**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-Q**


(Mark
      One)





**x** QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
      FOR THE QUARTERLY PERIOD ENDED **March 31, 2008**





**o** **** TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934. ****





**Commission
      File No.** **333-140633**





**UKARMA
      CORPORATION**





(Exact
      name of registrant as specified in it charter)





**Nevada**
            
            **68-048-2472**(State
                or other jurisdiction of incorporation or
            
            (IRS
                Employer Identificationorganization)
            
            No.)





**520
      Broadway, Suite 350**


**Santa
      Monica, CA 90401**





(Address
      of principal executive offices)





**(310)
      998-8909**





(Registrant's
      telephone number, including area code)





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 o No x




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. (Check one):


Large
      Accelerated filer o   Non-Accelerated
      Filer o


Accelerated
      Filer o   Smaller
      Reporting Company x





The
      registrant is a shell company (as defined by Rule 12b-2 of the Exchange
      Act). Yes o No x




APPLICABLE
      ONLY TO CORPORATE ISSUERS:





Indicate
      the number of shares outstanding of each issuer's classes of common stock,
      as of
      the latest practicable date: 21,917,390 issued and outstanding as of May 9,
      2008.





**UKARMA
      CORPORATION**


TABLE
      OF
      CONTENTS


TO
      QUARTERLY REPORT ON FORM 10-Q


FOR
      PERIOD ENDED MARCH 31, 2008




**Page****PART
                I**
            **FINANCIAL
                INFORMATION**
            2Item
                1.
            Financial
                Statements
            2Condensed
                Consolidated Balance Sheets
            2Condensed
                Consolidated Statements of Operations
            3Condensed
                Consolidated Statements of Cash Flows
            4Notes
                to Condensed Consolidated Financial Statements
            5-13Item
                2.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            14Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            18Item
                4.
            Controls
                and Procedures
            18**PART
                II**
            **OTHER
                INFORMATION**
            18Item
                1.
            Legal
                Proceedings
            18Item
                1A.
            Risk
                Factors
            19Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            19Item
                3.
            Defaults
                Upon Senior Securities
            19Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            19Item
                5.
            Other
                Information
            19Item
                6.
            Exhibits
            19**Signatures**
            22**Exhibits**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1.**  **FINANCIAL
      STATEMENTS**


**UKARMA
        CORPORATION**
 
 **BALANCE
        SHEETS**
 
 **March 31,**
                
                December 31,**2008**
                
                2007**(Unaudited)**
                
                (Audited)ASSETSCurrent
                    AssetsCash
                
                **$**
                **490,651**
                
                $
                483,564Prepaid
                    expenses
                
                
                **69,983**
                
                
                55,146Inventory
                
                
                **23,403**
                
                
                23,547Total
                    Current Assets
                
                
                **584,037**
                
                
                562,257Property
                    and equipment, net of accumulated depreciation of $ 2,439 for
                    2008, and
                    $1,929 for 2007
                
                
                **10,201**
                
                
                10,711Other
                    AssetsProduction
                    costs, net of accumulated amortization of $ 119,184 for 2008,
                    and $99,393
                    for 2007
                
                
                **499,901**
                
                
                594,709Deposit
                
                
                **3,734**
                
                
                3,734Patent
                
                
                **10,358**
                
                
                10,358Total
                    Other Assets
                
                
                **513,993**
                
                
                608,801TOTAL
                    ASSETS
                
                **$**
                **1,108,231**
                
                $
                1,181,769LIABILITIES
                    AND STOCKHOLDERS' EQUITYCurrent
                    LiabilitiesAccounts
                    payable
                
                **$**
                **81,772**
                
                $
                56,987Accrued
                    expenses
                
                
                **37,253**
                
                
                33,288Notes
                    payable to related party
                
                
                **183,631**
                
                
                183,631Total
                    Current Liabilities
                
                
                **302,656**
                
                
                273,906Stockholders'
                    EquityCommon
                    stock, $0.001 par value; 100,000,000 shares authorized; 22,036,977
                    and
                    20,611,406 shares issued and outstanding in 2008 and 2007, respectively
                
                
                **22,037**
                
                
                20,611Preferred
                    stock, $0.001 par value; 20,000,000 shares authorized, none issued
                
                
                **-**
                
                
                -Paid-in
                    capital
                
                
                **4,711,640**
                
                
                4,152,161Stock
                    subscriptions
                
                
                **-**
                
                
                147,200Accumulated
                    deficit
                
                
                **(3,928,102**
                **)**
                
                (3,412,109
                )Total
                    Stockholders' Equity
                
                
                **805,575**
                
                
                907,863TOTAL
                    LIABILITIES AND STOCKHOLDERS' EQUITY
                
                **$**
                **1,108,231**
                
                $
                1,181,769
 **The
        accompanying notes are an integral part of these interim unaudited financial
        statements**
  2
  **UKARMA
        CORPORATION**
 
 **STATEMENTS
        OF OPERATIONS (UNAUDITED)**
 **For
        the three months ended March 31, 2008, and 2007**
 
 **For three months ended****March 31,****2008**
                  
                  2007Sales
                  
                  **$**
                  **2,759**
                  
                  $
                  -Cost
                      of Sale
                  
                  
                  **144**
                  
                  
                  -Gross
                      Profit
                  
                  
                  **2,615**
                  
                  
                  -Selling,
                      General and Administrative Expenses
                  
                  
                  **514,600**
                  
                  
                  466,944Operating
                      Loss
                  
                  
                  **(511,985**
                  **)**
                  
                  (466,944
                  )Other
                      Income (Expenses)Interest
                      Expense
                  
                  
                  **(3,208**
                  **)**
                  
                  (3,350
                  )Total
                      Other Income (Expense)
                  
                  
                  **(3,208**
                  **)**
                  
                  (3,350
                  )Net
                      Loss before Income Taxes
                  
                  
                  **(515,193**
                  **)**
                  
                  (470,294
                  )Provision
                      for Income Taxes
                  
                  
                  **800**
                  
                  
                  800Net
                      Loss
                  
                  **$**
                  **(515,993**
                  **)**
                  $
                  (471,094
                  )Loss
                      Per Share-Basic and Diluted
                  
                  **$**
                  **(0.02**
                  **)**
                  $
                  (0.03
                  )Weighted
                      Average Number of Shares
                  
                  
                  **21,522,444**
                  
                  
                  15,447,126
 **The
        accompanying notes are an integral part of these interim unaudited financial
        statements**
  3
  **UKARMA
        CORPORATION**
 **STATEMENTS
        OF CASH FLOWS (UNAUDITED)**
 **For
        the three months ended March 31, 2008, and 2007**
 
 
 **For three months ended****March 31,****2008**
              
              2007Cash
                  Flow from Operating Activities:Net
                  loss
              
              **$**
              **(515,993**
              **)**
              $
              (471,094
              )Adjustment
                      to reconcile net loss to net cash used by operating
                      activities:Depreciation
              
