UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
  FORM 10-Q
 
 x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
      ACT OF 1934For
      the quarterly period ended June 30, 2008ORo
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934For
      the transition period from
                      
      to
                     .
  Commission File No333-141564
   SLOUD,
INC.
 (Exact
Name of Registrant as Specified in its Charter)
 
 Nevada
              
              13-4314229(State
      or other jurisdiction of incorporation or organization)
              
              (I.R.S.
      Employer Identification No.)1900
      Campus Commons Dr.Suite
      100
                Reston,
      VA 20191
              
              20191(Address
      of principal executive offices)
              
              (Zip
      Code)
  (703) 766-6526
 (Registrant’s
telephone number, including area code)
  N/A
 (Former
name, former address and former fiscal year if changed since last
report)
  Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90
days.   YES    x
   NO    o
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the
Exchange Act (Check one).
  Large
      Accelerated Filer   o
              Accelerated
      Filer   o
              Non-Accelerated
      Filer   x
  Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
  YES  
o
    NO   x
  The
number of shares of the Registrant’s common stock outstanding as of July
30, 2008:      19,500,000.












SLOUD, INC.


INDEX
TO FORM 10-Q FILING


FOR
THE THREE AND SIX MONTHS ENDED June 30, 2008





TABLE
OF CONTENTS





PART
I


FINANCIAL
      INFORMATION
            PAGE




Page NumbersPART
      I - FINANCIAL INFORMATIONItem 1.
            
            Financial
      Statements (unaudited)Balance Sheets
            
            3Statements of Operations
            
            4Statements of Cash Flows
            
            5Notes to Financial Statements
            
            6Item 2.
            
            Management Discussion & Analysis of Financial Condition and
      Results of Operations
            
            10Item 3
            
            Quantitative and Qualitative Disclosures About Market
      Risk
            
            12Item 4.
            
            Controls and Procedures
            
            12PART
      II - OTHER INFORMATIONItem 1.
            
            Legal Proceedings
            
            13Item 1A
            
            Risk Factors
            
            13Item 2.
            
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            
            15Item 3.
            
            Defaults Upon Senior Securities
            
            15Item 4.
            
            Submission of Matters to a Vote of Security
      Holders
            
            15Item 5
            
            Other information
            
            15Item 6.
            
            Exhibits
            
            16







CERTIFICATIONS





Exhibit
      31 – Management certification
            17-20Exhibit
      32 – Sarbanes-Oxley Act
            21-22





2
 Table of Contents





SLOUD, INC.


(A
Development Stage Company)


BALANCE
SHEETS





For
      the Six Months Ended June
      30, 2008 (unaudited)
            
            
            December 31,
      2007 (audited)ASSETSCURRENT
      ASSETSCash
      in bank
            
            $
            125
            
            
            $
            206TOTAL
      ASSETS
            
            $
            -
            
            
            $
            206LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
            
            $
            -
            
            
            $
            -TOTAL
      LIABILITIES
            
            
            -
            
            
            
            -Common
      Stock $0.001 par value, 100,000,000 shares authorized, 19,500,000 shares
      issued and outstanding
            
            $
            19
      500
            
            
            $
            19
      500Additional
      Paid in Capital
            
            
            30
      565
            
            
            
            30
      565Deficit
      Accumulated During Development Stage
            
            
            (49
      940
            )
            
            
            (49
      859
            )TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            125
            
            
            $
            206





The
accompanying notes are an integral part of these statements





3
 Table of Contents





SLOUD, INC.


