**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**FORM        10-QSB**

**x QUARTERLY        REPORT PURSUANT TO        SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**.        000-52068**

----

**GRACE        7, INC.**

----

| **Delaware**                                                                                     |   | **20-3709028**                                                            |
|--------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|
| (State                    or other jurisdiction ofincorporation                    or formation) |        | (I.R.S.                    EmployerIdentification                    No.) |

**N/A**

**www.SourlisLaw.com**

----

----

| **PART                  I - FINANCIAL STATEMENTS**                                                         |   |
|------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                       |   |
| Item                  1. Financial Statements                                                              | 3      |
|                                                                                                       |   |
| Item                  2. Management’s Discussion and Analysis or Plan of                  Operations | 10     |
|                                                                                                       |   |
| Item                  3. Controls and Procedures                                                           | 10     |
|                                                                                                       |   |
| **PART                  II – OTHER INFORMATION**                                                     |   |
|                                                                                                       |   |
| Item                  1. Legal Proceedings                                                                 | 11     |
|                                                                                                       |   |
| Item                  2. Changes in Securities                                                             | 11     |
|                                                                                                       |   |
| Item                  3. Defaults Upon Senior Securities                                                   | 11     |
|                                                                                                       |   |
| Item                  4. Submission of Matters to a Vote of Security Holders                               | 11     |
|                                                                                                       |   |
| Item                  5. Other Information                                                                 | 11     |
|                                                                                                       |   |
| Item                  6. Exhibits and Reports of Form 8-K                                                  | 11     |

----

**PART        I – FINANCIAL STATEMENTS**

----

|                                                                                                                                            |   | 11/30/2007    |   | 5/31/2007 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|-----------|--------|
|                                                                                                                                            |   | **Unaudited** |   |      |   |
| Assets                                                                                                                                          |   |          |   |      |   |   |   |
| Prepaid                  expenses                                                                                                               |   | $             | -      |      | $      | 1,500 |   |
|                                                                                                                                            |   |          |   |      |   |   |   |
| Total                  assets                                                                                                                   |   | $             | -      |      | $      | 1,500 |   |
|                                                                                                                                            |   |          |   |      |   |   |   |
| LIABILITIES                  AND STOCKHOLDER'S EQUITY (DEFICIT)                                                                                 |   |          |   |      |   |   |   |
|                                                                                                                                            |   |          |   |      |   |   |   |
| Current                  liabilities                                                                                                            |   |          |   |      |   |   |   |
| Accounts                  payable                                                                                                               |   | $             | 1,214  |      | $      | 4,000 |   |
|                                                                                                                                            |   |          |   |      |   |   |   |
| Total                  liabilities                                                                                                              |   |          | 1,214  |      |   | 4,000 |   |
|                                                                                                                                            |   |          |        |      |   |  |   |
| Commitment                  and contingencies                                                                                                   |   |          | -      |      |   | - |   |
|                                                                                                                                            |   |          |   |      |   |   |   |
| Stockholder's                  equity (deficit)                                                                                                 |   |          |   |      |   |   |   |
| Preferred                  stock, $.0001 par value, authorized 10,000,000 shares, none                  issued                                  |   |          | -      |      |   | - |   |
| Common                  stock, $.0001 par value, authorized 100,000,000 shares 100,000                  issued and                  outstanding |   |          | 10     |      |   | 10 |   |
| Additional                  paid-in capital                                                                                                     |   |          | 5,320  |      |   | 2,784 |   |
| Deficit                  accumulated during the development stage                                                                               |   |          | (6,544 | )         |   | (5,294 | ) |
|                                                                                                                                            |   |          |   |      |   |   |   |
| Total                  stockholder's equity (deficit)                                                                                           |   |          | (1,214 | )         |   | (2,500 | ) |
|                                                                                                                                            |   |          |   |      |   |   |   |
| Total                  liabilities and stockholder's equity (deficit)                                                                           |   | $             | -      |      | $      | 1,500 |   |

