U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





(Mark
One)





x ANNUAL
REPORT UNDER SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934





For the
fiscal year ended December 31, 2008





o TRANSITION
REPORT UNDER SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934





For the
transition period from ______________ to ______________





Commission
File Number 000-52087


_______________________________________________





SCOUT
ACQUISITION, INC.


(Exact
name of registrant as specified in its charter)


______________________________________________





Delaware
            26-0133324(State
      or other jurisdiction of
            (I.R.S.
      Employerincorporation
      or organization)
            Identification
      No.)




c/o
Sands Brothers Venture Capital LLC, 90 Park Avenue, 31st
Floor, New York, New York 10016


(Address
of principal executive offices)





(212)
953-4983


(Registrant’s
telephone number, including area code)


_____________________________________________





Securities
registered under Section 12(b) of the Exchange Act:


None.




Securities
registered under Section 12(g) of the Exchange Act:





Common
Stock, $0.0001 par value per share


(Title of
Class)




Check
whether the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.  Yes o  No
x




Check
whether the registrant is required to file reports pursuant to Section 13 or
15(d) of the Exchange Act.Yes x  No
o




Check
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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




Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K (§229.405 of this chapter) contained
herein, and no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
x




Check
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company.  See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):




Large
      Accelerated Filer
            o
            Accelerated
      Filer
            oNon-accelerated
      Filer
            o
            Smaller
      Reporting Company
            x(Do
      not check if a smaller reporting company.)





Check
whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange
Act).  Yes x   No
o





As of
December 31, 2008, there were no non-affiliate holders of common stock of the
Company.




APPLICABLE
ONLY TO CORPORATE REGISTRANTS





As of
March 31, 2009, there were 1,500,000 shares of common stock, par value $.0001,
outstanding.














FORWARD-LOOKING
STATEMENTS





Certain
statements made in this Annual Report on Form 10-K are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) regarding the plans and objectives of management for future operations.
Such statements involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of Scout Acquisition,
Inc. (the “Company”) to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. The forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties. The Company's plans
and objectives are based, in part, on assumptions involving the continued
expansion of business. Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance the forward-looking
statements included in this Report will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.




- 2
-




PART I





Item 1. Description of Business.





Scout
Acquisition, Inc. (“we”, “us”, “our”, or the “Company”) was incorporated in the
State of Delaware on January 3, 2006 and maintains its principal executive
offices at c/o Sands Brothers Venture Capital LLC, 90 Park Avenue, 31st Floor,
New York, New York 10016. Since inception, the Company has been engaged in
organizational efforts and obtaining initial financing. The Company was formed
as a vehicle to pursue a business combination.  The Company filed a
registration statement on Form 10-SB with the U.S. Securities and Exchange
Commission (the “SEC”) on June 30, 2006, and since its effectiveness, the
Company has begun efforts to identify a possible business
combination.  However, the Company has not entered into a letter of
intent or any definitive agreement concerning any target business. The business
purpose of the Company is to seek the acquisition of, or merger with, an
existing company.





The
Company, based on proposed business activities, is a “blank check” company. The
SEC defines those companies as "any development stage company that is issuing a
penny stock, within the meaning of Section 3(a)(51) of the Exchange Act, and
that has no specific business plan or purpose, or has indicated that its
business plan is to merge with an unidentified company or companies." Many
states have enacted statutes, rules and regulations limiting the sale of
securities of "blank check" companies in their respective jurisdictions. The
Company is also a “shell company,” defined in Rule 12b-2 under the Exchange Act
as a company with no or nominal assets (other than cash) and no or nominal
operations. Management does not intend to undertake any efforts to cause a
market to develop in our securities, either debt or equity, until we have
successfully concluded a business combination. The Company intends to comply
with the periodic reporting requirements of the Exchange Act for so long as we
are subject to those requirements.





The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. The Company’s principal business objective
for the next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with an operating business. The Company will not
restrict its potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of
business.





The analysis of new business
opportunities is undertaken by or under the supervision of the officers and
directors of the Company.  As of this date the Company has not entered
into any definitive agreement with any party.  The Company has
unrestricted flexibility in seeking, analyzing and participating in potential
business opportunities. In its efforts to analyze potential acquisition targets,
the Company will consider the following kinds of factors:





(a)   
Potential for growth, indicated by new technology, anticipated market expansion
or new products;




(b)   
Competitive position as compared to other firms of similar size and experience
within the industry segment as well as within the industry as a
whole;




(c)   
Strength and diversity of management, either in place or scheduled for
recruitment;




(d)   
Capital requirements and anticipated availability of required funds, to be
provided by the Company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements or from other
sources;




(e)   
The cost of participation by the Company as compared to the perceived tangible
and intangible values and potentials;





- 3
-





(f)   
The extent to which the business opportunity can be advanced;




(g)   
The accessibility of required management expertise, personnel, raw materials,
services, professional assistance and other required items; and




(h)   
Other relevant factors.





In
applying the foregoing criteria, no one of which will be controlling, management
will attempt to analyze all factors and circumstances and make a determination
based upon reasonable investigative measures and available data. Potentially
available business opportunities may occur in many different industries, and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Due to the Company's limited capital available for investigation,
the Company may not discover or adequately evaluate adverse facts about the
opportunity to be acquired.





COMPETITION





The
Company faces vast competition from other shell companies with the same
objectives.  The Company is in a highly competitive market for a small
number of business opportunities which could reduce the likelihood of
consummating a successful business combination.  A large number of
established and well-financed entities, including small public companies and
venture capital firms, are active in mergers and acquisitions of companies that
may be desirable target candidates for us.  Nearly all these entities
have significantly greater financial resources, technical expertise and
managerial capabilities than we do; consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination.  These competitive factors may
reduce the likelihood of our identifying and consummating a successful business
combination.





FORM OF
ACQUISITION





The
manner in which the Company participates in an opportunity will depend upon the
nature of the opportunity, the respective needs and desires of the Company and
the promoters of the opportunity, and the relative negotiating strength of the
Company and such promoters.





