**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**Form
      10-QSB**





**QUARTERLY
      REPORT PURSUANT SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**




For
      the quarterly period ended September 30, 2007





Commission
      File Number: 333-140633





**UKARMA
      CORPORATION**


(Name
      of
      small business issuer in its charter)





**NEVADA**
            **68-048-2472**(State
                or other jurisdiction of
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)





**520
      Broadway, Suite 350**


**Santa
      Monica, CA 90401**


**(310)
      998-8909**


(Address,
      including zip code, and telephone number, including area code, of


small
      business issuer’s principal executive offices)




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act during the past 12 months (or for such
      shorter period that the small business issuer was required to file such
      reports), and (2) has been subject to such filing requirements for the past
      90
      days.        Yes x No o




Indicate
      by checkmark whether the small business issuer is a shell company (as defined
      in
      Rule 12b-2 of the Exchange Act)      Yes o No x




**APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY**


**PROCEEDINGS
      DURING THE PRECEDING FIVE YEARS**





Check
      whether the issuer has filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court.        Yes o No o




**APPLICABLE
      ONLY TO CORPORATE ISSUERS**





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





20,031,247 shares
      of
      common stock as of November 14, 2007





Transitional
      Small Business Disclosure
      Format          Yes o No x





**UKARMA
      CORPORATION**





**FORM
      10-QSB**




**INDEX**


**Page
                  No.****PART
                  I.**
              **Financial
                  Information**Item
                  1.Condensed
                  Consolidated Financial Statements (unaudited) :
              
              1Condensed
                  Consolidated Balance Sheet as of September 30, 2007
              
              1Condensed
                  Consolidated Statements of Operations for the Three and Nine Months
                  Ended
                  September 30, 2007 and 2006
              
              2Condensed
                  Consolidated Statements of Cash Flows for the Nine Months Ended
                  September
                  30, 2007 and 2006
              
              3Notes
                  to Condensed Consolidated Financial Statements
              
              4Item
                  2.Management’s
                  Discussion and Analysis or Plan of Operation
              
              13Item
                  3.Controls
                  and Procedures
              
              13**PART
                  II.**
              **Other
                  Information**Item
                  1.Legal
                  Proceedings
              
              14Item
                  2.Unregistered
                  Sales of Equity Securities and Use of Proceeds
              
              14Item
                  3.Defaults
                  Upon Senior Securities
              
              14Item
                  4.Submission
                  of Matters to a Vote of Security Holders
              
              14Item
                  5.Other
                  Information
              
              14Item
                  6.Exhibits
              
              14SIGNATURES
              
              18





**PART
      I.**  **FINANCIAL
      INFORMATION**





**Item
      1.**  **Financial
      Statements**


**UKARMA
          CORPORATION**
 
 **BALANCE
          SHEETS**
 As
                    of**September
                    30,**
                
                December
                    31,**2007**
                
                2006**(Unaudited)**
                
                (Audited)ASSETSCurrent
                    AssetsCash
                
                **$**
                **-**
                
                $
                102,902Prepaid
                    expenses
                
                
                **25,594**
                
                
                97,513Inventory
                
                
                **25,392**Available-for-sale
                    securities
                
                
                **-**
                
                
                17,000Total
                    Current Assets
                
                
                **50,986**
                
                
                217,415Property
                    and equipment, net of accumulated depreciationof
                    $1,329 for 2007, and $94 for 2006
                
                
                **11,312**
                
                
                3,836Other
                    AssetsProduction
                    costs, net of accumulated amortization of$64,896
                    for 2007, and none for 2006
                
                
                **627,416**
                
                
                651,228Deposit
                
                
                **3,136**
                
                
                3,136Patent
                
                
                **10,358**
                
                
                10,358Total
                    Other Assets
                
                
                **640,910**
                
                
                664,722TOTAL
                    ASSETS
                
                **$**
                **703,208**
                
                $
                885,973LIABILITIES
                    AND STOCKHOLDERS' EQUITYCurrent
                    LiabilitiesOverdraft
                
                **$**
                **77,729**
                
                $
                -Accounts
                    payable
                
                
                **195,652**
                
                
                208,419Accrued
                    expenses
                
                
                **84,611**
                
                
                11,778Notes
                    payable to related party
                
                
                **208,630**
                
                
                100,000Total
                    Current Liabilities
                
                
                **566,622**
                
                
                320,197Stockholders'
                    EquityCommon
                    stock, $0.001 par value; 100,000,000shares
                    authorized; 16,950,000 and 15,218,734 shares issuedand
                    outstanding in 2007 and 2006, respectively
                
                
                **16,950**
                
                
                15,219Preferred
                    stock, $0.001 par value; 20,000,000 shares authorized,none
                    issued
                
