UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q (Mark One)  SQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2008  £TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT  For the transition period from ___________ to _____________  Solutions Mechanical, Inc.  (Exact name of small business issuer as specified in its charter)  Nevada333-14110220-8273570(State or other jurisdiction of incorporation or organization)(Commission file number)(IRS Employer Identification No.)  Jeffery Thompson
Solutions Mechanical, Inc.
2702 Pebble Creek Drive
Pearland, TX 77581
(Address of principal executive offices)  1-888-471-3599(Issuer's telephone number)   Check whether the registrant (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 S 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 filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (Check one):  Large Accelerated Filer o  Accelerated Filer o  Non-Accelerated Filero    Smaller Reporting Company S  State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 10,000,000 shares of Common Stock, as of May 15, 2008.  Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934) (check one): Yes £    No S  Transitional Small Business Disclosure Format (check one): Yes £    No S   SOLUTIONS MECHANICAL, INC.  FORM 10-Q  March 31, 2008  INDEX  PART I-- FINANCIAL INFORMATION  Item 1.Financial Statements3Item 2.Managements Discussion and Analysis of Financial Condition8Item 3Quantitative and Qualitative Disclosures About Market Risk13Item 4T.Control and Procedures13  PART II-- OTHER INFORMATION  Item 1Legal Proceedings15Item 2.Unregistered Sales of Equity Securities and Use of Proceeds15Item 3.Defaults Upon Senior Securities15Item 4.Submission of Matters to a Vote of Security Holders15Item 5.Other Information15Item 6.Exhibits and Reports on Form 8-K15  SIGNATURE  2   ITEM 1. Financial Information    SOLUTIONS MECHANICAL, INC.  PageITEM 1  Financial InformationBalance Sheets as of March 31, 2008 (Unaudited) and December 31, 20073Statements of Operations for the Three Months Ended March 31, 2008 and 2007 (Unaudited)4Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007 (Unaudited)6Notes to the Financial Statements (Unaudited)7   3   SOLUTIONS MECHANICAL, INC.  Balance Sheets  March 31,
2008December 31,
2007(Unaudited)ASSETSCURRENT ASSETS:Cash$53,665$16,476Accounts receivable - net40,42234,533Other272805Total Current Assets94,35951,814EQUIPMENT:Trucks33,62123,099Trailer and tools16,26811,801Computer2,7292,729Total52,61837,629Accumulated depreciation(26,986)(22,986)Net25,63214,643TOTAL ASSETS$119,991$66,457LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIES:Accounts payable$59,538$7,438Accrued expenses41,79935,577Note payable48,67019,327Current maturity of  long-term debt4,8465,203Total Current Liabilities154,85367,545LONG-TERM DEBT7,6218,530TOTAL LIABILITIES162,47476,075STOCKHOLDERS DEFICIT:Preferred stock at $0.001 par value; 1,000,000 shares authorized; no shares issued or outstanding-Common stock at $0.001 par value; 74,000,000 shares authorized; 10,000,000 shares issued and outstanding10,00010,000Additional paid-in capital397397Accumulated deficit(52,880)(20,015)Total Stockholders Deficit(42,483)(9,618)TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT$119,991$66,457See accompanying notes to the financial statements.   4   SOLUTIONS MECHANICAL, INC.  Statements of Operations For the Three Months Ended March 31, 2008 and 2007 (Unaudited)  20082007Sales$184,407$72,456Cost of Sales188,32458,830Gross Profit (Loss)(3,917)13,626Other (Income) Expenses:General and administrative24,97110,867Depreciation4,0003,000Other, net(23)14128,94814,008Net Loss$(32,865)$(382)Net loss per common share - basic and diluted$(0.00)$(0.00)Basic and diluted weighted average number of common shares outstanding10,000,0009,847,111See accompanying notes to the financial statements.  5   SOLUTIONS MECHANICAL, INC.  Statements of Cash Flows For the Three Months Ended March 31, 2008 and 2007  (Unaudited)  20082007CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(32,865 )$(382)Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation4,0003,000Changes in net operating assets52,966(1,444)Net Cash Provided by Operating Activities24,1011,174CASH FLOWS FROM INVESTING ACTIVITIESPurchase of equipment(14,989)(977)CASH FLOWS FROM FINANCING ACTIVITIESSale of common stock-860Proceeds from notes payable48,670-Repayment of loans(20,593)(2,084)Net Cash Provided by (Used in) Financing Activities28,077(1,224)NET INCREASE (DECREASE) IN CASH37,189(1,027)CASH AT BEGINNING OF PERIOD16,47611,401CASH AT END OF PERIOD$53,665$10,374See accompanying notes to the financial statements.  6   SOLUTIONS MECHANICAL, INC.  Notes to Unaudited Financial Statements  March 31, 2008 (Unaudited)  NOTE 1 BASIS OF PRESENTATION  The accompanying interim financial statements for the three-month periods ended March 31, 2008 and 2007 are unaudited and include all adjustments (consisting of normal recurring adjustments) considered necessary by management for a fair presentation.  The results of operations realized during an interim period are not necessarily indicative of results to be expected for a full year.  These financial statements should be read in conjunction with the information filed as part of the Companys Annual Report on Form 10-KSB of the Company as filed with the United States Securities and Exchange Commission (the SEC) on April 14, 2008.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.  NOTE 2 CURRENT DEVELOPMENTS  As part of the Companys plan to augment its financial resources and consider attractive business opportunities, its principal stockholders have entered into discussions with an unaffiliated third party with respect to a potential merger transaction which could result in change of control/ownership and new management. There can be no assurance that a merger or other significant transaction will be consummated with the third party or, if consummated, that the Company or its stockholders would realize any benefits from it.  