Network 1 Financial (NTFL) 10-Q 2009 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008
OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

COMMISSION FILE NUMBER: 001-14753

INTERNATIONALSMARTSOURCING,INC.
(Exact Name of Registrant as specified in its charter)

Delaware	11-3423157
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
320 Broad Hollow Road
Farmingdale, NY 11735
(Address of principal executive offices)
(631)293-4650
(Registrant’s telephone number)

Indicate by check mark whether the registrant (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.            YesR Noo

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filero
Non-accelerated filero	Smaller reporting companyR

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

As of November 4, 2008, the Registrant had 18,899,435 shares of its Common Stock, $.001 par value, issued and 10,974,435 outstanding.

INTERNATIONAL SMART SOURCING, INC.
FORM 10-Q
SEPTEMBER 30, 2008

TABLE OF CONTENTS

			Page
PART I – FINANCIAL INFORMATION			1
	ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1
	ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
		CONDITION AND RESULTS OF OPERATIONS	2
	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
		MARKET RISK	4
	ITEM 4T.	CONTROLS AND PROCEDURES	5
PART II – OTHER INFORMATION			6
	ITEM 1.	LEGAL PROCEEDINGS	6
	ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
		PROCEEDS	6
	ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	6
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	6
	ITEM 5.	OTHER INFORMATION	6
	ITEM 6.	EXHIBITS	6
SIGNATURES			7

i

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Index to Financial Statements

Condensed Balance Sheets	F–1
Condensed Statements of Operations	F–2
Condensed Statements of Cash Flows	F–3
Notes to Condensed Financial Statements	F–4

1

INTERNATIONAL SMART SOURCING, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEETS

ASSETS
		September 30, 2008			December 31, 2007 *
		(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	626,899		$	689,637
Certificate of deposit		542,448			529,088
Prepaid expenses		6,355			6,124
Note Receivable		-			50,000
TOTAL ASSETS	$	1,175,702		$	1,274,849
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	4,181		$	5,015
TOTAL LIABILITIES		4,181			5,015
SHAREHOLDERS' EQUITY:
Preferred Stock, $.001 par value, 1,000,000 shares authorized,
no shares issued or outstanding		-			-
Common Stock, $.001 par value, 100,000,000 shares authorized,
18,899,435 issued and 10,974,435 outstanding		18,899			18,899
Additional paid-in capital		8,254,495			8,254,495
Accumulated deficit		(5,094,144	)		(5,094,144	)
Deficit accumulated during the development stage		(343,479	)		(245,166	)
		2,835,771			2,934,084
Less: Treasury Stock, at cost, 7,925,000 shares		(1,664,250	)		(1,664,250	)
TOTAL SHAREHOLDERS' EQUITY		1,171,521			1,269,834
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,175,702		$	1,274,849

* Derived from audited financial statements

See Notes to Condensed Financial Statements

F–1

INTERNATIONAL SMART SOURCING, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

														Cumulative from
														September 29, 2006
														(Inception of
		Three Months Ended						Nine Months Ended						development stage)
		September 30,			September 30,			September 30,			September 30,			to September 30,
		2008			2007			2008			2007			2008
GENERAL AND ADMINISTRATIVE
EXPENSES	$	31,129		$	41,615		$	126,793		$	193,339		$	419,528
LOSS BEFORE OTHER INCOME		(31,129	)		(41,615	)		(126,793	)		(193,339	)		(419,528	)
OTHER INCOME
Other income - Interest		6,656			11,413			28,480			45,770			86,276
LOSS BEFORE PROVISION FOR
INCOME TAX		(24,473	)		(30,202	)		(98,313	)		(147,569	)		(333,252	)
Income tax		-			-			-			-			(10,227	)
NET LOSS	$	(24,473	)	$	(30,202	)	$	(98,313	)	$	(147,569	)	$	(343,479	)
Loss per share of common stock:
Net loss per share - Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted average number of shares
of common stock outstanding -
Basic and diluted		10,974,435			10,974,435			10,974,435			10,974,435

See Notes to Condensed Financial Statements

F–2

INTERNATIONAL SMART SOURCING, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

