MMTS Multi Media Tutorial Services Inc (CE)

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 May 31, 2008

OR

[_] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________

Commission file number: 0-25758

 Delaware 73-1293914
------------------------------- ---------------------------------------
(State of Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)

 1214 East 15th Street
 Brooklyn, NY 11230
--------------------------------------- -------------------------
(Address of Principal Executive Offices) (Zip Code)

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 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. [X] Yes [ ] 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. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer |_| Accelerated filer |_|

Non-accelerated filer |_| Smaller reporting company |X|

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

There are 54,084,902 shares of common stock, par value $0.0001 per share, issued and outstanding as of July 15, 2008.

Transitional Small Business Disclosure Format (check one): [_] Yes [X] No

 Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements F-1
Item 2. Management's Discussion and Analysis or Plan of Operation 2
Item 3. Controls and Procedures 4

PART II - OTHER INFORMATION
Item 1. Legal Proceedings 5
Item 2. Unregistered Sale 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

PART I
FINANCIAL INFORMATION

Item 1. Financial Statements.

 Assets
 May 31, 2008
 ------------
Current assets:

Cash $ --
Accounts receivable, less allowance for
 doubtful accounts of $8,231 125,196

Inventories 1,459
Prepaid expenses 109,281
 ------------
Total current assets 235,936
 ------------
Furniture & equipment, net
 13,158

Intangible assets, net 70,089

Other assets 26,736
 ------------
Total assets $ 345,919
 ============
 Liabilities and Stockholders' Deficit
Current liabilities

Book overdraft $ 32,488
Accounts payable and accrued expenses 4,501,189
Notes payable 2,194,775
 ------------
Total current liabilities 6,728,452
 ------------
Long-term debt
Notes payable, net of discount of $190,727 459,273
 ------------
Commitments and contingencies
Stockholders' deficit
Preferred stock, Series A, $0.01 par value; 1,000,000
 shares authorized; no shares issued and outstanding --
Preferred stock, Series B, $0.01 par value; 50 shares
 authorized; no shares issued and outstanding --
Common stock, $0.0001 par value; 100,000,000
 shares authorized; 54,084,902 shares issued and outstanding 5,408

Stock subscription receivable (6,000)
Additional paid-in capital 15,486,419
Accumulated deficit (22,327,633)
 ------------
Total stockholders' deficit (6,841,806)
 ------------
Total liabilities and stockholders' deficit $ 345,919
 ============

The financial information presented herein has been prepared by management without audit by independent certified public accountants.

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

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
---------------------------------------------------------------------------------

 For the Three Months Ended
 May 31,
 -------------------------------
 2008 2007
 ------------ ------------



Net sales $ 151,973 $ 179,742

Cost of sales 12,999 28,865
 ------------ ------------

Gross profit 138,974 150,877

Selling, general and administrative expenses 346,928 457,921
 ------------ ------------

Loss from operations (207,954) (307,044)
 ------------ ------------

OTHER INCOME (EXPENSE)

Cancellation of Debt -- 46,174

Interest Expense (93,844) (127,291)
 ------------ ------------

Total other expense (93,844) (81,117)
 ------------ ------------


NET LOSS $ (301,798) $ (388,161)
 ============ ============


BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.01)
 ============ ============


WEIGHTED-AVERAGE SHARES OUTSTANDING 53,687,763 44,703,004
 ============ ============


The financial information presented herein has been prepared by management
without audit by independent certified public accountants.


