UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

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

For the Quarterly Period Ended September 30, 2007

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From __________ to __________

Commission File Number: 0-9500

MOUNTAINS WEST EXPLORATION, INC.

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

New Mexico	85-0280415
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

2001 Butterfield Road, Suite 1050, Downers Grove, IL 60515

(Address of principal executive offices)

Issuer's telephone number, including area code: (630) 271-8590

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

The number of shares of the issuer's common stock, no par value per share, outstanding at November 9, 2007, was 10,503,600 shares.

Transitional Small Business Disclosure Format (check one): Yes o No x

TABLE OF CONTENTS

	PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements	3
Balance Sheets September 30, 2007 (unaudited) and
December 31, 2006	3
Statements of Operations for the Three-Months and Nine-Months
ended September 30, 2007 (unaudited)	4
Statements of Cash Flows for the Three-Months and Nine-Months ended
September 30, 2007 (unaudited)	5
Statements of Stockholders Equity (Deficit) September 30, 2007
(unaudited)	6
Notes to Consolidated Financial Statements (unaudited)	7
Item 2. Management's Discussion and Analysis on Plan of Operation	13
Item 3. Controls and Procedures	16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3. Defaults Upon Senior Securities	16
Item 4. Submission of Matters to a Vote of Security Holders	16
Item 5. Other Information	16
Item 6. Exhibits	16
Signatures	17

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MOUNTAINS WEST EXPLORATION INC.

Balance Sheets

	September 30, 2007			Dec. 31, 2006
ASSETS:
Current assets:
Cash	$	200,149		$	345
Total current assets		200,149			345
TOTAL ASSETS	$	200,149		$	345
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT):
Current liabilities:
Accounts Payable	$	164,124		$	103,381
Accrued expenses		15,895			25,133
Note Payable		202,500			103,000
Total current liabilities		382,519			231,514
Long-Term Debt:
Long-Term Debt		-			647,500
Total long-term debt		-			647,500
Total liabilities		382,519			879,014
Stockholders’ equity:
Common Stock, no par value; 50,000,000 shares authorized;
1,300,018 shares issued and outstanding and 1,953,582 committed for subscription at September 30, 2007 and 1,300,018 issued and outstanding at December 31, 2006		2,655,256			1,582,786
Retained Earnings (Deficit)		(2,837,626	)		(2,461,455	)
Total stockholders’ equity (deficit)		(182,370	)		(878,669	)
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)	$	200,149		$	345

The accompanying notes are an integral part of these financial statements  

3

MOUNTAINS WEST EXPLORATION INC.

Statements of Operations

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
Revenue:	$	-		$	-		$	-		$	-
Operating Expenses:		58,544			18,148			173,052			92,680
Operating Profit (Loss)		(58,544	)		(18,148	)		(173,052	)		(92,680	)
Other Income and Expense
Interest Expense		88,319			5,175			203,119			15,525
Net Income (Loss)	$	(146,863	)	$	(23,323	)		(376,171	)	$	(108,205	)
Per Share Information:
Weighted average number of common shares outstanding		1,554,833			1,300,018			1,385,576			1,300,018
Net Loss per Common Share	$	(0.09	)	$	(0.02	)	$	(0.27	)	$	(0.08	)

The accompanying notes are an integral part of these financial statements

4

MOUNTAINS WEST EXPLORATION INC.

Statements of Cash Flows

(Indirect Method)  

	Nine Months Ended
	September 30,
	2007			2006
Cash Flows from Operating Activities:
Net Profit (Loss)	$	(376,171	)	$	(108,205	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		-			-
Stock warrant expense issued with debt		73,426			-
Stock option compensation expense		2,718
Increase in accounts payable		60,743			107,005
Increase in accrued expenses		53,588			-
(Increase) in other assets		-			-
Net Cash Flows Used by Operations		(185,696	)		(1,200	)
Cash Flows from Investing Activities:
Payment for deposit on acquisition		-			(250,000	)
Net Cash Flows Provided by Financing Activities		-			(250,000	)
Cash Flows from Financing Activities:
Proceeds of notes payable - convertible		736,000			347,500
Payments of notes payable - convertible		(250,000	)		-
Proceeds of note payable - related party		2,500			103,000
Repayment of notes payable - related party		(103,000	)		(197,000	)
Net Cash Flows Provided by Financing Activities		385,500			253,500
Net Increase (Decrease) in Cash		199,804			2,300
Cash at Beginning of Period		345			-
Cash at End of Period	$	200,149		$	2,300
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	92,000		$	-
Cash paid for income taxes	$	-		$	-
Non-Cash Investing and Financing Activities
Common stock committed for subscription for debt	$	933,500		$	-

The accompanying notes are an integral part of these financial statements

5

MOUNTAINS WEST EXPLORATION INC.