								Cumulative from
								September 29, 2006
								(Inception of
		Nine Months Ended						development stage)
		September 30,			September 30,			to September 30,
		2008			2007			2008
Cash flows from operating activities:
Net loss	$	(98,313	)	$	(147,569	)	$	(343,479	)
Adjustments to reconcile net loss to net
cash used in operating activities:
Non-cash compensation expense related
to issuance of warrants		-			15,000			15,000
Interest earned on certificate of deposit		(13,364	)		(23,253	)		(42,452	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(231	)		(7,381	)		(6,352	)
Accounts payable and accrued expenses		(830	)		(39,549	)		4,182
Income taxes payable		-			(10,227	)		-
Total adjustments		(14,425	)		(65,410	)		(29,622	)
Net cash used in operating activities		(112,738	)		(212,979	)		(373,101	)
Cash flows from investing activities:
Purchase of certificate of deposit		-			-			(600,000	)
Proceeds from repayment of note receivable		50,000			-			50,000
Net proceeds from maturity of certificate of deposit		-			100,000			100,000
Net cash provided by (used in) investing activities:		50,000			100,000			(450,000	)
Net decrease in cash and cash equivalents		(62,738	)		(112,979	)		(823,101	)
Cash and cash equivalents - beginning of period		689,637			828,847			1,450,000
Cash and cash equivalents - end of period	$	626,899		$	715,868		$	626,899
See Notes to Condensed Financial Statements
F–3

INTERNATIONAL SMART SOURCING, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008
(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim unaudited financial statements and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and disclosures required for annual financial statements. These unaudited financial statements should be read in conjunction with the financial statements and related footnotes included in the International Smart Sourcing, Inc. (the “Company” or “ISSI”) annual report on Form 10-KSB for the year ended December 31, 2007.

In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company’s financial position as of September 30, 2008 and the results of operations and cash flows for the periods shown have been included.

The results of operations for the interim periods ended September 30, 2008, are not necessarily indicative of the results to be expected for the full year ending December 31, 2008.

Effective September 29, 2006, the Company is reporting as a development stage company.

2. PLAN OF OPERATIONS

Until the sale of its operating subsidiaries, Electronic Hardware Corp., Smart Sourcing Inc., and Compact Disc Packaging Corp. (the “Subsidiaries”), on September 28, 2006, the Company was a holding company and the shares of the Subsidiaries held by the Company constituted substantially all of the Company’s assets. Accordingly, since the sale of the Subsidiaries, the Company has existed as a shell company with no subsidiaries and no business operations. The Company’s plan of operation is to seek a target company with which to merge or to complete a business combination. In any transaction, management anticipates that the Company would be the surviving legal entity and the shareholders of the Company would retain a percentage ownership interest in the post-transaction company. The amount of the retained equity ownership by the shareholders will be negotiated by the Company’s management and the target company.

On July 29, 2008, the Company entered into a letter of intent with Network 1 Financial Securities Inc., a Texas corporation (“NETW”), pursuant to which the Company would purchase one hundred percent (100%) of the issued and outstanding capital stock of NETW, resulting in NETW becoming the Company’s wholly owned subsidiary, in exchange for twenty-two million (22,000,000) shares of the Company’s common stock, $0.001 par value, which amount shall be subject to adjustment after the completion of (a) NETW’s audited financial statements for the years ended June 30, 2008 and 2007 and (b) a due diligence review by the Company. NETW is a registered broker-dealer. The acquisition is subject to due diligence and the execution of definitive agreements. If consummated the transaction would constitute a reverse acquisition of the Company by NETW, as NETW would control the post merged company.

F–4

INTERNATIONAL SMART SOURCING, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008
(Unaudited)

The Company can give no assurance that any transaction discussed herein will occur, or that if such a transaction were to occur, it would enhance its future operations or financial results, or specifically that the Company would become and remain profitable as a result of such transaction.

The Company does not plan to restrict its search to any specific business, industry or geographic location, and it may participate in a business venture of virtually any kind or nature.

The Company may seek a business opportunity with entities which have recently commenced operations, or that desire to utilize the public marketplace in order to raise additional capital to expand into new products or markets, to develop a new product or service, or for other corporate purposes. The Company may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

3. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates.

Stock Based Compensation

The Company accounts for stock based compensation using the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123R (revised 2004), “Share Based Payment.”

The Company did not record any compensation (including stock based compensation) expense for the nine months ended September 30, 2008.

Recent Accounting Pronouncements

(i) In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 is effective for fiscal years beginning after November 15, 2007. SFAS 159 permits companies to measure many financial instruments and certain other assets and liabilities at fair value on an instrument-by-instrument basis. SFAS 159 also establishes presentation and disclosure requirements to facilitate comparisons between companies that select different measurement attributes for similar types of assets and liabilities. The Company’s adoption of SFAS 159 has not had a material impact on the Company’s financial position and results of operations.

F–5

INTERNATIONAL SMART SOURCING, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008
(Unaudited)

(ii) On February 12, 2008, the FASB issued FASB Staff Position (FSP) No. SFAS 157-2, “Effective Date of FASB Statement No. 157” (FSP SFAS 157-2). FSP SFAS 157-2 amends SFAS No. 157, to delay the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for the items that are recognized or disclosed at fair value in the financial statements on a recurring basis. For items within its scope, FSP SFAS 157-2 defers the effective date of SFAS 157 to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting SFAS 157 and FSP SFAS 157-2 on its consolidated financial statements.

4. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash and cash equivalents and certificates of deposit. At times, the cash in any one bank account may exceed the Federal Deposit Insurance Corporation’s (the “FDIC”) $250,000 limit. At September 30, 2008, the Company maintained balances that were over the FDIC limit. The Company places its cash with high credit quality financial institutions and does not believe it is exposed to any significant credit risk on cash or cash equivalents.

5. INCOME TAXES

As of September 30, 2008, the Company has a net operating loss (“NOL”) of approximately $267,000. The deferred tax asset related to such NOL has been fully reserved.

The Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”), on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes,” and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There were no unrecognized tax benefits as of January 1, 2007 and September 30, 2008.

The Company has identified its federal tax return and its state tax return in New York State as “major” tax jurisdictions. Based on the Company’s evaluation, it has concluded that there are no significant uncertain tax positions which require recognition in the Company’s financial statements. The Company’s evaluation was performed for the tax years ended 2003 through 2007, the only periods subject to examination. The Company believes that its income tax positions and deductions would be sustained on audit and the Company does not anticipate any adjustments that would result in a material change to its financial position. Consequently, the Company did not record a cumulative effect adjustment related to the adoption of FIN 48.

The Company classifies interest and penalties related to unrecognized tax benefits in other expenses. The Company did not incur interest or penalties during the nine months ended September 30, 2008.

F–6

INTERNATIONAL SMART SOURCING, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008
(Unaudited)

6. LOSS PER SHARE

Basic loss per share (“LPS”) is determined by dividing net loss for the period by the weighted average number of shares of common stock outstanding during the same period. Diluted LPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock, which would then share in the earnings of the Company. For the interim periods ended September 30, 2008 and 2007, the Company had approximately 7.7 million warrants that were not included in the dilutive loss per share calculation. The Company had net losses during the interim periods ended September 30, 2008 and 2007 and any adjustment would have been antidilutive.

F–7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Until the sale of our subsidiaries, Electronic Hardware Corp., Smart Sourcing Inc., and Compact Disc Packaging Corp. (the “Subsidiaries”) on September 28, 2006, we were a holding company and the shares of the Subsidiaries held by us constituted substantially all of our assets. Accordingly, since the sale of the Subsidiaries, we have existed as a shell company with no subsidiaries and no business operations. Our plan of operation is to seek a target company with which to merge or to complete a business combination. In any transaction, management anticipates that we would be the surviving legal entity and our shareholders would retain a percentage ownership interest in the post-transaction company. The amount of the retained equity ownership by the shareholders will be negotiated by management and the target company, but would likely be less than a controlling interest.

We do not plan to restrict our search to any specific business, industry or geographic location, and we may participate in a business venture of virtually any kind or nature.

We may seek a business opportunity with entities which have recently commenced operations, or that desire to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

On July 29, 2008, we entered into a letter of intent with Network 1 Financial Securities Inc., a Texas corporation (“NETW”), pursuant to which we would purchase one hundred percent (100%) of the issued and outstanding capital stock of NETW, resulting in NETW becoming our wholly owned subsidiary, in exchange for twenty-two million (22,000,000) shares of our Company’s common stock, $0.001 par value, which amount shall be subject to adjustment after the completion of (a) NETW’s audited financial statements for the years ended June 30, 2008 and 2007, and (b) a due diligence review by us. NETW is a registered broker-dealer. The acquisition is subject to due diligence and the execution of definitive agreements. If consummated, the transaction would constitute a reverse acquisition of us by NETW, as NETW would control the post merged company.

We can give no assurance that any transaction discussed herein will occur, or that if such a transaction were to occur, it would enhance our future operations or financial results, or specifically that we would become and remain profitable as a result of such transaction.

RESULTS OF OPERATIONS

For the interim periods ended September 30, 2008 and September 30, 2007, our financial statements reflect that we had no operations. As a result of the sale of the Subsidiaries on September 28, 2006, we are currently in the development stage and exist as a shell company.

2

OPERATING EXPENSES

General and Administrative Expenses

General and administrative expenses for the three month period ended September 30, 2008 were $31,129, as compared to $41,615 for the comparable period ended September 30, 2007. General and administrative expenses decreased by $10,486 or 25.2% during the quarter ended September 30, 2008 as compared to September 30, 2007 due to decreased accounting fees for the three month period.

General and administrative expenses for the nine month period ended September 30, 2008 were $126,793, as compared to $193,339 for the comparable period ended September 30, 2007. General and administrative expenses decreased by $66,546 or 34.4% during the nine months ended September 30, 2008 as compared to September 30, 2007 due to a decrease in accounting and legal fees for the nine month period.

