**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

____________________________

**FORM 10-QSB**

 

**xQUARTERLY REPORT UNDER SECTION 13 OR            15(d)**

**OF            THE SECURITIES**

 

**EXCHANGE ACT OF 1934**

____________________________

 

**For the Quarterly Period Ended June 30, 2007**

 

**Commission File Number: 0-9500**

 

**MOUNTAINS WEST EXPLORATION, INC.**

(Exact name of small business issuer as specified in its            charter)

 

| **New Mexico**                                                                     | **85-0280415**      |
|------------------------------------------------------------------------------------|---------------------|
| (State or other jurisdiction of                                                    | (IRS Employer       |
| incorporation or organization)                                                     | Identification No.) |
|                                                                               |                |
| **2001 Butterfield Rd., Suite 1050, Downers Grove,                            IL** | **60515**           |
| (Address of principal executive offices)                                           | (Zip Code)          |

 

Issuer’s telephone number (630) 271-8590

 

P.O.            Box 57819, Chicago, Illinois 60657

____________________________

Former Address

 

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

 

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

 

The            number of shares outstanding of the issuer’s common stock, no par value, at            August 10, 2007, was 1,300,018 shares.

 

| Transitional Small Business Disclosure Format:                              Yes  o  No                              x |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

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**TABLE OF CONTENTS**

 

**PART            I. - FINANCIAL INFORMATION**

 

| **Item 1.**                                                                                                            | **Financial Statements**                                                                       | 4  |
|------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|----|
|                                                                                                                   |                                                                                           |
| Balance Sheets June 30, 2007 (unaudited) and December                            31, 2006                              | 5                                                                                              |
| Statements of Operations for the Three and Six Months                            ended June 30, 2006 and June 30, 2007 | 6                                                                                              |
| Statements of Cash Flows for the Six Months ended June                            30, 2007                             | 7                                                                                              |
| Statements of Stockholders Equity (Deficit) June 30,                            2007 (unaudited)                       | 8                                                                                              |
| Notes to Consolidated Financial Statements                            (unaudited)                                      | 9                                                                                              |
|                                                                                                                   |                                                                                           |
| **Item 2.**                                                                                                            | **Management’s Discussion and Analysis or Plan of                            Operation** | 11 |
|                                                                                                                   |                                                                                           |
| **Item 3.**                                                                                                            | **Controls and Procedures**                                                                    | 14 |

 

 

2

 

 

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**PART            II. - OTHER INFORMATION**

 

| **Item 1.**       | **Legal Proceedings**                                                                      | 15 |
|-------------------|--------------------------------------------------------------------------------------------|----|
|              |                                                                                       |
| **Item 2.**       | **Unregistered Sales of Equity Securities and Use of                            Proceeds** | 15 |
|              |                                                                                       |
| **Item 3.**       | **Defaults upon Senior Securities**                                                        | 15 |
|              |                                                                                       |
| **Item 4.**       | **Submission of Matters to a Vote of Security                            Holders**         | 15 |
|              |                                                                                       |
| **Item 5.**       | **Other Information**                                                                      | 15 |
|              |                                                                                       |
| **Item 6.**       | **Exhibits**                                                                               | 15 |
|              |                                                                                       |
| **Signatures**    | 16                                                                                         |
|              |                                                                                       |
| **Exhibit Index** | 17                                                                                         |

             

 

3

 

 

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**MOUNTAINS WEST EXPLORATION INC.**

**FINANCIAL STATEMENTS**

**THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006**

 

4

 

 

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**MOUNTAINS WEST EXPLORATION INC.**

 

**Balance Sheets**

 

