UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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

For the quarterly period ended: September 30, 2009

or

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

For the transition period from: _____________ to _____________

———————

QUAMTEL, INC.

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

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14911 Quorum Drive, Suite 140, Dallas, Texas 75254

(Address of Principal Executive Office) (Zip Code)

(972) 361-1980

(Issuer’s telephone number, including area code)

———————

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨  No þ

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Check whether the registrant filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ¨  No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares outstanding of each of the issuer's classes of common equity, as of November 12, 2009 is 16,672,090.

QUAMTEL, INC.

TABLE OF CONTENTS

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PART – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

QUAMTEL, INC.

BALANCE SHEETS

The accompanying notes are an integral part of these financial statements.

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QUAMTEL, INC.

STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

The accompanying notes are an integral part of these financial statements.

4

QUAMTEL, INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

The accompanying notes are an integral part of these financial statements.

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QUAMTEL, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2009 AND 2008

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

On January 13, 2009, Quamtel, Inc. (formerly Atomic Guppy, Inc.) (“Quamtel”) and WQN, Inc., a Texas corporation (“WQN”) (individually and collectively also referred to as the “Company”) executed a Share Exchange Agreement (the “Share Exchange Agreement”), pursuant to which the shareholders of WQN were entitled to receive a total of 15,000,000 post-split shares of Common Stock. All conditions for closing were satisfied or waived, and the transaction closed on July 28, 2009. As a result of the Exchange, the shareholders of WQN own approximately 91% of the outstanding Common Stock of Quamtel. In conjunction with closing the Share Exchange Agreement, certain outstanding obligations of Quamtel including officers and director’s compensation, notes and amounts payable to officers and directors and third party loans outstanding, were exchanged for 1,275,000 post-split shares of Quamtel’s common stock.

As a result of the Share Exchange Agreement, WQN became a wholly-owned subsidiary of Quamtel, through which its operations will be conducted. On September 8, 2009, Quamtel filed an amendment to its Articles of Incorporation concluding a one-for-ten reverse split of its common stock, and increasing its authorized stock to 200,000,000 common shares and 50,000,000 preferred shares.

The Share Exchange Agreement has been accounted for as a reverse merger, and as such the historical financial statements of WQN are being presented herein as those of the Company.  Also, the capital structure of the Company for all periods presented herein is different from that appearing in the historical financial statements of the Company due to the recapitalization accounting.

The financial information presented herein should be read in conjunction with the financial statements of WQN for the year ended December 31, 2008, as presented in the Company’s Form 8-K filed on August 3, 2009 and amended on September 24, 2009. The accompanying financial statements for the three and nine months ended September 30, 2009 and 2008 are unaudited but, in the opinion of management, include all adjustments (which are normal and recurring in nature) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Therefore, the results of operations for the three and nine months ended September 30, 2009 are not necessarily indicative of operating results to be expected for the full year or future interim periods.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies are detailed in WQN’s financial statements for the year ended December 31, 2008 as presented in the Company’s Form 8-K filed on August 3, 2009 and amended on September 24, 2009.

Accounting Standards Updates

In June 2009, the Financial Accounting Standards Board (FASB) issued its final Statement of Financial Accounting Standards (SFAS) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a Replacement of FASB Statement No. 162”. SFAS No. 168 made the FASB Accounting Standards Codification (the Codification) the single source of U.S. GAAP used by nongovernmental entities in the preparation of financial statements, except for rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws, which are sources of authoritative accounting guidance for SEC registrants. The Codification is meant to simplify user access to all authoritative accounting guidance by reorganizing U.S. GAAP pronouncements into roughly 90 accounting topics within a consistent structure; its purpose is not to create new accounting and reporting guidance. The Codification supersedes all existing non-SEC accounting and reporting standards and was effective for the Company beginning July 1, 2009. Following SFAS No. 168, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead, it will issue Accounting Standards Updates (ASU). The FASB will not consider ASUs as authoritative in their own right; these updates will serve only to update the Codification, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the Codification.

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QUAMTEL, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

SEPTEMBER 30, 2009 AND 2008

In August 2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures—Overall”. The update provides clarification that in circumstances, in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. The adoption of this standard did not have a material impact on the Company’s financial position and results of operations.

