FORM
10-Q





U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
quarterly period ended March 31, 2009





OR





 ̈
TRANSITION REPORT PURSUANT TO 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
                    
                    (I.R.S.
      Employer Identification Number)of
      incorporation or organization)




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


(Address
of principal executive offices)





(212)
953-4983


(Registrant’s
telephone number, including area code)





No
change


(Former
name, former address and former fiscal year, if changed since last
report)





Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes x No  ̈.





Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such
files).           Yes  ̈    No   ̈





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


Large
      accelerated filer   ̈
            Accelerated
      filer                     
       ̈Non-accelerated
      filer     ̈
            Smaller
      reporting company    x.(Do
      not check if a smaller reporting company)





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





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING


THE
PRECEDING FIVE YEARS:





Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes  ̈ No  ̈.





APPLICABLE
ONLY TO CORPORATE ISSUERS:





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: 1,500,000shares of common stock,
par value $.0001 per share, outstanding as of May 13, 2009.





SCOUT
ACQUISITION, INC.





-
INDEX -





PagePART
      I – FINANCIAL INFORMATION:Item
      1.
              Financial
      Statements:Balance
      Sheets as of March 31, 2009 (Unaudited) and December 31,
    2008
              
              1Statements
      of Operations (Unaudited) for the Three Months Ended March 31, 2009 and
      2008 and for the Cumulative Period from January 3, 2006 (Inception) to
      March 31, 2009
              
              2Statement
      of Stockholders’ Deficiency for the Period from January 3, 2006
      (Inception) to March 31, 2009 (Unaudited)
              
              3Statements
      of Cash Flows (Unaudited) for the Three Months Ended March 31, 2009 and
      2008 and for the Cumulative Period from January 3, 2006 (Inception) to
      March 31, 2009
              
              4Notes
      to Unaudited Financial Statements
              
              5Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              
              10Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              
              13Item
      4T.
              Controls
      and Procedures
              
              13PART II – OTHER
      INFORMATION:Item
      1.
              Legal
      Proceedings
              
              13Item
      1A.
              Risk
      Factors
              
              13Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              
              13Item
      3.
              Defaults
      Upon Senior Securities
              
              13Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              
              13Item
      5.
              Other
      Information
              
              14Item
      6.
              Exhibits
              
              14Signatures
              
              15





PART I – FINANCIAL
INFORMATION





Item
1.  Financial Statements.





SCOUT ACQUISITION,
INC.


A
Development Stage Company


BALANCE
SHEETS





March 31, 2009
                  (Unaudited)
              
              
              December 31,
                  2008ASSETSCURRENT
      ASSETS:Cash
              
              $
              41,328
              
              
              $
              1,688Prepaid
      expenses
              
              
              1,875
              
              
              
              3,750TOTAL
      CURRENT ASSETS
              
              $
              43,203
              
              
              $
              5,438LIABILITIES
      AND STOCKHOLDERS’ DEFICIENCYCURRENT
      LIABILITIES:Accounts
      payable and accrued expenses
              
              $
              11,574
              
              
              $
              3,861Loans
      payable to stockholders
              
              
              35,000
              
              
              
              -Accrued
      interest payable to stockholders
              
              
              3,030
              
              
              
              -TOTAL
      CURRENT LIABILITIES
              
              
              49,604
              
              
              
              3,861LONG
      TERM LIABILITIES:Loans
      payable to stockholders
              
              
              93,750
              
              
              
              88,750Accrued
      interest payable to stockholders
              
              
              8,418
              
              
              
              9,780102,168
              
              
              
              98,530TOTAL
      LIABILITIES
              
              
              151,772
              
              
              
              102,391STOCKHOLDERS’
      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
              
              
              (133,569
              )
              
              
              (121,953
              )TOTAL
      STOCKHOLDERS’ DEFICIENCY
              
              
              (108,569
              )
              
              
              (96,953
              )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
              
              $
              43,203
              
              
              $
              5,438





See
accompanying notes to unaudited financial statements.