              
              **510**
              
              
              214Amortization
                  of production costs
              
              
              **19,791**
              
              
              -Issuance
                  of stock for services
              
              
              **-**
              
              
              30,647Stock
                  option expenses
              
              
              **47,514**
              
              
              47,514Stock
                  warrant expenses
              
              
              **14,440**
              
              
              110,437(Increase)
                  Decrease in:Prepaid
                  expenses
              
              
              **(14,837**
              **)**
              
              11,214Inventory
              
              
              **144**
              
              
              -Capitalized
                  production costs
              
              
              **75,017**
              
              
              (15,139
              )Increase
                  (Decrease) in:Accounts
                  payable
              
              
              **24,785**
              
              
              (133,152
              )Accrued
                  expenses
              
              
              **3,965**
              
              
              19,341Net
                  Cash Used by Operating Activities
              
              
              **(344,664**
              **)**
              
              (400,018
              )Cash
                  Flow from Investing Activities:Purchase
                  of property and equipment
              
              
              **-**
              
              
              (4,577
              )Net
                  Cash Used by Investing Activities
              
              
              **-**
              
              
              (4,577
              )Cash
                  Flow from Financing Activities:Bank
                  overdraft
              
              
              **-**
              
              
              63,114Proceeds
                  from officer advances
              
              
              **-**
              
              
              238,579Proceeds
                  from sale of stock
              
              
              **351,751**
              
              
              -Net
                  Cash Provided by Financing Activities
              
              
              **351,751**
              
              
              301,693Net
                  Increase in Cash
              
              
              **7,087**
              
              
              (102,902
              )Cash
                  Balance at Beginning of Period
              
              
              **483,564**
              
              
              102,902Cash
                  Balance at End of Period
              
              **$**
              **490,651**
              
              $
              -Supplemental
                  Disclosures:Interest
                  Paid
              
              **$**
              **6,413**
              
              $
              -Taxes
                  Paid
              
              **$**
              **-**
              
              $
              -Noncash
                  Investment and Financing Activities:Unrealized
                  gain (loss) on marketable securities
              
              **$**
              **-**
              
              $
              (4,800
              )
 
 **The
        accompanying notes are an integral part of these interim unaudited financial
        statements**
  4
  **UKARMA
        CORPORATION**
  **NOTES
        TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 
 
 **NOTE
        1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES**
 
 uKarma
        Corporation (“the Company”) was incorporated under the name of OM Capital
        Corporation in the State of Nevada on June 26, 2001. On April 30, 2004, the
        Company changed its name to uKarma Corporation. In 2006, the Company relocated
        its headquarter to the State of California, and became a California foreign
        corporation.
 
 uKarma
        Corporation develops and markets proprietary branded personal health and
        wellness products, including fitness DVDs, nutraceuticals, and mind, body,
        and
        spirit goods and services, for fitness and health-conscious consumers. The
        company’s product lines target the rapidly growing tens of millions that are
        seeking to enrich their physical, spiritual and mental wellness.
 
 Through
        infomercials and other marketing initiatives, uKarma launched its initial
        products. The goal of the infomercials are to generate initial working capital,
        and build a community of loyal customers. From there, the company will expand
        its product offerings into proprietary branded products primarily within
        the
        fitness/wellbeing multimedia and nutraceutical markets. As the brand image
        builds, the company intends to extend its brand systematically to other
        complementary consumer products that meet its stringent product guidelines
        and
        are consistent with its message of “total health and happiness for oneself and
        others.”
 
 The
        company began to generate revenue in the second quarter of 2007; accordingly,
        the Company ceased its development stage status commencing April 1,
        2007.
 
 Presentation
        of Interim Information :
        The
        accompanying financial statements as of March 31, 2008 and for the three
        months
        ended March 31, 2008, and 2007 have been prepared by the Company, without
        audit,
        pursuant to the rules and regulations of the Securities and Exchange Commission.
        The accompanying financial statements have been prepared in accordance with
        accounting principles generally accepted in the United States of America
        (GAAP).
 
 The
        balance sheet as of December 31, 2007 has been derived from the audited
        financial statements at that date but does not include all of the information
        and footnotes required by the U.S. GAAP for complete financial
        statements.
 
 In
        the
        opinion of Management, all adjustments (which include only normal recurring
        adjustments) necessary to present fairly the financial position, results
        of
        operations and cash flows as of March 31, 2008 and for the three months ended
        March 31, 2008, and 2007 have been made. The results of operations for the
        three
        months ended March 31, 2008 are not necessarily indicative of the operating
        results for the full year.
 
 Revenue
        recognition :
        The
        Company generally recognizes product revenue when persuasive evidence of
        an
        arrangement exists, delivery has occurred, the fee is fixed or determinable,
        and
        collectability is probable. In instances where the final acceptance of the
        product is specified by the customer, revenue is deferred until all acceptance
        criteria have been met. Customers’ prepayments are deferred until products are
        shipped and accepted by the customers.
 
 Use
        of
        estimates :
        The
        preparation of the accompanying financial statements in conformity with
        accounting principles generally accepted in the United States requires
        management to make certain estimates and assumptions that directly affect
        the
        results of reported assets, liabilities, revenue, and expenses. Actual results
        may differ from these estimates.
  5
  **UKARMA
          CORPORATION**
  **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
  **NOTE
        1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES (continued)**
 
 Cash
        Equivalents: For purposes of the statements of cash flows, the Company
        considers all highly liquid debt instruments with an original maturity of
        three
        months or less to be cash equivalents.
 
 Concentration
        of Cash :
        The
        Company places its cash and cash equivalents with high quality financial
        institutions. At times, cash balances may be in excess of the FDIC insurance
        limits. Management considers the risk to be minimal..
 
 Property
        and Equipment :
        Property and equipment are valued at cost. Maintenance and repair costs are
        charged to expenses as incurred. Depreciation is computed on the straight-line
        method based on the estimated useful lives of the assets, generally 5 to
        39
        years. Depreciation expense for the three months ended March 31, 2008 and
        2007
        was $510 and $214, respectively.
 
 Investment :
        The
        Company has minority investment in a publicly traded Company. The investment
        is
        carried at market value and is classified as a current investment.
 
 Patents :
        The
        Company capitalizes patent costs as incurred, excluding costs associated
        with
        Company personnel, relating to patenting its technology. The majority of
        capitalized costs represent legal fees related to a patent application. If
        the
        Company elects to stop pursuing a particular patent application or determines
        that a patent application is not likely to be awarded or elects to discontinue
        payment of required maintenance fees for a particular patent, the Company,
        at
        that time, records as expense the capitalized amount of such patent application
        or patent. Awarded patents will be amortized over the shorter of the economic
        or
        legal life of the patent.
 
 Fair
        value of financial instruments :
        All
        financial instruments are carried at amounts that approximate estimated fair
        value.
 
 Advertising
        Costs :
        All
        costs associated with advertising and promoting the Company’s products and
        services are expensed as incurred. Advertising expense for the three months
        ended March 31, 2008 and 2007 was $188,355 and $97,464,
        respectively.
 