It is
likely that the Company will acquire its participation in a business opportunity
through the issuance of common stock or other securities of the Company.
Although the terms of any such transaction cannot be predicted, it should be
noted that in certain circumstances the criteria for determining whether or not
an acquisition is a so-called "tax free" reorganization under Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") depends upon
whether the owners of the acquired business own 80% or more of the voting stock
of the surviving entity. If a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions provided under the
Code, all prior stockholders would in such circumstances retain 20% or less of
the total issued and outstanding shares of the surviving entity. Under other
circumstances, depending upon the relative negotiating strength of the parties,
prior stockholders may retain substantially less than 20% of the total issued
and outstanding shares of the surviving entity. This could result in substantial
additional dilution to the equity of those who were stockholders of the Company
prior to such reorganization.





The
present stockholders of the Company will likely not have control of a majority
of the voting securities of the Company following a reorganization transaction.
As part of such a transaction, all or a majority of the Company's directors may
resign and one or more new directors may be appointed without any vote by
stockholders.





In the
case of an acquisition, the transaction may be accomplished upon the sole
determination of management without any vote or approval by stockholders. In the
case of a statutory merger or consolidation





- 4
-





directly
involving the Company, it will likely be necessary to call a stockholders'
meeting and obtain the approval of the holders of a majority of the outstanding
securities. The necessity to obtain such stockholder approval may result in
delay and additional expense in the consummation of any proposed transaction and
will also give rise to certain appraisal rights to dissenting stockholders. Most
likely, management will seek to structure any such transaction so as not to
require stockholder approval.





It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial cost for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation might not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in the loss
to the Registrant of the related costs incurred.





We
presently have no employees apart from our management. Our officers and
directors are engaged in outside business activities and anticipate that they
will devote to our business very limited time until the acquisition of a
successful business opportunity has been identified. We expect no significant
changes in the number of our employees other than such changes, if any, incident
to a business combination.





Item 1A. Risk Factors





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.





Item
1B.  Unresolved Staff Comments





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.





Item
2. Description of Property.





The
Company neither rents nor owns any properties. The Company utilizes the office
space and equipment of its management at no cost. Management estimates such
amounts to be immaterial.  The Company currently has no policy with
respect to investments or interests in real estate, real estate mortgages or
securities of, or interests in, persons primarily engaged in real estate
activities.





Item
3. Legal Proceedings.





To the best knowledge of our officers
and directors, the Company is not a party to any legal proceeding or
litigation.








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





None.






- 5
-





PART
II





Item
5. Market for Common Equity, Related Stockholder Matters and Small Business
Issuer Purchases of Equity Securities.




Common
Stock





Our
Certificate of Incorporation authorizes the issuance of up to 75,000,000 shares
of common stock, par value $.0001 per share (the “Common Stock”).  The
Common Stock is not listed on a publicly-traded market.  As of March
24, 2009, there were 4 holders of record of the Common Stock.





Preferred
Stock





Our
Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
of preferred stock, par value $.0001 per share (the “Preferred
Stock”).  The Company has not yet issued any of its preferred
stock.




Dividend
Policy





The
Company has not declared or paid any cash dividends on its common stock and does
not intend to declare or pay any cash dividend in the foreseeable future. The
payment of dividends, if any, is within the discretion of the Board of Directors
and will depend on the Company’s earnings, if any, its capital requirements and
financial condition and such other factors as the Board of Directors may
consider.





Securities
Authorized for Issuance under Equity Compensation Plans





The
Company does not have any equity compensation plans or any individual
compensation arrangements with respect to its common stock or preferred stock.
The issuance of any of our common or preferred stock is within the discretion of
our Board of Directors, which has the power to issue any or all of our
authorized but unissued shares without stockholder approval.





Recent
Sales of Unregistered Securities





The Company has not issued any
unregistered securities during the fiscal quarter ended December 31,
2008.





On
January 3, 2006, the Registrant sold an aggregate of 1,500,000 shares of Common
Stock to Sands Brothers Venture Capital LLC (“SBV”), Sands Brothers Venture
Capital II LLC (“SBV-II”), Sands Brothers Venture Capital III LLC (“SBV-III”),
and Sands Brothers Venture Capital IV LLC (“SBV-IV”) for an aggregate investment
of $25,000.  The Registrant sold these shares of Common Stock under
the exemption from registration provided by Section 4(2) of the Securities
Act.





No
securities have been issued for services. Neither the Registrant nor any person
acting on its behalf offered or sold the securities by means of any form of
general solicitation or general advertising. No services were performed by any
purchaser as consideration for the shares issued.





Issuer
Purchases of Equity Securities





None.





Item
6.  Selected Financial Data





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.











- 6
-





Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operation





The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. Our principal business objective for the
next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict our potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.





The Company currently does not engage
in any business activities that provide cash flow.  During the next
twelve months we anticipate incurring costs related to:




(i)   
filing Exchange Act reports, and


(ii)   investigating,
analyzing and consummating an acquisition.





We believe we will be able to meet
these costs through use of funds in our treasury, through deferral of fees by
certain service providers and additional amounts, as necessary, to be loaned to
or invested in us by our stockholders, management or other
investors.





The Company may consider acquiring a
business which has recently commenced operations, is a developing company in
need of additional funds for expansion into new products or markets, is seeking
to develop a new product or service, or is an established business which may be
experiencing financial or operating difficulties and is in need of additional
capital. In the alternative, a business combination may involve the acquisition
of, or merger with, a company which does not need substantial additional capital
but which desires to establish a public trading market for its shares while
avoiding, among other things, the time delays, significant expense, and loss of
voting control which may occur in a public offering.





Any target business that is selected
may be a financially unstable company or an entity in its early stages of
development or growth, including entities without established records of sales
or earnings. In that event, we will be subject to numerous risks inherent in the
business and operations of financially unstable and early stage or potential
emerging growth companies. In addition, we may effect a business combination
with an entity in an industry characterized by a high level of risk, and,
although our management will endeavor to evaluate the risks inherent in a
particular target business, there can be no assurance that we will properly
ascertain or assess all significant risks.