In September 2009, the FASB has published ASU No. 2009-12, “Fair Value Measurements and Disclosures (Topic 820) - Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”. This ASU amends Subtopic 820-10, “Fair Value Measurements and Disclosures – Overall”, to permit a reporting entity to measure the fair value of certain investments on the basis of the net asset value per share of the investment (or its equivalent). This ASU also requires new disclosures, by major category of investments including the attributes of investments within the scope of this amendment to the Codification. The guidance in this Update is effective for interim and annual periods ending after December 15, 2009. Early application is permitted.  The adoption of this standard is not expected to have a material impact (any impact) on the Company’s financial position and results of operations.

In October 2009, the FASB has published ASU 2009-13, “Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements”, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. The guidance in this update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The adoption of this standard is not expected to have any impact on the Company’s financial position and results of operations.

In October 2009, the FASB has published ASU 2009-14, “Software (Topic 985)-Certain Revenue Arrangements that Include Software Elements” and changes the accounting model for revenue arrangements that include both tangible products and software elements. The guidance in this ASU is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The adoption of this standard is not expected to have any impact on the Company’s financial position and results of operations.

Other ASUs not effective until after September 30, 2009 are not expected to have a significant effect on the Company’s financial position or results of operations.

NOTE C - PROPERTY AND EQUIPMENT, NET

At September 30, 2009 and December 31, 2008, respectively, property and equipment consisted of the following:

Depreciation expense for the nine months ended September 30, 2009 and 2008 amounted to $57,812 and $43,121, respectively.

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QUAMTEL, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

SEPTEMBER 30, 2009 AND 2008

NOTE D - INTANGIBLE ASSET

The Company's balance sheet includes an intangible asset with an original cost of $367,589 pertaining to goodwill, recorded primarily in connection with its acquisition in June, 2007.

In August 2009, the Company issued 25,000 of its common shares, valued at $67,500, to acquire an option to purchase the url 800.com (the “Domain Name”). Steven Ivester, an agent of iTella, Inc., (“Assignor”), subsequently acquired the Domain Name in a Bankruptcy Court auction for the sum of $250,000. The acquisition was made for the benefit of the Company. Effective September 30, 2009, in return for the Company reimbursing to Assignor his $250,000 cost, Assignor assigned to the Company all right, title and interest in and to the Domain Name, together with the goodwill of the business symbolized by the Domain Name. The total cost of the Domain Name was $317,500, and is included in Intangible assets in the Company’s balance sheet.

NOTE E – RELATED PARTY TRANSACTIONS

From time to time, Steven Ivester, the Company’s former sole shareholder and currently a consultant to the Company through a Consulting Services Agreement with iTella, Inc. (“Consultant”), has made personal advances to the Company. These advances are repayable upon demand, are unsecured, and are non-interest bearing. Such advances amounted to $361,887 and $10,575 at September 30, 2009 and December 31, 2008, respectively.

See Note D for the Domain Name transaction involving Mr. Ivester.

Effective August 1, 2009 and amended on November 4, 2009, WQN executed a Consulting Services Agreement with Consultant, whereby Consultant shall provide, at the reasonable request of the Company’s management, advanced business strategy, financing, product development and marketing advice including but not limited to day to day operations. The initial term of this agreement is for five years, and automatically renews for additional one year terms if approved by both parties. During this agreement’s term and at the Company’s expense, Consultant will be provided an office and administrative support in Weston, Florida. Consultant’s compensation shall consist of the following:

1.

Cash payments totaling $75,000 for the first six months, payable monthly;

2.

Annual cash payments of $250,000 thereafter, payable monthly;

3.

Nine percent of the Company’s consolidated gross revenue, payable quarterly (except the first two months, in which the rate is one percent of gross revenues);

4.

Medical insurance benefits for up to three of Consultant’s key employees and their families;

5.

$1,000 per month car allowance plus related auto insurance;

6.

Reimbursement of Consultant’s reasonable business expenses incurred by Consultant in performance of related services;

7.