The Note Payable of $48,670 at March 31, 2008 is due to the Companys President. It is noninterest-bearing and due on demand.  NOTE 3 GOING CONCERN  The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At March 31, 2008, the Company has limited financial resources, has not established a source of equity or debt financing has negative working capital and has incurred operating losses since inception. These factors, among others, indicate that the Company's continuation as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing.  The Company will solicit sales based on all leads that it can obtain from contacts of its president, existing customers, advertising and trade literature. However, the Company cannot predict the likelihood of it being successful in its efforts to increase sales.  The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.  7   ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995  Information set forth herein contains "forward-looking statements" which can be identified by the use of forward-looking terminology such as "believes," "expects," "may, should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. No assurance can be given that the future results covered by the forward-looking statements will be achieved. The Company cautions readers that important factors may affect the Companys actual results and could cause such results to differ materially from forward-looking statements made by or on behalf of the Company.  These factors include the Companys lack of historically profitable operations, dependence on key personnel, the success of the Companys business, ability to manage anticipated growth and other factors identified in the Company's filings with the Securities and Exchange Commission, press releases and/or other public communications.  Current Developments  As part of our plan to augment our financial resources and consider attractive business opportunities, our principal stockholders have entered into discussions with an unaffiliated third party with respect to a potential merger transaction which could result in change of control/ownership and new management. There can be no assurance that a merger or other significant transaction will be consummated with the third party or, if consummated, that the Company or its stockholders would realize any benefits from it.  Operations  We were founded as an unincorporated business in January 2006, became a limited liability company on April 3, 2006 under the name JL Solutions Mechanical LLC and a C corporation on October 10, 2006. We began generating revenue in January 2006. At May 5, 2008, we had one employee, Jeffery Thompson, our president. Mr. Thompson devotes fulltime to us.  8   A summary of our operations for the three months ended March 31, 2008 and 2007 follows:  20082007Sales$184,407$72,456Cost of Sales188,32458,830Gross Profit (Loss)(3,917)13,626Other (Income) Expenses:General and administrative24,97110,867Depreciation4,0003,000Other, net(23)14128,94814,008Net Loss$(32,865)$(382)  Sales - We commenced operations in January 2006. We devoted the first nine months of 2006 developing our initial business. Our revenue for quarters since then reflects increases over the corresponding period in the prior year. We cannot provide any assurances that that trend will continue.  Cost of sales  gross margin was negative in 2008 because the engagements required more purchases of installed equipment and subcontractor costs incurred to complete a large job were more than anticipated.  General and administrative - The principal components of general and administrative expenses in 2008 are advertising ($4,357), automobile and fuel expenses ($6,994), communications ($2,916), insurance ($1,482), office supplies and expenses ($3,634), and rent ($2,628). In 2007 the principal categories of general and administrative expenses are advertising ($1,804), automobile and fuel expenses ($2,676), communications ($1,219), insurance ($1,846), office supplies ($675), and professional fees ($1,583).  Depreciation depreciation relates principally to our trucks and equipment.  General  As a corporate policy,we will not incur any cash obligations that we cannot satisfy with known resources, of which there are currently none except as described in Liquidity below and/or elsewhere in this prospectus.  We believe that the perception that many people have of a public company make it more likely that they will accept restricted securities from a public company as consideration for indebtedness to them than they would from a private company. We have not performed any studies of this matter.  Our conclusion is based on our own observations.  However, there can be no assurances that we will be successful in any of those efforts even if we are a public entity.  Additionally, issuance of restricted shares would necessarily dilute the percentage of ownership interest of our stockholders.  9   Liquidity  In 2007, we failed to generate cash from operating activities. We believe that we can manage our basic HVAC operations in a manner to at least breakeven from a cash perspective during the next 12 months. We do not plan on making any significant capital expenditures have no plans to hire additional employees and therefore do not anticipate raising any additional funds during the next twelve months. See below for a discussion of the expected impact of incremental costs associated with becoming a public company.  