Secured Digital Storage 10QSB 2007 Q2 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-QSB

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES

EXCHANGE ACT OF 1934

____________________________

For the Quarterly Period Ended June 30, 2007

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 Rd., Suite 1050, Downers Grove, IL	60515
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number (630) 271-8590

P.O. Box 57819, Chicago, Illinois 60657

____________________________

Former Address

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   x   No   o

The number of shares outstanding of the issuer’s common stock, no par value, at August 10, 2007, was 1,300,018 shares.

Transitional Small Business Disclosure Format:   Yes  o  No   x

TABLE OF CONTENTS

PART I. - FINANCIAL INFORMATION

Item 1.	Financial Statements	4
Balance Sheets June 30, 2007 (unaudited) and December 31, 2006		5
Statements of Operations for the Three and Six Months ended June 30, 2006 and June 30, 2007		6
Statements of Cash Flows for the Six Months ended June 30, 2007		7
Statements of Stockholders Equity (Deficit) June 30, 2007 (unaudited)		8
Notes to Consolidated Financial Statements (unaudited)		9
Item 2.	Management’s Discussion and Analysis or Plan of Operation	11
Item 3.	Controls and Procedures	14

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PART II. - OTHER INFORMATION

Item 1.	Legal Proceedings	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults upon Senior Securities	15
Item 4.	Submission of Matters to a Vote of Security Holders	15
Item 5.	Other Information	15
Item 6.	Exhibits	15
Signatures		16
Exhibit Index		17

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MOUNTAINS WEST EXPLORATION INC.

FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006

4

MOUNTAINS WEST EXPLORATION INC.

Balance Sheets

	June 30, 2007			Dec. 31, 2006
ASSETS:
Current assets:
Cash	$	150		$	345
Total current assets		150			345
TOTAL ASSETS	$	150		$	345
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT):
Current liabilities:
Accounts Payable	$	125,308		$	103,381
Accrued Interest		47,933			25,133
Note Payable		2,500			103,000
Total current liabilities		175,741			231,514
Long-Term Debt:
Long-Term Debt		933,500			647,500
Total long-term debt		933,500			647,500
Total liabilities		1,109,241			879,014
Stockholders’ equity:
Common Stock, no par value; 50,000,000 shares authorized;
1,300,018 shares issued and outstanding June 30, 2007 and December 31, 2006		1,582,786			1,582,786
Retained Earnings (Deficit)		(2,691,877	)		(2,461,455	)
Total stockholders’ equity (deficit)		(1,109,091	)		(878,669	)
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)	$	150		$	345

The accompanying notes are an integral part of these financial statements

5

MOUNTAINS WEST EXPLORATION INC.

Statements of Operations

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
Revenue:	$	–		$	–		$	–		$	–
Operating Expenses:		77,519			38,003			115,622			74,532
Operating Profit		(77,519	)		(38,003	)		(115,622	)		(74,532	)
Other Income and Expense
Interest Expense		11,300			5,175			114,800			10,350
Net Income (Loss)	$	(88,819	)	$	(43,178	)		(230,422	)	$	(84,882	)
Per Share Information:
Weighted average number of common shares outstanding		1,300,018			1,300,018			1,300,018			1,300,018
Net Loss per Common Share	$	(0.07	)	$	(0.03	)	$	(0.18	)	$	(0.06	)

The accompanying notes are an integral part of these financial statements

6

MOUNTAINS WEST EXPLORATION INC.

Statements of Cash Flows

(Indirect Method)

	Six Months Ended
	June 30,
	2007			2006
Cash Flows from Operating Activities:
Net Profit (Loss)	$	(230,422	)	$	(84,882	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		–			–
Increase in Accounts Payable		21,927			84,882
Increase in Accrued Expenses		22,800			–
(Increase) in Other Assets		-			(250,000	)
Net Cash Flows Used by Operations		(185,695	)		(250,000	)
Cash Flows from Financing Activities:
Proceeds of Notes Payable – Convertible		536,000			347,500
Payments of Notes Payable – Convertible		(253,000	)		–
Proceeds of Note Payable – Related Party		2,500			(197,000	)
Repayment of Notes Payable – Related Party		(100,000	)		115,000
Net Cash Flows Provided by Financing Activities		185,500			265,500
Net Increase (Decrease) in Cash		(195	)		15,500
Cash at Beginning of Period		345			–
Cash at End of Period	$	150		$	15,500
Supplemental Disclosure of Cash Flow Information
Cash paid for Interest	$	92,000		$	–
Cash paid for Income Taxes	$	–		$	–

The accompanying notes are an integral part of these financial statements

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MOUNTAINS WEST EXPLORATION INC.

Stockholders’ Equity (Deficit)

June 30, 2007

				Retained
				Earnings
	# of Shares	Amount		(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		)
Net Loss for Period	–		–		(230,422	)			(230,422	)
Balance June 30, 2007	1,300,018	$	1,582,786	$	(2,691,877	)	$	(1,109,091		)
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

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MOUNTAINS WEST EXPLORATION INC.

Notes to Financial Statements

June 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 June 30, 2007 and the results of operations for the three-months and six-months ended June 30, 2007 and 2006, and the related cash flows for the six-months ended June 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 – 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 3 – Notes Payable – Convertible Debenture:

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

		June 30, 2007		December 31, 2006
Notes to various individuals, bearing interest at 7% per annum, due December 31, 2007.	$	933,500	$	647,500
	$	933,500	$	647,500

These notes are all convertible at a 25% discount to the private placement per share offering price, if and when it occurs. As of June 30, 2007, the Company is currently not in process of raising capital. Included in the Notes Payable – Convertible Debenture is a $128,000 note from Grander, L.L.C., and a $128,000 note from One-Seven, LLC, each entities are owned by the executive officers and directors of the Company.

