SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-Q
 
 [X]
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
quarterly period ended June 30, 2008
 
 [  
      ]
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 Commission
File Number: 000-52692
 
 DON MARCOS TRADING
CO.
 (Exact
name of registrant as specified in its charter)
  Florida
              
              65-0921319(State
      or other jurisdiction of
              
              (IRS
      Employerincorporation
      or organization)
              
              Identification
      No.)
  1850 Southeast 17th Street,
Suite 300, Ft. Lauderdale, FL  33316
 (Address
of principal executive offices)
 
 (954)
356-8111
 (Issuer's
telephone number)
 
 N/A
 (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. Yes þ 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. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
  Large
accelerated filer  ̈                                                                                Accelerated
filer  ̈
 Non-accelerated
filer  ̈                                                                                  Smaller
reporting company þ
 (Do not
check if a smaller reporting company)
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes  ̈ No þ
  As of
August 13, 2008, the number of shares of common stock outstanding was
44,300,000.
 
 
      INDEX
 
 PageNumberPART
      I - FINANCIAL INFORMATIONItem
      1.
              Financial
      Statements (Unaudited)
              1Condensed
      Balance Sheet – June 30, 2008 and 2007
              1Condensed
      Statement of Operations –For
      the three and six months ended June 30, 2008 and 2007
              2Condensed
      Statements of Cash Flows –For
      the six months ended June 30, 2008 and 2007
              3Condensed
      Notes to Financial Statements
              5Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              8Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              12Item
      4.
              Controls
      and Procedures
              12Item
      4T.
              Controls
      and Procedures
              12PART
      II - OTHER INFORMATIONItem
      1.
              Legal
      Proceedings
              13Item
      1A.
              Risk
      FactorsItem
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              13Item
      3.
              Defaults
      Upon Senior Securities
              13Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              13Item
      5.
              Other
      Information
              13Item
      6.
              Exhibits
              13SIGNATURES
              14
 
  
     PART
I - FINANCIAL INFORMATION
 
 ITEM
1.          FINANCIAL
STATEMENTS
 
 DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
BALANCE SHEET
 JUNE
30, 2008 AND DECEMBER 31, 2007
 
 UnauditedJune
      30,
                2008
              
              
              December
      31, 2007ASSETSCURRENT
      ASSETSCash
              
              $
              60
              
              
              $
              11,166Inventory
              
              
              8,914
              
              
              
              4,255TOTAL CURRENT
      ASSETS
              
              $
              8,974
              
              
              $
              15,421
  
 LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
              
              $
              15,465
              
              
              $
              9,466STOCKHOLDERS’
      EQUITYPreferred
      stock, no stated valueAuthorized
      10,000,000 sharesIssued
      and outstanding -0- shares
              
              
              -
              
              
              
              -Common
      stock, no par valueAuthorized
      100,000,000 sharesIssued
      and outstanding - 39,500,000 shares
              
              
              199,454
              
              
              
              187,454Deficit
      accumulated during thedevelopment
      stage
              
              
              (
      205,945
              )
              
              
              (
      181,499
              )TOTAL
      STOCKHOLDERS’ EQUITY
              
              
              (
      6,491
              )
              
              
              5,955TOTAL
      LIABILITIES ANDSTOCKHOLDERS’
      EQUITY
              
              $
              8,974
              
              
              $
              15,421
  The
accompanying notes are an integral part of these unaudited financial
statements.
 
  1
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
STATEMENTS OF OPERATIONS
 FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
 AND
FOR THE PERIOD FROM MAY 11, 1999 TO JUNE 30, 2008
 (UNAUDITED)
 
 
 Three
      Months Periods Ended
                  June
      30,
                
                
                Six
      Month Periods Ended
                  June
      30,
                
                
                May
      11, 1999 (Inception) To June 30,2008
                
                
                2007
                
                
                2008
                
                
                2007
                
                
                2008REVENUES
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -OPERATING
      EXPENSES
                
                
                7,889
                
                
                
                27,798
                
                
                
                24,446
                
                
                
                93,515
                
                
                
                205,945NET
      LOSS
                
                $
                (7,889
                )
                