                
                **-**
                
                
                -Paid-in
                    capital
                
                
                **2,868,898**
                
                
                2,046,030Accumulated
                    other comprehensive income
                
                
                **-**
                
                
                12,000Stock
                    subscriptions
                
                
                **117,950**
                
                
                55,000Accumulated
                    deficit
                
                
                **(2,867,212**
                **)**
                
                (1,562,473
                )Total
                    Stockholders' Equity
                
                
                **136,586**
                
                
                565,776TOTAL
                    LIABILITIES AND STOCKHOLDERS' EQUITY
                
                **$**
                **703,208**
                
                $
                885,973
  **The
          accompanying notes are an integral part of these interim unaudited financial
          statements**
  1
  **UKARMA
        CORPORATION**
 
 **STATEMENTS
        OF OPERATIONS (Unaudited)**
 **For
        the three and nine months ended September 30, 2007, and
        2006**
  **For
                  three months**
              
              **For
                  nine months****ended
                  September 30,**
              
              **ended
                  September 30,****2007**
              
              2006
              
              **2007**
              
              2006Sales
              
              **$**
              **19,343**
              
              $
              -
              
              **$**
              **75,366**
              
              $
              -Cost
                  of Sale
              
              
              **4,322**
              
              
              
              
              
              **22,624**Gross
                  Profit
              
              
              **15,021**
              
              
              **-**
              
              
              **52,742**
              
              
              **-**Selling,
                  General and Administrative Expenses
              
              
              **449,080**
              
              
              136,093
              
              
              **1,234,689**
              
              
              1,059,946Operating
                  Loss
              
              
              **(434,059**
              **)**
              
              (136,093
              )
              
              **(1,181,947**
              **)**
              
              (1,059,946
              )Other
                  Income (Expenses)Interest
                  Income
              
              
              **-**
              
              
              814
              
              
              **-**
              
              
              8,412Gain
                  on Sale of Securities
              
              
              **-**
              
              
              -
              
              
              **3,279**
              
              
              -Interest
                  Expense
              
              
              **(113,101**
              **)**
              
              -
              
              
              **(125,271**
              **)**
              
              (270
              )Total
                  Other Income (Expense)
              
              
              **(113,101**
              **)**
              
              814
              
              
              **(121,992**
              **)**
              
              8,142Net
                  Loss before Income Taxes
              
              
              **(547,160**
              **)**
              
              (135,279
              )
              
              **(1,303,939**
              **)**
              
              (1,051,804
              )Provision
                  for Income Taxes
              
              
              **-**
              
              
              800
              
              
              **800**
              
              
              800Net
                  Loss
              
              **$**
              **(547,160**
              **)**
              $
              (136,079
              )
              **$**
              **(1,304,739**
              **)**
              $
              (1,052,604
              )Loss
                  Per Share-Basic and Diluted
              
              **$**
              **(0.03**
              **)**
              $
              (0.01
              )
              **$**
              **(0.08**
              **)**
              $
              (0.08
              )Weighted
                  Average Number of Shares
              
              
              **16,486,984**
              
              
              14,114,999
              
              
              **16,486,984**
              
              
              13,536,389
 **The
          accompanying notes are an integral part of these interim unaudited financial
          statements**
 2
 **UKARMA
          CORPORATION**
 
 **STATEMENTS
          OF CASH FLOWS (Unaudited)**
 **For
          the nine months ended September 30, 2007, and 2006**
 **For
                    nine months ended****September
                    30,****2007**
                
                2006Cash
                    Flow from Operating Activities:Net
                    loss
                
                **$**
                **(1,304,739**
                **)**
                $
                (1,052,604
                )Adjustment
                    to reconcile net loss tonet
                    cash used by operating activities:Depreciation
                
                
                **1,235**
                
                
                -Amortization
                    of production costs
                
                
                **64,896**
                
                
                -Issuance
                    of stock for services
                
                
                **152,360**
                
                
                126,146Stock
                    option expenses
                
                
                **142,543**
                
                
                70,462Stock
                    warrant expenses
                
                
                **110,437**
                
                
                488,154Non-cash
                    interest expense
                
                
                **104,073**
                
                
                -Gain
                    on sale of investment
                
                
                **(3,279**
                **)**
                
                -(Increase)
                    Decrease in:Prepaid
                    expenses
                
                
                **71,919**
                
                
                (6,264
                )Inventory
                
                
                **(25,392**
                **)**
                
                -Capitalized
                    production costs
                
                
                **(41,084**
                **)**
                
                (321,135
                )Deposit
                
                
                **-**
                
                
                6,800Increase
                    (Decrease) in:Accounts
                    payable
                
                
                **(12,767**
                **)**
                
                66,241Accrued
                    expenses
                
                
                **83,019**
                
                
                (18,200
                )Net
                    Cash Used by Operating Activities
                