----

----

|                                                                                                                          |   |                        |    |                        |   |                           |   | For the period    |    |
|-------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|-----------------------------|--------|--------------------------------|--------|-----------------------------|---------|
|                                                                                                                          |   | For the three     |    | For the six       |   | For the period       |   | October 27, 2005  |    |
|                                                                                                                          |   | months ended           |    | months ended           |   | June 2, 2006 to |   | (Inception) to         |    |
|                                                                                                                          |   | November 30, 2007 |    | November 30, 2007 |   | November 30, 2006    |   | November 30, 2007 |    |
|                                                                                                                          |   | **Unaudited**               |    | **Unaudited**               |   | **Unaudited**                  |   | **Unaudited**               |    |
|                                                                                                                          |   |                        |    |                        |   |                           |   |                        |    |
| Net                  sales                                                                                                    |   | $                           | -       |                        | $      | -                              |   | $                           | -       |   | $ | - |   |
|                                                                                                                          |   |                        |    |                        |   |                           |   |                        |    |   |   |   |   |
| Cost                  of sales                                                                                                |   |                        | -       |                        |   | -                              |   |                        | -       |   |   | - |   |
|                                                                                                                          |   |                        |    |                        |   |                           |   |                        |    |   |   |   |   |
| Gross                  profit                                                                                                 |   |                        | -       |                        |   | -                              |   |                        | -       |   |   | - |   |
|                                                                                                                          |   |                        |    |                        |   |                           |   |                        |    |   |   |   |   |
| General                      and administrative Expenses                                                                      |   |                        | 500     |                        |   | 1,250                          |   |                        | 2,484   |   |   | 6,544 |   |
|                                                                                                                          |   |                        |    |                        |   |                           |   |                        |    |   |   |   |   |
| Net                  loss                                                                                                     |   | $                           | (500    | )                           | $      | (1,250                         | )      | $                           | (2,484  | ) | $ | (6,544 | ) |
|                                                                                                                          |   |                        |    |                        |   |                           |   |                        |    |   |   |   |   |
| Weighted                      average number of common shares outstanding (basic and fully                      diluted) |   |                        | 100,000 |                        |   | 100,000                        |   |                        | 100,000 |   |   | 100,000 |   |
|                                                                                                                          |   |                        |    |                        |   |                           |   |                        |    |   |   |   |   |
| Basic                      and diluted (loss) per common share                                                                |   | $                           | (0.005  | )                           | $      | (0.013                         | )      | $                           | (0.025  | ) | $ | (0.065 | ) |

----

GRACE        7,        INC.

**Unaudited**

----

|                                                 |   | Preferred                  Stock |   | Common                  Stock |   | AdditionalPaid-In |   | DeficitAccumulatedDuring                  theDevelopment |    | Stockholder'sEquity |   |
|------------------------------------------------------|--------|----------------------------------|--------|-------------------------------|--------|-------------------|--------|----------------------------------------------------------|---------|---------------------|--------|
|                                                 |   | Shares                           |   | Amount                        |   | Shares            |   | Amount                                                   |    | Capital             |   | Stage |   | (Deficit) |   |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |
| Balance                  – October 27, 2005    |   |                             | -      |                          | $      | -                 |   |                                                     | -       |                | $      | - |   | $ | - |   | $ | - |   | $ | - |   |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of common shares           |   |                             | -      |                          |   | -                 |   |                                                     | 100,000 |                |   | 10 |   |   | 90 |   |   | - |   |   | 100 |   |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  (loss)                          |   |                             | -      |                          |   | -                 |   |                                                     | -       |                |   | - |   |   | - |   |   | (100 | ) |   | (100 | ) |
|                                                 |   |                             |        |                          |   |                   |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                  June 02, 2006              |   |                             | -      |                          | $      | -                 |   |                                                     | 100,000 |                | $      | 10 |   | $ | 90 |   | $ | (100 | )  | $ | - |   |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital                  contributions - shareholder |   |                             | -      |                          |   | -                 |   |                                                     | -       |                |   | - |   |   | 2,694 |   |   | - |   |   | 2,694 |   |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  (loss)                          |   |                             | -      |                          |   | -                 |   |                                                     | -       |                |   | - |   |   | - |   |   | (5,194 | ) |   | (5,194 | ) |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                  May 31, 2007               |   |                             | -      |                          | $      | -                 |   |                                                     | 100,000 |                | $      | 10 |   | $ | 2,784 |   | $ | (5,294 | )  | $ | (2,500 | ) |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital                  contributions - shareholder |   |                             | -      |                          |   | -                 |   |                                                     | -       |                |   | - |   |   | 2,536 |   |   | - |   |   | 2,536 |   |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  (loss)                          |   |                             | -      |                          |   | -                 |   |                                                     | -       |                |   | - |   |   | - |   |   | (1,250 | ) |   | (1,250 | ) |
|                                                 |   |                             |   |                          |   |              |   |                                                     |    |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                  November 30, 2007          |   |                             | -      |                          | $      | -                 |   |                                                     | 100,000 |                | $      | 10 |   | $ | 5,320 |   | $ | (6,544 | )  | $ | (1,214 | ) |

----

GRACE        7,        INC.