1


SCOUTACQUISITION,
INC.


A
Development Stage Company


STATEMENTS OF
OPERATIONS


(Unaudited)





For the Three Months Ended March
                  31,
              
              
              For the
                Cumulative
                Period from
                January 3, 2006
                (Inception) to
                March 31,2009
              
              
              2008
              
              
              2009REVENUE
              
              $
              
              
              
              $
              -
              
              
              $General
      and administrative expenses
              
              
              9,948
              
              
              
              10,809
              
              
              
              122,121LOSS
      BEFORE OTHER EXPENSES
              
              
              (9,948
              )
              
              
              (10,809
              )
              
              
              (122,121
              )OTHER
      EXPENSES:Interest
      expense
              
              
              1,668
              
              
              
              1,052
              
              
              
              11,448NET
      (LOSS)
              
              $
              (11,616
              )
              
              $
              (11,861
              )
              
              $
              (133,569
              )BASIC
      AND DILUTED NET LOSS PER SHARE
              
              $
              (.01
              )
              
              $
              (.01
              )NUMBER
      OF SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS PER
      SHARE
              
              
              1,500,000
              
              
              
              1,500,000





See
accompanying notes to unaudited financial statements.


2


SCOUT ACQUISITION,
INC.


A
Development Stage Company


STATEMENT OF STOCKHOLDERS’
DEFICIENCY





(Deficit)AccumulatedAdditional
                  
                  
                  During
      thePreferred
      Stock
                  
                  
                  Common
      Stock
                  
                  
                  Paid-in
                  
                  
                  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
                  )Net
      (loss)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (11,616
                  )
                  
                  
                  (11,616
                  )BALANCE,
      MARCH 31, 2009(UNAUDITED)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,500,000
                  
                  
                  $
                  150
                  
                  
                  $
                  24,850
                  
                  
                  $
                  (133,569
                  )
                  
                  $
                  (108,569
                  )





See
accompanying notes to unaudited financial statements.


3


SCOUT ACQUISITION,
INC.


A
Development Stage Company


STATEMENTS OF CASH
FLOWS


(Unaudited)





For the Three Months Ended
                      March 31,
                    
                    
                    For the
                      Cumulative
                      Period from
                      January 3, 2006
                      (Inception) to
                      March 31,2009
                    
                    
                    2008
                    
                    
                    2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss)
                    
                    $
                    (11,616
                    )
                    
                    $
                    (11,861
                    )
                    
                    $
                    (133,569
                    )Adjustments
      to reconcile net (loss) to net cash used in operating
      activities:Changes
      in operating assets and liabilities:Decrease
      (increase) in prepaid expenses
                    
                    
                    1,875
                    
                    
                    
                    625
                    
                    
                    
                    (1,875
                    )Increase
      in accrued interest payable to stockholders
                    
                    
                    1,668
                    
                    
                    
                    908
                    
                    
                    
                    11,448Increase
      in accounts payable and accrued expenses
                    
                    
                    7,713
                    
                    
                    
                    3,644
                    
                    
                    
                    11,574Net
      cash used in operating activities
                    
                    
                    (360
                    )
                    
                    
                    (6,684
                    )
                    
                    
                    (112,422
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of common stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    25,000Proceeds
      from stockholder loans
                    
                    
                    40,000
                    
                    
                    
                    35,000
                    
                    
                    
                    128,750Net
      cash provided by financing activities
                    
                    
                    40,000
                    
                    
                    
                    35,000
                    
                    
                    
                    153,750NET
      INCREASE IN CASH
                    
                    
                    39,640
                    
                    
                    
                    28,316
                    
                    
                    
                    41,328Cash,
      beginning of period
                    
                    
                    1,688
                    
                    
                    
                    6,454
                    
                    
                    
                    -CASH,
      END OF PERIOD
                    
                    $
                    41,328
                    
                    
                    $
                    34,770
                    
                    
                    $
                    41,328





See
accompanying notes to unaudited financial statements.


4


SCOUT ACQUISITION,
INC.