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

 F-2

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
 For the Three Months Ended
 May 31,
 -------------------------
 2008 2007
 --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss $(301,798) $(388,161)
Adjustments to reconcile net loss to net cash
 (used in) provided by operating activities
 Depreciation and amortization 6,160 7,429
 Forgiveness of debt -- (46,174)
 Amortization of prepaid contract for service 3,649 10,938
 Amortization of deferred compensation 51,750 9,875
 Amortization of discount on debt 26,250 57,351
 Stock based compensation 25,578 99,378
 Common stock issued for:
 Services 33,349 58,500
Changes in Operating assets and Liabilities:
 Accounts receivable (16,881) 13,750
 Inventories (632) 671
 Prepaid expenses and other assets 1,276 (40,229)
 Accounts Payable and accrued expenses 108,251 8,826
 --------- ---------
Net cash used in operating activities (63,048) (207,846)
 --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of furniture and equipment (77) (1,500)
 Increase in intangibles (9,201) (1,800)
 --------- ---------

Net cash used in investing activities (9,278) (3,300)
 --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from issuance of notes payable -- 450,000
 Repayment of note payable 60,000 (81,700)
 Cash deficit 12,326 (16,113)
 --------- ---------

Net cash provided by financing activities 72,326 352,187
 --------- ---------


Net increase (decrease) in cash -- 141,041

CASH, BEGINNING OF PERIOD -- --
 --------- ---------
CASH, END OF PERIOD $ -- $ 141,041
 ========= =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 INTEREST PAID $ 1,856 $ --
 ========= =========
 INCOME TAXES PAID $ -- $ --
 ========= =========

NON-CASH INVESTING AND FINANCING ACTIVITIES
 Common stock issued:
 With issuance of debt $ -- $ 236,250
 ========= =========
 Deferred compensation paid in common stock $ -- $ 97,000
 ========= =========
 Conversion of debt to common stock $ -- $ 50,000
 ========= =========

The financial information presented herein has been prepared by management
without audit by independent certified public accountants.

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

 F-3

MULTI-MEDIA TUTORIAL SERVICES, INC. AND SUBSIDIARIES

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Multi-Media Tutorial Services, Inc. (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q under Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all material adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended May 31, 2008 are not necessarily indicative of the results that are to be expected for the year ended February 28, 2009. The information contained in this Form 10-Q should be read in conjunction with the audited financial statements filed as part of the Company's Form 10-KSB for the year ending February 29, 2008.

NOTE 2 - GOING CONCERN

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses and has an accumulated deficit of $22,327,633 and a working capital deficiency of $6,841,806 at May 31, 2008. Also, the Internal Revenue Service has placed a federal tax lien on substantially all of the Company's assets as the Company is in arrears on payment of payroll taxes, accrued prior to February 28, 2004 of approximately $500,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans with respect to these matters include restructuring its existing debt, settling its existing debt by issuing shares of its common stock and raising additional capital through future issuance of stock and or debentures. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of Multi-Media Tutorial Services, Inc. ("MMTS") and its wholly-owned subsidiaries, Video Tutorial Services, Inc. ("VTS") and Math Channel, Inc. ("Math Channel"). All significant intercompany transactions and balances have been eliminated in consolidation. Action Telesales and Communications, Inc. is an affiliated company of the Company which handles the billing process for MMTS and VTS. All intercompany transactions have been eliminated.

ESTIMATES

In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company classifies highly liquid temporary investments with an original maturity of six months or less when purchased as cash equivalents.

CONCENTRATION OF CREDIT RISK FOR CASH HELD AT BANKS

The Company maintains cash in bank deposit accounts which, at times, exceed federally insured limits. The Company has not experienced any losses on these accounts.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued payroll and other expenses, the carrying amounts approximate fair value due to their short maturities. The amount shown for notes payable also approximates fair value because the current interest rates offered to the Company for debt of similar maturities are substantially the same.

STOCK BASED COMPENSATION

Effective March 1, 2006, the Company began recording compensation expense associated with stock-based awards and other forms of equity compensation in accordance with Statement of Financial Accounting Standards No. 123-R, Share-Based Payment, ("SFAS 123R") as interpreted by SEC Staff Accounting Bulletin No. 107. The Company adopted the modified prospective transition method provided for under SFAS 123r and consequently has not retroactively adjusted results from prior periods. The Company records expense over the vesting period in connection with stock options granted. The compensation expense for stock-based awards includes an estimate for forfeitures and is recognized over the expected term of the award on a straight line basis.