The Company anticipates that the
selection of a business combination will be complex and extremely risky. Because
of general economic conditions, rapid technological advances being made in some
industries and shortages of available capital, our management believes that
there are numerous firms seeking even the limited additional capital which we
will have and/or the perceived benefits of becoming a publicly traded
corporation. Such perceived benefits of becoming a publicly traded corporation
include, among other things, facilitating or improving the terms on which
additional equity financing may be obtained, providing liquidity for the
principals of and investors in a business, creating a means for providing
incentive stock options or similar benefits to key employees, and offering
greater flexibility in structuring acquisitions, joint ventures and the like
through the issuance of stock. Potentially available business combinations may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.





Liquidity
and Capital Resources





As of December 31, 2008, the Company
had assets equal to $5,438, comprised exclusively of cash and prepaid
assets.  This compares with the Company’s assets equal to $8,954, as
of December 31, 2007.  The Company’s current liabilities as of
December 31, 2008 totaled $3,861, comprised exclusively of accounts payable and
accrued expenses.  This compares with the Company’s current
liabilities of $7,000 as of December





- 7
-





31, 2007,
comprised exclusively of accounts payable and accrued expenses.  The
Company can provide no assurance that it can continue to satisfy its cash
requirements for at least the next twelve months.





The following is a summary of the
Company's cash flows provided by (used in) operating, investing, and financing
activities for the years ended December 31, 2008 and December 31, 2007 and for
the cumulative period from January 3, 2006 (Inception) to December 31,
2008.





The
      Year
              Ended
              December
      31, 2008
            
            
            The
      Year
              Ended
              December
      31, 2007
            
            
            For
      the Cumulative
              Period
      from
              January
      3, 2006 (Inception) to
              December
      31, 2008Net
      Cash (Used in) Operating Activities
            
            $
            (39,766
            )
            
            $
            (28,817
            )
            
            $
            (112,062
            )Net
      Cash (Used in) Investing Activities
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Cash Provided by Financing Activities
            
            $
            35,000
            
            
            $
            35,000
            
            
            $
            113,750Net
      Increase (Decrease) in Cash and Cash Equivalents
            
            $
            (4,766
            )
            
            $
            6,183
            
            
            $
            1,688




The
Company has nominal assets and has generated no revenues since inception. The
Company is also dependent upon the receipt of capital investment or other
financing to fund its ongoing operations and to execute its business plan of
seeking a combination with a private operating company. In addition, the Company
is dependent upon certain related parties to provide continued funding and
capital resources. If continued funding and capital resources are unavailable at
reasonable terms, the Company may not be able to implement its plan of
operations.





Results
of Operations





The
Company has not conducted any active operations since inception, except for its
efforts to locate suitable acquisition candidates. No revenue has been
generated by the Company from January 3, 2006 (Inception) to December 31,
2008.  It is unlikely the Company will have any revenues unless it is
able to effect an acquisition or merger with an operating company, of which
there can be no assurance.  It is management's assertion that these
circumstances may hinder the Company's ability to continue as a going
concern.  The Company’s plan of operation for the next twelve months shall
be to continue its efforts to locate suitable acquisition
candidates.





For the
fiscal year ended December 31, 2008, the Company had a net loss of $41,323,
consisting of legal, accounting, audit, and other professional service fees
incurred in relation to the filing of the Company’s Quarterly Report on Form
10-Q for the period ended September 30, 2008 in November of 2008, Quarterly
Report on Form 10-Q for the period ended June 30, 2008 in August of 2008,
Quarterly Report on Form 10-Q for the period ended March 31, 2008 in May of 2008
and Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007, in
March of 2008.





For the
year ended December 31, 2007, the Company had a net loss of $41,276 comprised
exclusively of legal, accounting, audit, and other professional service fees
incurred in relation to the filing of the Company’s Quarterly Report on Form
10-Q for the period ended September 30, 2007 in November of 2008, Quarterly
Report on Form 10-Q for the period ended June 30, 2007 in August of 2007,
Quarterly Report on Form 10-Q for the period ended March 31, 2007 in May of 2007
and Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, in
April of 2007.






- 8
-





For the
period from January 3, 2006 (Inception) to December 31, 2008, the Company had a
net loss of $121,953
comprised exclusively of legal, accounting, audit, and other professional
service fees incurred in relation to the formation of the Company, the filing of
the Company’s Registration Statement on Form 10 in June of 2006 and Quarterly
Reports on Form 10-QSB, Form 10-Q and Form 10-K.





Off-Balance
Sheet Arrangements





The Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company’s financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to
investors.





Contractual
Obligations





As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.





Item
7A.  Quantitative and Qualitative Disclosures about Market
Risk.





As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.





Item 8.  FinancialStatements and Supplementary Data.





Audited financial statements begin on
the following page of this report.





- 9
-




SCOUT ACQUISITION,
INC.


A
Development Stage Company


DECEMBER
31, 2008




-
TABLE OF CONTENTS -




Page(s)Financial
      Statements:Report
      of Independent Registered Public Accounting Firm
            F -
      2Balance
      Sheets as of December 31, 2008 and 2007
            F -
      3Statements
      of Operations for the Years Ended December 31, 2008 and 2007, and for the
      Period from January 3, 2006 (Inception) to December 31,
    2008
            F -
      4Statement
      of Stockholders’ Deficiency from January 3, 2006 (Inception) to December
      31, 2008
            F -
      5Statements
      of Cash Flows for the Years Ended December 31, 2008 and 2007, and for the
      Period from January 3, 2006 (Inception) to December 31,
    2008
            F -
      6Notes
      to Financial Statements
            F -
      7 – F - 11







F-1




Report
of Independent Registered Public Accounting Firm






To the
Board of Directors and Stockholders of


Scout
Acquisition, Inc.


New York,
NY






We have
audited the accompanying balance sheets of Scout Acquisition, Inc. (A
Development Stage Company) (the “Company”) as of December 31, 2008 and 2007, and
the related statements of operations, stockholders’ deficiency, and cash flows
for the years then ended, and the cumulative period January 3, 2006 (inception)
through December 31, 2008. The Company’s management is responsible for these
financial statements. Our responsibility is to express an opinion on these
financial statements based on our audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Scout Acquisition, Inc. as of
December 31, 2008 and 2007, and the results of its operations and its cash flows
for the years then ended and  the cumulative period January 3, 2006
(inception) through December 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.