                
                **(656,779**
                **)**
                
                (640,400
                )Cash
                    Flow from Investing Activities:Purchase
                    of property and equipment
                
                
                **(8,711**
                **)**
                
                -Sale
                    of investment
                
                
                **8,279**
                
                
                -Patent
                
                
                **-**
                
                
                (10,358
                )Net
                    Cash Used by Investing Activities
                
                
                **(432**
                **)**
                
                (10,358
                )Cash
                    Flow from Financing Activities:Bank
                    overdraft
                
                
                **77,729**
                
                
                -Proceeds
                    from notes payable
                
                
                **50,000**
                
                
                -Proceeds
                    from officer advances
                
                
                **308,630**
                
                
                -Stock
                    subscriptions
                
                
                **117,950**
                
                
                -Repayments
                    to officer advances
                
                
                **-**
                
                
                (3,028
                )Proceeds
                    from sale of stock
                
                
                **-**
                
                
                135,000Net
                    Cash Provided by Financing Activities
                
                
                **554,309**
                
                
                131,972Net
                    Decrease in Cash
                
                
                **(102,902**
                **)**
                
                (518,786
                )Cash
                    Balance at Beginning of Period
                
                
                **102,902**
                
                
                739,843Cash
                    Balance at End of Period
                
                **$**
                **-**
                
                $
                221,057Supplemental
                    Disclosures:Interest
                    Paid
                
                **$**
                **-**
                
                $
                -Taxes
                    Paid
                
                **$**
                **-**
                
                $
                -Noncash
                    Investment and Financing Activities:Unrealized
                    gain (loss) on marketable securities
                
                **$**
                **-**
                
                $
                6,000Conversion
                    of notes payable and accrued interest intocommon
                    stock
                
                **$**
                **260,186**
                
                $
                -
  **The
          accompanying notes are an integral part of these interim unaudited financial
          statements**
  3
  **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 September 30, 2007 and for the three
        and
        nine months ended September 30, 2007, and 2006 have been prepared by the
        Company, without audit, pursuant to the rules and regulations of the Securities
        and Exchange Commission. Certain information and footnote disclosures normally
        included in financial statements prepared in accordance with generally accepted
        accounting principles have been condensed or omitted pursuant to such rules
        and
        regulations. However, the Company believes that the disclosures are adequate
        to
        make the information presented not misleading. These financial statements
        should
        be read in conjunction with the financial statements and the notes thereto
        included in the Company’s Annual Report on Form SB-2 for the year ended December
        31, 2006.
 
 The
        balance sheet as of December 31, 2006 has been derived from the audited
        financial statements at that date but does not include all of the information
        and footnotes required by 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 September 30, 2007 and for the three and
        nine
        months ended September 30, 2007, and 2006 have been made. The results of
        operations for the three and nine months ended September 30, 2007 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
        collectibility 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.
 
 4
 **UKARMA
          CORPORATION**
 
 **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 
 **NOTE
        1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)**
 
 Use
        of
        estimates :
        The
        preparation of the accompanying financial statements in conformity with
        accounting principles generally accepted in the United States (U.S. GAAP)
        requires management to make certain estimates and assumptions that affect
        the
        reported amounts of assets and liabilities and disclosure of contingent assets
        and liabilities at the date of the financial statements and the reported
        amounts
        of revenues and expenses during the reporting period. Actual results could
        differ from those estimates.
 
 Net
        Loss Per Share :
        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 $142,543 and $70,462 for
        nine
        months ended September 30, 2007 and 2006, respectively.
 
 New
        Accounting Pronouncements :
        In May
        2007, the FASB issued FASB Staff Position No. FIN 48-1 (“FSP 48-1”), *Definition
        of Settlement in FASB Interpretation No. 48* .  FSP
        48-1 amended FIN 48 to provide guidance on how an enterprise should determine
        whether a tax position is effectively settled for the purpose of recognizing
        previously unrecognized tax benefits.  FSP 48-1 required application
        upon the initial adoption of FIN 48.  The adoption of FSP 48-1 did not
        affect the Company’s financial statements.
 
 In
        February 2007, the Financial Accounting Standards Board (“FASB’) issued
        Financial Accounting Standards (“FAS”) No. 159, *The
        Fair Value Option for Financial Assets and Financial Liabilities - Including
        an
        amendment of FASB Statement No. 115* ,
        which
        permits entities to choose to measure many financial instruments and certain
        other items at fair value at specified election dates. A business entity
        is
        required to report unrealized gains and losses on items for which the fair
        value
        option has been elected in earnings at each subsequent reporting date. This
        statement is expected to expand the use of fair value measurement. FAS No.159
        is
        effective for financial statements issued for fiscal years beginning after
        November 15, 2007, and interim periods within those fiscal years.
 