(A
Development Stage Company)


STATEMENTS OF OPERATIONS


(Unaudited)





For
      the Three Months Ended June 30, 2008
            
            
            For
      the Three Months Ended June 30, 2007
            
            
            For
      the Six Months Ended June 30, 2008
            
            
            For
      the Six Months Ended June 30, 2007
            
            
            From Inception
      October 10, 2005 through June 30, 2008REVENUES:Revenues
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            300Total
      Revenues
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            300OPERATING
      EXPENSES:General
      and Administrative
            
            $
            —
            
            
            $
            3,816.72
            
            
            $
            81
            
            
            $
            6,295
            
            
            $
            50,240Net
      (Loss)
            
            $
            —
            
            
            $
            (3,816.72
            )
            
            $
            (81
            )
            
            $
            (6,295
            )
            
            
            (49,940
            )Provision
      for Income Taxes
            
            
            -
      —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Basic
      earnings per share
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —Weighted
      Average Number of Common Shares Outstanding
            
            
            19,500,00
            
            
            
            19,500,00
            
            
            
            19,500,00
            
            
            
            19,500,00




The
accompanying notes are an integral part of these statements





4
 Table of Contents





SLOUD, INC.


(A
Development Stage Company)


STATEMENTS OF CASH
FLOWS


(Unaudited)





For
      the Six Months Ended June 30, 2008
            
            
            For
      the Six Months Ended June 30, 2007
            
            
            From Inception
      October 10, 2005 through June 30, 2008Operating
      Activities:Net
      income (loss)
            
            $
            (81
            )
            
            $
            (6,295
            )
            
            $
            (49,940
            )Cash
      used in operations
            
            $
            (81
            )
            
            $
            (6,295
            )
            
            $
            (49,940
            )Financing
      Activities:Issuance
      of common stock for cash
            
            $
            —
            
            
            $
            —
            
            
            $
            50,065Cash
      from financing
            
            $
            —
            
            
            $
            —
            
            
            $
            50,065Net
      increase (decrease) in cash
            
            $
            (81
            )
            
            $
            (6,295
            )
            
            
            125Cash
      at beginning of the period
            
            $
            206
            
            
            $
            6
      606
            
            
            
            —Cash
      at end of the period
            
            $
            125
            
            
            $
            311
            
            
            $
            125Supplemental
      Information
            
            $
            —
            
            
            $
            —
            
            
            $
            —





The
accompanying notes are an integral part of these statements





5
 Table of Contents





SLOUD, INC.


(A
Development Stage Company)


NOTES TO AUDITED FINANCIAL
STATEMENTS


June 30,
2008








NOTE
1.  GENERAL ORGANIZATION AND BUSINESS





Sloud,
Inc. (the Company) is a Nevada corporation established on October 10, 2005. It
is a company focusing on the research and development of tools to simplify music
search, comparison, and composition over the internet. The Company has developed
proprietary technology that uses a human voice to efficiently locate and
retrieve sound, enabling music search and other audio-related computer services
based on actual audio content. Instead of the usual services based on keyboard
input (typing of words), the users of the Company's services will sing, whistle,
and hum musical sequences into a microphone. The Company's technology converts
the sound to music scores and then uses it to search music databases. The
Company plans to utilize this technology to operate an audio search engine
website which will allow users to efficiently locate a song by singing,
whistling, or humming it. Once the song is identified, the website will allow
users to then purchase the song online, or buy the CD as well as various other
affiliated services associated with the results.





The
Company is in the development stage, and has not had any revenues to date. In
the Fall of 2005, the Company found a team of Ukrainian programmers who had a
software product that demonstrated music recognition technology. In November,
2005 the programmers were hired as contractors and issued stock for their
intellectual property. From November, 2005 until March, 2006, the product was
refined and repackaged, and in March, 2006 the product known as Query by Humming
(QbH) was released. The product cannot be sold or leased to individual users
because it has a very small backend music database. The product is being
marketed to music stores and technology companies who already have the music
database.








NOTE
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





The
relevant accounting policies and procedures are listed below.





Accounting
Basis





The
statements were prepared following generally accepted accounting principles of
the United States of America consistently applied.  The Company uses a
December 31 year end.





Use
of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.





Cash
and Cash Equivalents





For
purposes of reporting cash flows, the Company considers all highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents.





6
 Table of Contents





Income
Taxes





The
Company has incurred operating losses of $49,940, which, if utilized, will begin
to expire in 2026. Future tax benefits, which may arise as a result of these
losses, have not been recognized in these financial statements, and have been
off set by a valuation allowance.