As of May 31, 2008, there are 10,675,000 options with a weighted average exercise price of $.043 and a weighted average remaining life of approximately 2-1/2 years, remaining outstanding and continue to be measured at the intrinsic value over their remaining vesting period. Compensation expense in any given period is calculated as the difference between total earned compensation at the end of the period, less total earned compensation at the beginning of the period. Compensation earned is calculated on a straight line basis over the requisite service period for any given option award. When the stock options are granted, the fair value of each option grant is estimated on the date of grant using the Black-Scholes valuation model.

------------------------------- ------------------------------------------------
 For the Three Months Ended
 May 31,
------------------------------- ----------------------- ------------------------
 2008 2007
------------------------------- ----------------------- ------------------------
Risk free interest rate: 4.81% 4.64%
------------------------------- ----------------------- ------------------------
Expected life (years): 10 10
------------------------------- ----------------------- ------------------------
Dividend rate: 0% 0%
------------------------------- ----------------------- ------------------------
Expected Volatility: 268% 271%
------------------------------- ----------------------- ------------------------

During the three months ended May 31, 2008 the Company granted options for 700,000 shares of the Company's common stock at an average price of $.03. These options were valued with the use of the Black-Scholes valuation model. These options are exercisable upon grant, and accordingly their entire value of $25,578 has been expensed as a general and administrative expense for the three months ended May 31, 2008. These options expire ten years from the date of grant.

As of May 31, 2008, there is approximately $34,953 of total unrecognized compensation costs related to granted stock options that are unvested. These costs are expected to be recognized over a weighted average period of 2-1/2 years.

NOTE 4 - NOTES PAYABLE

NOTES PAYABLE, Current
----------------------

As of May 31, 2008, the Company maintained the following notes payable, current:

a) 10% notes, unsecured, payable on demand. These advances accrue
 interest based on an annualized rate of 10% per annum. During the
 nine months ended November 30, 2007 the Company repaid $81,700 of
 these demand notes payable. $ 490,613
 --------------------------------------------------------------------------------------------

b) On April 10, 2006, the Company issued demand notes totaling $87,500
 for consulting services to be performed by the note holders over a
 twenty-four month period, subsequent to the issuance of these notes
 payable. These notes accrue interest at 10% per annum. In lieu of
 cash payment the Company may redeem these notes, and any accrued
 interest, with the issuance of Series E unsecured convertible
 promissory notes ("Series E"). The Company has recorded the issuance
 of these notes payable for consulting services as a prepaid expense
 of $87,500 that is being expensed over the twenty four month period
 of the consulting agreement. During the nine months ended November 30,
 2007, the Company expensed $32,813, of this deferred compensation.

 In February 2007, a total of $75,000 of these demand notes redeemed
 their note principal (accrued interest paid subsequent to February
 28, 2007) for Series E notes. Under the terms of the Series E note,
 the note holder upon issuance of Series E receives 5 shares of
 common stock for each $1 of debt, for a total of 375,000 share of
 common stock. These shares have been valued at $29,950, and have
 been recorded as a discount on debt, that was to have been amortized
 and expensed as interest over the life of the debt, or until such
 time as the debt was converted. The Series E debt is convertible at
 $.50 per share, or 50 percent of the average closing bid during the
 five trading days prior to the note holder giving notice of
 conversion, but not lower than $.10 per share. This note, including
 accrued interest, was due and payable in February 2010. In February
 2007, these demand note holders, upon conversion into these Series E
 notes, converted all $75,000 Series E principal into 750,000 shares
 of common stock valued at $0.10 per share or $75,000. The $29,950
 discount on debt was fully expensed as interest upon conversion of
 the Series E into common stock.