                $
                (27,798
                )
                
                $
                (24,446
                )
                
                $
                (93,515
                )
                
                $
                (205,945
                )NET
      LOSS PER SHAREBasic
      and diluted
                
                $
                (.00
                )
                
                $
                (.00
                )
                
                $
                (.00
                )
                
                $
                (.00
                )
                
                $
                (.00
                )WEIGHTED
      AVERAGE NUMBEROF
      SHARES OUTSTANDINGBasic
      and diluted
                
                
                39,500,000
                
                
                
                36,900,000
                
                
                
                38,300,000
                
                
                
                26,285,635
                
                
                
                38,300,000
  
 
 The
accompanying notes are an integral part of these unaudited financial
statements
 
 2
   
 DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
STATEMENTS OF CASH FLOWS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007
 AND
FOR THE PERIOD FROM MAY 11, 1999 (INCEPTION) TO JUNE 30, 2008
 UNAUDITED
 
 May
      11, 1999(Inception)To2008
              
              
              2007
              
              
              June
      30, 2008CASH
      FLOWS FROMOPERATING
      ACTIVITIES:Net
      loss
              
              $
              (24,446
              )
              
              $
              (93,515
              )
              
              $
              (205,945
              )Adjustments
      to reconcile netloss
      to net cash usedby
      operating activities :Common
      stock issuedfor
      services
              
              
              -
              
              
              
              -
              
              
              
              3,635Stock
      based compensation
              
              
              -
              
              
              
              45,474
              
              
              
              45,474Changes
      in operating assets and liabilities:Inventory
              
              
              (4,659
              )
              
              
              -
              
              
              
              (8,914
              )Accounts
      payable and accrued expenses
              
              
              5,999
              
              
              
              261
              
              
              
              15,465NET
      CASH USED INOPERATING
      ACTIVITIES
              
              
              (
      23,106
              )
              
              
              (47,780
              )
              
              
              (150,285
              )CASH
      FLOWS FROMINVESTING
      ACTIVITIES
              
              
              -
              
              
              
              -
              
              
              
              -CASH
      FLOWS FROMFINANCING
      ACTIVIITESIssuance
      of common stock for cash
              
              
              12,000
              
              
              
              82,000
              
              
              
              148,000Cash
      contributed by stockholder
              
              
              -
              
              
              
              -
              
              
              
              2,345NET
      CASH PROVIDED BYFINANCING
      ACTIVITIES
              
              
              12,000
              
              
              
              82,000
              
              
              
              150,345NET
      INCREASE (DECREASE) IN CASHAND
      CASH EQUIVALENTS
              
              
              (11,106
              )
              
              
              34,220
              
              
              
              60CASH
      AND CASH EQUIVALENTS,BEGINNING
      OF PERIOD
              
              
              11,166
              
              
              
              131
              
              
              
              -CASH
      AND CASH EQUIVALENTS,END
      OF PERIOD
              
              $
              60
              
              
              $
              34,351
              
              
              $
              60
 
 
 
 The
accompanying notes are an integral part of these unaudited financial
statements
 
  3
   
 DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
STATEMENTS OF CASH FLOWS (CONTINUED)
 FOR
THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007
 AND
FOR THE PERIOD FROM MAY 11, 1999 (INCEPTION) TO JUNE 30, 2008
 (UNAUDITED)
 
 May
      11, 1999(Inception)To2008
              
              
              2007
              
              
              June
      30, 2008SUPPLEMENTAL
      DISCLOSUREOF
      CASH FLOW INFORMATIONCASH
      PAID DURING THE YEAR FOR:Interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -
 
  
 
 
 The
accompanying notes are an integral part of these unaudited financial
statements
 
  4
    DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
NOTES TO FINANCIAL STATEMENTS
 JUNE
30, 2008 AND 2007
 (UNAUDITED)
  NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 
 Nature of Business and
History of Company
 
 Don
Marcos Trading Co. (“the Company”) is a development stage enterprise
incorporated on May 11, 1999 in the state of Florida. The Company has had no
significant operations since its inception. The Company’s only activities have
been organizational, directed at raising its initial capital and developing its
business plan.
 