The
potential future tax benefits of these losses have not been recognized in these
financial statements due to uncertainty of their realization. When the future
utilization of some portion of the carry forwards is determined not to be “more
likely than not,” a valuation allowance is provided to reduce the recorded tax
benefits from such assets.








NOTE
3.  GOING CONCERN





As the
Company is in the development stage, the long-term viability of the Company's
business plan is still uncertain. The ability of the Company to continue as a
going concern is dependent on additional sources of capital and the success of
the Company's plan. Management feels there are adequate outside sources of
additional operating capital to continue operations, albeit at possibly reduced
levels, for the next several years. At June 30, 2008, the Company has an
accumulated deficit of $49,940, working capital of $125, and has earned $300 in
revenues since inception.





Losses
are expected to continue for the immediate future.  In addition, the
Company’s cash flow requirements have been met by the generation of capital
through private placements of the Company’s common stock and
loans.  Assurance cannot be given that this source of financing will
continue to be available to the Company and demand for the Company’s equity
instruments will be sufficient to meet its capital needs.  However;
the company is in process of following through with its business plan with
sufficient capital at present to meet its business plan.





The
financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern.  The Company’s
continuation as a going concern is dependent upon its ability to generate
sufficient cash flow to meet it’s obligations on a timely basis, to retain its
current financing, to obtain additional financing, and ultimately to generate
revenues.






NOTE
4:  RELATED PARTY TRANSACTIONS





The
Company’s administrative office and support are provided by entities controlled
by one of the Company’s stockholders at no charge.  There is no formal
agreement to continue this arrangement.






NOTE
5.  CAPITAL STOCK





The
Company has authorized 100,000,000 common shares with a par value of $0.001 per
share.  From inception of the Company (October 10, 2005) to June 30,
2008, the Company issued 19,500,000 common shares. 17,500,000 shares were
issued in exchange for intellectual property at par; 2,000,000 shares were
issued for cash at par value for a total consideration of $32,565.





7
 Table of Contents





NOTE
6.  THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS





Below is
a listing of the most recent Statement of Financial
Accounting Standards (SFAS) 154-159 and their effect on the
Company.





Statement No. 154 -Accounting Changes and Error
Corrections





In May
2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No.
3." This statement changes the requirements for the accounting for and
reporting of a change in accounting principle. Previously, Opinion 20 required
that most voluntary changes in accounting principle be recognized by including
in net income of the period of change the cumulative effect of changing to a new
principle. This statement requires retrospective application to prior periods'
financial statements of changes in accounting principle, when
practicable.




Statement
No. 155 –Accounting
for Certain Hybrid Financial Instruments




In
February 2006, the FASB issued SFAS No. 155,Accounting
for Certain Hybrid Financial Instruments, which amends SFAS No. 133,
Accounting for Derivatives
Instruments and Hedging Activities and SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of
Liabilities.  SFAS No. 155 amends SFAS No. 133 to narrow the
scope exception for interest-only and principal-only strips on debt instruments
to include only such strips representing rights to receive a specified portion
of the contractual interest or principle cash flows.  SFAS No. 155
also amends SFAS No. 140 to allow qualifying special-purpose entities to hold a
passive derivative financial instrument pertaining to beneficial interests that
itself is a derivative instrument.