 In
        September 2006, the FASB issued FAS No.
        157, *Fair
        Value Measurements* .
        FAS No.
        157 defines fair value, establishes a framework for measuring fair value
        in
        generally accepted accounting principles, and expands disclosures about fair
        value measurements. This statement addresses how to calculate fair value
        measurements required or permitted under other accounting pronouncements.
        Accordingly, this statement does not require any new fair value measurements.
        However, for some entities, the application of the statement will change
        current
        practice. FAS No. 157 is effective for the Company beginning January 1, 2008.
        The Company is currently evaluating the impact of this standard.
 
 5
 **UKARMA
          CORPORATION**
 
 **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
  **NOTE
        1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)**
 
 In
        September 2006, the Securities and Exchange Commission ("SEC") staff issued
        Staff Accounting Bulletin No. 108 ("SAB 108"), *Considering
        the Effects of Prior Year Misstatements when Quantifying Misstatements in
        Current Year Financial Statements.* The
        stated purpose of SAB 108 is to provide consistency between how registrants
        quantify financial statement misstatements.
 
 Prior
        to
        the issuance of SAB 108, there have been two widely-used methods, known as the
        "roll-over" and "iron curtain" methods, of quantifying the effects of financial
        statement misstatements. The roll-over method quantifies the amount by which
        the
        current year income statement is misstated while the iron curtain method
        quantifies the error as the cumulative amount by which the current year balance
        sheet is misstated. Neither of these methods considers the impact of
        misstatements on the financial statements as a whole.
 
 SAB
        108
        established an approach that requires quantification of financial statement
        misstatements based on the effects of the misstatement on each of the Company's
        financial statements and the related financial statement disclosures. This
        approach is referred to as the "dual approach" as it requires quantification
        of
        errors under both the roll-over and iron curtain methods.
 
 SAB
        108
        allows registrants to initially apply the dual approach by either retroactively
        adjusting prior financial statements as if the dual approach had always been
        used, or by recording the cumulative effect of initially applying the dual
        approach as adjustments to the carrying values of assets and liabilities
        as of
        January 1, 2006 with an offsetting adjustment recorded to the opening balance
        of
        retained earnings.
 
 The
        Company will initially apply SAB 108 using the cumulative effect transition
        method in connection with the preparation of the annual financial statements
        for
        the year ending December 31, 2006. The Company does not believe the adoption
        of
        SAB 108 will have a significant effect on its 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.
 
 6
 **UKARMA
          CORPORATION**
 
 **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
  **NOTE
        3 - AVAILABLE-FOR-SALE SECURITIES**
 
 In
        June
        2007, the Company sold its minority equity investment in a publicly traded
        company and recognized a gain of $3,279.
 
 The
        aggregate fair market value of the securities was $17,000 as of December
        31,
        2006. The gross unrealized holding gains related to the investment as of
        December 31, 2006 was $12,000.
  **NOTE
        4 - PREPAID EXPENSES**
 
 Prepaid
        expenses consisted of the following:
 September
                    30,
                
                December
                    31,2007
                
                2006(Unaudited)
                
                (Audited)Legal
                    Retainer
                
                $
                -
                
                $
                67,513Prepaid
                    Royalties
                
                
                25,594
                
                
                30,000$
                25,594
                
                $
                97,513
 **NOTE
          5 - PRODUCTION COSTS**
 
 The
        Company capitalized costs incurred for recording seven fitness videos’ master
        copies. As of September 30, 2007, total costs of $692,312 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 $64,896 for the nine
        months ended September 30, 2007.
  **NOTE
        6 - PATENT**
 
 The
        Company filed for a patent for three proprietary yoga mates, which it believes
        provide unique functions and benefits compared to yoga mates currently in
        the
        market. Through to date, the patent is still pending for approval.
 
 7
 **UKARMA
            CORPORATION**
 
 **NOTES
            TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 **NOTE
        7 - ACCRUED EXPENSES**
 
 Accrued
        expenses consisted of the following:
  September
                    30,
                
                December
                    31,2007
                
                2006(Unaudited)
                
                (Audited)Accrued
                    Compensation
                
                $
                59,496
                
                $
                -Accrued
                    Professional Fees
                
                
                8,962
                
                
                10,000Accrued
                    Interest
                
                
                7,195
                
                
                978Employee
                    Reimbursable
                
                
                7,358
                
                
                -Accrued
                    Income Tax
                
                
                1,600
                
                
                800Total
                    Accrued Expenses
                
                $
                84,611
                
                $
                11,778
 **NOTE
        8 - NOTES PAYABLE**
 
 During
        the nine months ended September 30, 2007, **** the
        Company entered into debt agreement with two unrelated parties and received
        an
        aggregate amount of $50,000 at an interest rate of 7% per annum payable on
        demand.
 
