The following discussion and analysis should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Report.





Forward-Looking Statements

The following information contains certain forward-looking statements of management of the Company. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as "may," "could," "expect," "estimate," "anticipate," "plan," "predict," "probable," "possible," "should," "continue," or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

Critical Accounting Policies and Estimates

The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure 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 those estimates.





RESULTS OF OPERATIONS



Selected Financial Data

The following selected statement of operations and balance sheet data for the three months ended June 30, 2008 as compared to the three months ended June 30, 2007 were derived from our financial statements and notes thereto included in this report which are unaudited. Historical results are not necessarily indicative of results that may be expected for any future period. The following data should be read in conjunction with "Plan of Operation" below, and our unaudited financial statements, including the related notes to the financial statements.





                                                        For the three        For the three
                                                         months ended         months ended
                                                        June 30, 2008        June 30, 2007
Statement of Operations Data:
Net revenues                                           $              -     $            166
Operating expenses                                     $       (114,828 )   $       (280,650 )
Operating loss                                         $       (114,828 )   $       (280,484 )
Net loss                                               $       (128,899 )   $       (291,297 )




                               June 30, 2008
Balance Sheet Data:
Total assets                  $        40,936
Total liabilities             $     2,233,594

Total stockholders' deficit $ (3,222,464 )

Our total operating expenses decreased by $165,822 for the three months ended June 30, 2008, as compared to the three months ended June 30, 2007. The major change was a decrease of ($166,909) in general and administration expenses.









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(Note: The following constituted our business plan during the 2008 and 2009 fiscal years. After an analysis of the lack of progress, the Company filed a Form 15 with the SEC on July 28, 2010. The new Board has determined to seek other opportunities, and so the following Plan of Operation is no longer effective.)





Plan of Operation

This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those described elsewhere in this report.

On September 10, 2002, we entered into a License Agreement with Two Dog Net ('TDN") for an exclusive worldwide license to market and sell The Children's Internet® service. We subsequently replaced the royalty and license agreement with a new Wholesale Sales & Marketing Agreement dated March 3, 2003. The new agreement provides for us to be the exclusive marketers of TDN's proprietary secure Internet service for children at the pre-school to junior high levels called The Children's Internet®. We further amended this agreement in February 2005 to decrease the per user fee to TDN from $3.00 to $1.00. In consideration for this decrease of the royalty fee, TDN was granted an option to acquire 18,000,000 shares of the Company's restricted common stock at an exercise price of $.07 per share for five years from the date of grant. The shares underlying the option have "piggy back" registration rights for a period of one year following any exercise of the option.

TDN did not give written notice to terminate the contract one year prior to the expiration of the initial five-year term. Therefore, the licensing agreement was automatically renewed for an additional five years expiring in 2013.

The Company released The Children's Internet®, version 9.0, to the market on March 2, 2006. The Company is the exclusive marketer and distributor of The Children's Internet® membership-based service created just for kids. In the August 2004 issue of PC Magazine, The Children's Internet® was ranked as Editors' Choice in the category of "Kids' Browsers and Services," and was voted number one over AOL, EarthLink and MSN Premium 9. Additionally in August 2006, The Children's Internet® was declared winner of Outstanding Products of 2006 by iParenting Media Awards in the software category. Shortly thereafter in September 2006, The Children's Internet® received the coveted National Parenting Center's Seal of Approval.

We believe The Children's Internet® is the most comprehensive, smart solution to the problems inherent to a child's unrestricted and unsupervised Internet access. We offer a protected online service and "educational super portal" specifically designed for children, pre-school to junior high, providing them with SAFE, real-time access to the World Wide Web; access to hundreds of thousands of the best pre-selected, pre-approved educational and entertaining web pages accessed through a secure propriety browser and search engine.

During 2007, the technology on which the product is based and the functionality of the service was improved. The Company, through TDN, also substantially upgraded the underlying system infrastructure by increasing redundant servers and improving control procedures which in turn increased the reliability of the service. Additionally, during the first quarter of 2007, where appropriate, the Company contracted with third party companies to outsource administrative support services and effectively put in place the infrastructure to support the marketing initiatives. These outsource providers handled telemarketing and the order taking process and media placement.

