UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
      10-QSB**





(Mark
      One)


[X]
      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
      ACT OF 1934





For
      the
      quarterly period ended: June 30, 2007





OR





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





For
      the
      transition period from _________ to _________





Commission
      file number **333-141521**





**City
      Language Exchange, Inc.**


(Name
      of
      small business issuer in its charter)





**Delaware**
            
            **20-5433090**(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)**2114
                Robie Street, Unit 1,****Halifax,
                Nova Scotia, Canada, B3K 4M4**
            
            **B3H
                3P4**(Address
                of principal executive offices)
            
            (Zip
                code)





Issuer's
      telephone number: ( **902)
      478-5065**





Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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 shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
      [ ]
      No[X]





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date:


Class
      -
      Common Stock, 7,189,000 shares outstanding as of June 30, 2007.





Transitional
      Small Business Disclosure Format (check one): Yes [ ] No [X]








**TABLE
      OF CONTENTS**




PART
                I - FINANCIAL INFORMATION
            1Item
                1. Financial Statements
            1Item
                2. Management's Discussion and Analysis Or Plan of
                Operation
            7Item
                3. Controls and Procedures
            10PART
                II - OTHER INFORMATION
            11Item
                1. Legal Proceedings
            11Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            11Item
                3. Defaults Upon Senior Securities.
            11Item
                4. Submission of Matters to a Vote of Security Holders.
            11Item
                5. Other Information.
            11Item
                6. Exhibits
            11SignaturesExhibits










**PART
      I - FINANCIAL INFORMATION**





**Item
      1.**  **** **FINANCIAL
      STATEMENTS** **(UNAUDITED)**





The
      accompanying unaudited financial statements of City Language Exchange, Inc.
      (“CLE” or the “Company”) have been prepared in accordance with generally
      accepted accounting principles in the United States for interim financial
      reporting and pursuant to the rules and regulations of the Securities and
      Exchange Commission ("Commission"). While these statements reflect all normal
      recurring adjustments which are, in the opinion of management, necessary in
      order to make the financial statements not misleading and for fair presentation
      of the results of the interim period, they do not include all of the information
      and footnotes required by generally accepted accounting principles for complete
      financial statements. For further information, refer to the financial statements
      and footnotes thereto, for the fiscal year ended December 31, 2006, previously
      filed with the Commission, which are included in the Company's Registration
      Statement filed on Form SB-2.
















1


CITY
      LANGUAGE EXCHANGE, INC.


(A
      Development Stage Company)


BALANCE
      SHEETS


(unaudited)










June
                30, 2007
            
            December
                31, 2006ASSETSCurrent
                AssetsCash
            
            $
            5,127
            
            $
            5,081Total
                Current Assets
            
            
            5,127
            
            
            5,081Equipment,
                net of accumulated depreciation of $354 and $74,
                respectively
            
            
            1,116
            
            
            1,396Total
                Assets
            
            $
            6,243
            
            $
            6,477LIABILITIES
                AND STOCKHOLDERS' EQUITYCurrent
                LiabilitiesAccrued
                liabilities
            
            $
            -
            
            $
            1,746Total
                Current Liabilities
            
            
            -
            
            
            1,746Commitments
                and contingencies
            
            
            -
            
            
            -Stockholders'
                EquityPreferred
                stock, .000001, 20,000,000 sharesauthorized,
                none issued and outstanding
            
            
            -
            
            
            -Common
                stock, $.000001 par value, 1,000,000,000shares
                authorized, 7,189,000 and 7,000,000shares
                issued and outstanding, respectively
            
            
            7
            
            
            7Additional
                paid-in capital
            
            
            49,318
            
            
            13,138Deficit
                accumulated during development stage
            
            
            (43,082
            )
            
            (8,414
            )Total
                Stockholders' Equity
            
            
            6,243
            
            
            4,731Total
                Liabilities and Stockholders' Equity
            
            $
            6,243
            
            $
            6,477












See
      accompanying summary of accounting policies


and
      notes
      to financial statements





2


CITY
      LANGUAGE EXCHANGE, INC.