The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company is in the development stage and has suffered recurring
losses. This raises substantial doubt about its ability to continue as a going
concern. Management’s plans in regards to these matters are also described in
Note 1. The accompanying financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


/s/
      Raich Ende Malter & Co. LLPRaich
      Ende Malter & Co. LLPNew
      York, New YorkMarch
      30, 2009






F-2




SCOUT ACQUISITION,
INC.


A
Development Stage Company


BALANCE
SHEETS


ASSETSDecember
      31,
                2008
            
            
            December
      31,
                2007CURRENT
      ASSETS:Cash
            
            $
            1,688
            
            
            $
            6,454Prepaid
      expenses
            
            
            3,750
            
            
            
            2,500TOTAL
      ASSETS
            
            $
            5,438
            
            
            $
            8,954LIABILITIES
      AND STOCKHOLDERS’ DEFICIENCYCURRENT
      LIABILITIES:Accounts
      payable and accrued expenses
            
            $
            3,861
            
            
            $
            7,000TOTAL
      CURRENT LIABILITIES
            
            
            3,861
            
            
            
            7,000LONG
      TERM LIABILITIES:Loans
      payable to stockholders
            
            
            98,530
            
            
            
            57,584TOTAL
      LIABILITIES
            
            
            102,391
            
            
            
            64,584STOCKHOLDERS’
      DEFICIENCY:Preferred
      stock, $.0001 par value; 10,000,000 shares authorized; none issued and
      outstanding
            
            
            —
            
            
            
            —Common
      stock, $.0001 par value; 75,000,000 shares authorized; 1,500,000 shares
      issued and outstanding
            
            
            150
            
            
            
            150Additional
      paid-in capital
            
            
            24,850
            
            
            
            24,850Deficit
      accumulated during the development stage
            
            
            (121,953
            )
            
            
            (80,630
            )TOTAL
      STOCKHOLDERS’ DEFICIENCY
            
            
            (96,953
            )
            
            
            (55,630
            )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
            
            $
            5,438
            
            
            $
            8,954






SEE
ACCOMPANYING NOTES TO FINANCIAL STATEMENTS




F-3






SCOUT ACQUISITION,
INC.


A
Development Stage Company


STATEMENTS OF
OPERATIONS




For
      the Year Ended
              December
      31,
            
            
            For
      the Year Ended
              December
      31,
            
            
            For
      the Period from January 3, 2006 (Inception) to December
      31,2008
            
            
            2007
            
            
            2008REVENUE
            
            $
            —
            
            
            $
            —
            
            
            $
            —General
      and administrative expenses
            
            
            35,377
            
            
            
            38,067
            
            
            
            112,173LOSS
      BEFORE OTHER EXPENSES
            
            
            (35,377
            )
            
            
            (38,067
            )
            
            
            (112,173
            )OTHER
      EXPENSES:Interest
      expense
            
            
            5,946
            
            
            
            3,209
            
            
            
            9,780NET
      (LOSS)
            
            $
            (41,323
            )
            
            $
            (41,276
            )
            
            $
            (121,953
            )BASIC
      AND DILUTED NET (LOSS) PER SHARE
            
            $
            (.03
            )
            
            $
            (.03
            )WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
            
            
            1,500,000
            
            
            
            1,500,000






SEE
ACCOMPANYING NOTES TO FINANCIAL STATEMENTS




F-4




SCOUT ACQUISITION,
INC.


A
Development Stage Company


STATEMENT OF STOCKHOLDERS’
DEFICIENCY




Preferred
      Stock
            
            
            Common
      Stock
            
            
            Additional
              Paid-in
            
            
            (Deficit)
              Accumulated
              During
      the Development
            
            
            Stockholders’Shares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Stage
            
            
            DeficiencyBALANCE,
      JANUARY 3, 2006
            
            
            —
            
            
            $
            —
            
            
            
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —Issuance
      of common stock
            
            
            —
            
            
            
            —
            
            
            
            1,500,000
            
            
            
            150
            
            
            
            24,850
            
            
            
            —
            
            
            
            25,000Net
      (loss)
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (39,354
            )
            
            
            (39,354
            )BALANCE,
      DECEMBER 31, 2006
            
            
            —
            
            
            
            —
            
            
            
            1,500,000
            
            
            
            150
            
            
            
            24,850
            
            
            
            (39,354
            )
            
            
            (14,354
            )Net
      (loss)
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (41,276
            )
            
            
            (41,276
            )BALANCE,
      DECEMBER 31, 2007
            
            
            —
            
            
            
            —
            
            
            
            1,500,000
            
            
            
            150
            
            
            
            24,850
            
            
            
            (80,630
            )
            
            
            (55,630
            )Net
      (loss)
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (41,323
            )
            
            
            (41,323
            )BALANCE,
      DECEMBER 31, 2008
            
            
            —
            
            
            $
            —
            
            
            
            1,500,000
            
            
            $
            150
            
            
            $
            24,850
            
            
            $
            (121,953
            )
            
            $
            (96,953
            )






SEE
ACCOMPANYING NOTES TO FINANCIAL STATEMENTS




F-5






SCOUT ACQUISITION,
INC.


A
Development Stage Company


STATEMENTS OF CASH
FLOWS




For
      the Year Ended December 31, 2008
            
            
            For
      the Year Ended December 31, 2007
            
            
            For
      the Period from January 3, 2006 (Inception) to December 31,
      2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss)
            
            $
            (41,323
            )
            
            $
            (41,276
            )
            
            $
            (121,953
            )Adjustments
      to reconcile net (loss) to net cash used inoperating
      activities:Accrued
      interest payable to stockholders
            
            
            5,946
            
            
            
            3,209
            
            
            
            9,780Changes
      in operating assets and liabilities:Decrease
      (increase) in prepaid expenses
            
            
            (1,250
            )
            
            
            3,750
            
            
            
            (3,750
            )(Decrease)  increase
      in accounts payableand
      accrued expenses
            
            
            (3,139
            )
            
            
            5,500
            
            
            
            3,861Net
      cash used in operating activities
            
            
            (39,766
            )
            
            
            (28,817
            )
            
            
            (112,062
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of common stock
            
            
            —
            
            
            
            —
            
            
            
            25,000Proceeds
      from stockholder loans
            
            
            35,000
            
            
            
            35,000
            
            
            
            88,750Net
      cash provided by financing activities
            
            
            35,000
            
            
            
            35,000
            
            
            
            113,750NET
      (DECREASE) INCREASE IN CASH
            
            
            (4,766
            )
            
            
            6,183
            
            
            
            1,688Cash,
      beginning of period
            
            
            6,454
            
            
            
            271
            
            
            
            —CASH,
      END OF PERIOD
            
            $
            1,688
            
            
            $
            6,454
            
            
            $
            1,688






SEE
ACCOMPANYING NOTES TO FINANCIAL STATEMENTS




F-6




SCOUT
ACQUISITION, INC.