Stockholders’ Equity (Deficit)

September 30, 2007

	# of Shares		Amount		Retained Earnings (Deficit)			Totals
Balance - December 31, 2001		740,409	$	1,554,786	$	(1,573,676	)	$	(18,890	)
Net Loss for year		-		-		(4,094	)		(4,094	)
Balance - December 31, 2002		740,409		1,554,786		(1,577,770	)		(22,984	)
Net Loss for year		-		-		(16,483	)		(16,483	)
Balance - December 31, 2003		740,409		1,554,786		(1,594,253	)		(39,467	)
Issuance of stock for cash		259,609		25,000		-			25,000
Net Profit for the Year		-		-		1,433			1,433
Balance - December 31, 2004		1,000,018		1,579,786		(1,592,820	)		(13,034	)
Issuance of stock for cash		300,000		3,000		-			3,000
Net Loss for Year		-		-		(216,849	)		(216,849	)
Balance - December 31, 2005		1,300,018		1,582,786		(1,809,669	)		(226,883	)
Net Loss for Year		-		-		(651,786	)		(651,786	)
Balance - December 31, 2006		1,300,018	$	1,582,786	$	(2,461,455	)	$	(878,669	)
Conversion of debt and accrued interest committed for stock subscription		1,953,582		996,326		-			996,326
Stock warrants issued for debt		-		73,426					73,426
Stock based compensation		-		2,718					2,718
Net Loss for Period		-		-		(376,171	)		(376,171	)
Balance September 30, 2007		3,253,600	$	2,655,256	$	(2,837,626	)	$	(182,370	)
All shares of stock reflect a 1 for 50 reverse split in April 2005

 The accompanying notes are an integral part of these financial statements

6

MOUNTAINS WEST EXPLORATION INC.

Notes to Financial Statements

September 30, 2007

Note 1 - Presentation of Interim Information:

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

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

Note 2 - Summary of Significant Accounting Policies:

Cash and Cash Equivalents

The Company considers those short-term, highly liquid investments with original maturities of three months or less as cash and cash equivalents.

Accounting for Stock-Based Compensation

The Company has adopted Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS 123R), which revises SFAS 123, “Accounting for Stock-Based Compensation” (SFAS 123) and supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25). SFAS 123R requires that share-based payment transactions with employees be recognized in the financial statements based on their fair value and recognized as compensation expense over the vesting period. The Company had no stock based compensation prior to 2007. As a result of SFAS 123R, the Company recognized stock-based compensation expense during the three and nine months ended September 30, 2007 of $2,718. No tax benefit has been recorded as the Company is not recording the tax benefits of its losses.

The Company accounts for equity instruments issued for services and goods to non-employees under SFAS 123; EITF 96-18, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”; and EITF 00-18, “Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees”. Generally, the equity instruments issued for services and goods are for shares of the Company's common stock or warrants to purchase shares of the Company's common stock. These shares or warrants generally are fully-vested, nonforfeitable and exercisable at the date of grant and require no future performance commitment by the recipient. The Company expenses the fair market value of these securities over the period in which the related services are received.

Loss Per Share

Basic and diluted net loss per share information is presented under the requirements of SFAS No. 128, “Earnings per Share.” Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, less shares subject to repurchase. Diluted net loss per share reflects potential dilution of securities by adding other potential common shares, including stock options and warrants in the weighted-average number of common shares outstanding for a period, if dilutive. All potentially dilutive securities, including stock options and warrants, have been excluded from this computation, as their effect is anti-dilutive.

7

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications

Certain amounts previously reported have been reclassified to conform to the current period presentation.

Note 3 - Going Concern:

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

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

Note 4 - Stock Based Compensation:

Although the Company does not have a formal stock option plan in place, the Company has issued stock options to certain employees, subject to finalization of such plan. The plan will be adopted for key employees and other persons providing assets or services. The Company considers its option program a core component of its operating productivity. A total of 4,100,000 stock options had been issued and outstanding under the proposed plan, all of which were granted during the three-month period ended September 30, 2007.

The following table summarizes other stock grants for January 1, 2007 to September 30, 2007:

Options Outstanding:	Number of Shares		Exercise Price per Share		Weighted Average Exercise PricePer Shares
January 1, 2007		—	$	—		—
Granted		4,100,000		0.51		0.51
Terminated		—		—		—
September 30, 2007		4,100,000		0.51		0.51
Vested Shares:
Vested, September 30, 2007		1,640,000	$	0.51		0.51

The weighted average remaining contractual life of those options was 10 years.