 Net
        Loss Per Share :
        Basic
        net loss per share includes no dilution and is computed by dividing net loss
        available to common stockholders by the weighted average number of common
        stock
        outstanding for the period. Diluted net loss per share does not differ from
        basic net loss per share since potential shares of common stock are
        anti-dilutive for all periods presented. Potential shares consist of restricted
        common stock, stock warrants, and stock options.
 
 Stock
        Based Compensation :
        Effective January 1, 2006, the Company adopted the fair value recognition
        provisions of FASB Statement No. 123(R), “Shares-Based Payment” (SFAS 123R),
        using the modified-prospective-transition method. Under that transition method,
        compensation cost recognized in 2006 includes: (a) compensation cost for
        all
        share-based payments granted prior to, but not yet vested as of January 1,
        2006
        based of the grant date fair value calculated in accordance with the original
        provisions of SFAS 123, and (b) compensation cost for all share-based payments
        granted subsequent to December 31, 2005, based on the grant-date fair value
        estimated in accordance with the provisions of SFAS 123(R). As a result of
        adopting SFAS 123(R) on January 1, 2006, the Company reorganized pre-tax
        compensation expense related to stock options of $47,514 for the three months
        ended March 31, 2008.
  6
  **UKARMA
          CORPORATION**
  **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
  **NOTE
        1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES (continued)**
 
 New
        Accounting Pronouncements: In March
        2008, Financial Accounting Standards Board {“FASB”) issued Statement of
        Financial Accounting Standards (SFAS) No. 161, *“Disclosures
        about Derivative Instruments and Hedging Activities”* (“SFAS
        161”). SFAS 161 is intended to improve financial reporting about derivative
        instruments and hedging activities by requiring companies to enhance disclosure
        about how these instruments and activities affect their financial position,
        performance and cash flows. SFAS 161 also improves the transparency about
        the
        location and amounts of derivative instruments in a company’s financial
        statements and how they are accounted for under SFAS 133. SFAS 161 is effective
        for financial statements issued for fiscal years beginning after November
        15,
        2008 and interim periods beginning after that date. As such, the Company
        is
        required to adopt these provisions beginning with the quarter ending in February
        2009. Adoption of SFAS 161 is not expected to have a material impact on the
        Company’s financial statements.
 
 In
        February 2007, the FASB issued SFAS No. 159 (“SFAS No. 159”), “ *The
        Fair Value Option For Financial Assets And Financial Liabilities - Including
        An
        Amendment of FASB Statement No. 115.”* SFAS No.
        159 provides an option to report selected financial assets and financial
        liabilities using fair value, and establishes required presentation and
        disclosures to facilitate comparisons with companies that use different
        measurements for similar assets and liabilities. SFAS No. 159 is effective
        for
        the Company’s fiscal year beginning August 1, 2008, with early adoption allowed
        only if SFAS No. 157 is also adopted. The Company is currently evaluating
        the
        potential impact of this standard on the financial statements.
 
 In
        June
        2007, the FASB ratified Emerging Issues Task Force Issue No. 07-3, *“Accounting
        for Nonrefundable Advance Payments for Goods or Services to Be Used in Future
        Research and Development Activities”* (“EITF
        07-3”). EITF 07-3 requires non-refundable advance payments for goods and
        services to be used in future research and development activities to be recorded
        as an asset and the payments to be expensed when the research and development
        activities are performed. EITF 07-1 will be effective for the Company’s fiscal
        year beginning August 1, 2008. Currently, the Company does not anticipate
        that
        this statement will have a significant impact on its financial
        statements.
  In
        December 2007, the FASB issued SFAS No. 141 (revised 2007), *“Business
        Combinations”* (“SFAS
        No.141(R)”). SFAS No. 141(R) will replace SFAS 141, and establishes principles
        and requirements for how the acquirer in a business combination reorganizes
        and
        measures in its financial statements the identifiable assets acquired, the
        liabilities assumed and any noncontrolling interest in the acquiree; recognizes
        and measures the goodwill acquired in the business combination or gain from
        a
        bargain purchase; and determines what information to disclose to enable users
        of
        the financial statements to evaluate the nature and financial effects of
        the
        business combination. 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.
        Currently, the Company does not anticipate that this Statement will have
        a
        significant impact on its financial statements.
 
 In
        December 2007, the FASB issued SFAS No. 160, *“Non-Controlling
        Interests in Consolidated Financial Statements - an amendment of ARB No.
        51”* (“SFAS
        No. 160”). This statement requires that noncontrolling or minority interests in
        subsidiaries be presented in the consolidated statement of financial position
        within equity, but separate from the parents’ equity, and that the amount of the
        consolidated net income attributable to the parent and to the noncontrolling
        interest be clearly identified and presented on the face of the consolidated
        statement of income. SFAS No. 160 will be effective for the Company’s fiscal
        year beginning August 1, 2009. The adoption of this statement did not have
        a
        material effect on the Company's financial statements.
  7
 **UKARMA
        CORPORATION**
  **NOTES
        TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
  **NOTE
        1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)**
 
 In
        December 2007, the FASB ratified the consensus reached on Emerging Issues
        Task
        Force Issue No. 07-1, *“Accounting
        for Collaborative Arrangements Related to the Development and Commercialization
        of Intellectual Property”* (“EITF
        07-1”). EITF 07-1 defines collaborative arrangements and establishes reporting
        requirements for transactions between participants in a collaborative
        arrangement and between participants in the arrangement and third parties.
        EITF
        07-1 will be effective for the Company’s fiscal year beginning August 1, 2009.
        The Company is currently evaluating the potential impact of this standard
        on the
        financial statements.
 
 In
        December 2007, the SEC issued Staff Accounting Bulletin No. 110 (“SAB 110”). SAB
        110 permits companies to continue to use the simplified method, under certain
        circumstances, in estimating the expected term of “plain vanilla” options beyond
        December 31, 2007. SAB 110 updates guidance provided in SAB 107 that previously
        stated that the Staff would not expect a company to use the simplified method
        for share option grants after December 31, 2007. Adoption of SAB 110 is not
        expected to have a material impact on the Company’s financial
        statements.
 
 **NOTE
        2 – GOING CONCERN**
 
 The
        Company's financial statements have been prepared on a going concern basis,
        which contemplates the realization of assets and the settlement of liabilities
        and commitments in the normal course of business. In the near term, the Company
        expects operating costs to continue to exceed funds generated from operations.
        As a result, the Company expects to continue to incur operating losses, and
        the
        operations in the near future are expected to continue to use working capital.
 
 Management
        of the Company is actively increasing marketing efforts to increase revenues. The
        ability of the Company to continue as a going concern is dependent on its
        ability to meet its financing arrangement and the success of its future
        operations. The financial statements do not include any adjustments that
        might
        be necessary if the Company is unable to continue as a going concern.
 
 **NOTE
        3 – PREPAID EXPENSES**
 
 Prepaid
        expenses were $69,983 and $55,146 as of March 31, 2008 and December 31, 2007,
        respectively.
 
