Raphael Industries Ltd. (“the Company”) was incorporated on October 31, 2005 under the laws of the State of Nevada. Its principal business is to market database for commercial use in newsletters, direct mail, and internet marketing promotions.

The financial statements are prepared in accordance with generally accepted accounting principles in the United States on a going concern basis which contemplates the realization of assets and discharge of liabilities and commitments in the normal course of business. To date the Company has funded operations through the issuance of capital stock and the limited generation of revenues. The Company has limited operating history, has generated limited revenues from operations, and may require additional capital requirements. As at March 31,June 30, 2010, the Company has an accumulated deficit of $383,645.$418,796. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management’s plan is to continue raising additional funds through future equity or debt financings, as needed, until it can generate sufficient revenues to maintain sustainable profitable operations. On October 25, 2006, the Company filed an amended SB-2 Registration Statement with the United States Securities and Exchange Commission and raised $251,150. On June 3, 2010 the Company filed an S-1 registration statement to register 10,000,000 shares for sale at $0.10 per share. The registration statement was declared effective by the Securities and Exchange Commission on June 11, 2010. As of the balance sheet date no funds have been raised pursuant to the registration statement. It has sufficient capital to maintain operations for the next 12 months.

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is September 30.

The interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations, and cash flows for the periods shown. The results of operations for such periods are not necessary indicative of the results expected for a full year or for any future period.

The Company adopts new accounting pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective adoption date. Management does not believe that any recently issued but not yet effective standards, if currently adopted, would have a material effect on these financial statements.

Consulting fees of $14,400 ($28,800 in 2009) were recorded as donated services by the previous President of the Company for consulting services provided to the Company during the six month period ended March 31, 2010 and consulting fees of $7,200 were recorded as donated services by the current President of the Company for consulting services provided to the Company during the three month period ended June 30, 2010. These fees are included in general and administrative, and recorded as donated capital.

On March 17, 2010 the Board of Directors passed a resolution approving a 2:1 forward stock split of the outstanding common shares of the Company’s common stock. The split was effected by a stock dividend to each of the Company’s stockholders of 1 additional common share of common stock for each 1 share of common stock held on January 18, 2010.

On February 15, 2010 the Board of Directors authorized an increase in the number of authorized shares of common stock from 50,000,000 to 100,000,000.

These financial statements give retroactive effect to each of these events.

This Form 10-Q includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this Form 10-Q, other than statements of historical facts, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including operating costs, future capital expenditures (including the amount and nature thereof), and other such matters are forward-looking statements. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our business, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking stateme nts. Becausestatements. Becau se our stock is a penny stock, each time we refer to the Litigation Reform Act, the safe harbor does not apply.

Factors that could cause actual results to differ materially from those in forward-looking statements include: the change of business focus; continued availability of capital and financing; general economic, market or business conditions; acquisition opportunities or lack of opportunities; changes in laws or regulations; risk factors listed from time to time in our reports filed with the Securities and Exchange Commission; and other factors.

Raphael Industries Ltd is a Nevada company incorporated on October 31, 2005. We are a startup company providing list management and marketing services in the direct mail marketing industry. To date we have had limited revenues and have been issued a going concern opinion from our auditors. Our registered office and agent for service is located at 5190 Neil Road Suite 430 Reno NV 89502. Our telephone and fax numbers are 1-866-261-8853 and 1-302-288-8853, respectively and our corporate website is www.raphaelindustries.net.

The Registrant has no employees. The company's President, Ronald Hughes, is retained as a consultant.

During the three months ending March 31,June 30, 2010, we realized revenues of $nil compared to a refund of $524 for the same period of 2009(2009: $nil) and we incurred an operating loss before taxes of $28,707$35,151 compared to an operating loss of $22,806$9,222 for 2009. Total operating expenses for the three months ended March 31,June 30, 2010 were $28,707$35,151 (2009 - $22,532)$9,222). The major components to expenses faced by the company during the three months were general and administrative of $33,255$28,966 (2009 - $18,358)$20,853), foreign currency loss of $6,185 (2009 – gain of $4,548 (2009 – loss of $4,174)$11,631). The change in general and administrative expenses was as a result of legal fees associated with our S-1 registration statement and additional travel expenses related to business development.

During the sixnine months ending March 31,June 30, 2010, we realized revenues of $nil compared to $9,390 for the same period of 2009 and we incurred an operating loss before taxes of $49,476$84,627 compared to an operating loss of $67,646$76,868 for 2009. Total operating expenses for the sixnine months ended March 31,June 30, 2010 were $49,476$84,627 (2009 - $72,157)$81,379). The major components to expenses faced by the company during the sixnine months were general and administrative of $57,417$86,383 (2009 - $45,091)$65,944), foreign currency gain of $7,941$1,756 (2009 – loss of $27,066)$15,435), and cost of sales of $nil (2009 – $4,879).

As of March 31,June 30, 2010 the Company had $210,690$188,954 in cash (September 30, 2009 - $239,248), $141$94 in prepaid expenses (September 30, 2009 - $100), and $2,017$1,736 in property and equipment (September 30, 2009 - $434).

The Company further had $13,533$19,420 in accounts payable and accrued liabilities (September 30, 2009 - $5,391), and $43,410 in licensee fee payable (September 30, 2009 - $43,410). There is no long-term debt. The Company may, in the future, invest in short-term investments from time to time but there can be no assurance that these investments will result in profit or loss.

On February 10, 2010 we received the resignation from Craig Wacaser as a Director. On February 11, 2010 we appointed Ronald Hughes as an interim Director and our Chief Executive and Chief Financial Officer.

 

Our future growth and success will be dependent on our ability to market the lists for our clients and to secure additional lists. If we cannot succeed in marketing licensed lists and to secure contracts to market lists then our prospects for growth are limited. We are in discussions with list brokers to secure list agreements and other possible business opportunities.

As of March 31,June 30, 2010 our sole source of revenue has been list rental and brokerage services. Accordingly, no table showing percentage breakdown of revenue by business segment or product line is included.

We do not have any off balance-sheet arrangements that have or are reasonably likely to have a current or future effect on the small business issuer's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

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Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer, of the e ffectivenesseffectivene ss of the design and operation of the Company's disclosure controls and procedures. Based upon and as of the date of that evaluation, the Chief Executive Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

There were no changes in our internal control over financial reporting during the quarter ended March 31,June 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended March 31,June 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Company’s SB-2 registration statement, file number 333-135331 was declared effective by the Securities and Exchange Commission on November 9, 2006. The offering has commenced and was closed on April 30, 2007 and 2,511,500 shares were issued at an offering price of $0.10 per share for total proceeds of $251,150. The following table details the use of proceeds through March 31,June 30, 2010.