A
Development Stage Company


NOTES TO FINANCIAL
STATEMENTS


December
31, 2008





NOTE
      1 -
              ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:





(a)
            Organization
      and Business:





Scout
Acquisition, Inc. (the Company) was incorporated in the state of Delaware on
January 3, 2006 for the purpose of raising capital that is intended to be
used in connection with its business plans which may include a possible merger,
acquisition or other business combination with an operating
business.




The
Company is currently in the development stage.  All activities of the
Company to date relate to its organization, initial funding and share
issuances.





(b)
            Basis
      of Presentation:





The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern, which contemplates the recoverability of assets and
the satisfaction of liabilities in the normal course of business.  The
Company has had no revenue and has incurred accumulated net losses from January
3, 2006 (inception) through December 31, 2008 of $121,953.  In
addition, the Company’s development activities since inception have been
financially sustained through stockholder loans.  The ability of the
company to continue as a going concern is dependent upon its ability to find a
suitable acquisition/merger candidate, raise additional capital from the sale of
common stock, receive additional loans from its shareholders and, ultimately,
the achievement of significant operating revenues.  The accompanying
financial statements do not include any adjustments that might be required
should the Company be unable to recover the value of its assets or satisfy its
liabilities.  Management plans to issue more shares of common stock in
order to raise money and to continue to borrow from the Company’s existing
stockholders until a business combination is effective.





(c)
            Use
      of Estimates:





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the balance sheet and
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.





(d)
            Cash
      Equivalents:





For
purposes of the statement of cash flows, the Company considers highly liquid
financial instruments purchased with a maturity of three months or less to be
cash equivalents.  There are no cash equivalents at the balance sheet
date.






F-7




SCOUT ACQUISITION,
INC.


A
Development Stage Company


NOTES TO FINANCIAL
STATEMENTS


December
31, 2008





NOTE
      1 -
            ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES


(Continued):





(e)
            Income
      Taxes:





On
January 1, 2007 the Company adopted Financial Accounting Standards Board (FASB)
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an
interpretation of FASB Statement No. 109” (FIN 48).  The Company’s
practice is to recognize interest and/or penalties related to income tax matters
in income tax expense.  Since the adoption of FIN 48 at January 1,
2007, the Company has had no uncertain tax positions.  The Company
currently has no federal or state tax examinations in progress nor has it had
any federal or state tax examinations since its inception.  In the
normal course of business the Company is subject to examination by taxing
authorities.




The
Company utilizes the liability method of accounting for income
taxes.  Under the liability method deferred tax assets and liabilities
are determined based on the differences between financial reporting basis and
the tax basis of the assets and liabilities and are measured using enacted tax
rates and laws that will be in effect, when the differences are expected to
reverse.  An allowance against deferred tax assets is recognized, when
it is more likely than not, that such tax benefits will not be
realized.





(f)
            Loss
      per Common Share:





Basic
loss per share is calculated using the weighted-average number of common shares
outstanding during each reporting period.  Diluted loss per share
includes potentially dilutive securities such as outstanding options and
warrants, using various methods such as the treasury stock or modified treasury
stock method in the determination of dilutive shares outstanding during each
reporting period.  The Company does not have any potentially dilutive
instruments.





(g)
            Fair
      Value of Financial Instruments:





The
carrying value of current assets and liabilities approximates fair value due to
the short period of time to maturity.  The stockholder loans
approximate fair value based on market rates available to the Company for
financing with similar terms.




On
January 1, 2008 the Company adopted Statement of Financial Accounting Standards
No. 157, “Fair Value Measurements” (“FAS 157”).  There was no impact
on the Company’s financial
position, results of operations, or cash flows at December 31, 2008 and for the
year then ended as a result of the adoption of FAS 157.




On
January 1, 2008 the Company adopted Statement of Financial Accounting Standards
No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”
(“FAS 159”).  There was no impact on the Company’s financial position,
results of operations, or cash flows at December 31, 2008 and for the year then
ended as a result of the adoption of FAS 159.






F-8




SCOUT
ACQUISITION, INC.


A
Development Stage Company


NOTES TO FINANCIAL
STATEMENTS


December
31, 2008





NOTE
      1 -
            ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES


(Continued):





(h)
            Reclassifications:





Certain
amounts for 2007 have been reclassified to conform with the current year’s
presentation.  Such reclassifications had no impact on previously
reported net income.





NOTE
      2 -
            LOANS
      PAYABLE TO STOCKHOLDERS:





On
January 3, 2006 and July 1, 2006, the Company entered into loan agreements with
certain of its stockholders in the aggregate amount of $12,500 and $6,250,
respectively.  These loans accrue interest at 4.00%.  These
loans and all accrued interest shall be repaid in full upon the completion of a
merger, and if not, the loans, including all accrued interest, will mature on
December 31, 2010.




On
February 22, 2007, the Company entered into loan agreements with certain of its
stockholders in the aggregate amount of $35,000.  These loans accrue
interest at 8.25%.  These loans and all accrued interest were to be
repaid in full upon the completion of a merger, and if not, the loans, including
all accrued interest, were to mature on February 22, 2009.  On March
27, 2009, the Company entered into an Amended and Restated Promissory Note for
each of these loan agreements extending the maturity dates to December 31,
2010.




On March
13, 2008, the Company entered into loan agreements with certain of its
stockholders in the aggregate amount of $35,000.  These loans accrue
interest at 8.25%.  These loans and all accrued interest shall be
repaid in full upon the completion of a merger, and if not, the loans, including
all accrued interest, will mature on March 13, 2010.




