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 June 30, 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 o.
 
 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 August 12, 2009.
  
  SCOUT
ACQUISITION, INC.
 
 -
INDEX -
 
 PagePART
      I – FINANCIAL INFORMATION:Item
      1.
                              Financial
      Statements:Balance
      Sheets as of June 30, 2009 (Unaudited) and December 31,
    2008
                              
                              1Statements
      of Operations (Unaudited) for the Three and Six Months
    Ended
                              
                              2June
      30, 2009 and 2008 and for the Cumulative Period from January 3,
      2006(Inception)
      to June 30, 2009Statement
      of Stockholders’ Deficiency for the Period from January 3, 2006
      (Inception)
                              
                              3to
      June 30, 2009 (Unaudited)Statements
      of Cash Flows (Unaudited) for the Six Months Ended June 30,
      2009
                              
                              4and
      2008 and for the Cumulative Period from January 3, 2006
      (Inception)to
      June 30, 2009Notes
      to Unaudited Financial Statements
                              
                              5Item
      2.
                              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                              
                              11Item
      3.
                              Quantitative
      and Qualitative Disclosures About Market Risk
                              
                              14Item
      4.
                              Controls
      and Procedures
                              
                              14PART
      II – OTHER INFORMATION:Item
      1.
                              Legal
      Proceedings
                              
                              14Item
      1A.
                              Risk
      Factors
                              
                              14Item
      2.
                              Unregistered
      Sales of Equity Securities and Use of Proceeds
                              
                              14Item
      3.
                              Defaults
      Upon Senior Securities
                              
                              14Item
      4.
                              Submission
      of Matters to a Vote of Security Holders
                              
                              14Item
      5.
                              Other
      Information
                              
                              15Item
      6.
                              Exhibits
                              
                              15Signatures
                              
                              16
  
  PART I – FINANCIAL
INFORMATION
 
 Item
1.  Financial Statements.
 SCOUT ACQUISITION,
INC.
 A
Development Stage Company
 BALANCE
SHEETS
 
 June
      30, 2009
                    (Unaudited)
                
                
                December
      31,
                    2008ASSETSCURRENT
      ASSETS:Cash
                
                $
                24,949
                
                
                $
                1,688Prepaid
      expenses
                
                
                -
                
                
                
                3,750TOTAL
      ASSETS
                
                $
                24,949
                
                
                $
                5,438LIABILITIES
      AND STOCKHOLDERS’ DEFICIENCYCURRENT
      LIABILITIES:Accounts
      payable and accrued expenses
                
                $
                -
                
                
                $
                3,861Loans
      payable to stockholders
                
                
                35,000
                
                
                
                -Accrued
      interest payable to stockholders
                
                
                3,752
                
                
                
                -TOTAL
      CURRENT LIABILITIES
                
                
                38,752
                
                
                
                3,861LONG
      TERM LIABILITIES:Loans
      payable to stockholders
                
                
                93,750
                
                
                
                88,750Accrued
      interest payable to stockholders
                
                
                10,152
                
                
                
                9,780103,902
                
                
                
                98,530TOTAL
      LIABILITIES
                
                
                142,654
                
                
                
                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
                
                
                (142,705
                )
                
                
                (121,953
                )TOTAL
      STOCKHOLDERS’ DEFICIENCY
                
                
                (117,705
                )
                
                
                (96,953
                )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
                
                $
                24,949
                
                
                $
                5,438
 
 See
accompanying notes to unaudited financial statements.
  1
 
 SCOUT ACQUISITION,
INC.
 A
Development Stage Company
 STATEMENTS OF
OPERATIONS
 (Unaudited)
 
 For the Three Months Ended
                    June 30,
                
                
                For the Six Months Ended June
                    30,
                
                
                For the
                    Cumulative
                    Period from
                    January 3,
                    2006
                    (Inception) to
                    June 30,2009
                
                
                2008
                
                
                2009
                
                
                2008
                
                
                2009REVENUE
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -General
      and administrative expenses
                
                
                6,680
                
                
                
                10,383
                
                
                
                16,628
                
                
                
                21,192
                
                
                
                128,801LOSS
      BEFORE OTHER EXPENSES
                
                
                (6,680
                )
                
                
                (10,383
                )
                
                
                (16,628
                )
                
                
                (21,192
                )
                
                
                (128,801
                )OTHER
      EXPENSES:Interest
      expense
                
                
                2,456
                
                
                
                1,631
                
                
                
                4,124
                
                
                
                2,683
                
                
                
                13,904NET
      LOSS
                
                $
                (9,136
                )
                
                $
                (12,014
                )
                
                $
                (20,752
                )
                
                $
                (23,875
                )
                
                $
                (142,705
                )BASIC
      AND DILUTED NET LOSS PER SHARE
                
                $
                (.01
                )
                
                $
                (.01
                )
                
                $
                (.01
                )
                
                $
                (.02
                )NUMBER
      OF SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS PER
      SHARE
                
                
                1,500,000
                
                
                
                1,500,000
                
                
                
                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
 FOR THE PERIOD FROM JANUARY 3, 2006 (INCEPTION) TO
JUNE 30, 2009
  Preferred Stock
                                                                    