(A
      Development Stage Company)


STATEMENTS
      OF DEVELOPMENT STAGE EXPENSES


Three
      and
      Six Months Ended June 30, 2007, and the


Period
      From August 28, 2006 (Inception) through June 30, 2007


(unaudited)










For
                the Three Months Ended
              June
                30,
            
            For
                the Six Months Ended
              June
                30,
            
            Inception
                through June 30,2007
            
            2007
            
            2007DEVELOPMENT
                STAGE INCOMETranslation
                service income
            
            $
            1,590
            
            $
            2,500
            
            $
            2,500Total
                revenue
            
            
            1,590
            
            
            2,500
            
            
            2,500DEVELOPMENT
                STAGE EXPENSESGeneral
                & administrative
            
            
            1,557
            
            
            36,888
            
            
            45,228Depreciation
                expense
            
            
            140
            
            
            280
            
            
            354Total
                expenses
            
            
            1,697
            
            
            37,168
            
            
            45,582Net
                loss
            
            $
            (107
            )
            $
            (34,668
            )
            $
            (43,082
            )Net
                loss per share - basicAnd
                diluted
            
            $
            (0.00
            )
            
            (0.00
            )Weighted
                average shareoutstanding
                - basic and
              diluted
            
            
            7,189,000
            
            
            7,158,718














See
      accompanying summary of accounting policies


and
      notes
      to financial statements


3




CITY
      LANGUAGE EXCHANGE, INC.


(A
      Development Stage Company)


STATEMENTS
      OF CASH FLOWS


Six
      Months Ended June 30, 2007 and the


Period
      From August 28, 2006 (Inception) through June 30, 2007


(unaudited)








June
                30, 2007
            
            Inception
                through June 30, 2007Cash
                Flows From Operating ActivitiesNet
                loss
            
            $
            (34,668
            )
            $
            (43,082
            )Adjustments
                to reconcile net lossto
                net cash used in operating activities:Depreciation
            
            
            280
            
            
            354Change
                in:Accrued
                expenses
            
            
            (1,746
            )
            
            -Net Cash Used In Operating Activities
            
            
            (36,134
            )
            
            (42,728
            )Cash
                Flows From Investing ActivitiesPurchase
                of equipment
            
            
            -
            
            
            (1,470
            )Cash
                Flows From Financing Activities:Proceeds
                from sale of common stock
            
            
            18,900
            
            
            18,900Contributed
                capital by owner
            
            
            17,280
            
            
            30,425Net
                Cash Provided by Financing Activities
            
            
            36,180
            
            
            49,325Net
                increase in cash
            
            
            46
            
            
            5,127Cash
                at beginning of period
            
            
            5,081
            
            
            -Cash
                at end of period
            
            $
            5,127
            
            $
            5,127Supplemental
                Information:Interest
                paid
            
            $
            -
            
            $
            -Income
                taxes paid
            
            
            -
            
            
            -











See
      accompanying summary of accounting policies


and
      notes
      to financial statements





4


CITY
      LANGUAGE EXCHANGE, INC


(A
      Development Stage Company)


NOTES
      TO
      FINANCIAL STATEMENTS


(Unaudited)








NOTE
      1 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Nature
      of
      business. City Language Exchange, Inc was organized in Delaware on August 8,
      2006 as a corporation. CLE is a web based cultural integration service which
      matches people of different cultural backgrounds for effective, efficient and
      inexpensive language exchange meetings.





Basis
      of
      Presentation. The accompanying unaudited interim financial statements of CLE
      have been prepared in accordance with accounting principles generally accepted
      in the United States of America and the rules of the Securities and Exchange
      Commission, and should be read in conjunction with CLE’s audited 2006 annual
      financial statements and notes thereto. In the opinion of management, all
      adjustments, consisting of normal recurring adjustments, necessary for a fair
      presentation of financial position and the results of operations for the interim
      periods presented have been reflected herein. The results of operations for
      interim periods are not necessarily indicative of the results to be expected
      for
      the full year. Notes to the financial statements, which would substantially
      duplicate the disclosure required in CLE’s 2006 annual financial statements have
      been omitted.





Use
      of
      Estimates. The preparation of these 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 amount
      of
      revenues and expenses during the reporting period. Actual results could differ
      from those estimates.