Note 4 – Notes Payable – Related Party:

At June 30, 2007, the Company had a 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. Also, included in the Notes Payable – Convertible Debenture is a $128,000 note from Grander, L.L.C., and a $128,000 note from One-Seven, LLC, each entities are owned by the executive officers and directors of the Company.

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MOUNTAINS WEST EXPLORATION INC.

Notes to Financial Statements

June 30, 2007

Note 5 – 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.

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.

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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.

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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 in 2006 and any Current Reports on Form 8-K filed by the Company.

Results of Operations for the Three-Months Ended June 30, 2007 compared to Same Period in 2006

The Company had no revenues during the three month period in 2007 or 2006. The Company divested itself of fractional producing working interests in June 2006, when the production was unitized by the operator and the Company was notified of significant back charges against future revenues, as well as a significantly reduced ownership in the unit. The cost of goods sold was $0 and $0 in the three month period in 2007 and 2006 respectively.

The Company incurred $77,519 in expenses in the three-month period in 2007 compared to $38,003 in such expense in the same period in 2006. The majority of the expense is related to legal and accounting fees for the Company. Additionally, the Company incurred interest expense for the period of $11,300 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. The net loss for the period was $88,819 ($.07 per share) in 2007 compared to a net loss of $43,178 ($.03) in 2006 for the same period.

Results of Operations for the Six-Months Ended June 30, 2007 compared to Same Period in 2006

The Company had no revenues during the six-month period in 2007 or 2006. The Company divested itself of fractional producing working interests in June 2006, when the production was unitized by the operator and the Company was notified of significant back charges against future revenues, as well as a significantly reduced ownership in the unit. The cost of goods sold was $0 and $0 in the six-month period in 2007 and 2006 respectively.

The Company incurred $90,622 in expenses for the six-month period in 2007 compared to $74,532 in such expense in the same period in 2006. The majority of the expense is related to legal and accounting fees for the Company. 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 $114,800 compared to $10,350 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, with the remaining associated with the 7% convertible debentures that the Company has outstanding. The net loss for the period was $230,422 ($.18 per share) in 2007 compared to a net loss of $84,882 ($.06 per share) in 2006 for the same period.

Changes in Financial Condition

Year to date the Company experienced a decrease in cash position to $150 at quarter end. The Company’s long term debt is $933,500. The Company has Accounts Payable outstanding of $125,308 and interest accrued on the convertible debentures of $47,933. The Company does not expect improvements to its financial condition with continued losses to fund expenses and interest expense expected.

Liquidity and Capital Resources

The Company has virtually no cash at June 30, 2007. The Company’s current cash position remains insufficient for any significant operations. The Company’s only capital resources are its common stock which might be sold to raise capital.

12

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 will have to seek loans or equity placements 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.

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.

13

SUBSEQUENT EVENTS

None.

OFF-BALANCE SHEET ARRANGEMENTS

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

Item 3. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure 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.

(b) Changes in Internal Control over Financial Reporting:

There were no changes in the Company’s internal control over financial reporting identified in connection with the Company evaluation of these controls as of the end of the period covered by this report that could have significantly affected those controls subsequent to the date of the evaluation referred to in the previous paragraph, including any correction action with regard to significant deficiencies and material weakness.

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PART II.

OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

NONE

Item 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS.

On April 6, 2007, the Board of the Company authorized the issuance of warrants to purchase 439,500 shares of the Company’s common stock to certain lenders to the Company. All warrants have a term of  5 years and an exercise price of the common stock per share equivalent in connection with the Company's next equity financing. There was no underwriter associated with the privately negotiated transaction. These warrants were issued in reliance upon applicable exemptions from registration under Section 4(2) of the Securities Act of 1933, as amended.

Item 3. DEFAULTS UPON SENIOR SECURITIES.

NONE.

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

NONE

Item 5. OTHER INFORMATION.

On April 6, 2007, the Board of the Company authorized the issuance to certain previous lenders to the Company, warrants to purchase 439,500 shares of the Company’s common stock, all with a term of 5 years and an exercise price of the common stock per share equivalent in connection with the Company's next equity financing.

On June 14, 2007, the Company entered into a lease agreement with The Esplanade at Locust Point - 1 Limited Partnership for the lease of office space. The terms of the lease is 5 years with the following rental payment schedule: Months 1 – 3 ($0); Months 4 – 12 ($3,401); Months 13 – 24 ($3,503); Months 26 – 36($3,608); Month 37 ($0); Months 38 – 48 ($4,347); Month 49 ($0); Months 50 – 60 ($4,478). A copy of such Lease is set forth as Exhibit 10.1 to this report and is incorporated herein in its entirety.

After June 30, 2007, the Convertible Notes were extended and are now due and payable on December 31, 2007.

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 17 of this Report.

15

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.

August 20, 2007	/s/Lee Wiskowski
	Lee Wiskowski, President
	(principal executive officer)

/s/Douglas Stukel

Douglas Stukel, Treasurer

(principal financial officer)

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Exhibit Index

Exhibit Number	Exhibit Description
3.1	Articles (1)
3.2	Bylaws (1)
10.1	Lease Agreement, dated June 14, 2007, by and between the Company and The Esplanade at Locust Point - 1 Limited Partnership.
31.1	302 Sarbanes-Oxley Certification
31.2	302 Sarbanes-Oxley Certification
32.1	906 Sarbanes-Oxley Certification
32.2	906 Sarbanes-Oxley Certification

___________________

(1) The Registrant's Articles of Incorporation and Bylaws are incorporated herein by reference to SEC file No. 2-69024, filed September 2, 1980.

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