Grants of stock options pursuant to the Company's Parent 's Equity Incentive Plan in such amounts as may from time to time be determined by the Board of Directors; and

Accrued expenses under the Share Exchange Agreement for the three and nine months ended September 30, 2009 were $22,635. Prior to closing the Share Exchange Agreement, Quamtel did not have expertise in the management and financing of a public company, and required the services of iTella, Inc. as outlined in the Consulting Services Agreement. The Consulting Services Agreement is not cancellable by either party in advance of its contractual term, except under a defined change in control.

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QUAMTEL, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

SEPTEMBER 30, 2009 AND 2008

NOTE F - NOTES PAYABLE

NOTE G – FINANCING AND OTHER TRANSACTIONS

On August 20, 2009, the Company issued and sold $300,000 in principal amount of an unsecured convertible note to an accredited investor (the “Investor”) receiving net proceeds of $300,000. This note bore interest at 18% and was immediately convertible at the option of the Company into shares of the Company's common stock at $2.70 per share. The Investor also received six-year warrants to purchase 54,000 shares of the Company's common stock for $2.70 per share. On September 10, 2009, this convertible note, plus accrued interest, was converted to 115,000 shares of the Company’s common stock.

On August 20, 2009, the Company also executed a consulting agreement with the Investor, whereby the Investor will provide advice and counsel regarding the Company’s financial management and strategic opportunities. As compensation, the Investor shall be issued 300,000 shares of the Company’s common stock, to be registered by October 6, 2009. The shares have not yet been issued or registered, but there are no related penalties. The Company’s obligation to issue the 300,000 common shares has been valued at $810,000 based on the traded market per-share market price per share of $2.70 at August 20, 2009, and has been reflected as Stock-related payable on the company’s balance sheet, and a noncash charge included in Compensation, consulting and related expenses in the Company’s statement of operations.

On September 30, 2009, 150,000 shares of the Company’s common stock were issued for $60,000 cash. In January 2009, pre-merger shares of WQN were issued for $20,000 cash.

NOTE H - INCOME TAXES

The components of the Company's income tax expense (benefit) are as follows:

The Company's income tax expense (benefit) at the statutory rate was substantially equal to the reported income tax expense (benefit).  The Company is only subject to federal income taxes.

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QUAMTEL, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

SEPTEMBER 30, 2009 AND 2008

At September 30, 2009, the Company's net deferred tax asset consisted of the following:

The Company's net operating loss carryforward for federal income tax purposes was approximately $1,467,367 as of September 30, 2009, expiring in 2022. In accordance with Internal Revenue Code Section 382, the Company may be limited in its ability to recognize the benefit of future net operating loss carry-forwards. Consequently, the Company did not recognize a benefit from operating loss carry-forwards.

NOTE I – COMMITMENTS AND CONTINGENCIES

Leases

The Company is obligated under a non-cancelable operating lease for its primary office facilities, which expires on February 28, 2015. Future minimum lease payments under this operating lease as of September 30, 2009 were $335,097.

Rent expense for these operating leases (net of a month-to-month sublease for a small portion of the primary office premises) for the nine months ended September 30, 2009 and 2008 was $58,261 and $38,787, respectively.

Consulting Agreement

See Note E for a discussion of the Consulting Services Agreement.

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis contains various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-Q, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business, including but not limited to, reliance on key customers and competition in its markets, market demand, product performance, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the financial statements included herein. Further, this quarterly report on Form 10-Q should be read in conjunction with the Company’s Financial Statements and Notes to Financial Statements included in its Current Report on Form 8-K filed on August 3, 2009 and amended on September 24, 2009.

On January 13, 2009, Quamtel, Inc. (formerly Atomic Guppy, Inc.) (“Quamtel”) and WQN, Inc., a Texas corporation (“WQN”) (individually and collectively also referred to as the “Company”) executed a Share Exchange Agreement (the “Share Exchange Agreement”), pursuant to which the shareholders of WQN were entitled to receive a total of 15,000,000 post-split shares of Common Stock. All conditions for closing were satisfied or waived, and the transaction closed on July 28, 2009. As a result of the Exchange, the shareholders of WQN own approximately 91% of the outstanding Common Stock of Quamtel. In conjunction with closing the Share Exchange Agreement, certain outstanding obligations of Quamtel including officers and director’s compensation, notes and amounts payable to officers and directors and third party loans outstanding, were exchanged for 1,275,000 post-split shares of Quamtel’s common stock.