 On
        August
        14, 2007, all the notes payable and related accrued interest of $1,038 was
        converted into common shares (See note 10).
  **NOTE
        9 - OTHER COMPREHENSIVE INCOME (LOSS)**
 
 The
        Company’s accumulated other comprehensive income (loss) consists of the
        unrealized gain on available-for-sale securities only. The components of
        comprehensive loss were as follows:
  For
                    three months ended
                
                For
                    nine months endedSeptember
                    30,
                
                September
                    30,2007
                
                2006
                
                2007
                
                2006Net
                    Loss
                
                $
                (547,160
                )
                $
                (136,079
                )
                $
                (1,304,739
                )
                $
                (1,052,604
                )Other
                    Comprehensive Income (Loss):Unrealized
                    gain on available-for-sale securities
                
                
                -
                
                
                -
                
                
                -
                
                
                6,000Comprehensive
                    Loss
                
                $
                (547,160
                )
                $
                (136,079
                )
                $
                (1,304,739
                )
                $
                (1,046,604
                )
  The
        Company did not have other comprehensive income for the three and nine months
        ended September 30, 2007.
 
 8
 **UKARMA
          CORPORATION**
 
 **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 **NOTE
        10 - STOCKHOLDERS’ EQUITY**
 
 On
        August
        6, 2007, the Company offered to sell up to 7,147,857 shares of common stock
        in a
        direct public offering, at $0.35 per share. As of September 30, 2007, the
        Company received $117,950 and sold 337,001 shares of the Company’s common stock.
        The shares will be issued in the forth quarter.
 
 During
        the nine months ended September 30, 2007, the Board of Directors of the Company
        approved the issuance aggregate of 592,926 shares of Company’s common stocks to
        various providers in consideration of their services to the Company. The
        shares
        were valued and charged to operations at a price of $0.25 to $0.35 per share
        or
        $152,360 of total. The valuation was based on the 2006 private placement
        offering price of $0.25 per share, and the current selling price of the stock
        at
        $0.35 per common share.
 
 On
        August
        14, 2007, the CEO agreed to convert $209,148 worth of his loans to the Company
        ($200,000 principal plus $9,148 accrued interest) into 836,592 shares of
        the
        Company’s Common Stock. In addition, on August 14, 2007, two unrelated parties
        agreed to convert $51,038, including accrued interest, worth of their notes
        payable into 204,151 shares of the Company’s Common Stock. The Board of
        Directors of the Company approved such conversions on August 14, 2007. The
        conversion was based on $0.25 per share; however, since the selling price
        of
        each share of the Company’s common stock was being sold at $0.35 per share, the
        difference, for an aggregate of $104,073, was charged against interest
        expense.
 
 On
        June
        29, 2006, the Board of Directors approved a private placement offering. Pursuant
        to this offering the Company is to offer up to $2 million of its common stocks
        to accredited investors. The stocks were sold at $0.25 per unit. Each unit
        consists of one common stock and one stock warrant to purchase the Company’s
        common stock at $1 per share. The warrants expire in five years after the
        dare
        of issuance. As of September 30, 2006, the Company sold 540,000 shares of
        common
        stock and received net proceeds of $135,000 under the 2006 offering. The
        offering was closed at the end of the year.
  **NOTE
        11 - NET LOSS PER SHARE**
 
 The
        following table sets forth the computation of basic and diluted net loss
        per
        share:
  For
                    three months ended
                
                For
                    nine months endedSeptember
                    30,
                
                September
                    30,Numerator:
                
                2007
                
                2006
                
                2007
                
                2006Net
                    Loss
                
                $
                (547,160
                )
                $
                (136,079
                )
                $
                (1,304,739
                )
                $
                (1,052,604
                )Denominator:Weighted
                    Average of Common Shares
                
                
                16,486,984
                
                
                14,114,999
                
                
                16,486,984
                
                
                13,156,389Basic
                    and Diluted Net Loss per Share
                
                $
                (0.03
                )
                $
                (0.01
                )
                $
                (0.08
                )
                $
                (0.08
                )
  As
        the
        Company incurred net losses for the three and nine months ended September
        30,
        2007, the effect of dilutive securities totaling 2,914,286 and 2,004,762
        equivalent shares, respectively, has been excluded from the calculation of
        diluted loss per share because their effect was anti-dilutive.
 