As of September 30, 2007, $448,282 of compensation expense remained to be recognized on the stock options above. The expense will be recognized over 3 years. The Company has not recognized any deferred income tax benefit related to stock-based compensation due to its deferred tax asset being fully reserved.

The weighted average fair value per stock option issued during the nine months ended September 30, 2007 was $0.51.

8

				Weighted-
				Average
	Options			grant-date
Non-Vested Options	Outstanding			fair value
Balance January 1, 2007		—		$	—
Grants		4,100,000			0.51
Vested		(1,640,000	)		(0.51	)
Expirations		—			—
Balance September 30, 2007		2,460,000		$	0.51

All stock awards granted by the Company have an exercise based on either the 10 day trailing average closing price or the closing market value on date of grant of the underlying common stock.  

The fair value of each award is estimated on the date of the grant using the Black-Scholes option-pricing model, assuming no expected dividends and the following assumptions:

	2007 Grants
Expected volatility factors		10%
Approximate risk free interest rates		4.50%
Expected lives		5 Years
Forfeiture rate		0%

The determination of the fair value of all awards is based on the above assumptions.

NOTE 5 - Stock Warrants

The Company has issued stock warrants to various individuals. The following table summarizes the stock warrants issued, share issue price, grant date and expiration date:

	Issue Date		Exp Date		# of Warrants		Exercise Price
Issuance to LD Acquisition,LLC		11/15/2005		11/15/2015		10,000,000	$	0.01
Issuance to certain convertible debtholders		4/6/2007		4/6/2012		627,000	$	0.51
Issuance to certain convertible debtholders		9/19/2007		9/19/2012		97,500	$	0.51
Total stock warrants outstanding, September 30, 2007						10,724,500	$	0.04

9

Note 6 - Notes Payable - Convertible Debenture:

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

	September 30, 2007		December 31, 2006
Convertible notes to various individuals, bearing interest at 7% per annum, due December 31, 2007.	$	200,000	$	647,500
	$	200,000	$	647,500

On September 19, 2007, the board established the per share price for the conversion of the convertible debentures, conditional upon note holder consent and required documentation for conversion which was completed subsequent to September 30, 2007. The board set a price of $.51, which was the price of the common stock the day preceding the pricing. At that date, the board also established the exercise price for 724,500 warrants provided to certain of the debenture holders at $.51 per share.

Note 7 - Notes Payable - Related Party:

At September 30, 2007, the Company had a short term note payable to each of Doug Stukel and Lee Wiskowski, executive officers and directors of the Company, in the amount of $1,250 each. The notes are short-term in nature and do not bear interest. These notes did not bear interest and were repaid subsequent to September 30, 2007. Additionally, included in the $200,000 of convertible notes payable listed above, Doug Stukel is a noteholder for $75,000 of this debt.

Note 8 - Deposit on Business Acquisition:

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

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

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

10

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

Note 9 - Subsequent Event - Acquisition of Secured Digital Storage LLC:

On November 7, the Company completed the acquisition of the membership interest of Secured Digital Storage, LLC a Nevada limited liability company (“SDS”). Pursuant to the terms of the agreement, MWXI assumed all of the liabilities of SDS. The aggregate consideration paid to SDS members’ in connection with the acquisition was 7,500,000 shares of common stock, $70,000 of cash and approximately $50,000 of expenses related to the acquisition, resulting in a $2,595,000 value placed on the acquisition.

The Company will hire a third-party independent valuation firm to assist in determining the fair value of the assets acquired and liabilities assumed, including the identification of the value of intangible assets that existed at the date of the acquisition of SDS. Under the purchase method of accounting, the total estimated consideration as shown in the table below based on high level estimated values as of September 30, 2007 for the purpose of illustrating the unaudited pro forma combined balance sheet. The estimated consideration is allocated as follows:

Total Consideration
MWXI Stock	$	2,475,000
Professional Fees		50,000
Advances to SDS		70,000
		2,595,000
Assets acquired and liabilities assumed:
Current assets		28,212
Liabilities assumed		(130,105	)
Net liabilities assumed		(101,893	)
Goodwill		2,696,893
	$	2,595,000

11

The following unaudited pro forma condensed consolidated results of operations have been prepared as if the acquisition of SDS had occurred as of beginning of the respective fiscal years:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Net revenues	$	—		$	—		$	—		$	—
Net loss	$	(217,638	)	$	(86,229	)	$	(701,112	)	$	(175,111	)
Net loss per share:
Basic and diluted	$	(0.02	)	$	(0.01	)	$	(.08	)	$	(0.02	)
Weighted average shares outstanding:
Basic and diluted		9,057,550			8,800,018			8,886,489			8,800,018

The unaudited pro forma condensed consolidated results of operations are not necessarily indicative of results that would have occurred had the acquisitions occurred as of January 1, 2007 and 2006, nor are they necessarily indicative of the results that may occur in the future.