----

|                                                                                                            |   | For the threemonths endedNovember 30, 2007 |   | For the sixmonths endedNovember 30, 2007 |   | For the periodJune 2, 2006 toNovember 30, 2006 |   | For the periodOctober 27, 2005(Inception) toNovember 30, 2007 |   |
|-----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   | **Unaudited**                                                       |   | **Unaudited**                                                     |   | **Unaudited**                                                                     |   | **Unaudited**                                                                                    |   |
| Cash                  flows from operating activities                                                           |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Net                  (loss)                                                                                     |   | $                                                                   | (500   | )                                                                 | $      | (1,250                                                                            | )      | $                                                                                                | (2,484 | ) | $ | (6,544 | ) |
|                                                                                                            |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Adjustments                  to reconcile net (loss) to net cash used in operating                  activities: |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| (Increase)                  decrease in prepaid expenses                                                        |   |                                                                | -      |                                                              |   | 1,500                                                                             |   |                                                                                             | -      |   |   | - |   |
| Increase                  (decrease) in accounts payable                                                        |   |                                                                | -      |                                                              |   | (2,786                                                                            | )      |                                                                                             | -      |   |   | 1,214 |   |
|                                                                                                            |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Net                  cash (used in) operating activities                                                        |   |                                                                | (500   | )                                                                 |   | (2,536                                                                            | )      |                                                                                             | (2,484 | ) |   | (5,330 | ) |
|                                                                                                            |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Cash                  flows from financing activities                                                           |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Proceeds                  from issuance of common stock                                                         |   |                                                                | -      |                                                              |   | -                                                                                 |   |                                                                                             | -      |   |   | 100 |   |
| Proceeds                  from additional capital contributions                                                 |   |                                                                | 500    |                                                              |   | 2,536                                                                             |   |                                                                                             | 2,484  |   |   | 5,230 |   |
|                                                                                                            |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Net                  cash provided by financing activities                                                      |   |                                                                | 500    |                                                              |   | 2,536                                                                             |   |                                                                                             | 2,484  |   |   | 5,330 |   |
|                                                                                                            |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Net                  increase in cash and cash equivalents                                                      |   |                                                                | -      |                                                              |   | -                                                                                 |   |                                                                                             | -      |   |   | - |   |
|                                                                                                            |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Cash                  - beginning of period                                                                     |   |                                                                | -      |                                                              |   | -                                                                                 |   |                                                                                             | -      |   |   | - |   |
|                                                                                                            |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Cash                  - end of period                                                                           |   | $                                                                   | -      |                                                              | $      | -                                                                                 |   | $                                                                                                | -      |   | $ | - |   |
|                                                                                                            |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Supplemental                  disclosure of cash flow information:                                              |   |                                                                |   |                                                              |   |                                                                              |   |                                                                                             |   |   |   |   |   |
| Taxes                  paid                                                                                     |   | $                                                                   | -      |                                                              | $      | -                                                                                 |   | $                                                                                                | -      |   | $ | - |   |
| Interest                  paid                                                                                  |   | $                                                                   | -      |                                                              | $      | -                                                                                 |   | $                                                                                                | -      |   | $ | - |   |

----

----

|   | ***a.*** | *Use                  of Estimates *-                  The preparation of the statement of financial condition 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 statement of financial condition and reported                  amounts                  of revenues and expenses during the reporting period. Actual results                  could                  differ from those estimates. |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ***b.*** | *Cash                  and 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. For the period October 27, 2005 (inception)                  through November 30, 2007, the Company did not maintain any bank                  accounts. |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ***c.*** | *Income                  Taxes*                  -                  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                  tax basis of the assets and liabilities and are measured using                  enacted tax                  rates 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. |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ***d.*** | *Loss                  per Common Share*                  -                  Basic loss per share is calculated using the weighted-average number                  of                  common shares outstanding during each period as required by the                  Financial                  Accounting Standards Board (FASB) under Statement of Financial                  Accounting                  Standards (SFAS) No. 128. 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                  period. The Company does not have any potentially dilutive                  instruments. |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ***e.*** | *Fair                  Value of Financial Instruments -*                  The carrying value of cash equivalents and accrued expenses approximates                  fair value due to the short term                  nature. |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | ***f.*** | *New                  Accounting Pronouncement -*                  In                  September 2006, the Financial Accounting Standards Board issued                  Statement                  of Financial Accounting Standards No. 157 (“FAS 157”), *Fair                  Value Measurements*,                  which defines fair value, establishes a framework for measuring                  fair value                  in generally accepted accounting principles (“GAAP”), and expands                  disclosures about fair value measurements. FAS 157 applies under                  other                  accounting pronouncements that require or permit fair value measurements.                  Prior to FAS 157, there were different definitions of fair value                  and                  limited guidance for applying those definitions in GAAP. Moreover,                  that                  guidance was dispersed among the many accounting pronouncements                  that                  require fair value measurements. Differences in that guidance created                  inconsistencies that added to the complexity in applying GAAP.                  The changes                  to current practice resulting from the application of FAS 157 relate                  to                  the definition of fair value, the methods used to measure fair                  value, and                  the expanded disclosures about fair value measurements. FAS 157                  is                  effective for financial statements issued for fiscal years beginning                  after                  November 15, 2007, and interim periods within those fiscal years.                  The                  Company does not expect the adoption of FAS 157 to have an effect                  on its                  financial statements. |
|--------|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

**PART        II - OTHER INFORMATION**

| *3.1 |   | Certificate                  of Incorporation, as filed with the Delaware Secretary of State                  on October                  27, 2005. |
|------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| *3.2 |   | By-Laws                                                                                                                                             |
| 31.1 |   |  Certification                  pursuant to Section 302 of Sarbanes Oxley Act of 2002                                                          |
| 32.1 |   |  Certification                  pursuant to Section 906 of Sarbanes Oxley Act of                  2002                                         |

----

| Grace                  7, Inc.               |
|----------------------------------------------|
|                                         |   |
| By:                                          | /s/                  Virginia K. Sourlis |
| Virginia                K. Sourlis           |
| President                                    |
| (Principal                Executive Officer) |
| (Principal                Financial Officer) |

----