As a result of the Share Exchange Agreement, WQN became a wholly-owned subsidiary of Quamtel, through which its operations will be conducted. On September 8, 2009, Quamtel filed an amendment to its Articles of Incorporation concluding a one-for-ten reverse split of its common stock, and increasing its authorized stock to 200,000,000 common shares and 50,000,000 preferred shares.

Overview

WQN was formed as a Texas corporation in June 2007, when it acquired an operating business that was originally founded in 1996. WQN provides prepaid and postpaid enhanced telecommunications services with an emphasis on transporting calls that originate from the United States and Canada and terminate to specific regions of the world. Customers utilize WQN’s Voice Over Internet Protocol (“VoIP”) network to place quality international calls at discounted rates. The voice quality of WQN’s VoIP calls is virtually the same as an international telephone call carried over a traditional telephone line. A substantial portion of WQN’s revenue is derived from the sale of prepaid service to customers calling from the United States to India. WQN’s products and services are provisioned and sold online via its websites.

Results of Operations for the Nine Months ended September 30, 2009 Compared to the Same Period in 2008

Revenues

Our revenues for the nine months ended September 30, 2009 and 2008 were $1,897,100 and $2,953,158, respectively. Revenues decreased primarily because the retail rates to India, one of the Company’s primary markets, have been rapidly declining due to increased competition. Revenues are derived primarily from our prepaid international calling services and our consumer based internet telephony services.

Cost of Sales and Gross Profit

Cost of sales was $1,206,289 and $1,960,446 for the nine months ended September 30, 2009 and 2008, respectively. This resulted in gross profit of $690,810 (36.4%) and $992,712 (33.6%) for the respective 2009 and 2008 periods. We improved our gross margin earlier in 2009 by negotiating more favorable pricing with our vendors. However, this was partially offset by decreased gross margins in the 3^rd quarter of 2009, as discussed below. Our aggregate gross profit decline during the nine months ended September 30, 2009 versus the corresponding 2008 period was otherwise due primarily to our decreased revenues during that period.

Operating Expenses

Operating expenses were $2,143,446 and $982,854 for the nine months ended September 30, 2009 and 2008, respectively. Compensation and consulting expenses increased from $666,075 to $1,432,192 during these nine month periods due primarily to the $810,000 noncash consulting agreement charge as described in Note G to the Company’s financial statements, and to a lesser extent the iTella, Inc. consulting agreement entered into in 2009, as described in Note E to the Company’s financial statements. General and administrative (“G&A”) expenses increased from $273,658 in the 2008 period to $653,443 in 2009, primarily due to increased legal and audit fees associated with the Share Exchange Agreement and becoming a publicly reporting company, and generally increased advertising, rent and travel expenses.

Net Income (Loss)

The revenue and gross margin decreases coupled with the operating expense increases noted above, combined to result in a net loss of $1,466,396, compared to net income of $3,881, in the 2009 and 2008 periods, respectively.

Results of Operations for the Three Months Ended September 30, 2009 Compared to the Same Period in 2008

Revenues

Our revenues for the three months ended September 30, 2009 and 2008 were $496,179 and $908,730, respectively. Revenues decreased primarily because the retail rates to India, one of the Company’s primary markets, have been rapidly declining due to increased competition.

Cost of Sales and Gross Profit

Cost of sales was $416,086 and $568,966 for the three months ended September 30, 2009 and 2008, respectively. This resulted in gross profit of $80,093 (16.1%) and $339,764 (37.4%) for the respective 2009 and 2008 periods. The decreased gross margin in 2009 was due to lowering our effective sales prices on our India traffic due to competitive market pressures, while our vendor cost reductions have not kept pace.

Operating Expenses

Operating expenses were $1,355,019 and $335,499 for the three months ended September 30, 2009 and 2008, respectively, reflecting the compensation and consulting, and G&A expense increases noted above.

Net Income (Loss)

The revenue and gross margin decreases coupled with the operating expense increases noted above, combined to result in a net loss of $1,286,192, compared to net income of $1,552, in the 2009 and 2008 periods, respectively.