 As
        the
        Company incurred net losses for the three and nine months ended September
        30,
        2006, the effect of dilutive securities totaling 500,000 and 500,000 equivalent
        shares, respectively, has been excluded from the calculation of diluted loss
        per
        share because their effect was anti-dilutive.
  9
 **UKARMA
          CORPORATION**
 
 **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 **NOTE
        11 - NET LOSS PER SHARE (continued)**
 
 There
        were also 5,827,000 and 10,415,000 shares out-of-money stock options and
        warrants excluded from the calculation of diluted net loss per share for
        the
        nine months ended September 30, 2007 and 2006, respectively, because their
        exercise prices were greater than the average fair market price of the common
        stock.
  **NOTE
        12 - 2006 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 September 30,
        2007
        and 2006 is presented in the following table:
 2007
                
                2006Weighted
                
                
                
                WeightedNumber
                
                Average
                
                Number
                
                Averageof
                
                Exercise
                
                of
                
                ExerciseShares
                
                Price
                
                Shares
                
                PriceOutstanding
                    at beginning of year
                
                
                5,250,000
                
                $
                0.20
                
                
                -
                
                $
                -Granted
                
                
                -
                
                
                -
                
                
                5,250,000
                
                
                0.20Exercised/Expired/Cancelled
                
                
                -
                
                
                -
                
                
                -
                
                
                -Outstanding
                    at end of period
                
                
                5,250,000
                
                $
                0.20
                
                
                5,250,000
                
                $
                0.20Exercisable
                    at end of period
                
                
                2,083,334
                
                $
                0.20
                
                
                -
                
                $
                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.
  2007
                
                2006Weighted
                    average fair value per option granted
                
                
                N/A
                
                $
                0.17Risk-free
                    interest rate
                
                
                N/A
                
                
                4.37
                %Expected
                    dividend yield
                
                
                N/A
                
                
                0.00
                %Expected
                    lives
                
                
                N/A
                
                
                10.00Expected
                    volatility
                
                
                N/A
                
                
                100.00
                %
 
 10
 **UKARMA
            CORPORATION**
 
 **NOTES
            TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 **NOTE
        12 - 2006 STOCK OPTION PLAN (continued)**
 
 The
        following table sets forth additional information about stock options
        outstanding at September 30, 2007:
  WeightedAverage
                
                WeightedRange
                    of
                
                
                
                Remaining
                
                AverageExercise
                
                Options
                
                Contractual
                
                Exercise
                
                OptionsPrices
                
                Outstanding
                
                Life
                
                Price
                
                Exercisable$
                    0.20
                
                
                5,250,000
                
                
                8.03
                
                $
                0.20
                
                
                2,083,3345,250,000
                
                
                8.03
                
                $
                0.20
                
                
                2,083,334
  As
        of September
        30 ,
        2007,
        there was $566,102 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 3.2
        years.
  **NOTE
        13 - STOCK WARRANTS**
 
 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.
 
 The
        assumptions used in the Black-Scholes option pricing model are as follows:
  September
                    30,2007
                
                2006Weighted
                    average fair value per option granted
                
                $
                0.19
                
                $
                0.11Risk-free
                    interest rate
                
                
                4.60
                %
                
                4.40
                %Expected
                    dividend yield
                
                
                0.00
                %
                
                0.00
                %Expected
                    lives
                
                
                5.00
                
                
                5.00Expected
                    volatility
                
                
                100.00
                %
                
                100.00
                %
 The
        Company recognized $110,437 and $488,154 stock warrants expense for the nine
        months ended September 30, 2007 and 2006, respectively.
  11
  **UKARMA
          CORPORATION**
 
 **NOTES
          TO INTERIM UNAUDITED FINANCIAL STATEMENTS**
 **NOTE
        14 - RELATED PARTY TRANSACTIONS**
 
 During
        the nine months ended September 30, 2007, the Company entered into various
        debt
        agreements with the CEO of the Company, and received loans from its CEO for
        an
        aggregate amount of $308,630 at an interest rate of 7% per annum payable
        on
        demand. During
        the 3rdquarter,
        the CEO converted $200,000 of principal loans into the Company’s common stock. As
        of
        September 30, 2007, the Company had loans payable to the CEO of the Company
        for
        $208,630 and accrued interest payable for the related loans of $7,195.
 
 On
        January 17, 2005, an option agreement was signed between the CEO and a Director
        of the Company to purchase up to 3,000,000 shares of the Company’s common stock
        from the director at $0.20 per share. The duration of the option agreement
        is
        for ten years commencing on January 17, 2005.
 
 On
        July
        9, 2007, the CEO and the Director exercised the option agreement whereby
        the CEO
        acquired 3,000,000 shares of the Company’s common stock from the Director.
 
 **NOTE
        15 - SUBSEQUENT EVENTS**
 
 Subsequent
        to September 30, 2007, the Company received $960,550 for 2,744,431 stock
        subscriptions.
  On
        October 12, 2007, the Company repaid $25,000 of the officer
        advances.
  12




**Item
      2.**  **Management’s
      Discussion and Analysis or Plan of Operation**





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. Actual results
      may differ from these estimates under different assumptions or conditions.
      References to “we”, “our”, “us” or the “Company” are to uKarma Corporation, a
      Nevada corporation.