 The
original purpose of the Company was to be the sole importer and distributor of
Don Marcos coffee.
 
 Basis of
Presentation
 
 The
interim financial statements of Don Marcos Trading Co. are condensed and do not
include some of the information necessary to obtain a complete understanding of
the financial data.  Management believes that all adjustments
necessary for a fair presentation of results have been included in the unaudited
financial statements for the interim period presented.  Operating
results for the six months ended June 30, 2008 are not necessarily indicative of
the results that may be expected for the year ended December 31,
2008.  Accordingly, your attention is directed to footnote disclosures
found in the December 31, 2007 Annual Report and particularly to Note 1, which
includes a summary of significant accounting policies.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
 Cash and Cash
Equivalents
 
 The
Company considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
 
 Fair value of financial
instruments
 
 For
certain of the Company’s instruments, including cash and accounts payable and
accrued expenses, the carrying amounts approximate fair value due to their short
maturities.
 
  5
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
NOTES TO FINANCIAL STATEMENTS
 JUNE
30, 2008 AND 2007
 (UNAUDITED)
 
  NOTE
1       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 Net (Loss) Per
Share
 
 The
Company adopted Statement of Financial Accounting Standards No. 128 that
requires the reporting of both basic and diluted earnings (loss) per share.
Basic earnings (loss) per share is computed by dividing net income (loss)
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted earnings (loss) per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock. In accordance with
FASB 128, any anti-dilutive effects on net income (loss) per share are
excluded.
 
 Revenue
Recognition
 
 The
Company will recognize revenue from product sales when shipment of product to
the customer has been made, which is when title passes. The Company will
estimate and record provisions for rebates, sales returns and allowances in the
period the sale is recorded. Shipping and handling charges will be included in
gross sales, with the related costs included in selling, general and
administrative expenses. For the six months ended June 30, 2008 and 2007, the
Company had not generated any revenue.
 
 Inventory
 
 Inventory
is stated at the lower of cost (determined by the first-in, first-out method, or
market.  Inventories are adjusted for estimated obsolescence and
written down to net realizable value based upon estimates of future demand,
technology developments, and market conditions.
 
 Stock Based
Compensation
 
 Effective
November 1, 2005, the Company adopted Statement of Financial Accounting
Standards (“SFAS”) No. 123(R), “Share-Based Payment: An Amendment of FASB
Statements No. 123 and 95” using the modified prospective method. Under this
method, compensation cost is recognized on or after the effective date for the
portion of outstanding awards, for which the requisite service has not yet been
rendered, based on the grant date fair value of those awards. For stock-based
awards issued on or after November 1, 2005, the Company recognizes the
compensation cost on a straight-line basis over the requisite service period for
the entire award. Measurement and attribution of compensation cost for awards
that are unvested as of the effective date of SFAS No. 123(R) are based on the
same estimate of the grant-date or modification-date fair value and the same
attribution method used previously under SFAS No. 12.
 
  6
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
NOTES TO FINANCIAL STATEMENTS
 JUNE
30, 2008 AND 2007
 (UNAUDITED)
 
 NOTE
1       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 Development Stage
Enterprise
 
 The
Company is a development stage enterprise, as defined in Financial Accounting
Standards Board No. 7. The Company’s planned principal operations have not
commenced, and accordingly, no revenue has been derived during this
period.
  NOTE
2       GOING
CONCERN
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the recoverability of
assets and the satisfaction of liabilities in the normal course of
business.
 
 The
Company’s development activities since inception have been financially sustained
through stockholder contribution to the Company and issuance of common stock.
The Company may raise additional funding to continue its operations through
contributions from the current shareholders and stock issuance to other
investors.
 
 The
ability of the Company to continue as a going concern is dependent upon its
ability to raise additional capital from the sale of common stock and,
ultimately, the achievement of significant operating revenues. The accompanying
financial statements do not include any adjustments that might be required
should the Company be unable to recover the value of its assets or satisfy its
liabilities.
 