Liquidity and Capital Resources

Cash and cash equivalents were $188,188 at September 30, 2009. Our net cash used in operating activities for the nine months ended September 30, 2009 was $105,073, due primarily to our cash-based net loss during this period, partially offset by increases in our accounts payable, accrued expenses and unearned revenue. Cash was used primarily to purchase the Domain Name and network equipment during this period. Our primary source of funding, as needed, has been through advances from our former shareholder and a sale of common stock and a convertible note for cash.

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Since inception of business in 2007, we have sustained a cumulative net loss of $1,464,511 through September 30, 2009. We experienced negative cash flows from operations in 2008, and have been dependent on financing by our former shareholder coupled with limited debt issuances to fund our operations and capital expenditures.

Capital Expenditure Commitments

We did not have any substantial outstanding commitments to purchase capital equipment at September 30, 2009.

Plan of Operations

By adjusting our operations and development to the level of capitalization, we believe that we have sufficient capital resources to meet projected cash flow requirements. However, if during that period or thereafter, we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations, liquidity and financial condition.

Our future cash requirements include those associated with maintaining our status as a reporting entity. We believe that on an annual basis those costs would not exceed an average of $15,000 per month.

We presently do not have any available credit, bank financing or other external sources of liquidity. Due to our brief history and lack of historical operating profits, our operations have not been a source of liquidity. We will need to obtain additional capital in order to expand operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding.

We will still need additional investments in order to grow our operations. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of the Company’s common stock and a downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of the Company’s common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

Critical Accounting Policies

The application of our accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. These estimates bear the risk of change due to the inherent uncertainty attached to the estimate and are likely to differ to some extent from actual results. Our critical accounting policy requiring the use of estimates pertains to our intangible asset. In accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," the Company tests its intangible asset (goodwill) for impairment at least annually and the Company may be required to record impairment charges for this asset if in the future its carrying value exceeds its fair value.

Capital Expenditure Commitments

We did not have any substantial outstanding commitments to purchase capital equipment at June 30, 2009.

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Payments Due by Period

The following table illustrates our outstanding debt, purchase obligations, and related payment projections as of September 30, 2009:

ITEM 3.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4T.

CONTROLS AND PROCEDURES

a)

Evaluation of Disclosure Controls and Procedures.

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of September 30, 2009, the end of the period covered by this report, our management concluded its evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this report, is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and to reasonably assure that such information is accumulated and communicated to our management, including our President, to allow timely decisions regarding required disclosure.

As of the evaluation date, our President who also serves as our principal financial and accounting officer, concluded that we do not maintain disclosure controls and procedures that are effective in providing reasonable assurance that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Our President is not a financial or accounting professional, and we have a limited accounting staff. Until we are able to engage a qualified financial officer, and/or accounting staff, we may continue to experience material weaknesses in our disclosure controls that may adversely affect our ability to timely file our quarterly and annual reports.

(b)

Changes in Internal Control over Financial Reporting.

During the quarter ended September 30, 2009, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS 

None

ITEM 1A.

RISK FACTORS

See the risk factors set forth in our Current Report on Form 8-K filed on August 3, 2009.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In conjunction with closing the Share Exchange Agreement, the following common shares (post-split) were issued as discussed in Item 1.01 of our Form 8-K filed on August 3, 2009:

On August 25, 2009, the Company issued 25,000 of its common shares, valued at $67,500, to acquire an option to purchase the url 800.com .

On September 1, 2009, 150,000 common shares (post-split) were issued to an investor for $60,000 cash.

On September 10, 2009, 115,000 common shares (post-split) were issued to an investor in exchange for his convertible note, as described in Note G to the Company’s financial statements.

All of these issuances were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 on the basis of the sophistication and small number of purchasers, and the restrictions placed on the certificates representing the shares and the representation received from the purchasers.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On September 8, 2009 our shareholders approved by majority consent an amendment to our Articles of Incorporation to change our name to QuamTel, Inc, approved a one-for-ten reverse split of our common stock, authorized additional shares of common and preferred stock, and adopted the 2009 Equity Incentive Plan.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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