12

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

Cautionary and Forward Looking Statements

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

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

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

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

(b) potential fluctuation in quarterly results;

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

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

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

(f) failure to make sales;

(g) rapid and significant changes in markets;

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

(i) insufficient revenues to cover operating costs.

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

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

13

Results of Operations for the Three-Months Ended September 30, 2007 compared to the Comparable 2006 Period

The Company had no revenues during the three month period in 2007 or 2006.

The Company incurred $58,544 in expenses in the three-month period in 2007 compared to $18,148 in such expense in the same period in 2006. The majority of the expense is related to legal and accounting fees for the Company, with travel and entertainment expense of $8,636 and stock based compensation of $2,718 making up the majority of the remaining expense. Additionally, the Company incurred interest expense for the period of $88,319 compared to $5,175 for the same period last year. The current period interest expense is associated with the 7% convertible debentures that the Company has outstanding, representing $14,893 of the expense, with the remaining expense derived from the cost of the warrants issued in conjunction with this debt.

Results of Operations for the Nine-Months Ended September 30, 2007 compared to the Comparable 2006 Period

The Company had no revenues during the nine-month period in 2007 or 2006.

The Company incurred $148,052 in expenses for the nine-month period in 2007 compared to $92,680 in such expense in the same period in 2006. The majority of the expense is related to legal and accounting fees for the Company, with travel and entertainment expense of $8,636 and stock based compensation of $2,718 making up the majority of the remaining expense. Additionally, the Company also wrote-off a $25,000 deposit it made during the first quarter relating to a potential acquisition that was cancelled. The Company incurred interest expense for the period of $203,119 compared to $15,525 for the same period last year. The current period interest expense is primarily associated with interest cost on short term debt instruments that occurred during the first quarter of 2007 totaling $86,000, with the remaining associated with the 7% convertible debentures that the Company has outstanding. Of the remaining $117,119 in interest expense, $73,426 represents cost associated with stock warrants issued related to the debt.

Changes in Financial Condition

Year-to-date the Company experienced an increase in its cash position to $200,149. This increase is primarily derived from $200,000 cash proceeds received in new convertible notes in September, 2007. The notes are convertible at $.80 per share. The Company’s other long term debt has been subscribed to be converted to equity. The only remaining debt is $2,500 of short term debt by executive officers that was repaid subsequent to September 30, 2007. The Company has accounts payable outstanding of $164,124 and primarily represents invoices from legal counsel.

14

Liquidity and Capital Resources

The Company has $200,149 of cash on hand at September 30, 2007. The Company is currently planning on raising approximately additional new equity in the near future. This new funding will be utilized to fund the operations from the acquisition of Secured Digital Storage LLC, which occurred on November 7, 2007. Although the Company is planning to raise the funds, there can be no assurances that the funding can be achieved. The Company’s only capital resources are its common stock which is being utilized to raise additional capital.

NEED FOR ADDITIONAL FINANCING

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

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

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

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

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

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

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

15

GOING CONCERN

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

SUBSEQUENT EVENTS

On November 7, 2007, the Company completed the acquisition of Secured Digital Storage LLC for 7,500,000 shares of common stock and the forgiveness of a $70,000 advance made to SDS. See Note 9 to the Financial Statements.

OFF-BALANCE SHEET ARRANGEMENTS

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

ITEM 3. CONTROLS AND PROCEDURES

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

There was no change in our internal control over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

NONE

ITEM 2. UNREGISTERED SALE 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

ITEM 5. OTHER INFORMATION.

NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits filed as a part of this quarterly report on Form 10-QSB are listed in the Index to Exhibits located on page 18 of this Report.

 

16

SIGNATURES

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

November 19, 2007	/s/ William M. Lynes
	William M. Lynes, Chief Executive Officer

17

EXHIBIT INDEX

Exhibit Index

Exhibit Number	Exhibit Description
10.1	Employment Letter between the Company and Mr. Lawrence Malone, dated September 19, 2007
10.2	Employment Letter between the Company and Mr. Donald Hauschild dated September 19, 2007
31.1	Officer’s Certificate Pursuant to 15 U.S.C. 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Officer’s Certificate Pursuant to 15 U.S.C. 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief 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 Treasurer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

18