As of
December 31, 2008 and 2007, $9,780 and $3,834, respectively, of accrued
interest, is included in loans payable to stockholders.




See Note
6




NOTE
      3 -
            CAPITAL
      STOCK:





The total
number of shares of capital stock which the Company shall have authority to
issue is eighty five million (85,000,000). These shares shall be divided into
two classes with 75,000,000 shares designated as common stock at $.0001 par
value (the “Common Stock”) and 10,000,000 shares designated as preferred stock
at $.0001 par value (the “Preferred Stock”).




The
Preferred stock of the Company shall be issued by the Board of Directors of the
Company in one or more classes or one or more series within any class and such
classes or series shall have such voting powers, full or limited, or no voting
powers, and such designations, preferences, limitations or restrictions as the
Board of Directors of the Company may determine, from time to time.




Holders
of shares of Common stock shall be entitled to cast one vote for each share held
at all stockholders' meetings for all purposes, including the election of
directors. The Common Stock does not have cumulative voting rights.






F-9




SCOUT ACQUISITION,
INC.


A
Development Stage Company


NOTES TO FINANCIAL
STATEMENTS


December
31, 2008





NOTE
      3 -
            CAPITAL
      STOCK(Continued):





On
January 3, 2006, the Company issued 1,500,000 shares of common stock at a
purchase price of $0.01667 per share, for an aggregate purchase price of
$25,000.





NOTE
      4 -
            INCOME
      TAXES:





As of
December 31, 2008, the Company has net operating loss carryforwards of
approximately $120,000 to reduce future federal and state taxable income through
2028.




The
provision for (benefit from) income taxes consists of the following for the
Period January 3, 2006 (inception) to December 31, 2008.




For
      The Year Ended December 31, 2008
            
            
            For
      The Year Ended December 31, 2007
            
            
            For
      The Cumulative Period from January 3 2006 (Inception) to December 31,
      2008Current:Federal
            
            $
            —
            
            
            $
            —
            
            
            $
            —Deferred
      tax asset:Federal
            
            
            15,400
            
            
            
            9,700
            
            
            
            31,000Valuation
      allowance
            
            
            (15,400
            )
            
            
            (9,700
            )
            
            
            (31,000
            )$
            —
            
            
            $
            —
            
            
            $
            —




The
difference between the tax provision at the statutory federal income tax rate
and the tax provision attributable to loss before income taxes is as
follows:




For
      The Year Ended December 31, 2008
            
            
            For
      The Year Ended December 31, 2007
            
            
            For
      The Cumulative Period from January 3, 2006 (Inception) to December 31,
      2008Statutory
      federal income tax rate
            
            
            (34
            )%
            
            
            (34
            )%
            
            
            (34
            )%Surtax
      exemption
            
            
            (3
            )%
            
            
            10
            %
            
            
            9
            %Valuation
      allowance
            
            
            37
            %
            
            
            24
            %
            
            
            25
            %Income
      tax rate
            
            
            0
            %
            
            
            0
            %
            
            
            0
            %





NOTE
      5 -
            RECENT
      ACCOUNTING PRONOUNCEMENTS:





In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 141 (revised
2007), Business Combinations, which replaces SFAS No 141. The statement retains
the purchase method of accounting for






F-10




SCOUT ACQUISITION,
INC.


A
Development Stage Company


NOTES TO FINANCIAL
STATEMENTS


December
31, 2008





NOTE
      5 -
            RECENT
      ACCOUNTING PRONOUNCEMENTS(Continued):





acquisitions,
but requires a number of changes, including changes in the way assets and
liabilities are recognized in the purchase accounting. It also changes the
recognition of assets acquired and liabilities assumed arising from
contingencies, requires the capitalization of in- process
research and development at fair value, and requires the expensing of
acquisition- related
costs as incurred. SFAS No. 141R is effective for business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. The
adoption of SFAS No. 141(R) before December 15, 2008 is
prohibited.  The Company does not expect the adoption of SFAS No.
141(R) to have a material effect on its financial statements.




In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB 51, which changes the
accounting and reporting for minority interests. Minority interests will be
recharacterized as noncontrolling interests and will be reported as a component
of equity separate from the parent’s equity, and purchases or sales of equity
interests that do not result in a change in control will be accounted for as
equity transactions. In addition, net income attributable to the noncontrolling
interest will be included in consolidated net income on the face of the income
statement and, upon a loss of control, the interest sold, as well as any
interest retained, will be recorded at fair value with any gain or loss
recognized in earnings. SFAS No. 160 is effective for annual periods
beginning after December 15, 2008. We are currently assessing the potential
impact that adoption of SFAS No. 160 would have on our financial
statements.




In March
2008, FASB issued FAS. No. 161, “Disclosures about Derivative Instruments and
Hedging Activities – an amendment of FASB Statement No. 133” (“FAS
161”).  FAS No. 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. FAS No. 161 is effective for fiscal years
and interim periods beginning after November 15, 2008. The Company is currently
assessing the potential impact that the adoption of FAS 161 could have on its
financial statements.




Management
does not believe that any other recently issued, but not yet effective account
pronouncements, if adopted, would have a material effect on the accompanying
financial statements.





NOTE
      6 -
            SUBSEQUENT
      EVENTS:





On March
27, 2009, the Company entered into Amended and Restated Promissory Notes for
each of the February 22, 2007 loan agreements (see note 2), and new loan
agreements with certain of its stockholders in the aggregate amount of
$40,000.  These loans accrue interest at 8.25%.  These loans
and all accrued interest shall be repaid in full upon the completion of a
merger, and if not, the loans, including all accrued interest, will mature on
March 27, 2011.






F-11




Item
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.





There are
not and have not been any disagreements between the Company and its accountants
on any matter of accounting principles, practices or financial statement
disclosure.





Item
9A(T). Controls and Procedures.





Evaluation of Disclosure
Controls and Procedures





The
Company’s management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by the Company in the reports that the Company files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and
forms.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by an issuer in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the issuer’s management,
including its principal executive officer or officers and principal financial
officer or officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.