**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 $75,366,000 in revenues to date. We incurred
        net losses of approximately $33,535 in 2004, $122,488 in 2005, and $1,397,922
        in
        2006. As of September 30, 2007, we had an accumulated deficit of $2,867,212.
        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. **** The
        brand
        of our initial DVD series is called Xflowsion. In
        May
        2007, we began to market and sell our initial Xflowsion DVDs. **** We
        believe that our success depends upon our ability to successful produce,
        market,
        and distribute such products.
 
 **Plan
        of Operation**
 
 As
        of **** September
        30, 2007, we had a negative working capital. To satisfy prior working capital
        needs while our SB-2 registration was pending, our CEO Bill Glaser loaned
        funds
        to the Company. During
        the 3rd quarter, Mr. Glaser loaned $20,051 to the Company.  Mr. Glaser
        loaned a total of $308,630 for the 9 months ending on September 30, 2007
        and a
        total of $408,630 in aggregate.  During the 3rd quarter, Mr. Glaser
        converted $200,000 of principal loans into the Company’s common stock.  The
        Company also repaid $25,000 to Mr. Glaser during the quarter. Since
        September 30, 2007, we have raised $960,550 via stock sales pursuant to our
        effective SB-2 registration statement. We plan to continue to raise sufficient
        capital via the sale of our common stock, however there is no guarantee that
        we
        will be able to meet current working capital needs if we do not receive
        additional capital.
  Our
        future cash requirements and the adequacy of available funds will depend
        on many
        factors, including the pace at which we are able to market, and distribute
        our
        Xflowsion DVDs, whether or not a market develops for our products and, if
        a
        market develops, the pace at which we are able to sell our products. It will
        also depend on our ability to raise capital through debt or equity
        financings.
 
 We
        have
        fully incurred the production cost of our Xflowsion DVD series and the
        production costs of our infomercial (final payment was made after September
        30,
        2007), and plan to make financial investments in marketing over the next
        six
        months. We expect to incur substantial losses over the next two years.
  We
        estimate that our expenses over the next 12 months beginning on October 1,
        2007
        will be approximately $685,000 as follows:
  ·
              $60,000
                  in auditor and legal fees;
  ·
              $75,000
                  for the production costs of three DVDs for use in continuity
                  plans;
  13
  ·
              $150,000
                  for the production of our infomercial and short-form TV
                  commercials;
  ·
              $100,000
                  initial media buying expenses; and
  ·
              $300,000
                  general and administrative costs.
 
 As
        of
        September 30, 2007, we had cash equivalents of $50,986. We believe that the
        capital we have raised via stock sales pursuant to our effective SB-2
        registration statement should be sufficient to meet our capital requirements
        over the next 12 months, however we will continue to seek additional capital
        as
        the amount of capital raised to date does not ensure our capital requirements
        .
        Our intention is to obtain this money through the continued sale of our common
        stock pursuant to our effective SB-2 registration statement and/or other
        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.
 
 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
        which 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.
  Our
        ultimate existence is dependent upon management's ability to develop profitable
        operations. We are in the process of marketing our first DVD series. We have
        negotiated an infomercial production arrangement with Caudill and Associates
        to
        produce a 30 minute infomercial along with a 60 second and 120 second TV
        commercials. The first version of such infomercial was completed in May 2007.
        We
        aired the infomercial for one week during May 2007 on TV stations throughout
        the
        United States. We plan to re-air the infomercial after various edits are
        made.
        Such edits and additional filming are expected to be completed in either
        December 2007 or January 2008. We plan to test-market the infomercial during
        the
        2-3 months following Caudill’s editing. During the test-marketing of the
        infomercial, we will test different pricing (the May airing of our infomercial
        had a pricing for the Xflowsion DVD series of three payments of $19.95 or
        $59.85
        plus $12.95 shipping and handling), as well as continue to edit the infomercial
        in an effort to elicit the greatest response We also engaged Synthesis Marketing
        to develop logo and brand identities for uKarma and Xflowsion, develop websites
        for uKarma and Xflowsion, author our Xflowsion DVD series, and design packaging
        for our Xflowsion DVDs. All of these activities by Synthesis, with the exception
        of completing the uKarma website, were completed in June 2007. The uKarma
        website is expected to be completed and operational during November or December
        2007.
 
 During
        the next 6-9 months, we intend to raise additional capital through the sale
        of
        our common stock pursuant to our effective SB-2 registration or from additional
        loans. We cannot guarantee that financing will be available to us, on acceptable
        terms or at all. If we do not earn revenues sufficient to support our business
        and we fail to obtain other financing, either through an offering of our
        securities or by obtaining additional loans, we may be unable to maintain
        our
        operations.
  We
        intend
        to spend approximately $500,000 over the course of the next year, mainly
        in the
        areas of media air time costs, administration, legal, accounting, and marketing.
        However, if we are successful in raising more than $1,000,000 pursuant to
        this
        public offering or by financing the cost of media buying expenses, we intend
        to
        increase our spending in the areas of production and marketing, and introduce
        other multimedia products.
 