 NOTE
3        COMMON STOCK
 
 The
Company effected a 1:5 forward split of the stock in February, 2007. All per
share amounts and number of shares outstanding have been retroactively restated
for this adjustment.
 
 On March
14, 2007, the Company offered a private placement of 16,400,000 shares of common
stock, no par value, with an aggregate value of $82,000.
 
 The
Company effected a 1:10 forward split of the stock on March 30, 2007. All per
share amounts and number of shares outstanding have been retroactively restated
for this adjustment.
 
 On April
1, 2008, the Company sold 2,400,000 shares of its common stock, no par value,
with an aggregate value of $12,000, to three officers of the
company.
   7
    ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 The
following discussion and analysis should be read in conjunction with our
financial statements, including the notes thereto, appearing elsewhere in this
Report.
 
 Overview
 
 We were
incorporated on May 11, 1999 in the state of Florida to be the sole importer and
distributor of Don Marcos® Coffee.
 
 Critical
Accounting Policies
 
 Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses.  In consultation with our Board of Directors, we have
identified several accounting principles that we believe are key to
understanding of our financial statements.  These important accounting
policies require management's most difficult, subjective judgments.
 
 Development
Stage Enterprise
 
 We are a
development stage enterprise, as defined in Financial Accounting Standards Board
No. 7. Our planned principal operations have not commenced, and, accordingly, no
revenue has been derived during the period.
 
 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.
 
 Net
Loss Per Share
 
 We
adopted Statement of Financial Accounting Standards No. 128 that requires the
reporting of both basic and diluted earnings (loss) per share. Basic earnings
(loss) per share is computed by dividing net income (loss) available to common
stockholders by the weighted average number of common shares outstanding for the
period.  Diluted earnings (loss) per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock. In accordance with FASB 128, any
anti-dilutive effects on net income (loss) per share are excluded.
 
 8
  
 Inventory
 
 Inventory
is stated at the lower of cost (determined by the first-in, first-out method),
or market.  Inventories are adjusted for estimated obsolescence and
written down to net realizable value based upon estimates of future demand,
technology developments, and market conditions.
 
 Stock
Issued for Non-Cash Transactions
 
 It is our
policy to value stock issued for non-cash transactions, such as services, at the
fair market value of the goods or services received or the consideration
granted, whichever is more readily determinable, at the date the transaction is
negotiated.
 
 There
were no shares of common stock issued for services during the six months ended
June 30, 2008 and 2007.
 
 Going
Concern
 
 Our
financial statements are prepared using generally accepted accounting principles
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. Our ability to
continue as a going concern is dependent upon our ability to locate sources of
capital, and attain future profitable operations. Our management is currently
initiating their business plan. The accompanying financial statements do not
include any adjustments that might be necessary should we be unable to continue
as a going concern.
 
 Stock
Based Compensation
 
 We
adopted SFAS No. 123 (Revised 2004), Share Based Payment (“SFAS
No. 123R”), under the modified-prospective transition method on
January 1, 2006. SFAS No. 123R requires companies to measure and
recognize the cost of employee services received in exchange for an award of
equity instruments based on the grant-date fair-value. Share-based compensation
recognized under the modified-prospective transition method of SFAS
No. 123R includes share-based compensation based on the grant-date
fair-value determined in accordance with the original provisions of SFAS
No. 123, Accounting for Stock-Based Compensation, for all share-based
payments granted prior to and not yet vested as of January 1, 2006 and
share-based compensation based on the grant-date fair-value determined in
accordance with SFAS No. 123R for all share-based payments granted after
January 1, 2006. SFAS No. 123R eliminates the ability to account for
the award of these instruments under the intrinsic value method prescribed by
Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock
Issued to Employees, and allowed under the original provisions of SFAS
No. 123. Prior to the adoption of SFAS No. 123R, we accounted for our
stock option plans using the intrinsic value method in accordance with the
provisions of APB Opinion No. 25 and related interpretations.
 
 Stock-based
compensation represents the cost related to stock-based awards granted to
employees.  We measure stock-based compensation cost at grant date,
based on the estimated fair value of the award, and recognizes the cost as
expense on a straight-line basis (net of estimated forfeitures over the employee
requisite service period.  We estimate the fair value of stock options
using a Black-Scholes valuation model.  The expense is recorded in
operating expenses in the condensed statements of operations.
 