                                                                    
                                                                    Common Stock
                                                                    
                                                                    
                                                                    Additional
                                                                      Paid-in
                                                                    
                                                                    
                                                                    (Deficit)
                                                                        Accumulated
                                                                        During the
                                                                      Development
                                                                    
                                                                    
                                                                    Stockholders’Shares
                                                                    
                                                                    
                                                                    Amount
                                                                    
                                                                    
                                                                    Shares
                                                                    
                                                                    
                                                                    Amount
                                                                    
                                                                    
                                                                    Capital
                                                                    
                                                                    
                                                                    Stage
                                                                    
                                                                    
                                                                    DeficiencyBALANCE,
      JANUARY 3, 2006
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    -Issuance
      of common stock
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    1,500,000
                                                                    
                                                                    
                                                                    
                                                                    150
                                                                    
                                                                    
                                                                    
                                                                    24,850
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    25,000Net
      (loss)
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    (39,354
                                                                    )
                                                                    
                                                                    
                                                                    (39,354
                                                                    )BALANCE,
      DECEMBER 31, 2006
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    1,500,000
                                                                    
                                                                    
                                                                    
                                                                    150
                                                                    
                                                                    
                                                                    
                                                                    24,850
                                                                    
                                                                    
                                                                    
                                                                    (39,354
                                                                    )
                                                                    
                                                                    
                                                                    (14,354
                                                                    )Net
      (loss)
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    (41,276
                                                                    )
                                                                    
                                                                    
                                                                    (41,276
                                                                    )BALANCE,
      DECEMBER 31, 2007
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    1,500,000
                                                                    
                                                                    
                                                                    
                                                                    150
                                                                    
                                                                    
                                                                    
                                                                    24,850
                                                                    
                                                                    
                                                                    
                                                                    (80,630
                                                                    )
                                                                    
                                                                    
                                                                    (55,630
                                                                    )Net
      (loss)
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    (41,323
                                                                    )
                                                                    
                                                                    
                                                                    (41,323
                                                                    )BALANCE,
      DECEMBER 31, 2008
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    1,500,000
                                                                    
                                                                    
                                                                    
                                                                    150
                                                                    
                                                                    
                                                                    
                                                                    24,850
                                                                    
                                                                    
                                                                    
                                                                    (121,953
                                                                    )
                                                                    
                                                                    
                                                                    (96,953
                                                                    )Net
      (loss)
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    (20,752
                                                                    )
                                                                    
                                                                    
                                                                    (20,752
                                                                    )BALANCE,
      JUNE 30, 2009
                                                                      (UNAUDITED)
                                                                    
                                                                    
                                                                    -
                                                                    
                                                                    
                                                                    $
                                                                    -
                                                                    
                                                                    
                                                                    
                                                                    1,500,000
                                                                    
                                                                    
                                                                    $
                                                                    150
                                                                    
                                                                    
                                                                    $
                                                                    24,850
                                                                    
                                                                    
                                                                    $
                                                                    (142,705
                                                                    )
                                                                    
                                                                    $
                                                                    (117,705
                                                                    )
 
 See
accompanying notes to unaudited financial statements.
  3
 
 SCOUT ACQUISITION,
INC.
 A
Development Stage Company
 STATEMENTS OF CASH
FLOWS
 (Unaudited)
 
 For the Six Months Ended
                    June 30,
                
                
                For the
                  Cumulative
                  Period from
                  January 3, 2006
                  (Inception) to
                  June 30,2009
                
                
                2008
                
                
                2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss)
                
                $
                (20,752
                )
                
                $
                (23,875
                )
                
                $
                (142,705
                )Adjustments
      to reconcile net (loss) to net cash used in operating
      activities:Changes
      in operating assets and liabilities:Decrease
      in prepaid expenses
                
                
                3,750
                
                
                
                2,500
                
                
                
                -Increase
      in accrued interest payable
                
                
                4,124
                
                
                
                -
                
                
                
                13,904(Decrease)
      in accounts payable and accrued expenses
                
                
                (3,861
                )
                
                
                (3,066
                )
                
                
                -Net
      cash used in operating activities
                
                
                (16,739
                )
                
                
                (24,441
                )
                
                
                (128,801
                )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
                
                
                23,261
                
                
                
                10,559
                
                
                
                24,949Cash,
      beginning of period
                
                
                1,688
                
                
                
                6,454
                
                
                
                -CASH,
      END OF PERIOD
                
                $
                24,949
                
                
                $
                17,013
                
                
                $
                24,949
 
 See
accompanying notes to unaudited financial statements.
  4


SCOUT ACQUISITION,
INC.
 A
Development Stage Company
 NOTES TO UNAUDITED FINANCIAL
STATEMENTS
 June
30, 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 June 30, 2009 of $142,705.  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
 June
30, 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 June 30, 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
 June
30, 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. 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 June 30, 2009
these loans and related accrued interest of $3,752 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
 June
30, 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
June 30, 2009, the Company has net operating loss carryforwards of approximately
$143,000 to reduce future federal and state taxable income through
2028.
  The
provision for (benefit from) income taxes consists of the following for the
Period January 3, 2006 (inception) to June 30, 2009.
  For the Six Months
                      Ended June 30,
                      2009
                  