NOTE
      2 -
      GOING CONCERN





Since
      its
      inception, CLE has incurred losses and has been dependent on its majority owner
      to provide cash resources to fund its operations. As of


June
      30,
      2007, CLE’s accumulated deficit was $43,082. The ability of CLE to emerge from
      the development stage with respect to its planned principal business activity
      is
      dependent upon its success in raising additional equity financing and attaining
      profitable operations. Management has plans to seek additional capital through
      private placements and public offerings of its common stock. There is no
      guarantee that CLE will be able to complete any of the above objectives. These
      factors raise substantial doubt regarding CLE's ability to continue as a going
      concern.








5





NOTE
      3 -
      COMMON STOCK





During
      2007, the chief executive officer of the company contributed $17,280 for
      operating expenses. The amount is reflected as contributed capital.





During
      2007, CLE sold 189,000 shares of common stock to a third party for
      $18,900.








6





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





The
      following discussion should be read in conjunction with our financial statements
      and the notes thereto which appear elsewhere in this report. The results shown
      herein are not necessarily indicative of the results to be expected in any
      future periods. This discussion contains forward-looking statements based on
      current expectations, which involve uncertainties. Actual results and the timing
      of events could differ materially from the forward-looking statements as a
      result of a number of factors.





***Forward-Looking
      Statement s***





The
      following discussion and analysis is provided to increase the understanding
      of,
      and should be read in conjunction with, the Financial Statements of the Company
      and Notes thereto included elsewhere in this Report. Historical results and
      percentage relationships among any amounts in these financial statements are
      not
      necessarily indicative of trends in operating results for any future period.
      The
      statements, which are not historical facts contained in this Report, including
      this Plan of Operations, and Notes to the Financial Statements, constitute
      "forward-looking statements" within the meaning of the Private Securities
      Litigation Reform Act of 1995. Such statements are based on currently available
      operating, financial and competitive information, and are subject to various
      risks and uncertainties. Future events and the Company's actual results may
      differ materially from the results reflected in these forward-looking
      statements. Factors that might cause such a difference include, but are not
      limited to, dependence on existing and future key strategic and strategic
      end-user customers, limited ability to establish new strategic relationships,
      ability to sustain and manage growth, variability of operating results, the
      Company's expansion and development of new service lines, marketing and other
      business development initiatives, the commencement of new engagements,
      competition in the industry, general economic conditions, dependence on key
      personnel, the ability to attract, hire and retain personnel who possess the
      technical skills and experience necessary to meet the service requirements
      of
      its clients, the potential liability with respect to actions taken by its
      existing and past employees, risks associated with international sales, and
      other risks described herein and in the Company's other SEC
      filings.





The
      safe
      harbors of forward-looking statements provided by Section 21E of the Exchange
      Act are unavailable to issuers of penny stock. As we issued securities at a
      price below $5.00 per share, our shares are considered penny stock and such
      safe
      harbors set forth under the Reform Act are unavailable to us.





Overview





In
      the
      online world, the Internet is increasingly being used as a tool to bring
      together people in real space and time. Email is used to coordinate meetings,
      and fast-growing sites such as Craigslist.com, Facebook.com, and Lavalife.com
      bring individuals together who otherwise would not meet. In the real world,
      we
      are experiencing the ‘global village phenomenon’; Americans are becoming more
      aware of other places and cultures and people from more places and cultures
      are
      coming to America. These two factors make possible an online business uniquely
      designed to bring people together who are interested in learning about each
      other’s language and culture. This business is City Language Exchange, Inc.





7


City
      Language Exchange, Inc. or CLE sets up a website in each city it enters and
      uses that website to connect individuals interested in exchanging languages.
      There are other websites that offer similar services online, but these fail
      where CLE will succeed for one of three reasons: 1 - These sites do not collect
      any money for their matching services and therefore do not have the ability
      to
      market themselves, and users have not paid for the service and therefore have
      no
      vested interest in showing up for their match and do not know that the other
      party will show up, 2 - These sites are nation- or world-wide, making finding
      a
      language exchange partner in your area unlikely and difficult, 3 - These sites
      offer online matching for online conversation and teaching, which puts barriers
      to communication between two people for whom it will already be somewhat
      difficult to communicate given the language barrier.