RESULTS OF OPERATIONS FOR THREE MONTH PERIOD ENDED JUNE 30, 2008 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2007





Revenue

We recognized $0 and $166 revenue during the three months ended June 30, 2008 and 2007, respectively.











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General and Administrative Expenses

During the three months ended June 30, 2008, we incurred general and administrative expenses of ($113,741).

By comparison, during the three months ended June 30, 2007, we incurred general and administrative expenses of ($280,650).





Operating Loss

During the three months ended June 30, 2008 and 2007, we incurred depreciation of ($1,087) and $0, respectively. During the three months ended June 30, 2008 and 2007, we recognized operating losses of ($114,828) and ($280,484), respectively.





Loss before Income Tax

During the three months ended June 30, 2008 and 2007, we incurred other expenses of ($14,071) and ($10,813), respectively. During the three months ended June 30, 2008 and 2007, we recognized losses before income tax of ($128,899) and ($291,297), respectively.





Provision for Income Tax

No provision for income taxes was recorded during the three months ended June 30, 2008 and 2007.





Net Loss

During the three months ended June 30, 2008 and 2007, we recognized net losses of ($128,899) and ($291,297), respectively, due to the factors discussed above.

RESULTS OF OPERATIONS FOR SIX MONTH PERIOD ENDED JUNE 30, 2008 COMPARED TO THE SIX MONTH PERIOD ENDED JUNE 30, 2007





Revenue

We recognized $0 and $332 revenue during the six months ended June 30, 2008 and 2007, respectively.

General and Administrative Expenses

During the six months ended June 30, 2008, we incurred general and administrative expenses of ($276,471).

By comparison, during the six months ended June 30, 2007, we incurred general and administrative expenses of ($561,300).





Operating Loss

During the six months ended June 30, 2008 and 2007, we incurred depreciation of ($2,173) and $0, respectively. During the six months ended June 30, 2008 and 2007, we recognized operating losses of ($278,644) and ($560,866), respectively.











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Loss before Income Tax

During the six months ended June 30, 2008 and 2007, we incurred other expenses of ($26,707) and ($21,626), respectively. During the six months ended June 30, 2008 and 2007, we recognized losses before income taxes of ($305,351) and ($582,492), respectively.





Provision for Income Tax

No provision for income taxes was recorded during the six months ended June 30, 2008 and 2007.





Net Loss

During the six months ended June 30, 2008 and 2007, we recognized net losses of ($305,351) and ($582,492), respectively, due to the factors discussed above.





CASH FLOW

As of June 30, 2008, we had cash or cash equivalents of $37,378, fixed assets of $3,558, no revenue generating activities or other source of income and we had outstanding liabilities of $3,263,400 and a shareholders' deficit of $(3,222,464).

By comparison, as of December 31, 2007, we had cash or cash equivalents of $37,482, fixed assets of $3,613, no revenue generating activities or other source of income and we had outstanding liabilities of $2,963,553 and a shareholders' deficit of ($2,920,340).

Consequently, we are now dependent on raising additional equity and/or debt to meet our ongoing operating expenses. There is no assurance that we will be able to raise the necessary equity and/or debt that we will need to fund our ongoing operating expenses.

Future losses are likely to occur as we have no sources of income to meet our operating expenses. As a result of these, among other factors, we received from our registered independent public accountants in their report for the financial statements for the years ended December 31, 2007 and 2006, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

CRITICAL ACCOUNTING POLICIES

All companies are required to include a discussion of critical accounting policies and estimates used in the preparation of their financial statements. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in Note 2 of our Unaudited Financial Statements above. These policies were selected because they represent the more significant accounting policies and methods that are broadly applied in the preparation of our financial statements.





Inflation

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future.

Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.











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Off-Balance Sheet Arrangements

Per SEC regulations, we are required to disclose our off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors. As of June 30, 2008 we have no off-balance sheet arrangements.





Share-based Compensation

The cost of equity instruments issued to non-employees in return for goods and services is measured by the fair value of the equity instruments issued in accordance with ASC 718, "Compensation - Stock Compensation." Measurement date for non-employees is the grant date of the stock-based compensation. The cost of employee services received in exchange for equity instruments is based on the grant date fair value of the equity instruments issued.

Recently Issued Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and do not believe any of these pronouncements will have a material impact on our financial statements.





Contractual Obligations



None.

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