  9
    Results
of Operations
 
 You
should read the selected financial data set forth below along with our
discussion and our financial statements and the related notes.  We
have derived the financial data from our unaudited financial
statements.  We believe the financial data shown in the table below
include all adjustments consisting only of normal recurring adjustments, that we
consider necessary for a fair presentation of such
information.  Operating results for the period are not necessarily
indicative of the results that may be expected in the future.
 
 Six
      Months
              
              
              Six
      Months
              
              
              Three
      Months
              
              
              Three
      MonthsEnded
              
              
              Ended
              
              
              Ended
              
              
              EndedJune
      30, 2008
              
              
              June
      30, 2007
              
              
              June
      30, 2008
              
              
              June
      30, 2007(Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)Revenue
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Operating
      expenses
              
              
              24,446
              
              
              
              93,515
              
              
              
              7,889
              
              
              
              27,798Net
      (loss)
              
              $
              (
      24,446
              )
              
              $
              (
      93,515
              )
              
              $
              (
      7,889
              )
              
              $
              (
      27,798
              )Net
      (loss) per share
              
              $
              (
      .00
              )
              
              $
              (
      .00
              )
              
              $
              (
      .00
              )
              
              $
              (
      .00
              )
   Results for the Six Months
Ended June 30, 2008 Compared to the Six Months Ended June 30,
2007
 
 Revenues
 
 There
were no revenues from operations for the six months ended June 30, 2008 and
2007.
 
 Operating
Expenses
 
 Operating
expenses decreased by $69,069 to $24,446for the six months ended
June 30, 2008 as compared to $93,515 for the six months ended June 30,
2007.
 
 During
the six months ended June 30, 2008, we incurred accounting, legal and
professional services of $23,594 associated with our public company reporting
requirements and other expenses of $492.  For the six
months ended June 30, 2007, we incurred accounting, legal and professional
services of $47,597 associated with our SEC filings, salaries expense of $45,474
associated with the issuance of stock options to employees, and other expenses
of $444.
 
 10
    Net
Loss
 
 Primarily
as a result of our operating expenses, we had a net loss of $24,446 for the six
months ended June 30, 2008 compared to a net loss of $93,515 for the same period
in the prior year.
 
 Results
for the Three Months Ended June 30, 2008 Compared to the Three Months ended June
30,
2007
 
 Revenues
 
 There
were no revenues from operations for the three months ended June 30, 2008 and
2007.
 
 Operating
Expenses
 
 Our total
operating expenses for the three months ended June 30, 2008 were $7,889 compared
to $27,798 for the three months ended June 30, 2007. Our expenses for the three
months ended June 30, 2008 and 2007 were primarily for legal and accounting fees
associated with our SEC filings required of a public company.
 
 Impact
of Inflation
 
 We
believe that inflation has had a negligible effect on our operations over the
past three years.
 
 Liquidity
and Capital Resources
 
 We
currently have no material commitments for capital expenditures and have no
fixed expenses.
 
 Working
capital is summarized and compared as follows:
  June
      30,
              
              
              June
      30,2008
              
              
              2007Current
      assets
              
              $
              8,974
              
              
              $
              34,351Current
      liabilities
              
              $
              15,465
              
              
              $
              10,261Working
      Capital (deficit)
              
              $
              (6,491
              )
              
              $
              24,099
  
 Changes
in cash flows are summarized as follows:
 
 Our net
cash used by operations was $23,106 for the six months ended June 30, 2008 as
compared to $47,780 for the six months ended June 30, 2007.  During
the six months ended June 30, 2008, we experienced a net loss of
$24,446.  In addition, we had an increase in inventory of
$4,659.  This was offset by an increase in accounts payable and
accrued expenses of $5,999. During the six months ended June 30, 2007, we
experienced a net loss of $93,515.  This was offset by non-cash stock
options issued to employees in the amount of $45,474 and an increase in accounts
payable and accrued expenses of $261.
 