 In March 2007, one of these notes payable for $50,000 redeemed
 their note principal for a Series E note. Under the terms of the
 Series E note, the note holder upon issuance of Series E received 5
 shares of common stock for each $1 of debt, for a total of 250,000
 share of common stock. These shares have been valued at $31,250, and
 have been recorded as a discount on debt, that was to have been
 amortized and expensed as interest over the life of the debt, or
 until such time as the debt was converted. In addition, the Company
 recognized a beneficial conversion of $12,500 related to the Series
 E. As Series E are immediately convertible to common stock, this
 Series E was issued and convertible at a rate below market on the
 date of issuance of the Series E. The Series E debt is convertible
 at $.50 per share, or 50 percent of the average closing bid during
 the five trading days prior to the note holder giving notice of
 conversion, but not lower than $.10 per share. This Series E note,
 including accrued interest, was due and payable in March 2010. On
 the date of conversion from a demand note to a Series E note, the
 note holder converted the $50,000 Series E principal into 500,000
 shares of common stock valued at $0.10 per share or $50,000. The
 $31,250 discount on debt, plus the $12,500 beneficial conversion
 feature, was fully amortized, and recorded as an interest expense
 upon conversion of the Series E into common stock. 69,846
 --------------------------------------------------------------------------------------------

 F-6

c) 8% notes, unsecured, payable on demand. These advances accrue
 interest based on an annualized rate of 8% per annum. 750,000
 --------------------------------------------------------------------------------------------

d) Non-interest bearing notes, unsecured, payable on demand. 201,676
 --------------------------------------------------------------------------------------------

e) 17% convertible unsecured notes payable on demand; the notes are
 convertible into common stock at a price of $1.2656 per share or an
 alternate conversion of 75% of the closing bid for the first five
 trading days prior to conversion. The alternate conversion price
 cannot be lower than $0.55 per share, or more than $3.55 per share. 250,000
 --------------------------------------------------------------------------------------------

f) 10% convertible unsecured notes, payable on demand. The notes are
 convertible into common stock at a price of the lesser of $.50 or
 50% of the average closing bid during the five trading days prior to
 notice of conversion, but not lower than $.10 per share. 401,390
 --------------------------------------------------------------------------------------------

g) 10% convertible notes payable variously in 2006; the notes are
 convertible into common stock at the lesser of $.50 or 50% of the
 average of the closing bid price in the over the counter market
 during the five business days ending on the day before the holder
 gives notice of conversion, but not lower than $.10 per share.

 During the year ended February 28, 2007, a total of $50,000 of these
 notes payable including accrued interest of $17,000, converted into
 670,000 shares of the Company's common stock at $0.10 per share. 25,000
 --------------------------------------------------------------------------------------------

i) 8% notes, unsecured, payable on demand. These advances accrue
 interest based on an annualized rate of 8% per annum. 6,250
 --------------------------------------------------------------------------------------------

 Total notes payable, current 2,194,775
 --------------------------------------------------------------------------------============

As of May 31, 2008, the Company maintained the following notes payable, long-term:

During the year ended February 28, 2008, the Company issued $650,000 of Series E notes payable along with 3,250,000 shares of the Company's common stock value at $315,000, which will be expensed as interest over the life of the debt, or until such time as the debt is converted. These Series E notes payable have a three
(3) year life from the date of issuance. The debt is convertible at $.50 per share or 50% of the average closing bid during the five (5) trading days prior to the note holder giving notice of conversion, but not lower than $.10 per share. As of May 31, 2008, the unamortized portion of the debt discount is $459,273.

NOTE 5 - COMMON STOCK

For the three months ended May 31, 2008, the Company issued 1,111,620 shares of common stock for services at an average price of $.03 per share. $33,349 of expense was charged to operations.

For the three months ended May 31, 2007, the Company issued 1,900,000 shares of common stock for services at an average price of $.097 per share. $183,500 of expense was charged to operations.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

COMMITMENTS:

In March 2007, the Company entered into a one year advertising and marketing consulting agreement. Under the terms of this agreement the Company is required to issue 100,000 shares of common stock each month commencing in March 2007. A total of 1,000,000 shares of common stock are to be to be issued under this agreement.