Going forward, general and administrative expenses should remain relatively constant unless we undertake an acquisition in which case legal and accounting expenses would significantly increase.

Interest Income

Interest income for the three month period ended September 30, 2008 was $6,656, as compared to $11,413 for the comparable period ended September 30, 2007. Interest income is earned from the certificates of deposit which we hold.

Interest income for the nine month period ended September 30, 2008 was $28,480, as compared to $45,770 for the comparable period ended September 30, 2007. In addition to interest income we earned from certificate of deposits which we hold, we earned $3,232 in interest during the nine months ended September 30, 2008 from a loan to Charter Fabrics, Inc. which we made on October 31, 2006 and which was included in the nine months ended September 30, 2008 amount above. This note receivable was repaid during the quarter ended March 31, 2008.

LIQUIDITY AND CAPITAL RESOURCES

Our total assets as of September 30, 2008 were $1,175,702, which are comprised of $626,899 cash and cash equivalents, $542,448 certificates of deposit with a maturity of six months, and $6,355 in prepaid expenses. We have $4,181 in current liabilities which consist of accrued office and legal expenses. We presently anticipate that cash requirements during the next twelve months will relate to maintaining the corporate entity, complying with the periodic reporting requirements of the Securities and Exchange Commission, evaluating and reviewing possible business ventures and acquisition opportunities and potentially negotiating and consummating any such transactions. We believe that we have sufficient cash on hand to meet these cash requirements over a period of twelve months. Our cash decreased by $62,738 to $626,899 at September 30, 2008 from $689,637 at December 31, 2007.

Cash flows used in operating activities was $112,738 for the nine months ended September 30, 2008 which reflected a net loss of $98,313. Our prepaid expenses increased by $231, which was due to a renewed insurance policy. Our accounts payable decreased by $830. In addition, we earned interest on a long term certificate of deposit in the amount of $13,364.

3

Cash provided by investing activities for the nine months ended September 30, 2008 was $50,000. During the quarter ended June 30, 2008, we received payment of the note receivable plus accrued interest from Charter Fabrics, Inc. in the amount of $53,232.

There were no financing activities for the nine months ended September 30, 2008.

CAUTIONARY FACTORS REGARDING FUTURE OPERATING RESULTS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations as of September 30, 2008 and for the three and nine months then ended, should be read in conjunction with the audited financial statements and notes thereto set forth in our annual report of Form 10-KSB for the year ended December 31, 2007, filed with the Securities and Exchange Commission on March 12, 2008.

Certain statements contained in this report, including, without limitation, statements containing the words, “likely,” “forecast,” “project,” “believe,” “anticipate,” “expect,” and other words of similar meaning, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any results, performance, or achievements expressed or implied by such forward-looking statements. In addition to forward-looking statements contained in this quarterly report on Form 10-Q, the following forward-looking factors could cause our future results to differ materially from our forward-looking statements: capital resources, credit resources and funding.

We assume no obligation to update any forward-looking statements as a result of new information or future events or developments other than in compliance with the federal securities laws.

OFF BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue, expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

4

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures” (as defined in Exchange Act Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within time periods specified in the Securities and Exchange Commission’s (the “SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

We believe that our disclosure controls and procedures are adequate to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosures. Further, we believe that information required to be disclosed by us is recorded, processed, summarized and reported within time periods specified in SEC’s rules and forms.

Changes in Internal Controls over Financial Reporting

There have not been any changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2008 that have materially affected or are reasonably likely to affect our internal control over financial reporting (and the material weakness which we disclosed in our Annual Report on Form 10-KSB, filed with the SEC on March 12, 2008).

5

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not party to any material legal proceedings, nor to our knowledge, are there any proceedings threatened against us.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We have not sold any unregistered equity securities within the past three years.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We have not submitted any matters to a vote of security holders during the period covered by this quarterly report.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

Exhibit
Number	Description
10.1	Letter of Intent between the Company and NETW, dated July 29, 2008 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 30, 2008)
31.1	Rule 13a – 14(a)/15d – 14(a) Certification, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002
31.2	Rule 13a – 14(a)/15d – 14(a) Certification, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002
32.1	Certification of the 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 the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

6

SIGNATURES

Pursuant to the requirements of Section 13(a) and 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.

INTERNATIONAL SMART SOURCING, INC.

November 4, 2008	/s/ David Hale
Date	David Hale
	Chairman, President and
	Principal Executive Officer
November 4, 2008	/s/ Michael Rakusin
Date	Michael Rakusin
	Chief Financial Officer

7