 

|                                                                                                   |   |              |       |
|--------------------------------------------------------------------------------------------------------|--------|-------------------|------------|
|                                                                                                   |   | **June 30, 2007** |       |   |   | **Dec. 31, 2006** |   |
| **ASSETS:**                                                                                            |   |              |       |   |   |   |   |   |   |
| Current assets:                                                                                        |   |              |       |   |   |   |   |   |   |
| Cash                                                                                                   |   | $                 | 150        |   |   |   | $ | 345 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| Total current assets                                                                                   |   |              | 150        |   |   |   |   | 345 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| **TOTAL ASSETS**                                                                                       |   | $                 | 150        |   |   |   | $ | 345 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY                            (DEFICIT):**                   |   |              |       |   |   |   |   |   |   |
| Current liabilities:                                                                                   |   |              |       |   |   |   |   |   |   |
| Accounts Payable                                                                                       |   | $                 | 125,308    |   |   |   | $ | 103,381 |   |
| Accrued Interest                                                                                       |   |              | 47,933     |   |   |   |   | 25,133 |   |
| Note Payable                                                                                           |   |              | 2,500      |   |   |   |   | 103,000 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| Total current liabilities                                                                              |   |              | 175,741    |   |   |   |   | 231,514 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| Long-Term Debt:                                                                                        |   |              |       |   |   |   |   |   |   |
| Long-Term Debt                                                                                         |   |              | 933,500    |   |   |   |   | 647,500 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| Total long-term debt                                                                                   |   |              | 933,500    |   |   |   |   | 647,500 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| Total liabilities                                                                                      |   |              | 1,109,241  |   |   |   |   | 879,014 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| Stockholders’ equity:                                                                            |   |              |       |   |   |   |   |   |   |
| Common Stock, no par value; 50,000,000 shares                            authorized;                   |   |              |       |   |   |   |   |   |   |
| 1,300,018 shares issued and outstanding June 30, 2007                            and December 31, 2006 |   |              | 1,582,786  |   |   |   |   | 1,582,786 |   |
| Retained Earnings (Deficit)                                                                            |   |              | (2,691,877 | ) |   |   |   | (2,461,455 | ) |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| Total stockholders’ equity (deficit)                                                             |   |              | (1,109,091 | ) |   |   |   | (878,669 | ) |
|                                                                                                   |   |              |       |   |   |   |   |   |   |
| **TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                            (DEFICIT)**                     |   | $                 | 150        |   |   |   | $ | 345 |   |
|                                                                                                   |   |              |       |   |   |   |   |   |   |

 

The            accompanying notes are an integral part of these financial statements

 

5

 

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**MOUNTAINS WEST EXPLORATION INC.**

**Statements of Operations**

 

 

|                                                                            |   | **Three Months Ended** |      |   |   | **Six Months Ended** |   |
|---------------------------------------------------------------------------------|--------|------------------------|-----------|--------|--------|----------------------|--------|
|                                                                            |   | **June 30,**           |      |   |   | **June 30,**         |   |
|                                                                            |   | **2007**               |      |   |   | **2006**             |   |   |   | **2007** |   |   |   | **2006** |   |
|                                                                            |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Revenue:**                                                                    |   | $                      | –   |   |   |                 | $      | – |   |   |   | $ | – |   |   |   | $ | – |   |
|                                                                            |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating Expenses:**                                                         |   |                   | 77,519    |   |   |                 |   | 38,003 |   |   |   |   | 115,622 |   |   |   |   | 74,532 |   |
|                                                                            |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Profit                                                                |   |                   | (77,519   | )      |   |                 |   | (38,003 | ) |   |   |   | (115,622 | ) |   |   |   | (74,532 | ) |
|                                                                            |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Other Income and Expense**                                                    |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense                                                                |   |                   | 11,300    |   |   |                 |   | 5,175 |   |   |   |   | 114,800 |   |   |   |   | 10,350 |   |
|                                                                            |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net Income (Loss)**                                                           |   | $                      | (88,819   | )      |   |                 | $      | (43,178 | ) |   |   |   | (230,422 | ) |   |   | $ | (84,882 | ) |
|                                                                            |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Per Share Information:**                                                      |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares                            outstanding |   |                   | 1,300,018 |   |   |                 |   | 1,300,018 |   |   |   |   | 1,300,018 |   |   |   |   | 1,300,018 |   |
|                                                                            |   |                   |      |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net Loss per Common Share**                                                   |   | $                      | (0.07     | )      |   |                 | $      | (0.03 | ) |   |   | $ | (0.18 | ) |   |   | $ | (0.06 | ) |