 On
        March
        26, 2008, the Company entered into an agreement with an author to write a
        book
        related to diet and nutrition that the Company plans to self publish and
        market
        directly to consumers. Pursuant to the agreement, the author will be paid
        a
        $40,000 advance on royalties with the following arrangement: $15,000 payable
        upon execution of the agreement; $15,000 payable on or before the completion
        and
        delivery of the first 50% of the book; and $10,000 on full completion, delivery,
        and acceptance of the book.  The $40,000 advance on royalties is based on
        the first 50,000 books sold. The author will receive a 5% royalty on sales
        above
        50,000 books sold where the Company acts as the publisher and 2 1/2% royalty
        on
        sales above 50,0000 books sold if the Company engages a third party
        publisher.
  8
  **UKARMA
          CORPORATION**
  **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
  **NOTE
        3 – PREPAID EXPENSES (continued)**
 
 On
        April
        19, 2006, the Company entered into an agreement with a consultant to provide
        consulting and advisory services for the Company, to appear in the Company’s
        yoga, health, and wellness film productions, to assist in scriptwriting for
        the
        projects such as classes, interviews and introductions, to participate in
        the
        projects rehearsals, and to assist in marketing and promoting the projects.
        Accordingly, the Company shall pay a royalty of 8% on the first $300,000
        and 10%
        on above $300,000 on all gross revenue, net of returns, refunds, chargebacks,
        taxes, and shipping and handling charges. As of March 31, 2008, there is
        a
        balance of $54,983 after advancing $75,000 and deducting royalties to the
        sales.
        Future royalty obligations will be deducted from the current
        balance.
 
 **NOTE
        4 – PRODUCTION COSTS**
 
 The
        Company capitalized costs incurred for recording seven fitness videos’ master
        copies. As of March 31, 2008, total costs of $619,085 were capitalized. All
        costs consisted of in-production costs only.
 
 Commenced
        on the second quarter of 2007, the costs were amortized on a straight-line
        method over the estimated life of the recorded performances, which is five
        years. The Company recorded an amortization expense of $19,791 and none for
        the
        three months ended March 31, 2008 and 2007, respectively.
 
 **NOTE
        5 – PATENT**
 
 The
        Company filed for a patent for three proprietary yoga mats, which it believes
        provide unique functions and benefits compared to yoga mats currently in
        the
        market. Through to date, the patent is still pending for approval.
 
 **NOTE
        6 – ACCRUED EXPENSES**
 
 Accrued
        expenses consisted of the following:
 March 31,
                
                December 31,2008
                
                2007(unaudited)
                
                (Audited)Accrued
                    Interest
                
                $
                13,693
                
                $
                10,488Accrued
                    Professional Fees
                
                
                15,000
                
                
                15,000Employee
                    Reimbursable
                
                
                6,955
                
                
                6,955Accrued
                    Sales Tax
                
                
                5
                
                
                45Accrued
                    Income Tax
                
                
                1,600
                
                
                800Total
                    Accrued Expenses
                
                $
                37,253
                
                $
                33,288
  **NOTE
        7 – NOTES PAYABLE TO RELATED PARTY**
 
 The
        notes
        payable bear interest at 7% per annum and are due on demand. As of March
        31,
        2008 and December 31, 2007, the balance was $183,631 and
        accrued interest of $13,693.
  9
  **UKARMA
          CORPORATION**
  **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
  **NOTE
        8 – OTHER COMPREHENSIVE LOSS**
 
 The
        Company’s accumulated other comprehensive loss consists of the unrealized loss
        on available-for-sale securities only. The components of comprehensive loss
        were
        as follows:
 
 For Three Months endedMarch 31,2008
              
              2007Net
                  Loss
              
              $
              (515,993
              )
              $
              (471,094
              )Other
                  Comprehensive Loss:Unrealized
                  loss on available-for-sale securities
              
              
              -
              
              
              (4,800
              )Comprehensive
                  Loss
              
              $
              (515,993
              )
              $
              (475,894
              )
 
 The
        Company did not have other comprehensive income for the three months ended
        March
        31, 2008.
 
 **NOTE
        9 – STOCKHOLDERS’ EQUITY**
 
 During
        the three months ended March 31, 2008, the Company received $351,750 and
        sold
        1,005,000 shares of the Company’s common stock pursuant
        to the August 6, 2007 offering. In addition, during the first three
        months ended March 31, 2008, the Company issued 420,571 shares of the Company’s
        stock for its $147,200 stock subscriptions pursuant to the August 6, 2007
        offering.
 
 **NOTE
        10 – NET LOSS PER SHARE**
 
 The
        following table sets forth the computation of basic and diluted net loss
        per
        share:
 
 For three months endedMarch 31,2008
              
              2007Numerator:Net
                  Loss
              
              $
              (515,993
              )
              $
              (471,094
              )Denominator:Weighted
                  Average of Common Shares
              
              
              21,522,444
              
              
              15,447,126Basic
                  and Diluted Net Loss per Share
              
              $
              (0.02
              )
              $
              (0.03
              )
  As
        the
        Company incurred net losses for the three months ended March 31, 2008 and
        2007,
        the effect of dilutive securities totaling 2,914,286 and 1,550,000 equivalent
        shares, respectively, has been excluded from the calculation of diluted loss
        per
        share because their effect was anti-dilutive.
 
 There
        were also 5,827,000 shares out-of-money stock options and warrants excluded
        from
        the calculation of diluted net loss per share for the three months ended
        March
        31, 2008 and 2007, because their exercise prices were greater than the average
        fair market price of the common stock.
  10
 **UKARMA
            CORPORATION**
  **NOTES
            TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 **NOTE
        11– 2008 STOCK OPTION PLAN**
 
 On
        January 1, 2006, the Board of Directors approved and adopted the 2006 Stock
        Option, Deferred Stock and Restricted Stock Plan (the “Plan”) to provide the
        issuance of non-qualified and/or incentive stock options to employees, officers,
        directors and consultants and other service providers. Generally, all options
        granted expire ten years from the date of grant. All options have an exercise
        price equal to or higher than the fair market value of the Company’s stock on
        the date the options were granted. It is the policy of the Company to issue
        new
        shares for stock option exercised and restricted stock, rather than issued
        treasury shares. Options generally vest over ten years. The Plan reserves
        7,500,000 shares of common stock under the Plan and shall be effective through
        December 31, 2015.
 
 A
        summary
        of the status of stock options issued by the Company as of March 31, 2008
        and
        2007 is presented in the following table:
 2008
                  
                  2007Weighted
                  
                  
                  
                  WeightedNumber
                  
                  Average
                  
                  Number
                  
                  Averageof
                  
                  Exercise
                  
                  of
                  
                  ExerciseShares
                  
                  Price
                  
                  Shares
                  
                  PriceOutstanding
                      at beginning of year
                  
                  
                  5,250,000
                  
                  $
                  0.20
                  
                  
                  5,250,000
                  
                  $
                  0.20Granted
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Exercised/Expired/Cancelled
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Outstanding
                      at end of period
                  
                  
                  5,250,000
                  
                  $
                  0.20
                  
                  
                  5,250,000
                  
                  $
                  0.20Exercisable
                      at end of period
                  
                  
                  2,625,000
                  
                  $
                  0.20
                  
                  
                  1,041,667
                  
                  $
                  0.20
 The
        fair
        value of the stock option granted is estimated on the date of grant using
        the
        Black-Scholes option valuation model. This model uses the assumptions listed
        in
        the table below. Expected volatilities are based on the estimated volatility
        of
        the Company’s stock. The risk-free rate for periods within the expected life of
        the option is based on the U.S. Treasury yield curve in effect at the time
        of
        grant.
 