In
accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was
completed under the supervision and with the participation of the Company’s
management, including the Company’s President, Principal Financial Officer and
Secretary, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures as of the end of the period covered by this
Annual Report.  Based on that evaluation, the Company’s management
including the President, Principal Financial Officer and Secretary, concluded
that the Company’s disclosure controls and procedures were effective in
providing reasonable assurance that information required to be disclosed in the
Company’s reports filed or submitted under the Exchange Act was recorded,
processed, summarized, and reported within the time periods specified in the
Commission’s rules and forms.





Evaluation of Internal
Controls and Procedures





Our
management is also responsible for establishing and maintaining adequate
internal control over financial reporting.  The Company’s internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles.





Our
internal control over financial reporting includes those policies and procedures
that:




·
            Pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;


·
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of the Company’s management
      and directors; and


·
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial
statements.





As of
December 31, 2008, we carried out an evaluation of the effectiveness of our
internal control over financial reporting based on the framework in “Internal
Control-Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our evaluation, our
management concluded that our internal control over financial reporting was
effective as of December 31, 2008.





- 10
-





This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.





Changes in Internal Controls
over Financial Reporting





There
have been no significant changes to the Company’s internal controls over
financial reporting that occurred during our last fiscal quarter of the year
ended December 31, 2008, that materially affected, or were reasonably likely to
materially affect, our internal controls over financial reporting.





Item
9B. Other Information.





None.




PART
III





Item
10. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.





(a)
            Identification
      of Directors and Executive Officers.  The following table sets
      forth certain information regarding the Company’s directors and executive
      officers:





Name
            Age
            Position
            TermScott
      Baily
            50
            President,
      Secretary and Director
            January
      3, 2006 thru Present





Scott Baily, President, Secretary and
Director.  Scott Baily has served as President, Secretary and
director of the Company since its inception.  Mr. Baily is also the
sole officer and director of Lynx Acquisition, Inc., which is a
publicly-reporting, non-trading, blank check shell company.  Mr. Baily
is Chief Operating Officer (COO) and a director of Sands Brothers Venture
Capital LLC Funds I-IV. Mr. Baily is involved in all aspects of the management
and operation of the venture capital funds. Mr. Baily’s Wall Street career spans
nearly 25 years in a variety of senior executive positions at established
investment firms. Most recently, he was Senior Partner and Senior Analyst at JPS
Fund Group LLC, a hedge fund (2004-2005). From 2001-2004, Mr. Baily was CEO and
President of GrandView Partners, a financial advisory firm focused on the small
cap and emerging growth sectors. Previously, at BlueStone Capital Partners, from
1996-2001, Mr. Baily was a Senior Vice President, Director of Research, and
Senior Equity Analyst. In 2000, while at BlueStone Mr. Baily was named by the
Wall Street Journal as an All Star Analyst for his stock-picking ability in the
healthcare sector. Earlier in his career, Mr. Baily worked at Barrow Street
Research 1988-1996, Smith Barney, Harris Upham, Inc. 1984-1988, and Paine
Webber, Jackson & Curtis (1982-1984) in a variety of senior research
positions and investment banking.  Mr. Baily was educated at Alma
College, where he earned a double B.A. degree in Business Administration and
Corporate Relations in 1981. Mr. Baily did his graduate work in Business
Administration at Central Michigan University (1981-1982) and the University of
Detroit (1983).





The
Company’s officers and directors are elected annually for a one year term or
until their respective successors are duly elected and qualified or until their
earlier resignation or removal.





(b)
            Significant
      Employees.





As of the date hereof, the Company has
no significant employees.








- 11
-






(c)
            Family
      Relationships.





There are no family relationships among
directors, executive officers, or persons nominated or chosen by the issuer to
become directors or executive officers.




(d)
            Involvement
      in Certain Legal Proceedings.






There have been no events under any
bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or
decrees material to the evaluation of the ability and integrity of any director,
executive officer, promoter or control person of Registrant during the past five
years.




Compliance
with Section 16(a) of the Exchange Act





Section 16(a)
of the Exchange Act requires the Company’s directors and officers, and persons
who beneficially own more than 10% of a registered class of the Company’s equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership of the Company’s securities with the SEC on Forms 3, 4 and 5.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file.




Based solely on the Company’s review of
the copies of the forms received by it during the fiscal year ended
December 31, 2008 and written representations that no other reports were
required, the Company believes that no person who, at any time during such
fiscal year, was a director, officer or beneficial owner of more than 10% of the
Company’s common stock failed to comply with all Section 16(a) filing
requirements during such fiscal years.




Code
of Ethics




We have
not adopted a Code of Business Conduct and Ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions in that our officers and
directors serve in these capacities.





Nominating
Committee





We have not adopted any procedures by
which security holders may recommend nominees to our Board of
Directors.





Audit
Committee





The Board of Directors acts as the
audit committee. The Company does not have a qualified financial expert at this
time because it has not been able to hire a qualified candidate. Further, the
Company believes that it has inadequate financial resources at this time to hire
such an expert.  The Company intends to continue to search for a
qualified individual for hire.





Item
11. Executive Compensation.





The
following table sets forth the cash and other compensation paid by the Company
to its President and all other executive officers who earned annual compensation
exceeding $100,000 for services rendered during the fiscal year ended December
31, 2008 and December 31, 2007.





Name and
      Position
            Year
            Total
      CompensationScott
      Baily, President, Secretary and Director
            2008
            None2007
            None








- 12
-




Director
Compensation





We do not currently pay any cash fees
to our directors, nor do we pay directors’ expenses in attending board
meetings.





Employment
Agreements





The
Company is not a party to any employment agreements.





Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.





(a)           The following tables set forth certain
information as of March 31, 2009, regarding (i) each person known by the Company
to be the beneficial owner of more than 5% of the outstanding shares of Common
Stock, (ii) each director, nominee and executive officer of the Company and
(iii) all officers and directors as a group.