 

The            accompanying notes are an integral part of these financial statements

 

6

 

 

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**MOUNTAINS WEST EXPLORATION INC.**

**Statements of Cash Flows**

 

**(Indirect Method)**

 

 

|                                                                                                   |   | **Six Months Ended** |     |
|--------------------------------------------------------------------------------------------------------|--------|----------------------|----------|
|                                                                                                   |   | **June 30,**         |     |
|                                                                                                   |   | **2007**             |     |   |   | **2006** |   |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| **Cash Flows from Operating Activities:**                                                              |   |                 |     |   |   |   |   |   |   |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| Net Profit (Loss)                                                                                      |   | $                    | (230,422 | ) |   |   | $ | (84,882 | ) |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| Adjustments to reconcile net loss to net cash used by                            operating activities: |   |                 |     |   |   |   |   |   |   |
| Depreciation                                                                                           |   |                 | –  |   |   |   |   | – |   |
| Increase in Accounts Payable                                                                           |   |                 | 21,927   |   |   |   |   | 84,882 |   |
| Increase in Accrued Expenses                                                                           |   |                 | 22,800   |   |   |   |   | – |   |
| (Increase) in Other Assets                                                                             |   |                 | -        |   |   |   |   | (250,000 | ) |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| **Net Cash Flows Used by Operations**                                                                  |   |                 | (185,695 | ) |   |   |   | (250,000 | ) |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| **Cash Flows from Financing Activities:**                                                              |   |                 |     |   |   |   |   |   |   |
| Proceeds of Notes Payable – Convertible                                                          |   |                 | 536,000  |   |   |   |   | 347,500 |   |
| Payments of Notes Payable – Convertible                                                          |   |                 | (253,000 | ) |   |   |   | – |   |
| Proceeds of Note Payable – Related                            Party                              |   |                 | 2,500    |   |   |   |   | (197,000 | ) |
| Repayment of Notes Payable – Related                            Party                            |   |                 | (100,000 | )  |   |   |   | 115,000 |   |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| **Net Cash Flows Provided by Financing                            Activities**                         |   |                 | 185,500  |   |   |   |   | 265,500 |   |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| **Net Increase (Decrease) in Cash**                                                                    |   |                 | (195     | )  |   |   |   | 15,500 |   |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| **Cash at Beginning of Period**                                                                        |   |                 | 345      |   |   |   |   | – |   |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| **Cash at End of Period**                                                                              |   | $                    | 150      |   |   |   | $ | 15,500 |   |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |
| **Supplemental Disclosure of Cash Flow                            Information**                        |   |                 |     |   |   |   |   |   |   |
| Cash paid for Interest                                                                                 |   | $                    | 92,000   |   |   |   | $ | – |   |
| Cash paid for Income Taxes                                                                             |   | $                    | –  |   |   |   | $ | – |   |
|                                                                                                   |   |                 |     |   |   |   |   |   |   |

 

The            accompanying notes are an integral part of these financial statements

 

7

 

 

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**MOUNTAINS WEST EXPLORATION INC.**

 

**Stockholders’ Equity (Deficit)**

**June 30, 2007**

 

 