In May 2007, the Company entered into an investor relations consulting agreement. This agreement has a one year term, and requires the issuance of 750,000 shares of common stock upon commencement. These shares have a market value of $57,000 on an average per share price of $.076, and have been recorded as a deferred compensation expense, netted against additional paid in capital. As services commence under this agreement, a pro-rata share of the deferred compensation is expensed.

In March 2007, the Company entered into a financial consulting agreement. This agreement has a one year term, and requires the issuance of 500,000 shares of common stock. Services under this agreement are set to commence in June 2007. These shares have a market value of $40,000, and have been recorded as a deferred compensation expense, netted against additional paid in capital. For the nine months ended November 30, 2007, the Company has recorded $20,000, as a consulting expense included in selling, general and administrative expenses.

The Company leases an approximate 1,400 square foot facility at 1214 East 15th Street, Brooklyn, New York, which houses its telemarketing and other staff. This lease, which currently calls for monthly rent of $2,500, expired in February, 2006. The company is currently leasing this facility on a month-to-month basis.

CONTINGENCIES:

The Company is subject to litigation in the normal course of business, and claims arise from time to time. Presently the Company is not aware of any pending or threatened litigation and has not provided a reserve or an accrual for any such contingencies.

The Company has a significant amount of debt and notes payable that have been recorded. In certain instances, the Company has been involved, and will be involved in the future, in litigation due to non-payment of debt and notes payable.

During the year ended February 29, 2008, the Company and its subsidiary, the Math Channel, received a notice of assessment from the New York State Department of Labor in the amount of approximately $15,000. The DOL is claiming a predecessor/successor relationship between the Company and the Math Channel, wherein the Company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that the Math Channel currently is obligated to pay based on certain compensation for each employee. The Company has retained Counsel to investigate and seek a resolution in this matter. The accompanying financial statements do not reflect this potential liability pending Counsel's attempt to resolve this matter.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward-Looking Statements

This Report contains statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as "may," "will," "expect," "intend," "estimate," "foresee," "project," "anticipate," "believe," "plans," "forecasts," "continue" or "could" or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management's opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.

GOING CONCERN

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses and has an accumulated deficit of $22,327,633 and a working capital deficiency of $6,841,806 at May 31, 2008. Also, the Internal Revenue Service has placed a federal tax lien on substantially all of the Company's assets as the Company is in arrears on payment of payroll taxes, accrued prior to February 28, 2004 of approximately $500,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans with respect to these matters include restructuring its existing debt, settling its existing debt by issuing shares of its common stock and raising additional capital through future issuance of stock and or debentures. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 31, 2008 AND 2007.

Net sales for the three months ended May 31, 2008 were $151,973, compared to $179,742 for the three months ended May 31, 2007. This decrease was due to increased competition for internet advertising resulting in fewer advertising opportunities. . Gross profit was $138,974 for the three months ended May 31, 2008, compared to $150,877 for the three months ended May 31, 2007. This decrease was due to a decrease in net sales.

Selling, general and administrative expenses (SG&A) were $346,928 for the three months ended May 31, 2008, compared to $457,921 for the three months ended May 31, 2007. This decrease was due to reduced advertising. In addition, the Company reduced its managerial and sales overhead in order to increase efficiency.

There was no settlement of debt in the quarter ended May 31, 2008. During the quarter ended May 31, 2007 the financials reflect a settlement for outstanding debt with a creditor for less than the amount owed. The debt originally for 63,674 was settled for 17,500; the difference of $46,174 was forgiven. The settlement amount was paid in July 2007.

Interest expense was $93,844 for the three months ended May 31, 2008 as compared to $127,291 for the three months ended May 31, 2007.

LIQUIDITY AND CAPITAL RESOURCES.