Statement
No. 156 –Accounting
for Servicing of Financial Assets




In March
2006, the FASB issued SFAS No. 156,Accounting
for Servicing of Financial Assets, which provides an approach to simplify
efforts to obtain hedge-like (offset) accounting.  This Statement
amends FASB Statement No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, with
respect to the accounting for separately recognized servicing assets and
servicing liabilities. The Statement (1) requires an entity to recognize a
servicing asset or servicing liability each time it undertakes an obligation to
service a financial asset by entering into a servicing contract in certain
situations; (2) requires that a separately recognized servicing asset or
servicing liability be initially measured at fair value, if practicable; (3)
permits an entity to choose either the amortization method or the fair value
method for subsequent measurement for each class of separately recognized
servicing assets or servicing liabilities; (4) permits at initial adoption a
one-time reclassification of available-for-sale securities to trading securities
by an entity with recognized servicing rights, provided the securities
reclassified offset the entity's exposure to changes in the fair value of the
servicing assets or liabilities; and (5) requires separate presentation of
servicing assets and servicing liabilities subsequently measured at fair value
in the balance sheet and additional disclosures for all separately recognized
servicing assets and servicing liabilities. SFAS No. 156 is effective for all
separately recognized servicing assets and liabilities as of the beginning of an
entity's fiscal year that begins after September 15, 2006, with earlier adoption
permitted in certain circumstances. The Statement also describes the manner in
which it should be initially applied.




Statement
No. 157 – Fair Value
Measurements




In
September 2006, the FASB issued SFAS No. 157, Fair
Value Measurements, to clarify how to measure fair value and to expand
disclosures about fair value measurements.  The expanded disclosures
include the extent to which companies measure assets and liabilities at fair
value, the information used to measure fair value, and the effect of fair value
on earnings and is applicable whenever other standards require (or permit)
assets and liabilities to be measured at fair value. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007
and interim periods within those fiscal years.




8
 Table of Contents





Statement
No. 158 -Employers’
Accounting for Defined Benefit Pension and Other Postretirement
Plans




In
September 2006, FASB issued Financial Accounting Standards No. 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
No. 87, 88, 106, and 132(R).”  This Statement improves
financial reporting by requiring an employer to recognize the over funded or
under funded status of a defined benefit postretirement plan (other than a
multiemployer plan) as an asset or liability in its statement of financial
position and to recognize changes in that funded status in the year in which the
changes occur through comprehensive income of a business entity or changes in
unrestricted net assets of a not-for-profit organization. This Statement also
improves financial reporting by requiring an employer to measure the funded
status of a plan as of the date of its year-end statement of financial position,
with limited exceptions.  SFAS 158 is effective.  An
employer with publicly traded equity securities is required to initially
recognize the funded status of a defined benefit postretirement plan and to
provide the required disclosures as of the end of the first fiscal year ending
after December 15, 2006.







Statement
No. 159 -The Fair
Value Option for Financial Assets and Financial Liabilities




In
February 2007, FASB issued Financial Accounting Standards No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities—Including an amendment of FASB Statement No.
115.”  This Statement permits entities to choose to measure
many financial instruments and certain other items at fair value. The objective
is to improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This Statement is expected to expand the use of fair value
measurement, which is consistent with the Board’s long-term measurement
objectives for accounting for financial instruments.  SFAS 159 is
effective as of the beginning of an entity’s first fiscal year that begins after
November 15, 2007.




The
adoption of these new Statements is not expected to have a material effect on
the Company’s current financial position, results or operations, or cash
flows.




9
 Table of Contents





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





Management’s
Discussion and Analysis contains various “forward looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
regarding future events or the future financial performance of the Company that
involve risks and uncertainties. Certain statements included in this Form 10-Q,
including, without limitation, statements related to anticipated cash flow
sources and uses, and words including but not limited to “anticipates”,
“believes”, “plans”, “expects”, “future” and similar statements or expressions,
identify forward looking statements. Any forward-looking statements herein are
subject to certain risks and uncertainties in the Company’s business, including
but not limited to, reliance on key customers and competition in its markets,
market demand, product performance, technological developments, maintenance of
relationships with key suppliers, difficulties of hiring or retaining key
personnel and any changes in current accounting rules, all of which may be
beyond the control of the Company. The Company adopted at management’s
discretion, the most conservative recognition of revenue based on the most
astringent guidelines of the SEC in terms of recognition of software licenses
and recurring revenue. Management will elect additional changes to revenue
recognition to comply with the most conservative SEC recognition on a forward
going accrual basis as the model is replicated with other similar markets (i.e.
SBDC). The Company’s actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth therein.




