| Scout                Acquisition, Inc.                                                          |
|-------------------------------------------------------------------------------------------------|
| (Exact                name of small business issuer as specified in its                charter) |

| Delaware                                       | 26-0133324                            |
|------------------------------------------------|---------------------------------------|
| (State                or other jurisdiction of | (I.R.S.                employer       |
| incorporation                or organization)  | identification                number) |

| c/o                Sands Brothers Venture Capital LLC   |                      |
|---------------------------------------------------------|---------------------------|
| 90                Park Avenue, 31st Floor               |                      |
| New                York, New York                       | 10016                     |
| (Address                of principal executive offices) | (Zip                Code) |

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**SCOUT      ACQUISITION, INC.**

**-      INDEX -**

|                                                                                              | Page   |
|---------------------------------------------------------------------------------------------------|--------|
| **PART                I - FINANCIAL INFORMATION:**                                                |   |
|                                                                                              |   |
| Balance                Sheet as of June 30, 2006 (unaudited)                                      | F-1    |
|                                                                                              |   |
| Statements                of Operations from January 3, 2006 (Inception)                          | F-2    |
| to                June 30, 2006 (unaudited) and the three months ended                            |   |
| June                30, 2006 (unaudited)                                                          |   |
|                                                                                              |   |
| Statement                of Stockholders' Equity from January 3, 2006 (Inception)                 | F-3    |
| to                June 30, 2006 (unaudited)                                                       |   |
|                                                                                              |   |
| Statement                of Cash Flows from January 3, 2006 (Inception)                           | F-4    |
| to                June 30, 2006 (unaudited)                                                       |   |
|                                                                                              |   |
| Notes                to Unaudited Financial Statements                                            | F-5    |
|                                                                                              |   |
| Item                2. Management's Discussion and Analysis or Plan of                Operation   | 1      |
|                                                                                              |   |
| Item                3. Controls and Procedures                                                    | 1      |
|                                                                                              |   |
| **PART                II - OTHER INFORMATION:**                                                   |   |
|                                                                                              |   |
| Item                1. Legal Proceedings                                                          | 2      |
|                                                                                              |   |
| Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds | 2      |
|                                                                                              |   |
| Item                3. Defaults Upon Senior Securities                                            | 2      |
|                                                                                              |   |
| Item                4. Submission of Matters to a Vote of Security Holders                        | 2      |
|                                                                                              |   |
| Item                5. Other Information                                                          | 2      |
|                                                                                              |   |
| Item                6. Exhibits                                                                   | 2      |
|                                                                                              |   |
| Signatures                                                                                        | 3      |

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**PART      I - FINANCIAL INFORMATION**

**Item      1. Financial Statements.**

**SCOUT      ACQUISITION, INC.**

**A      Development Stage Company**

**BALANCE      SHEET (UNAUDITED)**

**As      of June 30, 2006**

| **ASSETS**                                                                                                                                         |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                               |   |   |   |
| **CURRENT                ASSETS:**                                                                                                                 |   |   |   |   |
| Cash                and cash equivalents                                                                                                           |   | **$** | **25,000** |   |
|                                                                                                                                               |   |   |   |   |
|                                                                                                                                               |   |   |   |   |
| **TOTAL                ASSETS**                                                                                                                    |   | **$** | **25,000** |   |
|                                                                                                                                               |   |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                      |
|                                                                                                                                               |   |   |   |   |
| **CURRENT                LIABILITIES:**                                                                                                            |   |   |   |   |
| Accounts                payable and accrued expenses                                                                                               |   | **$** | **8,339** |   |
|                                                                                                                                               |   |   | **8,339** |   |
|                                                                                                                                               |   |   |   |   |
| **LONG                TERM LIABILITIES:**                                                                                                          |   |   |   |   |
| Loans                from stockholders                                                                                                             |   |   | **12,500** |   |
|                                                                                                                                               |   |   |   |   |
| **TOTAL                LIABILITIES**                                                                                                               |   |   | **20,839** |   |
|                                                                                                                                               |   |   |   |   |
| **STOCKHOLDERS’                EQUITY:**                                                                                                     |   |   |   |   |
| Preferred                stock, $.0001 par value; 10,000,000 shares authorized; none issued                and                outstanding          |   |   | **-** |   |
| Common                stock, $.0001 par value; 75,000,000 shares authorized; 1,500,000                shares                issued and outstanding |   |   | **150** |   |
| Additional                paid-in capital                                                                                                          |   |   | **24,850** |   |
| Deficit                accumulated during the development stage                                                                                    |   |   | **(20,839** | **)** |
|                                                                                                                                               |   |   |   |   |
| **TOTAL                STOCKHOLDERS’ EQUITY**                                                                                                |   |   | **4,161** |   |
|                                                                                                                                               |   |   |   |   |
| **TOTAL                LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                |   | **$** | **25,000** |   |