At March 31, 2008, we owed our President $48,670. The obligation is noninterest-bearing and due on demand. Our Presidents personal resources are limited. We do not believe that we can rely on the likelihood of any significant advance beyond the amount currently due to him if we are unable to pay standard operating costs and our president is not legally bound to provide us with such loan. We have a $6,000 revolving line of credit with a credit union that requires minimum monthly payments of $157 which includes interest and principal. Interest is charged at the rate of 6.24%, per annum. At March 31, 2008, the balance outstanding was $6,000. This line of credit is guaranteed by our President.  We have a long-term bank loan, the proceeds of which were used to purchase our truck. The balance outstanding at March 31, 2008 was $12,467. The loan is guaranteed by our president and is payable in equal monthly payments of $501 through June 2010. The loan includes interest at the rate of 7.10% per annum.  Private capital, if sought, will be sought from former business associates of our founder or private investors referred to us by those business associates. To date, we have not sought any funding source and have not authorized any person or entity to seek out funding on our behalf. If a market for our shares ever develops, of which there can be no assurances, we may use restricted shares of our common stock to compensate employees/consultants and independent contractors wherever possible.  We believe that operations are generating sufficient cash to continue operations for the next 12 months from the date of this prospectus.  We have become a public company and, by doing so, have incurred and will continue to incur additional significant expenses for legal, accounting and related services. Once we become a public entity, subject to the reporting requirements of the Exchange Act of 1934, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses for annual reports and proxy statements. We estimate that these costs will range up to $50,000 per year for the next few years and will be higher if our business volume and activity increases but lower during the first year of being public because our overall business volume will be lower, and we will not yet be subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. These obligations will reduce our ability and resources to fund other aspects of our business. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling obligations and compensate independent contractors who provide professional services to us, although there can be no assurances that we will be successful in any of those efforts. We will reduce the compensation levels paid to our president if there is insufficient cash generated from operations to satisfy these costs.  10   There are no current plans to seek private investment.  We do not have any current plans to raise funds through the sale of securities.  We hope to be able to use our status as a public company to enable us to use non-cash means of settling obligations and compensate persons and/or firms providing services or products to us, although there can be no assurances that we will be successful in any of those efforts.  Issuing shares of our common stock to such persons instead of paying cash to them would increase our chances to expand our business.  Having shares of our common stock may also give persons a greater feeling of identity with us which may result in referrals.  To date, we have not sought any funding source and have not authorized any person or entity to seek out funding on our behalf.  In January 2007, Solutions Mechanical sold 860,000 of its common stock to 39 individuals for $860. The sale of such shares was not specifically or solely intended to raise financing since the funds raised were de minimis.  It was also intended to get relatives and business associates of management involved in our business.  Although these stockholders have no obligation to provide any services to us, management hopes that these new stockholders, their families, friends and/or business associates may provide us with valuable services such as recommending our services and providing us with business advice in any areas of expertise or knowledge that they may have that can be of value and assistance to us.  Off Balance Sheet Arrangements  We have no off balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.  Recently Issued Accounting Pronouncements  In June 2003, the United States Securities and Exchange Commission adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (Section 404), as amended by SEC Release No. 33-8889 on February 1, 2008. Commencing with our annual report for the year ended September 30, 2009, we will be required to include a report of management on our internal control over financial reporting. The internal control report must include a statement.  § of managements responsibility for establishing and maintaining adequate internal control over our financial reporting;  § of managements assessment of the effectiveness of our internal control over financial reporting as of year end; and  § of the framework used by management to evaluate the effectiveness of our internal control over financial reporting.  Furthermore, in the following fiscal year, it is required to file the registered accounting firms attestation report separately on the Companys internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.  11   In September 2006, the Financial Accounting Standards Board (the FASB) issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"). This Statement defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure related to the use of fair value measures in financial statements. The Statement is to be effective for MDS financial statements issued in 2008; however, earlier application is encouraged. MDS is currently evaluating the timing of adoption and the impact that adoption might have on its financial position or results of operations.  