BUSINESS
DEVELOPMENT





The
company’s core technology is based on conversion of musical and rhythmical
sounds into standard musical notation. The company entered into a intellectual
property acquisition agreement and acquired its core technology from
Dr. Sergey Maruta in exchange for 800,000 shares of the company’s
common stock. The acquisition included various audio retrieval technologies that
had been under development since 1991. Dr. Maruta and his team of
developers joined the management of Sloud, Inc. and have continued with the
ongoing development and commercialization of the technology under the Sloud
brand name.





We plan
on offering a broad range of services based on a concept of audio input from
users. Instead of the usual services based on keyboard input (typing of words),
the users of our services will sing, whistle, and hum musical sequences into a
microphone. Our technology will convert sound to music scores and then use it
for searching music databases, and for creating musical performances based on a
user’s own singing. The services will be targeted at the conventional music
stores, selling CDs, online music digital music retailers, emerging mp3
player/juke boxes - cell phone hybrids, and the market for cell phone ring
tones. Additionally the company will operate an audio search engine website.
This website will allow users to efficiently locate a song by singing,
whistling, or humming it. Our search engine will return results based on a user
sample. The site will allow users to then purchase the song online, or buy the
CD as well as various other affiliated services associated with their
results.





Sloud has
been offering music transcription services free of charge to any user during the
time period we developed our technology. We believe this has built name
recognition while at the same time educating the public that a better music
search tool exists. The feedback from users has allowed us to perfect the
technology.





At this
stage we will be marketing our services through various media outlets in order
to receive the necessary support from the public marketplace. While working on
the core transcription and search technology, Sloud has begun to sell
advertising space on the web site to generate revenues.





10
 Table of Contents





Globalization
and advances in technology offer significant opportunities for expanding music
markets, and entertainment markets in general. We intend to increase our
revenues and profitability by capitalizing on these opportunities by
implementing the following three strategies:





·
            Add New
      Products and Services - We intend to develop new products as well
      as product line extensions based on research and development in
      collaboration with our customers and
licensees.





·
            License
      Technology to Third Parties - We intend to leverage our existing
      capacity and scalable technology and business processes to provide a broad
      range of services to music stores, online and conventional, cell phone
      providers, providers of cell-phone related
  services.





·
            Pursue
      Select Partners and Acquisitions - We plan to supplement our
      internal growth through the formation of joint ventures, partners and
      select acquisitions of businesses or technologies that will open the
      access to our markets or advance our technology. We will seek partners and
      acquisitions that enable us to enter new markets as well as provide
      services that we currently do not
offer.








PLAN OF
OPERATION





Our plan
of operations for the next twelve months is to release a initial version of
video monitoring solution based on acoustic fingerprinting. The solution allows
monitoring of user-generated video content for duplicates and copyright
infringement. The application is based on acoustic fingerprinting of audio track
extracted from the video. The actual video content is not
monitored.





An effort
will be extended to market this application to Internet video hosting services.
Based on feedback engineering will update the product with new
features.





Updated
version of UB Composer will be released. UB Composer converts voice or other
sound to music scores and can save them as MIDI. The updated version will
support RIFF audio format and have updated user interface.





The next
version of video monitoring solution will be released. This version is expected
to monitor both audio and video components of the video content (as opposed to
the first version which monitors just the audio component)





A full
version of Music Content Inspector will be released. It will support Windows
Vista, have updated user interface and some limitations will be removed, such as
a limitation on the number of indexed files.





An effort
will be extended to market the video monitoring application to video hosting
companies and bit torrent search operators.





If the
market for our products is accepted, and the Company generates more orders and
revenues, we will require additional employees. Continuous research and
development may also be required based on user needs and requirements. In order
to achieve these goals, we may require additional capital over the next twelve
months. Should additional capital be required, the Company will need to obtain
such financing.