 We
        intend
        to enter into agreement with fitness and wellness instructors to perform
        on
        screen for DVDs we intend to produce. In some instances, we may be required
        to
        offer these fitness instructors a royalty percentage of future sales. Because
        we
        are trying to keep our production and marketing costs at a minimum, we may
        offer
        royalty percentages of sales to such instructors as well as to other service
        providers such as telemarketing, fulfillment, and infomercial production.
        We
        anticipate that we may owe as much as 10% or more of our gross revenues in
        royalties to performers, of our DVDs and other service providers involved
        in
        marketing our products.
 
 **Off-Balance
        Sheet Arrangements**
  We
        do not
        have any off-balance sheet transactions.
  14




**Item
      3.** ****  **Controls
      and Procedures**





Based
      on
      an evaluation of the effectiveness of the Company’s disclosure controls and
      procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities
      Exchange Act of 1934 (the “Exchange Act”)) as of September 30, 2007, the
      Company’s Chief Executive Officer, who is also our acting Chief Financial
      Officer, believes that the Company’s disclosure controls and procedures (as
      defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act) are effective to
      ensure that information required to be disclosed by the Company in this report
      is accumulated and communicated to the Company’s management, including its
      principal executive officer and principal financial officer, as appropriate,
      to
      allow timely decisions regarding required disclosure.





**Changes
      in Internal Control over Financial Reporting**





There
      have been no changes in the Company’s internal control over financial reporting
      identified in connection with the evaluation described above that occurred
      during our last fiscal quarter ended September 30, 2007, that has materially
      affected, or is reasonably likely to materially affect, the Company’s internal
      control over financial reporting.




**PART
      II.**  **OTHER
      INFORMATION**




**Item
      1.**  **Legal
      Proceedings**





We
      are
      not a party to any material legal proceeding, nor to the knowledge of
      management, are any legal proceedings threatened against us. From time to time,
      we may be involved in litigation relating to claims arising out of operations
      in
      the normal course of business.




**Item
      2.**  **Unregistered**  **Sales
      of Equity Securities and Use of Proceeds**


On
        August
        14, 2007, our CEO agreed to convert $209,148 worth of his loans to the Company
        ($200,000 principal plus $9,148 accrued interest) into 836,592 shares of
        the
        Company’s Common Stock. In addition, on August 14, 2007, two unrelated parties
        agreed to convert $51,038, including accrued interest, worth of their notes
        payable into 204,151 shares of the Company’s Common Stock. The issuances were
        exempt from registration requirements in reliance on section 4(2) of the
        Securities Act.
  **Item
        3.**  **Defaults
        upon Senior Securities**





None.




**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders**





None.





**Item
      5.**  **Other
      Information**





None.




15




**Item
      6.** ****  **Exhibits**





3.1
            
            Amended
                and Restated Certificate of Incorporation, as currently in effect
                (1)3.2
            
            Bylaws
                of the small business issuer, as currently in effect
                (1)4.1
            
            Form
                of Warrant (1)10.1
            
            2006
                Stock Plan (1)10.2
            
            Employment
                Agreement between the Small business issuer and Bill Glaser dated
                January
                1, 2006 (1)10.3
            
            Consulting
                Agreement between the Small business issuer and Eric Paskel dated
                April
                19, 2006 (1)10.4
            
            Consulting
                Agreement between the Small business issuer and Craig Kulman dated
                February 13, 2006 (1)10.5
            
            Consulting
                Agreement between the Small business issuer and Len Panzer dated
                February
                28, 2006 (1)10.6
            
            Consulting
                Agreement between the Small business issuer and Jeremy Koff dated
                May 5,
                2006 (1)10.7
            
            Production
                Agreement between the Small business issuer and The Tribal Vision
                Group,
                LLC d/b/a Yoga Tribe and Culture Productions dated June 15, 2006
                (1)10.8
            
            Marketing
                Agreement between the Small business issuer and Synthesis Marketing
                dated
                October 11, 2006 (1)10.9
            
            Marketing
                Agreement between the Small business issuer and Much and House Public
                Relations dated October 11, 2006 (1)10.10
            
            Production
                Agreement between the Small business issuer 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)




16


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 the small business issuer 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*10.28
            
            McDonald
                Conversion Agreement dated August 27, 2007*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.(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.




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**SIGNATURES**





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




**UKARMA
                CORPORATION**Dated 
                 November 19, 2007
            By:
            /s/ Bill
                GlaserName:
                  Bill GlaserTitle:
                Chief Executive Officer (Principal Executive Officer); Chief
                Financial Officer (Principal Financial Officer); and Chairman of
                the
                Board




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