                  
                  For The Six Months
                      Ended June 30,
                      2008
                  
                  
                  For The Cumulative
                      Period from
                      January 3, 2006
                      (Inception) to June
                      30, 2009Current:Federal
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Deferred
      tax asset:Federal
                  
                  
                  7,900
                  
                  
                  
                  8,100
                  
                  
                  
                  38,900Valuation
      allowance
                  
                  
                  (7,900
                  )
                  
                  
                  (8,100
                  )
                  
                  
                  (38,900
                  )$
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
  8
  SCOUT ACQUISITION,
INC.
 A
Development Stage Company
 NOTES TO UNAUDITED FINANCIAL
STATEMENTS
 June
30, 2009
 
 NOTE
      4    -
              INCOME
      TAXES (continued):
  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 Six
                      Months Ended
                      June 30, 2009
                  
                  
                  For The Six
                      Months Ended
                      June 30, 2008
                  
                  
                  For The
                      Cumulative
                      Period from
                      January 3, 2006
                      (Inception) to
                      June 30, 2009Statutory
      federal income tax rate
                  
                  
                  (34
                  )%
                  
                  
                  (34
                  )%
                  
                  
                  (34
                  )%Surtax
      exemption
                  
                  
                  (4
                  )%
                  
                  
                  0
                  %
                  
                  
                  7
                  %Valuation
      allowance
                  
                  
                  38
                  %
                  
                  
                  34
                  %
                  
                  
                  27
                  %Income
      tax rate
                  
                  
                  0
                  %
                  
                  
                  0
                  %
                  
                  
                  0
                  %
 
 NOTE
      5    -
              RECENT
      ACCOUNTING PRONOUNCEMENTS:
 
 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.
 
 NOTE
      6    -
              INTERIM
      FINANCIALS STATEMENTS:
 
 The
accompanying interim financial statements of the Company have been prepared in
accordance with accounting principles generally accepted for interim financial
statements presentation and in accordance with the instructions to Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statement presentation. In the opinion of
management, all adjustments for a fair statement of the results of operations
and financial position for the interim periods presented have been included. All
such adjustments are of a normal recurring nature. The accompanying financial
statements and the information included under the heading Management’s
Discussion and Analysis of Financial Condition and Results of Operations should
be read in conjunction with the Company’s audited financial statements and
related notes included in the Company’s Form 10-K as of December 31, 2008.
Interim results are not necessarily indicative of the results for a full
year.
  9
  SCOUT ACQUISITION,
INC.
 A
Development Stage Company
 NOTES TO UNAUDITED FINANCIAL
STATEMENTS
 June
30, 2009
 
 NOTE
      7    -
              SUBSEQUENT
      EVENTS:
 
 We
evaluated all events or transactions that occurred after June 30, 2009 up
through
August 12, 2009, the date we issued these financial statements. During
this period the Company did not have any material recognizable subsequent
events
  10
  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.
  11
 
 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
June 30, 2009, the Company had assets equal to $24,949 comprised exclusively of
cash. 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 June 30, 2009 totaled $38,752, comprised exclusively of 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.
 
 The
following is a summary of the Company's cash flows provided by (used in)
operating, investing, and financing activities for the six months ended June 30,
2009 and June 30, 2008 and for the cumulative period from January 3, 2006
(Inception) to June 30, 2009:
  12
 
 For the Six
                    Months Ended
                    June 30, 2009
                  
                  
                  For the Six
                    Months Ended
                    June 30, 2008
                  
                  
                  For the Cumulative Period
                    from January 3, 2006
                    (Inception) to June 30, 2009Net
      cash used in operating activities
                  
                  $
                  (16,739
                  )
                  
                  $
                  (24,441
                  )
                  
                  $
                  (128,801
                  )Net
      cash used in investing activities
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Net
      cash provided by financing activities
                  
                  $
                  40,000
                  
                  
                  $
                  35,000
                  
                  
                  $
                  153,750Net
      increase in cash
                  
                  $
                  23,261
                  
                  
                  $
                  10,559
                  
                  
                  $
                  24,949
 
 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 June 30,
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 and six months ended June 30, 2009, the Company had a net loss of $9,136
and $20,752 respectively, 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 and Form 10-Q for the quarter ended
March 31, 2009 in May of 2009. This compares with a net loss of $12,014 and
$23,875 for the three and six months ended June 30, 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 and Form
10-Q for the quarter ended March 31, 2008 in May of 2008.
 
 For the
cumulative period from January 3, 2006 (Inception) to June 30, 2009, the Company
had a net loss of $142,705 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.
  13
  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
4.  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 June 30, 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 June 30,
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.
  14
  Item 5.  Other
Information.
 
 None.
 
 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 June 30,
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 June 30,
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.
  15
  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:
      August 12, 2009
              SCOUT
      ACQUISITION, INC.By:
              /s/ Scott BailyScott
      BailyPresident,
      Secretary, and DirectorPrincipal
      Executive OfficerPrincipal
      Financial Officer