**See      accompanying notes to unaudited financial statements**

----

**SCOUT      ACQUISITION, INC.**

**A      Development Stage Company**

**STATEMENTS      OF OPERATIONS**

|                                                                    |   | **For                the Cumulative Period from Inception (January 3, 2006) to June 30,                2006** |          | For                the Three Months Ended June 30, 2006 |   |
|-------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------|---------------|---------------------------------------------------------|--------|
|                                                                    |   | **(unaudited)**                                                                                                    |          | (unaudited)                                             |   |
|                                                                    |   |                                                                                                               |          |                                                    |   |
| **REVENUE**                                                             |   | **$**                                                                                                              | **-**         |                                                    | $      | - |   |
|                                                                    |   |                                                                                                               |          |                                                    |   |   |   |
| General                and administrative expenses                      |   |                                                                                                               | **20,589**    |                                                    |   | 8,089 |   |
|                                                                    |   |                                                                                                               |          |                                                    |   |   |   |
| **LOSS                BEFORE OTHER EXPENSES**                           |   |                                                                                                               | **(20,589**   | **)**                                                   |   | (8,089 | ) |
|                                                                    |   |                                                                                                               |          |                                                    |   |   |   |
| **OTHER                EXPENSES:**                                      |   |                                                                                                               |          |                                                    |   |   |   |
| Interest                expense                                         |   |                                                                                                               | **250**       |                                                    |   | 125 |   |
|                                                                    |   |                                                                                                               |          |                                                    |   |   |   |
| **NET                (LOSS)**                                           |   | **$**                                                                                                              | **(20,839**   | **)**                                                   | $      | (8,214 | ) |
|                                                                    |   |                                                                                                               |          |                                                    |   |   |   |
| **BASIC                AND DILUTED NET LOSS PER SHARE**                 |   | **$**                                                                                                              | **(.01**      | **)**                                                   | $      | (.01 | ) |
|                                                                    |   |                                                                                                               |          |                                                    |   |   |   |
| **WEIGHTED                AVERAGE NUMBER OF COMMON SHARES OUTSTANDING** |   |                                                                                                               | **1,500,000** |                                                    |   | 1,500,000 |   |

**See      accompanying notes to unaudited financial statements**

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**SCOUT      ACQUISITION, INC.**

**A      Development Stage Company**

**STATEMENT      OF STOCKHOLDERS’ EQUITY**

**For      the period January 3, 2006 (inception) through June 30,      2006**

**(UNAUDITED)**

|                                        |   |                           |   |                        |   | Additional                Paid-in Capital |   | (Deficit)                Accumulated During the Development Stage |      | Stockholders’                Equity |   |
|---------------------------------------------|--------|--------------------------------|--------|-----------------------------|--------|-------------------------------------------|--------|-------------------------------------------------------------------|-----------|-------------------------------------------|--------|
|                                        |   |                           |   |                        |   |                                      |   |                                                              |      |
|                                        |   |                           |   |                        |   |
|                                        |   | Preferred                Stock |   | Common                Stock |   |
|                                        |   | Shares                         |   | Amount                      |   | Shares                                    |   | Amount                                                            |      |
| **BALANCE                AT INCEPTION**     |   |                           | -      |                        | $      | -                                         |   |                                                              | -         |                                      | $      | - |   | $ | - |   | $ | - |   | $ | - |   |
| Issuance                of common stock     |   |                           | -      |                        |   | -                                         |   |                                                              | 1,500,000 |                                      |   | 150 |   |   | 24,850 |   |   | - |   |   | 25,000 |   |
| Net                (loss)                   |   |                           | -      |                        |   | -                                         |   |                                                              | -         |                                      |   | - |   |   | - |   |   | (20,839 | ) |   | (20,839 | ) |
| **BALANCE                AT JUNE 30, 2006** |   |                           | -      |                        | $      | -                                         |   |                                                              | 1,500,000 |                                      | $      | 150 |   | $ | 24,850 |   | $ | (20,839 | ) | $ | 4,161 |   |