 2008
              
              2007Weighted
                  average fair value per option granted
              
              
              N/A
              
              
              N/ARisk-free
                  interest rate
              
              
              N/A
              
              
              N/AExpected
                  dividend yield
              
              
              N/A
              
              
              N/AExpected
                  lives
              
              
              N/A
              
              
              N/AExpected
                  volatility
              
              
              N/A
              
              
              N/A
  11
  **UKARMA
          CORPORATION**
  **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
  **NOTE
        11 – 2008 STOCK OPTION PLAN (continued)**
 
 The
        following table sets forth additional information about stock options
        outstanding at March 31, 2008:
 WeightedAverage
                
                WeightedRange of
                
                
                
                Remaining
                
                AverageExercise
                
                Options
                
                Contractual
                
                Exercise
                
                OptionsPrices
                
                Outstanding
                
                Life
                
                Price
                
                Exercisable$
                0
                    .20
                
                
                5,250,000
                
                
                7.57
                
                $
                0
                    .20
                
                
                2,625,0005,250,000
                
                
                7.57
                
                $
                0
                    .20
                
                
                2,625,000
  As
        of March
        31 ,
        2008,
        there was $472,487 of total unrecognized compensation cost related to non-vested
        share-based compensation arrangements granted under the Plan. That cost is
        expected to be recognized over a weighted average period of 2.71
        years.
  **NOTE
        12 – STOCK WARRANTS**
 
 During
        the three months ended March 31, 2008, no stock warrants were
        issued.
 
 On
        October 4, 2007, the Company issued stock purchase warrants to a service
        provider for the right to purchase 80,000 shares of the Company’s common stock
        at the price of $.25 per share. The warrants shall have a term of five years
        from the date of warrants issued. The warrants were valued at $0.19 per share
        using the Black-Scholes option pricing model.
 
 On
        January 26, 2007, March 13, 2007, and March 29, 2007, the Company issued
        stock
        purchase warrants to the CEO of the Company for the right to purchase 200,000,
        250,000, and 125,000 shares of the Company, respectively, at the price of
        $0.25
        per share. The warrants shall have a term of five years from the date of
        stocks
        issued. The warrants were valued at $0.19 per share using the Black-Scholes
        option pricing model.
 
 On
        March
        1, 2006, the Company issued stock purchase warrants to a service provider
        for
        the right to purchase 250,000 shares of the Company’s common stock at the price
        of $1 per share. The warrants shall have a term of five years from the date
        of
        warrants issued. The warrants were valued at $0.11 per share using the
        Black-Scholes option pricing model.
 
 On
        April
        14, 2006, the Company issued stock purchase warrants to each of the investors
        who had participated in the Company’s 2004 private offering for the right to
        purchase an equal number of shares at the price of $1 per share with mandatory
        exercise provision when the Company’s stock trades at $1.50 or higher for five
        consecutive days. The warrants shall have a term of five years from the date
        of
        stocks issued. The warrants were valued at $0.11 per share using the
        Black-Scholes option pricing model.
  12
  **UKARMA
          CORPORATION**
  **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 **NOTE
        12 – STOCK WARRANTS (continued)**
 
 The
        assumptions used in the Black-Scholes option pricing model are as follows:
 
 March
                  31,2008
              
              2007Weighted
                  average fair value per option granted
              
              
              N/A
              
              $
              0.19Risk-free
                  interest rate
              
              
              N/A
              
              
              4.60
              %Expected
                  dividend yield
              
              
              N/A
              
              
              0.00
              %Expected
                  lives
              
              
              N/A
              
              
              5.00Expected
                  volatility
              
              
              N/A
              
              
              100.00
              %
 
 The
        Company recognized a $14,440 and $110,437 stock warrants expense for the
        three
        months ended March 31, 2008 and 2007, respectively.
 
 **NOTE
        13 – SUBSEQUENT EVENT**
 
 On
        April
        25, 2008, the Company entered into a lease agreement for a studio space in
        Los
        Angeles, California, which will be used to offer Xflowsion, fitness and yoga
        classes along with retail items and incidental food. The lease calls for
        $22,000
        rent per month for five years commencing on the earlier of either September
        25,
        2008, or the date the Company first opens the studio for business.
  13


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





**Forward
      Looking Statements**





The
      following discussion of our financial condition and results of operations should
      be read in conjunction with our financial statements and the notes to those
      statements included elsewhere in this report. In addition to the historical
      financial information, the following discussion and analysis contains
      forward-looking statements that involve risks and uncertainties. Our actual
      results may differ materially from those anticipated in these forward-looking
      statements as a result of certain factors, including those set forth under
“Risk
      Factors” and elsewhere in this report. **




**Overview**





We
      are an
      early stage company that develops and markets proprietary branded personal
      health and wellness products, including yoga and fitness DVDs, nutraceuticals,
      and other products targeting the MBS (Mind/Body/Spirit) consumer. We have
      generated no revenues since inception through the first quarter of 2007. We
      began to generate revenue during the second quarter of 2007 and have generated
      approximately $85,186 in revenues to date. We incurred net losses of
      approximately $122,488 in 2005 $1,397,922 in 2006, and $1,849,636 in 2007.
      As of
      March 31, 2008, we had an accumulated deficit of $3,928,102. As a company in
      the
      early stage of development, our limited history of operations makes prediction
      of future operating results difficult. We believe that period to period
      comparisons of our operating results should not be relied on as predictive
      of
      our future results.




Since
      April, 2004, we have dedicated our resources to developing our business plan
      and
      producing items that will appeal to the “wellness” conscious consumer, such as
      yoga and fitness DVDs. **** In
      May
      2007, we began to market and sell our initial Xflowsion products. **** We
      believe that our success depends upon our ability to successfully produce,
      market and distribute such products. After test-marketing the initial version
      of
      our infomercial, we recognized the need to shoot additional footage and to
      reedit it before airing it again. Due to capital constraints, we had to wait
      until our registration statement was declared effective by the Securities
      and Exchange Commission in order to raise capital. Our registration
      statement was declared effective on August 9, 2007, and we focused the remainder
      of 2007 raising capital and preparing to update our infomercial and implement
      our marketing strategy in 2008.