RESULTS
OF OPERATIONS





Substantial
positive and negative fluctuations can occur in our business due to a variety of
factors, including variations in the economy, and the abilities to raise
capital. As a result, net income and revenues in a particular period may not be
representative of full year results and may vary significantly in this early
stage of our operations. In addition results of operations, which may fluctuate
in the future, may be materially affected by many factors of a national and
international nature, including economic and market conditions, currency values,
inflation, the availability of capital, the level of volatility of interest
rates, the valuation of security positions and investments and legislative and
regulatory developments. Our results of operations also may be materially
affected by competitive factors and our ability to attract and retain highly
skilled individuals.





11
 Table of Contents





Revenue
for the six months ended June 30, 2008 was $0. We are a development stage
company. We were organized in October, 2005 and have not generated revenues to
date.





As a
result of the above, the net loss for the six months ended June 30, 2008 was
$81.





Revenue
from Inception October 10, 2005 through June 30, 2008 was $300. The
net loss from Inception October 10, 2005 through June 30, 2008 was
$49,940.





LIQUIDITY
AND CAPITAL RESOURCES





We have a
limited operating history. We are currently operating with insufficient working
capital, which, among other things has constrained our ability to market our
services. As a result, there can be no assurance that we will be successful in
our business model.





CRITICAL
ACCOUNTING POLICIES AND ESTIMATES




Our
financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which require management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, the disclosure of
contingent assets and liabilities, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The critical accounting policies that affect our more significant
estimates and assumptions used in the preparation of our financial statements
are reviewed and any required adjustments are recorded on a monthly
basis.





OFF-BALANCE
SHEET ARRANGEMENTS





We have
not entered into any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources and would be considered material to
investors. Certain officers and directors of the Company have provided personal
guarantees to our various lenders as required for the extension of credit to the
Company.






ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





We do not
hold any derivative instruments and do not engage in any hedging
activities.





ITEM
4.  CONTROLS AND PROCEDURES




(a)
Evaluation of Disclosure Controls and Procedures.Our management,
with the participation of our President, evaluated the effectiveness of our
disclosure controls and procedures as of the end of the period covered by this
report. Based on that evaluation, our President concluded that our disclosure
controls and procedures as of the end of the period covered by this report were
effective such that the information required to be disclosed by us in reports
filed under the Securities Exchange Act of 1934 is (i) recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms and (ii) accumulated and communicated to our management, including
our President, as appropriate to allow timely decisions regarding disclosure. A
controls system cannot provide absolute assurance, however, that the objectives
of the controls system are met, and no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within a company have been detected.





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Management’s
Report on Internal Control over Financial Reporting.Our management is
responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).
Our internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United
States.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance of achieving their control
objectives. Furthermore, smaller reporting companies face additional
limitations.  Smaller reporting companies employ fewer individuals and find
it difficult to properly segregate duties.  Often, one or two individuals
control every aspect of the Company’s operation and are in a position to
override any system of internal control.  Additionally, smaller reporting
companies tend to utilize general accounting software packages that lack a
rigorous set of software controls.





Our
management, with the participation of the Chief Executive Officer, evaluated the
effectiveness of the Company’s internal control over financial reporting as of
June 30, 2008.  In making this assessment, our management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control — Integrated Framework.  Based
on this evaluation, our management, with the participation of the President,
concluded that, as of June 30, 2008, our internal control over financial
reporting was effective.




(b)
 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 Exchange Act, during our most recently completed fiscal
quarter 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





The
Company is not a party to any litigation and, to its knowledge, no action, suit
or proceeding has been threatened against the Company except with threatened
litigation in regard to unpaid debt obligations, and one employee claiming
unlawful termination. No actions regarding the unpaid debt have been initiated
as of this date.   The Company also believes that the wrongful
termination suit has no merit.  There are no material proceedings to
which any director, officer or affiliate of the Company or security holder is a
party adverse to the Company or has a material interest adverse to the
Company.