Name and Address
            
            Amount
      and Nature of Beneficial
      Ownership
            
            
            Percentage
              of ClassSands
      Brothers Venture Capital LLC (1)
              90
      Park Avenue, 31st
      Floor
              New
      York, New York 10016
            
            
            187,500
            
            
            
            12.5
            %Sands
      Brothers Venture Capital II LLC (1)
              90
      Park Avenue, 31st
      Floor
              New
      York, New York 10016
            
            
            375,000
            
            
            
            25
            %Sands
      Brothers Venture Capital III LLC (1)
              90
      Park Avenue, 31st
      Floor
              New
      York, New York 10016
            
            
            750,000
            
            
            
            50
            %Sands
      Brothers Venture Capital IV LLC (1)
              90
      Park Avenue, 31st
      Floor
              New
      York, New York 10016
            
            
            187,500
            
            
            
            12.5
            %Scott
      Baily (2)
              c/o
      Sands Brothers Venture Capital LLC
              90
      Park Avenue, 31st
      Floor
              New
      York, New York 10016
            
            
            0
            
            
            
            0
            %All
      Directors and Officers as a Group
              (1
      individual)
            
            
            0
            
            
            
            0
            %





(1)
            Mr.
      Steven B. Sands and Mr. Martin S. Sands, who are brothers, are the
      member-managers of SBV, SBV-II, SBV-III, and SBV-IV.  Each of
      SBV, SBV-II, SBV-III, and SBV-IV is owned by trusts for the benefit of
      members of the families of Steven B. Sands and Martin S.
      Sands.  Messrs. Steven B. Sands and Martin S. Sands serve as
      trustees of the trusts, and therefore have voting and investment control
      over the shares of Common Stock.





- 13
-





(2)
            Scott
      Baily is the President, Secretary and sole director of the
      Company.





(b)
            The
      Company currently has not authorized any compensation plans or individual
      compensation arrangements.





Item
13. Certain Relationships and Related Transactions.





On February 22, 2007, the Company
issued four promissory notes, bearing eight and one quarter percent (8.25%)
interest annually, in the principal amounts of $4,375, $8,750, $17,500, and
$4,375 to SBV, SBV-II, SBV-III, and SBV-IV, respectively (the “February 2007
Notes”).  The February 2007 Notes and all accrued interest mature upon
completion of a merger, and if no merger is consummated, then the February 2007
Notes were to reach maturity on February 22, 2009.  On March 27, 2009,
the Company entered into an Amended and Restated Promissory Note for each of the
February 2007 Notes, extending the maturity date of the February 2007 Notes to
December 31, 2010.





On March 13, 2008, the Company issued
four additional promissory notes, bearing eight and one quarter percent (8.25%)
interest annually, in the principal amounts of $4,375, $8,750, $17,500, and
$4,375 to SBV, SBV-II, SBV-III, and SBV-IV, respectively (the “March 2008
Notes”).  The March 2008 Notes and all accrued interest mature upon
completion of a merger, and if no merger is consummated, then the 2008 Notes
will reach maturity on March 13, 2010.





On March 27, 2009, the Company issued
four additional promissory notes, bearing eight and one quarter percent (8.25%)
interest annually, in the principal amounts of $5,000, $10,000, $20,000, and
$5,000 to SBV, SBV-II, SBV-III, and SBV-IV, respectively (the “March 2009
Notes”).  The March 2009 Notes and all accrued interest mature upon
completion of a merger, and if no merger is consummated, then the 2008 Notes
will reach maturity on March 27, 2011.





Except as
otherwise indicated herein, there have been no related party transactions, or
any other transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-B.





Item
14.  Principal Accounting Fees and Services





Raich Ende Malter & Co. LLP
(“Raich Ende”) is the Company's independent registered public accounting
firm.





Audit
Fees





The
aggregate fees billed by Raich Ende for professional services rendered for the
audit of our annual financial statements and review of financial statements
included in our quarterly reports on Form 10-Q or services that are normally
provided in connection with statutory and regulatory filings were approximately
$17,500for the
fiscal year ended December 31, 2008 and $17, 500 for the fiscal year ended
December 31, 2007.





Audit-Related
Fees





There
were no feesbilled
by Raich Endefor
assurance and related services that are reasonably related to the performance of
the audit or review of the Company’s financial statements for the fiscal years
ended December 31, 2008 and December 31, 2007.




- 14
-




Tax
Fees




There
were no fees billed by Raich
Endefor
professional services for tax compliance, tax advice, and tax planning for the
fiscal years ended December 31, 2008 and December 31, 2007.





All
Other Fees





There
were no fees billed by Raich
Endefor other
products and services for the fiscal years ended December 31, 2008 and December
31, 2007.





Audit
Committee’s Pre-Approval Process




The Board
of Directors acts as the audit committee of the Company, and accordingly, all
services are approved by all the members of the Board of Directors.





PART
IV





Item
15. Exhibits, Financial Statement Schedules




(a)
            We
      set forth below a list of our audited financial statements included in
      Item 8 of this annual report on Form
10-K.





Statement
            Page*Index
      to Financial Statements
            F-1Report
      of Independent Registered Public Accounting Firm
            F-2Balance
      Sheets
            F-3Statement
      of Operations
            F-4Statement
      of Changes in Stockholder’s Equity (Deficit)
            F-5Statement
      of Cash Flows
            F-6Notes
      to Financial Statements
            F-7





*Page F-1
follows page 10 to this annual report on Form 10-K.





(b)
            Index
      to Exhibits required by Item 601 of Regulation
  S-K.




Exhibit
            Description*3.1
            Certificate
      of Incorporation




*3.2
            By-laws




31.1
            Certification
      of the Company’s Principal Executive Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual
      Report on Form 10-K for the year ended December 31,
  2008




31.2
            Certification
      of the Company’s Principal Financial Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual
      Report on Form 10-K for the year ended December 31,
  2008





32.1
            Certification
      of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of
      2002





32.2
            Certification
      of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of
      2002







*
            Filed
      as an exhibit to the Company's registration statement on Form 10-SB, as
      filed with the SEC on June 30, 2006, and incorporated herein by this
      reference.







- 15
-




SIGNATURES





In accordance with 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.






SCOUT
ACQUISITION, INC.




Dated:
March 31, 2009


By: 
/s/ Scott Baily


Scott
Baily


President,
Secretary and Director


Principal
Accounting Officer


Principal
Executive Officer


Principal
Financial Officer








In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.





Title
            
            Date/s/  Scott
      Baily
            
            President,
      Secretary
            
            March
      31, 2009Scott
      Baily
            
            and
      Director