We
      expect
      our Xflowsion infomercial to be fully edited by the end of May 2008 and expect
      to begin airing it nationally sometime during the beginning of June 2008. We
      have not yet commenced other marketing initiatives outside of our infomercial
      as
      we believe other marketing will be complimentary to our infomercial, and thus
      will be more effective when released in conjunction to our infomercial. When
      our
      infomercial begins airing in June 2008, we plan to engage an online marketing
      company for banner and email marketing, Search Engine Optimization (SEO),
      affiliate marketing, and social media or “word of mouth” marketing. We also plan
      to increase our brand exposure and awareness of Xflowsion via a public relations
      campaign. Toward that end, we engaged The Rose Group for public relations
      services in May 2008. We are also exploring many opportunities for a reality
      TV
      show that would exploit the Xflowsion brand. We
      had an
      offer for Eric Paskel to appear in the “Biggest Loser” television program airing
      on the NBC television network, but declined due to NBC’s insistence on
      controlling Mr. Paskel’s name and likeness. The “Biggest Loser” opportunity has
      created other potential television opportunities that we are currently
      pursuing.





In
      addition to soon beginning our marketing campaign for our Xflowsion DVD series,
      we signed a lease to open an Xflowsion studio in Los Angeles, California that
      will offer Xflowsion, fitness, and yoga classes along with retail items and
      food
      and beverages. We expect our Xflowsion studio to open in September 2008. On
      March 26, 2008, we also engaged an author to write a diet, nutrition, and
      lifestyle book that we plan to self-publish and market direct to consumers.
      We
      expect the book to be completed in the third quarter of 2008 and our marketing
      initiatives for the book to begin in either the third or fourth quarter of
      2008.
      We also expect to create an audio CD and downloadable series under our Dreams
      RealizedTM brand name in the third quarter of 2008. The Dreams Realized audio
      series will provide strategies and tools for people to achieve better health,
      achieve better relationships, achieve success, reduce stress, and other topics
      related to lifestyle and healthy living. In addition, we engaged a consultant
      to
      assist in the development of our patent-pending proprietary yoga mat. We are
      currently working on a prototype design before going into
      production.




14




**Critical
      Accounting Policies and Estimates**





Presentation
      of Interim Information.





The
      accompanying financial statements as of March 31, 2008 and for the three months
      ended March 31, 2008, and 2007 have been prepared by the Company, without audit,
      pursuant to the rules and regulations of the Securities and Exchange Commission.
      The accompanying financial statements have been prepared in accordance with
      accounting principles generally accepted in the United States of America (GAAP).





The
      balance sheet as of December 31, 2007 has been derived from the audited
      financial statements at that date but does not include all of the information
      and footnotes required by the U.S. GAAP for complete financial
      statements.





In
      the
      opinion of management, all adjustments (which include only normal recurring
      adjustments) necessary to present fairly the financial position, results of
      operations and cash flows as of March 31, 2008 and for the three months ended
      March 31, 2008, and 2007 have been made. The results of operations for the
      three
      months ended March 31, 2008 are not necessarily indicative of the operating
      results for the full year.





Revenue
      Recognition.





The
      Company generally recognizes product revenue when persuasive evidence of an
      arrangement exists, delivery has occurred, the fee is fixed or determinable,
      and
      collectability is probable. In instances where the final acceptance of the
      product is specified by the customer, revenue is deferred until all acceptance
      criteria have been met. Customers’ prepayments are deferred until products are
      shipped and accepted by the customers.





Use
      of
      Estimates.





The
      preparation of the accompanying financial statements in conformity with
      accounting principles generally accepted in the United States requires
      management to make certain estimates and assumptions that directly affect the
      results of reported assets, liabilities, revenue, and expenses. Actual results
      may differ from these estimates.





Net
      Loss per Share.





Basic
      net
      loss per share includes no dilution and is computed by dividing net loss
      available to common stockholders by the weighted average number of common stock
      outstanding for the period. Diluted net loss per share does not differ from
      basic net loss per share since potential shares of common stock are
      anti-dilutive for all periods presented. Potential shares consist of restricted
      common stock, stock warrants, and stock options.





Stock
      Based Compensation.





Effective
      January 1, 2006, the Company adopted the fair value recognition provisions
      of
      FASB Statement No. 123(R), “Shares-Based Payment” (SFAS 123R), using the
      modified-prospective-transition method. Under that transition method,
      compensation cost recognized in 2006 includes: (a) compensation cost for all
      share-based payments granted prior to, but not yet vested as of January 1,
      2006
      based of the grant date fair value calculated in accordance with the original
      provisions of SFAS 123, and (b) compensation cost for all share-based payments
      granted subsequent to December 31, 2005, based on the grant-date fair value
      estimated in accordance with the provisions of SFAS 123(R). As a result of
      adopting SFAS 123(R) on January 1, 2006, the Company reorganized pre-tax
      compensation expense related to stock options of $47,514 for the three months
      ended March 31, 2008.





New
      Accounting Pronouncements.





In
      March
      2008, Financial Accounting Standards Board {“FASB”) issued Statement of
      Financial Accounting Standards (SFAS) No. 161, *“Disclosures
      about Derivative Instruments and Hedging Activities”* (“SFAS
      161”). SFAS 161 is intended to improve financial reporting about derivative
      instruments and hedging activities by requiring companies to enhance disclosure
      about how these instruments and activities affect their financial position,
      performance and cash flows. SFAS 161 also improves the transparency about the
      location and amounts of derivative instruments in a company’s financial
      statements and how they are accounted for under SFAS 133. SFAS 161 is effective
      for financial statements issued for fiscal years beginning after November 15,
      2008 and interim periods beginning after that date. As such, the Company is
      required to adopt these provisions beginning with the quarter ending in February
      2009. Adoption of SFAS 161 is not expected to have a material impact on the
      Company’s financial statements.





15


In
      February 2007, the FASB issued SFAS No. 159 (“SFAS No. 159”), “ *The
      Fair Value Option For Financial Assets And Financial Liabilities - Including
      An
      Amendment of FASB Statement No. 115.”* SFAS No.
      159 provides an option to report selected financial assets and financial
      liabilities using fair value, and establishes required presentation and
      disclosures to facilitate comparisons with companies that use different
      measurements for similar assets and liabilities. SFAS No. 159 is effective
      for
      the Company’s fiscal year beginning August 1, 2008, with early adoption allowed
      only if SFAS No. 157 is also adopted. The Company is currently evaluating the
      potential impact of this standard on the financial statements.





In
      June
      2007, the FASB ratified Emerging Issues Task Force Issue No. 07-3, *“Accounting
      for Nonrefundable Advance Payments for Goods or Services to Be Used in Future
      Research and Development Activities”* (“EITF
      07-3”). EITF 07-3 requires non-refundable advance payments for goods and
      services to be used in future research and development activities to be recorded
      as an asset and the payments to be expensed when the research and development
      activities are performed. EITF 07-1 will be effective for the Company’s fiscal
      year beginning August 1, 2008. Currently, the Company does not anticipate that
      this statement will have a significant impact on its financial
      statements.





In
      December 2007, the FASB issued SFAS No. 141 (revised 2007), *“Business
      Combinations”* (“SFAS
      No.141(R)”). SFAS No. 141(R) will replace SFAS 141, and establishes principles
      and requirements for how the acquirer in a business combination reorganizes
      and
      measures in its financial statements the identifiable assets acquired, the
      liabilities assumed and any noncontrolling interest in the acquiree; recognizes
      and measures the goodwill acquired in the business combination or gain from
      a
      bargain purchase; and determines what information to disclose to enable users
      of
      the financial statements to evaluate the nature and financial effects of the
      business combination. 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.
      Currently, the Company does not anticipate that this Statement will have a
      significant impact on its financial statements.