|                                                                |   | **Retained**    |   |       |      |   |   |
|---------------------------------------------------------------------|--------|-----------------|--------|------------|-----------|--------|--------|
|                                                                |   | **Earnings**    |   |
|                                                                |   | **# of Shares** |   | **Amount** |      |   |   | **(Deficit)** |   |   |   | **Totals** |   |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2001                                         |   | 740,409         |   | $     | 1,554,786 |   |   |   | $  | (1,573,676 | ) |   |   | $  | (18,890 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss for year                                                   |   | –         |   |       | –   |   |   |   |   | (4,094 | ) |   |   |   | (4,094 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2002                                         |   | 740,409         |   |       | 1,554,786 |   |   |   |   | (1,577,770 | ) |   |   |   | (22,984 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss for year                                                   |   | –         |   |       | –   |   |   |   |   | (16,483 | ) |   |   |   | (16,483 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2003                                         |   | 740,409         |   |       | 1,554,786 |   |   |   |   | (1,594,253 | ) |   |   |   | (39,467 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of stock for cash                                          |   | 259,609         |   |       | 25,000    |   |   |   |   | – |   |   |   |   | 25,000 |   |
| Net Profit for the Year                                             |   | –         |   |       | –   |   |   |   |   | 1,433 |   |   |   |   | 1,433 |   |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2004                                         |   | 1,000,018       |   |       | 1,579,786 |   |   |   |   | (1,592,820 | ) |   |   |   | (13,034 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of stock for cash                                          |   | 300,000         |   |       | 3,000     |   |   |   |   | – |   |   |   |   | 3,000 |   |
| Net Loss for Year                                                   |   | –         |   |       | –   |   |   |   |   | (216,849 | ) |   |   |   | (216,849 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2005                                         |   | 1,300,018       |   |       | 1,582,786 |   |   |   |   | (1,809,669 | ) |   |   |   | (226,883 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss for Year                                                   |   | –         |   |       | –   |   |   |   |   | (651,786 | ) |   |   |   | (651,786 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Balance - December 31, 2006                                         |   | 1,300,018       |   | $          | 1,582,786 |   |   |   | $ | (2,461,455 | ) |   |   | $ | (878,669 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss for Period                                                 |   | –         |   |       | –   |   |   |   |   | (230,422 | ) |   |   |   | (230,422 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| Balance June 30, 2007                                               |   | 1,300,018       |   | $          | 1,582,786 |   |   |   | $ | (2,691,877 | ) |   |   | $ | (1,109,091 | ) |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
| All shares of stock reflect a 1 for 50

reverse split in April 2005 |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |            |   |       |      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |        |                 |        |            |           |        |        |  |  |  |  |  |  |  |  |  |  |  |

 

The            accompanying notes are an integral part of these financial statements

 

8

 

 

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**MOUNTAINS WEST EXPLORATION INC.**

 

**Notes to Financial Statements**

**June 30, 2007**

 

Note 1            –Presentation of Interim Information:

 

In the            opinion of management of Mountains West Exploration, Inc. the accompanying unaudited            financial statements include all normal adjustments considered necessary to present            fairly the financial position as of June 30, 2007 and the results of operations for the            three-months and six-months ended June 30, 2007 and 2006, and the related cash flows            for the six-months ended June 30, 2007 and 2006. Interim results are not necessarily            indicative of results for a full year.

 

The            financial statements and notes are presented as permitted by Form 10-QSB, and do not            contain certain information included in the Company’s audited financial            statements and notes for the fiscal year ended December 31, 2006.

 

Note 2            –Going Concern:

 

The            Company’s financial statements have been presented on the basis that it is a            going concern.

 

The            Company’s ability to continue as a going concern is dependent upon its ability to            develop additional sources of capital and achieve profitable operations. There is            insufficient cash on hand to support current or anticipated operations. The            accompanying financial statements do not include any adjustments that might result from            the outcome of these uncertainties. Management is seeking new capital to revitalize the            Company.

 

Note 3            –Notes Payable – Convertible            Debenture:

 

Following is the summary of Convertible Debenture Notes Payable at June            30, 2007 and December 31, 2006:

 

|                                                                                                              |   |   | June 30,

2007 |   |   |   |   | December 31,

2006 |   |
|-------------------------------------------------------------------------------------------------------------------|--------|--------|----------------|--------|--------|--------|--------|--------------------|--------|
| Notes to various individuals, bearing interest at 7% per                            annum, due December 31, 2007. |   | $      | 933,500        |   |   |   | $      | 647,500            |   |
|                                                                                                              |   | $      | 933,500        |   |   |   | $      | 647,500            |   |
|                                                                                                              |   |   |           |   |   |   |   |               |   |

 

These notes are all convertible at a 25%            discount to theprivateplacement per share offering price,if and whenit occurs.            As of June 30, 2007, theCompanyis currently not in process of raising capital.Included in the Notes Payable – Convertible            Debenture is a $128,000 note from Grander, L.L.C., and a $128,000 note from One-Seven,            LLC, each entities are owned by the executive officers and directors of the            Company.

