. Our independent registered public accounting firm has issued their
report on the December 31, 2009 financial statements that included an
explanatory paragraph expressing substantial doubt in our ability to continue as
a going concern without additional capital becoming available. Our ability to
continue as a going concern ultimately is dependent on our ability to generate a
profit which is dependent upon our ability to obtain additional equity or debt
financing, attain further operating efficiencies and, ultimately, to achieve
profitable operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.





We
anticipate that our future liquidity requirements will require a need to obtain
additional financing. The Company’s primary source of funding to date consists
of loans from its Chief Executive Officer and principal stockholder, Ronny
Yakov. Although Mr. Yakov has provided financing in the past, he has no binding
commitment to continue such financing. We may not be able to obtain such
additional financing or, if obtained, such financing may not be available and/or
not be on terms favorable to us.





Critical
Accounting Policies





Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
generally accepted accounting principles in the United States. The preparation
of financial statements require management to make estimates and disclosures on
the date of the financial statements. On an on-going basis, we evaluate our
estimates including, but not limited to, those related to revenue recognition.
We use authoritative pronouncements, historical experience and other assumptions
as the basis for making judgments. Actual results could differ from those
estimates. We believe that the following critical accounting policies affect our
more significant judgments and estimates in the preparation of our financial
statements.





Revenue
and Cost Recognition





Revenues
will be recognized when title and risk of loss transfers to the customer and the
earnings process is complete. In general, title passes to our customers upon the
customer's receipt of the merchandise. Revenue is accounted for in accordance
with the Revenue Recognition topic of the FASB ASC 605, reporting revenue gross
as a principal versus net as an agent. Revenue is recognized on a gross basis
since our company has the risks and rewards of ownership, latitude in selection
of vendors and pricing, and bears all credit risk. Our company records all
shipping and handling fees billed to customers as revenues, and related costs as
cost of goods sold, when incurred.





The
Company recognizes revenue when persuasive evidence of an arrangement exists,
services have been rendered, the sales price is fixed or determinable, and
collection is reasonably assured.


14


As a
rule, a majority of revenue for The Company is recognized when actual collection
of cash occurs. This is true for License revenue paid in full, Advanced
Solutions revenue and Subscription revenue. Our License revenue on payment plans
allows for customers to pay over time in installments and is recognized upon
delivery of the product at the present value of the installment payment
stream.





Costs are
recorded at the time the related revenue is recorded. Payment processing costs
are recorded in the period the costs are incurred and customer acquisition costs
are comprised primarily of telemarketing costs and service costs and other
additional benefit services.





Membership
Fees




The
Company recognizes revenues from membership fees for the sales of health-related
discount benefit plans as earned as part of the ShopFast program. These
arrangements are generally renewable monthly and revenue is recognized over the
renewal period.  As these products often include elements sold through
contracts with third-party providers, the Company considers each contractual
arrangement in accordance with the Revenue Recognition topic of the FASB ASC
605. The Company’s current contracts meets these requirements for reporting
revenue on a gross basis. The Company records a reduction in revenue for
refunds, chargeback’s from credit card companies, and allowances based upon
actual history and management’s evaluation of current facts and
circumstances.





Commissions




The
Company will pay commissions for its sales of third-party products. Commissions
are recognized as products are sold and services performed and the Company has
accomplished all activities necessary to complete the earnings
process.





Allowance
for Doubtful Accounts




Currently
we have no accounts receivable. We are required to make judgments based on
historical experience and future expectations, as to the realizability of our
accounts receivable. We make these assessments based on the following factors:
(a) historical experience, (b) customer concentrations, customer credit
worthiness, (d) current economic conditions, and (e) changes in customer payment
terms.





Intangible Assets





Intangible
assets are carried at cost and amortized over their estimated useful lives,
generally on a straight-line basis over two years. The Company reviews
identifiable amortizable intangible assets to be held and used for impairment
whenever events or changes in circumstances indicate that the carrying value of
the assets may not be recoverable. Determination of recoverability is based on
the lowest level of identifiable estimated undiscounted cash flows resulting
from use of the asset and its eventual disposition. Measurement of any
impairment loss is based on the excess of the carrying value of the asset over
its fair value.


15


Recently
Issued Accounting Pronouncements





During
the quarter ended June 30, 2010 and the year ended December 31, 2009, the
Company adopted the following accounting pronouncements:





In
September 2009, the Company adopted the Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”). The FASB established
the ASC as the single source of authoritative non-governmental United States
Generally Accepted Accounting Principles (“GAAP”), superseding various existing
authoritative accounting pronouncements.





In
October 2009, the FASB issued ASU 2009-13,Multiple-Deliverable Revenue
Arrangements, which amends FASB Accounting Standards Codification (“ASC”)
Topic 605,Revenue
Recognition,   and ASU 2009-14,Certain Arrangements
That Include Software Elements  , which amends FASB ASC
Topic 985,Software  . ASU 2009-13 requires entities to
allocate revenue in an arrangement using estimated selling prices of the
delivered goods and services based on a selling price hierarchy.




In
February 2010, the FASB amended Subsequent Events, Topic 855. It defines
subsequent events as those events or transactions that occur after the balance
sheet date, but before the financial statements are issued or available to be
issued. The adoption of this standard did not have a material impact on our
financial statements.





ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and, as such, are not required to provide the information under this
Item.





ITEM
4. CONTROLS AND PROCEDURES





Disclosure
Control and Procedures




We
maintain “disclosure controls and procedures,” as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange
Act ”), that are designed to ensure that information required to be
disclosed by us in our reports that we file or submit under the Exchange Act is
recorded, processed, summarized, and reported-,  within the time
periods specified in-  Securities and Exchange Commission rules and
forms, and that such information is accumulated and communicated to our
management, including our President and Interim Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. In
designing and evaluating our disclosure controls and procedures, management
designed its disclosure controls and procedures to provide reasonable assurance
that the objectives of the disclosure controls and procedures are
met.  The design of any disclosure controls and procedures 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.





As of
June 30, 2010, we carried out an evaluation, under the supervision and with the
participation of our President and Interim Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, our President and Interim Chief Financial
Officer concluded that our disclosure controls and procedures were effective in
ensuring that information required to be disclosed by us in our periodic reports
is recorded, processed, summarized and reported, within the time periods
specified for each report and that such information is accumulated and
communicated to our management, including our principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.




Changed
in Internal Control Over Financial Reporting




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


16


PART
II - OTHER INFORMATION




ITEM
1. LEGAL PROCEEDINGS





None.





ITEM
1A. RISK FACTORS




We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and, as such, are not required to provide the information under this
Item.




ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




None.





ITEM
3. DEFAULTS UPON SENIOR SECURITIES





None.





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





None.





ITEM
5. OTHER INFORMATION




None.


17


ITEM
6. EXHIBITS





Exhibit Number
                
                Exhibit Description31.1
                
                Certification
      of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange
      Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (filed
      herewith)31.2
                
                Certification
      of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange
      Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (filed
      herewith)32
                
                Certification
      of Chief Executive Officer and Chief Financial Officer, pursuant to 18
      United States Code Section 1350, as enacted by Section 906 of the
      Sarbanes-Oxley Act of 2002. (filed
herewith)


18


SIGNATURES





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




By:
                /s/ Ronny YakovDate:
      July 20, 2010
                Name:
                Ronny
      YakovTitle:
                President
      and Interim Chief Financial Officer
                  (Principal
      Executive Officer, Principal Financial
                  and
      Accounting Officer)


19