In
      December 2007, the FASB issued SFAS No. 160, *“Non-Controlling
      Interests in Consolidated Financial Statements - an amendment of ARB No.
      51”* (“SFAS
      No. 160”). This statement requires that noncontrolling or minority interests in
      subsidiaries be presented in the consolidated statement of financial position
      within equity, but separate from the parents’ equity, and that the amount of the
      consolidated net income attributable to the parent and to the noncontrolling
      interest be clearly identified and presented on the face of the consolidated
      statement of income. SFAS No. 160 will be effective for the Company’s fiscal
      year beginning August 1, 2009. The adoption of this statement did not have
      a
      material effect on the Company's financial statements.





In
      December 2007, the FASB ratified the consensus reached on Emerging Issues Task
      Force Issue No. 07-1, *“Accounting
      for Collaborative Arrangements Related to the Development and Commercialization
      of Intellectual Property”* (“EITF
      07-1”). EITF 07-1 defines collaborative arrangements and establishes reporting
      requirements for transactions between participants in a collaborative
      arrangement and between participants in the arrangement and third parties.
      EITF
      07-1 will be effective for the Company’s fiscal year beginning August 1, 2009.
      The Company is currently evaluating the potential impact of this standard on
      the
      financial statements.





In
      December 2007, the SEC issued Staff Accounting Bulletin No. 110 (“SAB 110”). SAB
      110 permits companies to continue to use the simplified method, under certain
      circumstances, in estimating the expected term of “plain vanilla” options beyond
      December 31, 2007. SAB 110 updates guidance provided in SAB 107 that previously
      stated that the Staff would not expect a company to use the simplified method
      for share option grants after December 31, 2007. Adoption of SAB 110 is not
      expected to have a material impact on the Company’s financial
      statements.





**Results
      of Operations**





*Comparison
      of Three Months Ended March 31, 2008 and 2007*


Three Months Ended March 312008
              
              2007Sales
              
              $
              2,759
              
              $
              —Cost
                  of Sales
              
              $
              144
              
              $
              —Gross
                  Profit
              
              $
              2,615
              
              $
              —Operating
                  Expense
              
              $
              514,600
              
              $
              466,944Operating
                  Profit (Loss)
              
              $
              (511,985
              )
              $
              (466,944
              )Other
                  Expenses
              
              $
              (3,208
              )
              $
              (3,350
              )Income
                  Before Income Tax Expenses
              
              $
              (515,193
              )
              $
              (470,294
              )Income
                  Tax Expenses
              
              $
              800
              
              $
              800Net
                  Income (Loss)
              
              $
              (515,993
              )
              $
              (471,094
              )




16


*Sales.* Sales
      increased from $0 for the three months ended March 31, 2007 to $2,759 for the
      three months ended March 31, 2008. Sales increased because we generated no
      revenues since inception through the first quarter of 2007.




*Cost
      of Sales.* Cost
      of
      sales increased from $0 for the three months ended March 31, 2007 to $144 for
      the three months ended March 31, 2008. This increase is attributable to the
      fact
      that we generated no revenues since inception through the first quarter of
      2007.




*Gross
      Margin.* Gross
      profit for the three months ended March 31, 2008 was $2,615 as compared to
      gross
      profit of $0 for the three months ended March 31, 2007.




*Selling,
      General and Administrative Expenses.* Total
      selling, general and administrative expenses for the three months ended March
      31, 2008 was $514,600 compared to $466,944 for the three months ended March
      31,
      2007, representing a 10.2% increase. The increase is attributable to expenses
      of
      approximately $186,855 related to infomercial production and related costs.
      These expenses included $121,675 for production and $52,295 of talent expenses
      for Joan Severance, Kiana Tom, and the winners of the American Gladiators
      television show. We also incurred approximately $82,000 related to non-cash
      expenses of option and warrant expense and amortization.




*Operating
      Profit/Loss.* Income
      from operations increased by 10.2% from losses of $466,944 in the three months
      of 2007 to losses of $511,985 in the first three months of 2008 as a result
      of
      incurring higher expenses related to the production of our infomercial for
      our
      Xflowsion DVD series.





*Other
      Expenses.* Other
      expenses consists solely of interest expense during the first quarters of 2008
      and 2007. Interest expense was $3,208 in the first quarter of 2008 compared
      to
      $3,350 in the first quarter of 2007. This slight decrease was due to a reduction
      in the amount of a loan made by an officer of the Company.





*Income
      Tax Expenses.* Income
      tax expense for the three months ended 2008 and 2007 each amounted to
      $800.





*Net
      Income/Loss.* Net
      loss
      for the three months ended March 31, 2008 was $515,993 as compared to a net
      loss
      for the three months ended March 31, 2007 of $471,094, representing a 9.5%
      increase in net loss. The increase is a result of incurring higher expenses
      related to the production of our infomercial for our Xflowsion DVD series.




**Liquidity
      and Capital Resources**





As
      of **** March
      31,
      2008 ,
      we had
      working capital of $281,381. To satisfy current working capital needs, our
      Chief
      Executive Officer, Bill Glaser, loaned funds to the Company. Until we raise
      sufficient capital through the sale of our common stock, there is no guarantee
      that we will be able to meet current working capital needs if we do not receive
      additional loans from either our CEO or other individuals. We have fully
      incurred the production cost of our Xflowsion DVD series have incurred
      approximately half of the production costs of our infomercial, and plan to
      make
      financial investments in marketing for the next six months. We expect to incur
      substantial losses over the next two years.





We
      estimate that our expenses over the next 9 months beginning on April 1, 2008
      will be approximately $1,060,000 as follows:





General
                and Administrative
            
            $
            300,000Inventory
            
            
            100,000Media
                (Airtime)
            
            
            100,000Marketing/Publicity
            
            
            300,000Legal
            
            
            75,000DVD/CD
                Production
            
            
            100,000Accounting
            
            
            35,000Product
                Development
            
            
            50,000




17




As
      of
      March 31, 2008, we had cash equivalents of $490,651, which will meet our capital
      requirements for approximately the next 5 months. We believe that we need
      approximately an additional $570,000 to meet our capital requirements over
      the
      next 9 months. Our intention is to obtain this money through debt/equity
      financings. As of the date of this report, we have fully paid for our initial
      product inventory for 10,000 Xflowsion DVD units as well as all branding, web
      development, DVD production, editing and DVD authoring costs, and infomercial
      production costs.





We
      plan
      to engage outside contractors and consultants who are willing to be paid in
      stock rather than cash or a combination of stock and cash. Expenses incurred
      that cannot be paid in stock, such as auditors' fees, will be paid through
      cash.
      There are no assurances that we will be able to meet our capital requirements
      or
      that our capital requirements will not increase. If we are unable to raise
      necessary capital to meet our capital requirements, we may not be able to
      successfully market and sell our Xflowsion DVDs or other products and
      services.