At May 31, 2008, the Company had a book overdraft of $32,488. During the quarter ended May 31, 2008 the Company issued $60,000 worth of promissory notes payable.

The Company continues to suffer recurring losses and has an accumulated deficit of approximately $22,327,633 and a working capital deficiency of approximately $6,492,515 at May 31, 2008. In addition, the Internal Revenue Service has placed a tax lien on substantially all of the Company's assets as the Company is in arrears on payment of payroll taxes, accrued prior to February 28, 2004 approximating $500,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Management's plans with respect to these matters include restructuring its existing debt, raising additional capital through future issuances of stock and/or equity, and finding sufficient profitable markets for its products to generate sufficient cash to meet its business obligations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

The Company continues to meet its working capital requirements through debt and equity funding from outside sources and internally generated funds. In addition, the Company may have to incur increased capital expenditures as it seeks to expand its product lines and tutorial services. In order to meet its current and future cash requirements, the Company is in discussions to negotiate additional debt and equity financing. There can be no assurance that any financing will be successful or that the Company will be able to fund internally its working capital requirements or meet its debt repayment obligations. In the event that the Company is unable to secure additional financing, it may be obligated to significantly reduce its operations and seek to sell assets, which would have a material adverse affect on the Company's prospects and financial results.

The report of our independent registered auditors on our consolidated financial statements for the years ended February 28, 2008 and February 29, 2007 contains an explanatory paragraph, assuming that the Company will continue as a going concern. The reports mentioned that we have incurred losses, have an accumulated deficit and have a working capital deficiency. In addition the report mentioned the on-going situation with the IRS regarding payroll taxes in arrears. This report raised substantial doubt about our ability to continue as a going concern. This report is not viewed favorably by analysts or investors and may make it more difficult for us to raise additional debt or equity financing needed to run our business.

The Company had a cash deficit of $32,488 as of May 31, 2008, compared to a bank overdraft of $20,163 as of February 28, 2008 and cash of $141,041 as of May 31, 2007. This decrease in cash was due to the accumulated losses in previous periods.

Net cash used in operating activities during the three months ended May 31, 2008 was $63,048, compared to net cash used in operating activities of $207,846 for the three months ended May 31, 2007. This decrease was due to reduction in overhead costs and in advertising costs.

Net cash used in investing activities during the three months ended May 31, 2008 was $9,278, compared to net cash used in investing activities of $3,300 for the three months ended May 31, 2007. This increase of cash used was due to additional expenditures relating to intangible assets.

Net cash provided by financing activities during the three months ended May 31, 2008 was $72,326, compared to net cash provided by financing activities of $352,187 for the three months ended May 31, 2007. The decrease was due to a reduction of proceeds received from issuance of notes payable.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A summary of significant accounting policies is included in Note 2 to the audited consolidated financial statements for the year ended February 28, 2008 in the Form 10-KSB. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Our financial statements and accompanying notes are prepared in accordance with U.S. Generally Accepted Accounting Principles. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. Critical accounting policies for us include revenue recognition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

N/A.

ITEM 4. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures.

The Company maintains controls and procedures designed to ensure that they are able to collect the information that is required to be disclosed in the reports they file with the Securities and Exchange Commission (the "SEC") and to process, summarize and disclose this information within the time period specified in the rules of the SEC. The Company's Chief Executive and Chief Financial Officer is responsible for establishing, maintaining and enhancing these procedures. The officer is also responsible, as required by the rules established by the SEC, for the evaluation of the effectiveness of these procedures.

Based on management's evaluation (with participation of our principal executive and principal financial officer), as of the end of the period covered by this report, the principal executive officer and principal financial officer concluded that a deficiency was identified in the Company's internal controls over financial reporting which constituted a "material weakness." Accordingly, management concluded that the Company's disclosure controls and procedures were not effective.

The material weakness was the result of an insufficient number of personnel having adequate knowledge, experience and training to provide effective, and timely, oversight and review over the Company's financial close and reporting process.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS

The Company's management does not expect that their disclosure controls or their internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

(b) Changes in Internal Controls over Financial Reporting.