 11
    There was
no net cash used or provided from investing activities for the six months ended
June 30, 2008 and 2007.
 
 Our net
cash provided from financing activities was $12,000 during the six months ended
June 30, 2008, due to the issuance of a private placement of common
stock.  Our net cash provided by financing was $82,000 during the six
months ended June 30, 2007, due to the issuance of a private placement of common
stock.
 
 On August
1, 2008, cash was provided from financing activities amounting to $24,000, which
were capital contributions by stockholders.
 
 Off-Balance
Sheet Arrangements
 
 None.
  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 are not required to provide information under this
item.
 
 ITEM
4.       CONTROLS AND
PROCEDURES
  Evaluation
of Disclosure Controls and Procedures
 
 Our
President and Chief Financial Officer have evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Securities Exchange Act of 1934) as of the end of period covered by this
report.  Based upon such evaluation,  the President and
Chief Financial Officer concluded that our disclosure controls and procedures
were effective to ensure that the information required to be disclosed by us in
the reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms, and is accumulated and communicated to our
management, including our President and Chief Financial Officer, as appropriate
to allow timely decisions regarding required disclosure.
 
 Changes
in Internal Control Over Financial Reporting
 
 There
were no changes in our internal control over financial reporting during the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.
 
 ITEM
4T.       CONTROLS AND
PROCEDURES
 We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.
  
 12
     PART
II - OTHER INFORMATION
 
 ITEM
      1.
              LEGAL
      PROCEEDINGS
 
 To the
best knowledge of our management, there are no legal proceedings pending or
threatened against us.
 
 ITEM
      1A.
              RISK
      FACTORS.
 
 We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.
 
 ITEM
      2.
              UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
 
 On August
4, 2008, we entered into Stock Purchase Agreements with certain of our officers
for the sale to those officers of shares of our common stock as
follows:
  Name
      of Officer
              Number
      of Shares of
                Common
      Stock Purchased
              Purchase
      Price PaidEarl
      T. Shannon
              1,600,000
              $8,000Steven
      W. Hudson
              1,600,000
              $8,000Scott
      W. Bodenweber
              1,600,000
              $8,000
  Pursuant
to the Stock Purchase Agreements described above, we sold an aggregate of
4,800,000 shares of our common stock at a price of $0.005 per share to three
accredited investors for gross proceeds of $24,000.  We relied on the
exemption from registration relating to offerings that do not involve any public
offering pursuant to Section 4(2) under the Act and/or Rule 506 of Regulation D
promulgated pursuant thereto.  We believe that the investors are
“accredited investors” under Rule 501 under Regulation D of the Act and had
adequate access to information about us.
 
 ITEM
      3.
              DEFAULTS
      UPON SENIOR SECURITIES
 
 None.
 
 ITEM
      4.
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
HOLDERS
 
 None.
 
 ITEM
      5.
              OTHER
      INFORMATION
 
 None.
 
  13
   
 ITEM
      6.
              EXHIBITS
 
 The
following Exhibits are filed herein:
 
 No.
              
              Title10.1
              
              Stock
      Purchase Agreement with Earl T. Shannon, dated August 4,
    2008.10.2
              
              Stock
      Purchase Agreement with Steven W. Hudson, dated August 4,
      2008.10.3
              
              Stock
      Purchase Agreement with Scott W. Bodenweber, dated August 4,
      2008.31.1
              
              Certification
      of President Pursuant to the Securities Exchange Act of 1934, Rules
      13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
              
              Certification
      of Chief Financial Officer Pursuant to the Securities Exchange Act of
      1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 200232
              
              Certifications
      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002
    14
      SIGNATURES
 
 In
accordance with 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, duly authorized.
  DATED:
      August 13, 2008
              DON
      MARCOS TRADING CO.By:
              /s/ Earl
      T. ShannonBY:
      Earl T. Shannon
                ITS:
      President
                (Principal
      Executive Officer)By:
              /s/
      Scott W. BodenweberBY:
      Scott W. BodenweberITS:
      Chief Financial Officer(Principal
      Financial Officer and Principal Accounting Officer)