A
Development Stage Company


NOTES TO UNAUDITED FINANCIAL
STATEMENTS


March
31, 2009





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 March 31, 2009 of $133,569.  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.


5


SCOUT ACQUISITION,
INC.


A
Development Stage Company


NOTES TO UNAUDITED FINANCIAL
STATEMENTS


March
31, 2009





NOTE
      1      -
            ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES


(Continued):





(e)
            Income
      Taxes:





As
required by FASB interpretation No. 48, “Accounting for Uncertainty in Income
Taxes—An Interpretation of FASB Statement No. 109” (“FIN 48”), the Company
recognizes the financial statement benefit of an uncertain tax position only
after considering the probability that a tax authority would sustain the
position in an examination. For tax positions meeting a "more-likely-than-not"
threshold, the amount recognized in the financial statements is the benefit
expected to be realized upon settlement with the tax authority. For tax
positions not meeting the threshold, no financial statement benefit is
recognized. The Company recognizes interest and penalties, if any, related to
uncertain tax positions in income tax expense. As of March 31, 2009, the Company
is unaware of any uncertain tax positions.





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.





(h)
            Business
      Combinations:





Effective
January 1, 2009, the Company adopted SFAS No. 141(R) and 160 and FSP 141(R)-1
without any effect.





Statement
of Financial Accounting Standards No. 141(R), “Business Combinations” (“SFAS
141R”), which replaced SFAS No. 141, “Business Combinations”, establishes
principles and requirements for determining how an enterprise recognizes and
measures the fair value of certain assets and liabilities acquired in a business
combination, including noncontrolling interests, contingent consideration and
certain acquired contingencies. SFAS 141(R) also requires acquisition-related
transaction expenses and restructuring costs be expensed as incurred rather than
capitalized as a component of the business combination.


6





SCOUT ACQUISITION,
INC.


A
Development Stage Company


NOTES TO UNAUDITED FINANCIAL
STATEMENTS


March
31, 2009





NOTE
      1      -
            ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES


(Continued):





(h)          
Business Combinations (continued):





Financial
Staff Position (“FSP”) 141(R)-1, “Accounting for Assets Acquired and Liabilities
Assumed in a Business Combination That Arise from Contingencies”, amended and
clarified SFAS 141R to address application issues associated with initial
recognition and measurement, subsequent measurement and accounting, and
disclosure of assets and liabilities arising from contingencies in a business
combination.





Statement
of Financial Accounting Standards No. No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – An Amendment of ARB No. 51” (“SFAS 160”),
establishes accounting and reporting standards for the noncontrolling interest
in a subsidiary (previously referred to as minority interests). SFAS 160 also
requires that a retained noncontrolling interest upon the deconsolidation of a
subsidiary be initially measured at its fair value. SFAS 160 also requires
reporting any noncontrolling interests as a separate component of stockholders’
equity and presenting any net income allocable to noncontrolling interests and
net income attributable to stockholders of the Company separately in its
consolidated statements of 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. At March 31, 2009, these
loans and related accrued interest of $3,030 are included in current
liabilities.





On March
27, 2009, the Company entered into 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.


7


SCOUT ACQUISITION,
INC.


A
Development Stage Company


NOTES TO UNAUDITED FINANCIAL
STATEMENTS


March
31, 2009





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.





NOTE
      4      -
            INCOME
      TAXES:





As of
March 31, 2009, the Company has net operating loss carryforwards of
approximately $134,000 to reduce future federal and state taxable income through
2029.




The
provision for (benefit from) income taxes consists of the following for the
period January 3, 2006 (inception) to March 31, 2009.