There were no changes in our internal controls over financial reporting during the fiscal quarter covered by this Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 4T. CONTROLS AND PROCEDURES

N/A

PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

During the year ended February 29, 2008, the Company and its subsidiary, the Math Channel, received a notice of assessment from the New York State Department of Labor in the amount of approximately $15,000. The DOL claimed there was a predecessor/successor relationship between the Company and The Math Channel, wherein the Company maintained a higher percentage of tax assessed for unemployment tax purposes versus the lower rate of tax that The Math Channel currently is obligated to pay based on certain compensation for each employee. The Company has retained legal counsel to investigate and seek a resolution in this matter. The accompanying financial statements as of May 31, 2008 do not reflect this potential liability pending legal counsel's efforts to resolve this matter as legal counsel continues to pursue a resolution.

The Company had made a settlement with one of its creditors that had begun litigation on January 6, 2000 in Superior Court, Judicial District of Stanford/Norwalk, whereby it has settled a $235,000 claim for $190,000 with a 29-month payout schedule. The Company has paid approximately $30,000 in honor of this settlement; however, since the creditor has not honored the terms of the settlement agreement to activate and to provide upgrades of its software, the Company has discontinued its schedule of payments. The creditor sued the Company in the State of Connecticut but the court ruled that the creditor could not proceed with the suit in the State of Connecticut. This case has not been reopened by the creditor.

The Company has settled with its largest creditor to whom it owed approximately $600,000. The creditor has settled for $150,000 with a four year payout schedule. The Company has not conformed to the original schedule but has been making periodic payments as per discussions with the creditor's counsel. The original judgment that the creditor held against the Company was withdrawn. However, the creditor has a stipulated judgment whereby in the event that the Company defaults on its payments the creditor can obtain a judgment for the remaining balance plus a penalty of $150,000. As of May 31, 2008, the creditor had not sent the Company any notice of default which would allow the Company ten days to cure before the creditor could file for a judgment.

The Company is subject to a claim for federal payroll and unemployment taxes for approximately, $400,000, and $100,000, respectively, which the Company is disputing. With regard to the federal payroll taxes, the Company has received notice of a levy in the amount of $83,448.33 against certain of the Company's assets. It has also received notice from the Federal Government and the Department of Labor of various liens with regard to the above arrears. The Company has filed a 941c adjustment which should eliminate all or at least a substantial portion of these tax arrears. It is doing so under advice of legal counsel who specializes in payroll tax issues. There is no assurance that the Company will be successful in resolving this dispute and having these liens removed.

ITEM 1A. RISK FACTORS

Please see Part I, Item 2, Management's Discussion and Analysis under the sub-heading "Going Concern". Such disclosure is incorporated by reference herein.

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

During the quarter ended May 31, 2008, the Company issued the following securities upon reliance on the exemption from registration afforded the Company under Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"): 1,111,620 common shares for services rendered on behalf of the Company valued at $0.03 per share. $33,348 was charged to operations

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5. OTHER INFORMATION.

Subsequent Events - None

ITEM 6. EXHIBITS.

No.: Description:
------------------------

31.1 Certification of Chief Executive Officer pursuant to Section 302 of
 Sarbanes Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to Section 302 of
 Sarbanes Oxley Act of 2002

32.1 Certification of Chief Executive Officer pursuant to Section 906 of
 Sarbanes Oxley Act of 2002

32.2 Certification of Chief Financial Officer pursuant to Section 906 of
 Sarbanes Oxley Act of 2002

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MULTI-MEDIA TUTORIAL SERVICES, INC.

Dated: July 15, 2008 By: /s/ BARRY REICHMAN
 ----------------------------------------
 Barry Reichman
 Chief Executive Officer and Chief
 Financial Officer
 (Principal Executive Officer)
 (Principal Financial Officer)
 of Multi-Media Tutorial Services, Inc.

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