**Off-Balance
      Sheet Arrangement** **s**





We
      have
      not entered into any other financial guarantees or other commitments to
      guarantee the payment obligations of any third parties. We have not entered
      into
      any derivative contracts that are indexed to our shares and classified as
      stockholder’s equity or that are not reflected in our consolidated financial
      statements. Furthermore, we do not have any retained or contingent interest
      in
      assets transferred to an unconsolidated entity that serves as credit, liquidity
      or market risk support to such entity. We do not have any variable interest
      in
      any unconsolidated entity that provides financing, liquidity, market risk or
      credit support to us or engages in leasing, hedging or research and development
      services with us.





**ITEM
      3.**  **QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**





Not
      Applicable.





**ITEM
      4.**  **CONTROLS
      AND PROCEDURES.**





**Disclosure
      Controls and Procedures**





As
      of the
      end of the period covered by this quarterly report, we carried out an
      evaluation, under the supervision of, and with the participation of our
      management, including our Chief Executive Officer and Chief Financial Officer,
      of the effectiveness of the Company’s disclosure controls and procedures (as
      defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
      of 1934, as amended) as of the end of the period covered by this report. Based
      on that evaluation, our Chief Executive Officer and Chief Financial Officer
      has
      concluded that, as of the end of the period covered by this report, our
      disclosure controls and procedures were effective to enable us to record,
      process, summarize and report information required to be included in our reports
      that we file or submit under the Exchange Act within the time periods required.





**Changes
      in Internal Control over Financial Reporting**





There
      were no changes in our internal control over financial reporting (as defined
      in
      Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
      amended) during the quarter ended March 31, 2008 that have materially
      affected, or are reasonably likely to materially affect our internal control
      over financial reporting.








**PART
      II - OTHER INFORMATION**





**ITEM
      1.**   **LEGAL
      PROCEEDINGS**





We
      know
      of no material, existing or pending legal proceedings against us, nor are we
      involved as a plaintiff in any material proceeding or pending litigation. There
      are no proceedings in which any of our directors, officers or affiliates, or
      any
      registered or beneficial stockholder, is an adverse party or has a material
      interest adverse to our company.





18




**ITEM
      1A.**  **RISK
      FACTORS**





Not
      applicable.





**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**




(a)
            None.




(b)
            There
                were no changes to the procedures by which security holders may recommend
                nominees to our board of directors.





**ITEM
      6.**   **EXHIBITS**





3.1
            
            Amended
                and Restated Certificate of Incorporation, as currently in effect
                (1)3.2
            
            Bylaws,
                as currently in effect (1)4.1
            
            Form
                of Warrant (1)10.1
            
            2006
                Stock Plan (1)10.2
            
            Employment
                Agreement between uKarma Corporation and Bill Glaser dated January
                1, 2006
                (1)10.3
            
            Consulting
                Agreement between uKarma Corporation and Eric Paskel dated April
                19, 2006
                (1)10.4
            
            Consulting
                Agreement between uKarma Corporation and Craig Kulman dated February
                13,
                2006 (1)10.5
            
            Consulting
                Agreement between uKarma Corporation and Len Panzer dated February
                28,
                2006 (1)10.6
            
            Consulting
                Agreement between uKarma Corporation and Jeremy Koff dated May 5,
                2006
                (1)10.7
            
            Production
                Agreement between uKarma Corporation and The Tribal Vision Group,
                LLC
                d/b/a Yoga Tribe and Culture Productions dated June 15, 2006
                (1)10.8
            
            Marketing
                Agreement between uKarma Corporation and Synthesis Marketing dated
                October
                11, 2006 (1)10.9
            
            Marketing
                Agreement between uKarma Corporation and Much and House Public Relations
                dated October 11, 2006 (1)




19




10.10
            
            Production
                Agreement between uKarma Corporation and Caudill and Associates dated
                November 2006 (1)10.11
            
            Option
                Agreement between Fred Tannous and Bill Glaser dated January 17,
                2005
                (1)10.12
            
            Promissory
                Note issued to Bill Glaser dated November 10, 2006 (1)10.13
            
            Promissory
                Note issued to Bill Glaser dated January 26, 2007 (1)10.14
            
            Warrant
                issued to Bill Glaser dated January 26, 2007 (1)10.15
            
            Promissory
                Note issued to Bill Glaser dated March 13, 2007 (2)10.16
            
            Common
                Stock Warrant issued to Bill Glaser dated March 13, 2007
                (2)10.17
            
            Demand
                Promissory Note issued to Bill Glaser dated March 29, 2007
                (2)




10.18
            
            Common
                Stock Warrant issued to Bill Glaser dated March 29, 2007
                (2)10.19
            
            Demand
                Promissory Note issued to Bill Glaser dated April 30, 2007
                (2)10.20
            
            Promissory
                Note issued to Mark Abdou dated June 26, 2007 (2)10.21
            
            Common
                Stock Purchase Warrant issued to Mark Abdou dated June 26, 2007
                (2)10.22
            
            Amendment
                to Option Agreement dated July 9, 2007 (3)10.23
            
            Notice
                of Exercise of Option dated July 9, 2007 (3)10.24
            
            Demand
                Promissory Note issued to Bill Glaser dated July 23,
                2007(3)10.25
            
            Conversion
                Agreement between uKarma Corporation and Bill Glaser dated August
                14, 2007
                (4)10.26
            
            Video
                Distribution Agreement dated September 25, 2007 (5)10.27
            
            Abdou
                Conversion Agreement dated August 27, 2007 (6)10.28
            
            McDonald
                Conversion Agreement dated August 27, 2007 (6)10.29
            
            Lease
                dated April 25, 2008 (7)31.1
            
            Rule
                13a-14(a) / 15d-14(a)(4) Certification by the Company’s Chief Executive
                Officer *31.2
            
            Rule
                13a-14(a) / 15d-14(a)(4) Certification by the Company’s Chief Financial
                Officer *32.1
            
            Section
                1350 Certification by the Company’s Chief Executive Officer and Chief
                Financial Officer *




*
            Filed
                herewith.




20




(1)
            Incorporated
                herein by reference to Form SB-2 filed with the SEC on February 12,
                2007.(2)
            Incorporated
                herein by reference to Form SB-2 Amendment No. 1 filed with the SEC
                on
                June 28, 2007.(3)
            Incorporated
                herein by reference to Form SB-2 Amendment No. 4 filed with the SEC
                on
                August 6, 2007.(4)
            Incorporated
                herein by reference to Form 10-QSB filed with the SEC on August 20,
                2007.(5)
            Incorporated
                herein by reference to Form 8-K filed with the SEC on October 4,
                2007.(6)
            Incorporated
                herein by reference to Form 10-QSB filed with the SEC on November
                19,
                2007.(7)
            Incorporated
                herein by reference to Form 8-K filed with the SEC on May 1,
                2008.




21


**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      as
      amended, the registrant caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.




**UKARMA
                CORPORATION**(Registrant)Date:
                May 20, 2008
            By:
            /s/
                Bill GlaserBill
                GlaserChief
                Executive Officer


22