CLE
      has
      attempted to mitigate business development risks by creating the business while
      the language exchange niche remains unfilled, using a freelance programmer
      and a
      freelance public relations agent to create and market an attractive website,
      and
      scheduling the president’s time according to the needs of the business.





We
      currently have over 700 registrants interested in matches and are focused on
      increasing that number primarily through on line marketing. In April 2007,
      we
      generated $0 in revenues, in May 2007, $849 in revenues and $60 in June 2007.
      The San Francisco site is a test-run of the larger business model, which has
      been modified based on learning from this single site. This model will be used
      to expand to ten (10) major cities in the United States in 2007, starting with
      New York, Los Angeles, and Seattle where the business began operations in June,
      2007 and is now collecting revenues. These new sites incorporate learning from
      website design and utilities and our marketing program based upon the experience
      we have developed in our San Francisco test site.





As
      the
      business and its effective marketing is based entirely online, there is
      relatively little effort required to replicate the site for a new city. While
      we
      are currently capable of expanding to new cities rapidly, we wish to continue
      learning from our business and increasing the effectiveness of our service
      to
      ensure customer satisfaction and corresponding word of mouth marketing. We
      feel
      that the continued success of the business model will depend upon ensuring
      we
      can service each city we expand to, before increasing the managerial load.
      We
      are adding three cities (New York, Los Angeles, and Seattle) in June 2007,
      and
      will follow by starting up at least another six by December 2007. New York
      and
      Los Angeles add substantial target population to our current test city.
      Presently, we are beginning to see the expected rise in revenues, as our base
      of
      registrants is steadily growing in these cities. This rise in revenues should
      continue as we gain registrants and make more and more matches in New York,
      Los
      Angeles, and Seattle. The target market will be increased by another 50% as
      we
      expand to another six smaller cities before the end of 2007.





We
      are
      also undertaking additional marketing efforts in creating an attractive new
      homebase webpage at www.CityLanguageExchange.com which will feature basic
      information about language exchanges in an easy-to-understand format, including
      a short video illustrating a language exchange. This webpage will link to the
      page in each city and will be used to attract more visitors through link
      exchanges, online publicity, and using popular online video sites including
      YouTube.com and Google Videos to attract internet users to
      CityLanguageExchange.com. Additionally, we are researching potential
      partnerships with organizations currently dedicated to increasing English
      Literacy in the USA, which currently is a major mandate for a number of
      governmental and quasi-governmental organizations, as well as for the charitable
      foundations of a number of businesses.





8


Six
      Months Ended June 30, 2007 and the period from August 28, 2006 (Inception)
      through June 30, 2007




InceptionJune
                30,
            
            through2007
            
            June
                30, 2007Translation
                service income
            
            
            2,500
            
            
            2,500Total
                revenue
            
            
            2,500
            
            
            2,500








We
      are a
      development stage company and have revenues of $2,500 from inception through
      June 30, 2007.




General
                and administrative
            
            
            36,888
            
            
            45,228





There
      were $36,888 of general and administrative expenses for the six month period
      ending June 30, 2007 in addition to the $8,340 of general and administrative
      expenses from inception through December 31, 2006. Advertising expenses composed
      8% and legal expenses compose 55% of the general and administrative expenses
      from inception through June 30, 2007.




Depreciation
                expense
            
            
            280
            
            
            354




This
      expense will be a constant amount until more equipment is
      purchased.





Accordingly,
      we had the following total expenses and net operating income:





Total
                expenses
            
            
            37,168
            
            
            45,582Net
                operating loss
            
            
            (34,668
            )
            
            (43,082
            )





We
      anticipate our primary expense, advertising expense, to rise as we continue
      to
      reach more translation clients through the internet, newspaper advertisements
      and other means of advertising.







9




Liquidity
      and Capital Resources




Since
      we
      are a development stage company, CLE has been dependent on its majority owner
      to
      provide cash resources to fund its operations. As of June 30, 2007, CLE’s
      accumulated deficit was $43,082.




We
      have
      provided for our cash requirements to date through financing provided by our
      president, who had contributed $30,425 in capital as of June 30, 2007. We also
      raised $18,900 from a private placement of our securities in the first quarter
      of 2007.