For the Three
                    Months Ended
                    March 31, 2009
                
                
                For the Three
                    Months Ended
                    March 31, 2008
                
                
                For the Cumulative
                    Period from January
                    3, 2006 (Inception) to
                    March 31, 2009Current:Federal
                
                $
                -
                
                
                $
                -
                
                
                $
                -Deferred:Federal
                
                
                (4,300
                )
                
                
                (4,100
                )
                
                
                (35,300
                )Valuation
      allowance
                
                
                4,300
                
                
                
                4,100
                
                
                
                35,300$
                -
                
                
                $
                -
                
                
                $
                -




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 Three
                    Months Ended
                    March 31, 2009
                
                
                For the Three
                    Months Ended
                    March 31, 2008
                
                
                For the
                    Cumulative
                    Period from
                    January 3, 2006
                    (Inception) to
                    March 31, 2009Statutory
      federal income tax rate
                
                
                (34
                )%
                
                
                (34
                )%
                
                
                (34
                )%Surtax
      exemption
                
                
                (3
                )%
                
                
                (0
                )%
                
                
                8
                %Valuation
      allowance
                
                
                37
                %
                
                
                34
                %
                
                
                26
                %Income
      tax rate
                
                
                0
                %
                
                
                0
                %
                
                
                0
                %


8





SCOUT ACQUISITION,
INC.


A
Development Stage Company


NOTES TO UNAUDITED FINANCIAL
STATEMENTS


March
31, 2009





NOTE
      5      -
            RECENT
      ACCOUNTING PRONOUNCEMENTS:





In April
2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value
of Financial Instruments.  This FSP amends FASB Statement No.
107, Disclosures about Fair
Value of Financial Instruments, to require disclosures about fair value
of financial instruments for interim reporting periods of publicly traded
companies as well as in annual financial statements.  This FSP also
amends APB Opinion No. 28, Interim Financial Reporting,to require those disclosures in summarized financial information at
interim reporting periods.  This FSP shall be effective for interim
reporting periods ending after June 15, 2009.  The Company will comply
with the additional disclosure requirements beginning in the second quarter of
2009.





In April
2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments. This FSP requires entities to separate
any other-than-temporary impairment of a debt security into two components when
there are credit related losses associated with the impaired debt security for
which management asserts that it does not have the intent to sell the security,
and it is more likely than not that it will not be required to sell the security
before recovery of its cost basis. The amount of the other-than-temporary
impairment related to a credit loss is recognized in earnings, and the amount of
the other-than-temporary impairment related to other factors is recorded in
other comprehensive loss. This FSP shall be effective for periods ending after
June 15, 2009, with early adoption permitted for periods ending after March 15,
2009. The Company currently does not have any debt security
investments.





In April
2009, the SEC released Staff Accounting Bulletin No. 111 (“SAB 111”) which
amends SAB Topic 5-M.  SAB 111 notes that FSP No. 115-2 and FAS 124-2
were scoped to debt securities only, and the FSP referred readers to SEC SAB
Topic 5-M for factors to consider with respect to other-than-temporary
impairments for equity securities.  With the amendments in SAB 111,
debt securities are excluded from the scope of Topic 5-M, but the SEC staff’s
views on equity securities are still included within the topic.  The
Company currently does not have any financial assets that are
other-than-temporary impaired.





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.


9





Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations.





Forward
Looking Statement Notice





Certain
statements made in this Quarterly Report on Form 10-Q are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) in regard to 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. (“we”, “us”, “our” or 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 Quarterly 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.





Description
of Business





The
Company was incorporated in the State of Delaware on January 3, 2006 and
maintains its principal executive office at c/o Sands Brothers Venture Capital
LLC, 90 Park Avenue, 31st Floor,
New York, NY 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 through the acquisition
of, or merger with, an operating business.  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 focused its efforts to identify a possible business
combination.





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 Securities Exchange
Act of 1934, as amended (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.


10





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.





Since our Registration Statement on
Form 10-SB went effective, our management has had contact and discussions with
representatives of other entities regarding a business combination with us. 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 March 31, 2009 and 2008, the
Company had assets equal to $43,203, comprised exclusively of cash and prepaid
expenses. This compares with assets of $5,438, comprised exclusively of cash and
prepaid expenses, as of December 31, 2008. The Company’s current liabilities as
of March 31, 2009 totaled $49,604, comprised exclusively of accounts payable and
accrued expenses, loans payable to stockholders and accrued interest payable to
stockholders. This compares to the Company’s current liabilities as of
December 31, 2008 of $3,861, 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.