Note 4            –Notes Payable – Related Party:

 

At June 30, 2007, the Company had a note            payable to each of Doug Stukel and Lee Wiskowski, executive officers and directors of            the Company, in the amount of $1,250 each. The notes are short-term in nature and do            not bear interest.Also, included in the Notes            Payable – Convertible Debenture is a $128,000 note from Grander, L.L.C., and a            $128,000 note from One-Seven, LLC, each entities are owned by the executive officers            and directors of the Company.

9

 

 

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**MOUNTAINS WEST EXPLORATION INC.**

 

**Notes to Financial Statements**

**June 30, 2007**

 

Note 5            –Deposit on Business Acquisition:

 

On            March 22, 2006, Mountains West Exploration, Inc. signed a letter of intent to purchase            an online dating and online education business from Think Partnership, Inc. with a            deposit of $250,000 to be credited against the purchase price if the transaction            completed. The $250,000 deposit was only to be returned to Mountains West Exploration,            Inc., if Think Partnership sold the selected subsidiaries to a third party. Mountains            West Exploration borrowed the funds for this transaction from a related party, LD            Acquisition, LLC. As of March 29, 2007 this letter of intent was cancelled and the            deposit was forfeited.

 

On            December 11, 2006 Mountains West Exploration, Inc. signed a letter of intent to            purchase The Right One, Together Dating and eLove.com. A deposit of $250,000 was wired            to The Right One as a deposit to this letter of intent. As of April 12, 2007 this            letter of intent was cancelled and the deposit was forfeited.

 

Both of            the deposits on these proposed transactions were written off in the 4th            quarter of 2006.

 

During            the first quarter of 2007 the Company signed a letter of intent to purchase Traffix,            Inc. A deposit of $25,000 was wired to Traffix, Inc. This letter of intent was            subsequently cancelled and the deposit was written off during the 1st            quarter of 2007.

 

10

 

 

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| **Item 2.** | **MANAGEMENT’S DISCUSSION AND ANALYSIS ON PLAN OF                            OPERATION** |
|-------------|------------------------------------------------------------------------------------------------|

*Cautionary and Forward Looking Statements*

 

In addition to statements of historical fact, this Form 10-QSB contains            forward-looking statements. The presentation of future aspects of Mountains West            Exploration, Inc., (“Mountains West Exploration, Inc.” the            “Company” or “Issuer”) found in these statements is subject to            a number of risks and uncertainties that could cause actual results to differ            materially from those reflected in such statements. Readers are cautioned not to place            undue reliance on these forward-looking statements, which reflect management’s            analysis only as of the date hereof. Without limiting the generality of the foregoing,            words such as “may,” “will,” “expect,”            “believe,” “anticipate,” “intend,” or            “could” or the negative variations thereof or comparable terminology are            intended to identify forward-looking statements.

 

These forward-looking statements are subject to numerous assumptions,            risks and uncertainties that may cause Mountains West Exploration, Inc. actual results            to be materially different from any future results expressed or implied by Mountains            West Exploration, Inc. in those statements. Important facts that could prevent            Mountains West Exploration, Inc. from achieving any stated goals include, but are not            limited to, the following:

 

Some of these risks might include, but are not limited to, the            following:

 

|   | (a) | volatility or decline of the Company’s stock                            price; |
|--------|-----|--------------------------------------------------------------------------------------|

|   | (b) | potential fluctuation in quarterly results; |
|--------|-----|---------------------------------------------|

|   | (c) | failure of the Company to earn revenues or                            profits; |
|--------|-----|--------------------------------------------------------------------------------|

|   | (d) | inadequate capital to continue or expand its                            business; |
|--------|-----|-----------------------------------------------------------------------------------|

|   | (e) | inability to raise additional capital or financing to                            implement its business plans; |
|--------|-----|----------------------------------------------------------------------------------------------------------------|

|   | (f) | failure to make sales; |
|--------|-----|------------------------|

|   | (g) | rapid and significant changes in markets; |
|--------|-----|-------------------------------------------|

|   | (h) | litigation with or legal claims and allegations by                            outside parties; or |
|--------|-----|---------------------------------------------------------------------------------------------------|

|   | (i) | insufficient revenues to cover operating                            costs. |
|--------|-----|----------------------------------------------------------------------------|