**See      accompanying notes to unaudited financial statements**

----

**SCOUT      ACQUISITION, INC.**

**A      Development Stage Company**

**STATEMENT      OF CASH FLOWS**

**For      the Cumulative Period January 3, 2006 (inception) through June 30,      2006**

**(unaudited)**

| **CASH                FLOWS FROM OPERATING ACTIVITIES:**                                                    |   |   |    |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| Net                loss                                                                                     |   | $      | (20,839 | )      |
| Adjustments                to reconcile net (loss) to net cash used in operating                activities: |   |   |    |   |
| Changes                in operating liabilities:                                                            |   |   |    |   |
| Increase                in accounts payable and accrued expenses                                            |   |   | 8,339   |   |
| **Net                cash used in operating activities**                                                    |   |   | (12,500 | )      |
|                                                                                                        |   |   |    |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES:**                                                    |   |   |    |   |
| Proceeds                from issuance of common stock                                                       |   |   | 25,000  |   |
| Proceeds                from stockholder loans                                                              |   |   | 12,500  |   |
| **Net                cash provided by financing activities**                                                |   |   | 37,500  |   |
|                                                                                                        |   |   |    |   |
| **NET                INCREASE IN CASH AND CASH EQUIVALENTS**                                                |   |   | 25,000  |   |
|                                                                                                        |   |   |    |   |
| Cash                and cash equivalents at beginning of period                                             |   |   | -       |   |
|                                                                                                        |   |   |    |   |
| **CASH                AND CASH EQUIVALENTS AT END OF PERIOD**                                               |   | $      | 25,000  |   |

**See      accompanying notes to unaudited financial statements**

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**SCOUT      ACQUISITION, INC.**

**A      Development Stage Company**

**NOTES      TO UNAUDITED FINANCIAL STATEMENTS**

**June      30, 2006**

| **NOTE              1 -** | **ORGANIZATION                AND SUMMARY OF SIGNIFICANT ACCOUNTING                POLICIES:** |
|---------------------------|------------------------------------------------------------------------------------------------|

|  | ***(a)*** | ***Organization                and Business:*** |
|--|-----------|-------------------------------------------------|

|  | ***(b)*** | ***Basis                of Presentation:*** |
|--|-----------|---------------------------------------------|

|  | ***(c)*** | ***Use                of Estimates:*** |
|--|-----------|----------------------------------------|

|  | ***(d)*** | ***Cash                and Cash Equivalents:*** |
|--|-----------|-------------------------------------------------|

|  | ***(e)*** | ***Income                Taxes:*** |
|--|-----------|------------------------------------|

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**SCOUT      ACQUISITION, INC.**

**A      Development Stage Company**

**NOTES      TO UNAUDITIED FINANCIAL STATEMENTS**

**June      30, 2006**

| **NOTE              1 -** | **ORGANIZATION                AND SUMMARY OF SIGNIFICANT ACCOUNTING                POLICIES** |
|---------------------------|-----------------------------------------------------------------------------------------------|

**(Continued):**

|  | ***(f)*** | ***Loss                per Common Share:*** |
|--|-----------|---------------------------------------------|

|  | ***(g)*** | ***Fair                Value of Financial                Instruments:*** |
|--|-----------|--------------------------------------------------------------------------|

| **NOTE              2 -** | **LOANS                FROM STOCKHOLDERS:** |
|---------------------------|---------------------------------------------|

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**SCOUT      ACQUISITION, INC.**

**A      Development Stage Company**

**NOTES      TO UNAUDITED FINANCIAL STATEMENTS**

**June      30, 2006**

| **NOTE              3 -** | **CAPITAL                STOCK:** |
|---------------------------|-----------------------------------|

| **NOTE              4 -** | **BASIS                OF PRESENTATION FOR INTERIM FINANCIAL                STATEMENTS:** |
|---------------------------|-------------------------------------------------------------------------------------------|

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**Item      2. Management’s Discussion and Analysis or Plan of Operation.**

**Item      3. Controls and Procedures.**

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**PART      II — OTHER INFORMATION**

**Item      1. Legal Proceedings. **

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

**Item      3. Defaults Upon Senior Securities.**

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

**Item      5. Other Information. **

**Item      6. Exhibits.**

|  | Exhibit | Description |
|--|---------|-------------|

|  | *3.1 | Certificate                of Incorporation |
|--|------|---------------------------------------------|

|  | *3.2 | By-laws |
|--|------|---------|

|  | 31.1 | Certification                of the Company’s Principal Executive Officer and 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-QSB for the                quarter ended June 30, 2006. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 32.1 | Certification                of the Company’s Principal Executive Officer and 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 9, 2006, and incorporated                herein                by this reference. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

|                                  |                           |                         |
|---------------------------------------|--------------------------------|------------------------------|
| Date:              September 15, 2006 | SCOUT ACQUISITION, INC.        |
|                             |                      |                    |
|                                  | By:                  | /s/              Scott Baily |
|                                  | Name:              Scott Baily |
|                                  | Title:              President  |

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