On February 15, 2007, the FASB issued Statement of Financial Accounting Standards No. 159,The Fair Value Option for Financial Assets and Financial Liabilities: Including an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 permits all entities to elect to measure many financial instruments and certain other items at fair value with changes in fair value reported in earnings. SFAS No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007, with earlier adoption permitted. We do not anticipate that the adoption of this statement will have a material effect on our financial condition and results of operations.      In June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-3 Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities (EITF Issue No. 07-3) which is effective for fiscal years beginning after December 15, 2007.  EITF Issue No. 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized.  Such amounts will be recognized as an expense as the goods are delivered or the related services are performed.  The Company does not expect the adoption of EITF Issue No. 07-3 to have a material impact on the financial results of the Company.  In December 2007, the FASB issued FASB Statement No. 141 (Revised 2007)Business Combinations (SFAS No. 141(R)), which requires the Company to record fair value estimates of contingent consideration and certain other potential liabilities during the original purchase price allocation, expense acquisition costs as incurred and does not permit certain restructuring activities previously allowed under Emerging Issues Task Force Issue No. 95-3 to be recorded as a component of purchase accounting.  SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements, which shall be applied retrospectively for all periods presented. The Company will adopt this standard at the beginning of the Companys year ending September 30, 2009 for all prospective business acquisitions. The Company has not determined the effect that the adoption of SFAS No. 141(R) will have on the financial results of the Company.  In December 2007, the FASB issued FASB Statement No. 160Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51 (SFAS No. 160), which causes noncontrolling interests in subsidiaries to be included in the equity section of the balance sheet.  SFAS No. 160 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements, which shall be applied retrospectively for all periods presented.  The Company will adopt this standard at the beginning of the Companys year ending September 30, 2009 for all prospective business acquisitions.  The Company has not determined the effect that the adoption of SFAS No. 160 will have on the financial results of the Company.  12   The FASB, the Emerging Issues Task Force and the United States Securities and Exchange Commission have issued certain other accounting pronouncements and regulations as of March 31, 2008 that will become effective in subsequent periods; however, management does not believe that any of those pronouncements would have significantly affected our financial accounting measurements or disclosures had they been in effect during the three and six months ended March 31, 2008 and 2007, and it does not believe that any of those pronouncements will have a significant impact on our financial statements at the time they become effective.  Critical Accounting Policies  The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.  An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.  Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements.  There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made.  Note 2to the financial statements, included elsewhere in this prospectus, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.  Seasonality  Typically, there is a greater demand for our services in the summer months.  ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  The Company is subject to certain market risks, including changes in interest rates and currency exchange rates.  The Company does not undertake any specific actions to limit those exposures.  ITEM 4T  CONTROLS AND PROCEDURES  We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (one person, our President), as appropriate, to allow timely decisions regarding required disclosures.  13   As required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of that date.  Managements Report on Internal Controls over Financial Reporting  Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of consolidated financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.  There has been no change in the Companys internal control over financial reporting during the quarter ended March 31, 2008 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.  The Companys management, including the Companys CEO and CAO, does not expect that the Companys disclosure controls and procedures or the Companys internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the companys internal control over financial reporting was effective as of March 31, 2008.  This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this quarterly report.  14    PART IIOTHER INFORMATIONItem 1Legal ProceedingsNoneItem 2Unregistered Sale of Equity Securities and Use of ProceedsNoneItem 3Defaults Upon Senior SecuritiesNoneItem 4Submission of Matters to a Vote of ShareholdersNoneItem 5Other InformationNoneItem 6Exhibits and Reports on Form 8-K  (a)           Exhibits  Exhibit NumberDescription31.1Section 302 Certification Of Chief Executive And Chief Financial Officer32.1Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002  Chief Executive And Chief Financial Officer  (b)           Reports of Form 8-K  None.  15   Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.  Solutions Mechanical, Inc. (Registrant)    /s/ Jeffery Thompson Jeffery Thompson  Title: President and Chief Financial Officer  May 15, 2008  16