ITEM 1A
- Risk Factors





We are
subject to various risks that may materially harm our business, financial
condition and results of operations. You should carefully consider the risks and
uncertainties described below and the other information in this filing before
deciding to purchase our common stock. If any of these risks or uncertainties
actually occurs, our business, financial condition or operating results could be
materially harmed. In that case, the trading price of our common stock could
decline and you could lose all or part of your investment.





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We
Have A Limited Operating History And Have Losses Which We Expect To Continue In
The Future. As A Result, We May Have To Suspend Or Cease
Operations.





We were
incorporated in October, 2005. Thus, we have little operating history upon which
an evaluation of our future success or failure can be made. We have generated
minimal revenue since our inception. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon our ability to procure
new business and generate revenues.





Based
upon current plans, we expect to incur operating losses in future periods. This
will happen because our minimum operating expenses continue to exceed our
projected revenues. Our failure to generate sufficient revenues in the future
may cause us to suspend or cease operations.




The
Timing And Amount Of Capital Requirements Are Not Entirely Within Our Control
And Cannot Accurately Be Predicted And As A Result, We May Not Be Able To Raise
Capital In Time To Satisfy Our Needs.





If we do
not increase our revenue significantly we may need to procure additional
financing. If capital is required, we may require financing sooner than
anticipated. We have no commitments for financing, and we cannot be sure that
any financing would be available in a timely manner, on terms acceptable to us,
or at all. Further, any equity financing could reduce ownership of existing
stockholders and any borrowed money could involve restrictions on future capital
raising activities and other financial and operational matters. If we were
unable to obtain financing as needed, we could be bankrupt.





We
Compete With Numerous Larger Competitors, Many Of Which Are Better Financed And
Have A Stronger Presence In The Industry Than Ourselves.





We were
established in October, 2005. There can be no assurance that we will ever
achieve significant revenues or any profitability. The revenue and income
potential of our proposed business and operations is unproven as the lack of
operating history makes it difficult to evaluate the future prospects of our
business. As many
of these firms have significantly stronger name recognition than us, they are in
a position to quickly attract clients which are in need of products and services
thus adversely impacting our potential pool of clients. Our sales and marketing
structure is not proprietary and it would not be difficult for a company to
offer similar services. Further, entry into the marketplace by new competitors
is relatively easy especially considering their existing presences and their
greater resources for financing, advertising and marketing.





Our
Common Shares Are Subject To The "Penny Stock" Rules Of The SEC And The
Trading Market In Our Securities is limited, which makes transactions in our
stock cumbersome and may reduce the value of an investment in our
stock.





The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:





that a
broker or dealer approve a person's account for transactions in penny stocks;
and the
broker or dealer receives from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to be
purchased.





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In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:





obtain
financial information and investment experience objectives of the person; and make a
reasonable determination that the transactions in penny stocks are suitable for
that person and the person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in penny
stocks.





The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:





·
            sets
      forth the basis on which the broker or dealer made the suitability
      determination; and


·
            that
      the broker or dealer received a signed, written agreement from the
      investor prior to the transaction.





Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our Common shares and cause a decline in the market value of our
stock.





Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.





ITEM
2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS SECURITIES





On
November 22, 2005, the Company issued 2,000,000 shares of common stock to
certain investors, sold pursuant to a private placement, 2,000,000 shares of
common stock at $0.025 per share, pursuant to the private placement. There
were no other changes in securities and small business issuer purchase of equity
securities during the period ended June 30, 2008.





ITEM
3.  DEFAULTS UPON SENIOR SECURITIES





There
were no defaults upon senior securities during the period ended June 30,
2008.





ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS





There
were no matters submitted to the vote of securities holders during the period
ended June 30, 2008.





ITEM
5.  OTHER INFORMATION





None.





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ITEM
6.  EXHIBITS






31.1
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act31.2
            Certification
      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act.32.1
            Certification
      of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.32.2
            Certification
      of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.








SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934 the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




Date:
      July 30, 2008
            
            By: /s/
      Gene SokolovGene SokolovChairman,
      President Chief Executive Officer (Principle Executive Officer), Chief
      Financial Officer






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