There is no assurance that the Company will be profitable, and the            Company may not be able to successfully develop, or manage any business, the Company            may not be able to attract or retain qualified executives and personnel, and            competition and government regulation may hinder the Company’s business attempts.            Further, additional dilution in outstanding stock ownership may be incurred due to the            issuance of more shares, warrants and stock options, or the exercise of warrants and            stock options, and other risks inherent in business.

 

11

 

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The Company undertakes no obligation to publicly revise these            forward-looking statements to reflect events or circumstances that arise after the date            hereof. Readers should carefully review the factors described in other documents the            Company files from time to time with the Securities and Exchange Commission, including            the Quarterly Reports on Form 10-QSB and Annual Report on Form 10-KSB filed by the            Company in 2006 and any Current Reports on Form 8-K filed by the Company.

 

*Results of Operations for the Three-Months Ended June 30, 2007            compared to Same Period in 2006*

 

The Company had no revenues during the three month period in 2007 or            2006. The Company divested itself of fractional producing working interests in June            2006, when the production was unitized by the operator and the Company was notified of            significant back charges against future revenues, as well as a significantly reduced            ownership in the unit. The cost of goods sold was $0 and $0 in the three month period            in 2007 and 2006 respectively.

 

The Company incurred $77,519 in expenses in the three-month period in            2007 compared to $38,003 in such expense in the same period in 2006. The majority of            the expense is related to legal and accounting fees for the Company. Additionally, the            Company incurred interest expense for the period of $11,300 compared to $5,175 for the            same period last year. The current period interest expense is associated with the 7%            convertible debentures that the Company has outstanding. The net loss for the period            was $88,819 ($.07 per share) in 2007 compared to a net loss of $43,178 ($.03) in 2006            for the same period.

             

*Results of Operations for the Six-Months Ended June 30, 2007 compared            to Same Period in 2006*

 

The Company had no revenues during the six-month period in 2007 or 2006.            The Company divested itself of fractional producing working interests in June 2006,            when the production was unitized by the operator and the Company was notified of            significant back charges against future revenues, as well as a significantly reduced            ownership in the unit. The cost of goods sold was $0 and $0 in the six-month period in            2007 and 2006 respectively.

 

The Company incurred $90,622 in expenses for the six-month period in            2007 compared to $74,532 in such expense in the same period in 2006. The majority of            the expense is related to legal and accounting fees for the Company. Additionally, the            Company also wrote-off a $25,000 deposit it made during the first quarter relating to a            potential acquisition that was cancelled. The Company incurred interest expense for the            period of $114,800 compared to $10,350 for the same period last year. The current            period interest expense is primarily associated with interest cost on short term debt            instruments that occurred during the first quarter of 2007, with the remaining            associated with the 7% convertible debentures that the Company has outstanding. The net            loss for the period was $230,422 ($.18 per share) in 2007 compared to a net loss of            $84,882 ($.06 per share) in 2006 for the same period.

 

*Changes in Financial Condition*

 

Year to date the Company experienced a decrease in cash position to $150            at quarter end. The Company’s long term debt is $933,500. The Company has            Accounts Payable outstanding of $125,308 and interest accrued on the convertible            debentures of $47,933. The Company does not expect improvements to its financial            condition with continued losses to fund expenses and interest expense            expected.

 

*Liquidity and Capital Resources*

 

The Company has virtually no cash at June 30, 2007. The Company’s            current cash position remains insufficient for any significant operations. The            Company’s only capital resources are its common stock which might be sold to            raise capital.