11





The following is a summary of the
Company's cash flows provided by (used in) operating, investing, and financing
activities for the three months ended March 31, 2009 and March 31, 2008 and for
the cumulative period from January 3, 2006 (inception) to March 31,
2009:




For the Three
                  Months Ended
                  March 31, 2009
                
                
                For the Three
                  Months Ended
                  March 31, 2008
                
                
                For the Cumulative Period
                  from January 3, 2006
                  (Inception) to March 31, 2009Net
      cash used in operating activities
                
                $
                (360
                )
                
                $
                (6,684
                )
                
                $
                (112.422
                )Net
      cash used in investing activities
                
                $
                -
                
                
                $
                -
                
                
                $
                -Net
      cash provided by financing activities
                
                $
                40,000
                
                
                $
                35,000
                
                
                $
                153,750Net
      increase in cash
                
                $
                39,640
                
                
                $
                28,316
                
                
                $
                41,328





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 March 31,
2009.  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
three months ended March 31, 2009, the Company had a net loss of $11,616
consisting of interest expense on stockholder loans and legal,
accounting, audit and other professional service fees incurred in relation to
the filing of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2008 in March of 2009.  This compares with a net loss of
$11,861 for the three months ended March 31, 2008, consisting of interest
expense on stockholder loans and legal, accounting, audit and other professional
service fees incurred in relation to the filing of the Company’s Annual Report
on Form 10-KSB for the year ended December 31, 2007 in March of
2008.





For the
cumulative period from January 3, 2006 (inception) to March 31, 2009, the
Company had a net loss of $133,569, consisting of interest expense on
stockholder loans and 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-SB in June of 2006, the filing of
the Company’s Quarterly Reports on Form 10-QSB and Form 10-Q and the filing of
the Company’s Annual Reports on Form 10-KSB 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.


12





Item
3.  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
information required by this Item.





Item
4T.  Controls and Procedures.





Evaluation
of Disclosure Controls and Procedures





We maintain disclosure controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed pursuant to the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules,
regulations and related forms, and that such information is accumulated and
communicated to our principal executive officer and principal financial officer,
as appropriate, to allow timely decisions regarding required
disclosure.





As of March 31, 2009, we carried out an
evaluation, under the supervision and with the participation of our principal
executive officer and our principal financial officer of the effectiveness of
the design and operation of our disclosure controls and procedures. Based on
this evaluation, our principal executive officer and our principal financial
officer concluded that our disclosure controls and procedures were effective as
of the end of the period covered by this report.





Changes
in Internal Controls





There have been no changes in our
internal controls over financial reporting during the quarter ended March 31,
2009 that have materially affected or are reasonably likely to materially affect
our internal controls.





PART II — OTHER
INFORMATION





Item
1.  Legal Proceedings.





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





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
information required by this Item.





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





None.





Item 3.  Defaults Upon
Senior Securities.





None.





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





None.


13





Item 5.  Other
Information.





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 Sands Brother 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”), 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 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
6.  Exhibits.





(a)  Exhibits
required by Item 601 of Regulation S-K.





Exhibit
              
              Description*3.1
              
              Certificate
      of Incorporation, as filed with the Delaware Secretary of State on January
      3, 2006.*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 Quarterly
      Report on Form 10-Q for the quarter ended March 31,
  2009.31.2
              
              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 Quarterly
      Report on Form 10-Q for the quarter ended March 31,
  2009.32.1
              
              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 Securities and Exchange Commission on June 30, 2006 and
      incorporated herein by this
reference.


14





SIGNATURES





Pursuant to the requirements 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.





Dated:
      May 13, 2009
              SCOUT
      ACQUISITION, INC.By:
              /s/ Scott BailyScott
      BailyPresident,
      Secretary, and DirectorPrincipal
      Executive OfficerPrincipal
      Financial Officer