Until
      financing described below has been received, all our costs, which we will incur
      irrespective of our business development activities, including bank service
      fees
      and those costs associated with SEC requirements associated with going and
      staying public, estimated to be less than $25,000 annually, will be funded
      as a
      loan from management, to the extent that funds are available to do so.
      Management is not obligated to provide these or any other funds. If we fail
      to
      meet these requirements, we will be unable to secure a qualification for
      quotation of our securities on the over the counter bulletin board, or if we
      have secured a qualification, may lose the qualification and our securities
      would no longer trade on the over the counter bulletin board. Further, if we
      fail to meet these obligations and as a consequence we fail to satisfy our
      SEC
      reporting obligations, investors will now own stock in a company that does
      not
      provide the disclosure available in quarterly and annual reports filed with
      the
      SEC, and investors may have increased difficulty in selling their stock as
      we
      will be non-reporting.





We
      will
      need to secure a minimum of $10,000 in funds to finance our business in the
      next
      12 months, in addition to the funds which will be used to go and stay public,
      which funds will be used for business development and sales and marketing.
      However in order to become profitable we may still need to secure additional
      debt or equity funding. We hope to be able to raise additional funds from an
      offering of our stock in the future. However, this offering may not occur,
      or if
      it occurs, may not raise the required funding. We do not have any plans or
      specific agreements for new sources of funding, except for the anticipated
      loans
      from management as described below, or any planned material acquisitions.





Our
      independent auditors have indicated in their audit report for the years ended
      December 31, 2006 that there is substantial doubt about our ability to continue
      as a going concern over the next twelve months.





**Item
      3.**  **CONTROLS
      AND PROCEDURES**





An
      evaluation was carried out under the supervision and with the participation
      of
      the Company's management, including the Chief Executive Officer ("CEO") and
      Chief Financial Officer ("CFO"), of the effectiveness of the Company's
      disclosure controls and procedures as of June 30, 2007. Based on that
      evaluation, the CEO and CFO have concluded that the Company's disclosure
      controls and procedures are effective to provide reasonable assurance that:
      (i)
      information required to be disclosed by the Company in reports that it files
      or
      submits under the Securities Exchange Act of 1934 is accumulated and
      communicated to the Company's management, including the CEO and CFO, as
      appropriate to allow timely decisions regarding required disclosure by the
      Company; and (ii) information required to be disclosed by the Company in reports
      that it files or submits under the Securities Exchange Act of 1934 is recorded,
      processed, summarized and reported within the time periods specified in
      Securities and Exchange Commission rules and forms. During the quarter ended
      June 30, 2007, there were no changes in the Company's internal control over
      financial reporting that have materially affected, or are reasonably likely
      to
      materially affect, its internal control over financial reporting.





10


**PART
      II - OTHER INFORMATION**





**Item
      1.** **LEGAL
      PROCEEDINGS**





None





**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





**Item
      6.** **EXHIBITS**





Exhibits
      required by Item 601 of Regulation S-B





Exhibit 3.1
            
            Articles
                of Incorporation (incorporated by reference to Exhibits to the March
                2007
                Form SB-2 of City Language Exchange, Inc., File No.
                333-141521)Exhibit
                3.2
            
            Bylaws
                (incorporated by reference to Exhibits to the March 2007 Form SB-2
                of City
                Language Exchange, Inc., File No. 333-141521)Exhibit
                4
            
            Form
                of common stock Certificate of the City Language Exchange, Inc.
                (incorporated by reference to Exhibits to the March 2007 Form SB-2
                of City
                Language Exchange, Inc., File No. 333-141521)Exhibit
                31
            
            Certification
                as Adopted Pursuant to Section 302(a) of the Sarbanes-Oxley Act of
                2002 by
                Chief Executive Officer and Chief Financial OfficerExhibit
                32
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002 by Chief Executive Officer and Chief
                Financial Officer





11





**SIGNATURES**





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




CITY
              LANGUAGE
              EXCHANGE, INC. (Registrant)Date: 
August
              14, 2007
            By:
            /s/
              Jonny WhiteJonny
              White, Director acting as Chief Executive
              Officer and Chief Financial Officer







12