 

12

 

 

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NEED            FOR ADDITIONAL FINANCING

 

The Company does not have capital sufficient to meet the Company’s            cash needs, to operate, and pay debt, including the costs of compliance with the            continuing reporting requirements of the Securities Exchange Act of 1934. The Company            will have to seek loans or equity placements to cover such cash needs. Lack of capital            may be a sufficient impediment to prevent it from accomplishing the goal of expanding            its operations. There is no assurance that without additional funds the Company will be            able to carry out its business. The Company will need to raise additional funds to            continue and expand its business activities in the next twelve months.

 

No commitments to provide additional funds have been made by management            or other stockholders. Accordingly, there can be no assurance that any additional funds            will be available to the Company to allow it to cover its expenses as they may be            incurred.

 

Irrespective of whether the Company’s cash assets prove to be            inadequate to meet the Company’s operational needs, the Company might seek to            compensate providers of services by issuances of stock in lieu of cash.

 

On March 22, 2006, Mountains West Exploration, Inc. signed a letter of            intent to purchase an online dating and online education business from Think            Partnership, Inc. with a deposit of $250,000 to be credited against the purchase price            if the transaction was completed. The $250,000 deposit would only be returned to            Mountains West Exploration, Inc., if Think Partnership sold the selected subsidiaries            to a third party. Mountains West Exploration borrowed the funds for this transaction            from a related party, LD Acquisition, LLC. As of March 29, 2007 this letter of intent            was cancelled and the deposit was forfeited.

 

On December 11, 2006 Mountains West Exploration, Inc. signed a letter of            intent to purchase The Right One, Together Dating and eLove.com. A deposit of $250,000            was wired to The Right One as a deposit to this letter of intent. As of April 12, 2007            this letter of intent was cancelled and the deposit was forfeited.

 

Both of the deposits on these proposed transactions were written off in            the 4th quarter of 2006.

 

During the first quarter of 2007 the Company signed a letter of intent            to purchase Traffix, Inc. A deposit of $25,000 was wired to Traffix, Inc. This letter            of intent was subsequently cancelled and the deposit was written off during the            1st quarter of 2007.

 

GOING            CONCERN

 

The Company’s auditor has issued a “going concern”            qualification as part of his opinion in the Audit Report. There is substantial doubt            about the ability of the Company to continue as a “going concern.” The            Company has no business, limited capital, no debt minimal cash, no other liquid assets,            and no capital commitments. Management hopes to seek and obtain funding, via loans or            private placements of stock for operations, debt and to provide working            capital.

 

13

 

 

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SUBSEQUENT EVENTS

 

None.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We are not a party to any off-balance sheet arrangements.

 

| **Item 3.** | **CONTROLS AND PROCEDURES** |
|-------------|-----------------------------|

 

|   | (a) | Evaluation of Disclosure Controls and                            Procedures: |
|--------|-----|------------------------------------------------------------------------------|

 

As of the end of the period covered by this report, we conducted an            evaluation, under the supervision and with the participation of our principal executive            officer and principal financial officer, of the effectiveness of our disclosure            controls and procedures (as defined in Rules 13a-15 and 15d-15 of the Securities            Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, our            principal executive officer and principal financial officer concluded that our            disclosure controls and procedures are effective to ensure that information required to            be disclosed by us in reports that we file or submit under the Exchange Act is            recorded, processed, summarized and reported within the time periods specified in the            SEC rules and forms.

             

|   | (b) | Changes in Internal Control over Financial                            Reporting: |
|--------|-----|----------------------------------------------------------------------------------|

 

There were no changes in the Company’s internal control over            financial reporting identified in connection with the Company evaluation of these            controls as of the end of the period covered by this report that could have            significantly affected those controls subsequent to the date of the evaluation referred            to in the previous paragraph, including any correction action with regard to            significant deficiencies and material weakness.

 

14

 

 

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**PART II.**

 

**OTHER INFORMATION**

 

| **Item 1.** | **LEGAL PROCEEDINGS.** |
|-------------|------------------------|

NONE

             

| **Item 2.** | **UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF                            PROCEEDS.** |
|-------------|--------------------------------------------------------------------------------------------|

On April 6, 2007, the Board of the Company authorized the issuance of            warrants to purchase 439,500 shares of the Company’s common stock to certain            lenders to the Company. All warrants have a term of  5 years and an exercise            price of the common stock per share equivalent in connection with the Company's next            equity financing. There was no underwriter associated with the privately negotiated            transaction. These warrants were issued in reliance upon applicable exemptions from            registration under Section 4(2) of the Securities Act of 1933, as amended.

             

| **Item 3.** | **DEFAULTS UPON SENIOR SECURITIES.** |
|-------------|--------------------------------------|

NONE.

             

| **Item 4.** | **SUBMISSION OF MATTERS TO A VOTE OF SECURITY                            HOLDERS.** |
|-------------|-------------------------------------------------------------------------------------|

NONE

             

| **Item 5.** | **OTHER INFORMATION.** |
|-------------|------------------------|

On April 6, 2007, the Board of the Company authorized the issuance to            certain previous lenders to the Company, warrants to purchase 439,500 shares of the            Company’s common stock, all with a term of 5 years and an exercise price of            the common stock per share equivalent in connection with the Company's next equity            financing.

             

On June 14, 2007, the Company entered into a lease agreement with The            Esplanade at Locust Point - 1 Limited Partnership for the lease of office space. The            terms of the lease is 5 years with the following rental payment schedule: Months 1            – 3 ($0); Months 4 – 12 ($3,401); Months 13 – 24 ($3,503); Months 26            – 36($3,608); Month 37 ($0); Months 38 – 48 ($4,347); Month 49 ($0); Months            50 – 60 ($4,478). A copy of such Lease is set forth as Exhibit 10.1 to this            report and is incorporated herein in its entirety.

             

After June 30, 2007, the Convertible Notes were extended and are now due            and payable on December 31, 2007.

             

| **Item 6.** | **EXHIBITS AND REPORTS ON FORM 8-K.** |
|-------------|---------------------------------------|

Exhibits filed as a part of this quarterly report on Form 10-QSB are            listed in the Index to Exhibits located on page 17 of this Report.

             

15

 

 

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

 

 

|            |   |   |                     |                          |
|-----------------|--------|--------|--------------------------|-------------------------------|
| August 20, 2007 |   |   |  

/s/Lee Wiskowski |
|            |   |   |                     | Lee Wiskowski, President      |
|            |   |   |                     | (principal executive officer) |

 

 

|   |   |   |   |                          |
|--------|--------|--------|--------|-------------------------------|
|   |   |   |   |  

/s/Douglas Stukel     |
|   |   |   |   | Douglas Stukel, Treasurer     |
|   |   |   |   | (principal financial officer) |

 

 

16

 

 

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**Exhibit Index**

 

| Exhibit Number |   | Exhibit Description                                                                                                                                                               |   |
|----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|           |   |                                                                                                                                                                              |   |
| 3.1            |   | Articles (1)                                                                                                                                                                      |   |
|           |   |                                                                                                                                                                              |   |
| 3.2            |   | Bylaws (1)                                                                                                                                                                        |   |
|           |   |                                                                                                                                                                              |   |
| 10.1           |   | Lease Agreement, dated June 14, 2007, by and between the                            Company and The Esplanade at Locust Point - 1 Limited                            Partnership. |
|           |   |                                                                                                                                                                              |   |
| 31.1           |   | 302 Sarbanes-Oxley Certification                                                                                                                                                  |   |
|           |   |                                                                                                                                                                              |   |
| 31.2           |   | 302 Sarbanes-Oxley Certification                                                                                                                                                  |   |
|           |   |                                                                                                                                                                              |   |
| 32.1           |   | 906 Sarbanes-Oxley Certification                                                                                                                                                  |   |
|           |   |                                                                                                                                                                              |   |
| 32.2           |   | 906 Sarbanes-Oxley Certification                                                                                                                                                  |   |

 

___________________

(1) The            Registrant's Articles of Incorporation and Bylaws are incorporated herein by reference            to SEC file No. 2-69024, filed September 2, 1980.

 

17