- Quarterly Report (10-Q)

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 June 30, 2009, OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______.

INTERNATIONAL SILVER, INC.

(Exact name of registrant as specified in its charter)

Arizona

(State or other jurisdiction of incorporation or

organization)

0001419482		86-0715596
(Commission File Number)		(IRS Employer Identification Number)

5210 E. Williams Circle, Suite 700

Tucson, Arizona 85711

(Address of principal executive offices including

zip code)

(520) 889-2040

(Registrant's telephone number, including area 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 Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically or posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Paragraph 232.405 of this chapter) during the preceding 12 months ( or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

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 "small reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

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

Yes o No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12,13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Shares Outstanding at August 5, 2009
Common Stock, $0.0001 Par Value		15,011,753

Exhibit Index located at page 36

TABLE OF CONTENTS

		Page

Part 1 - FINANCIAL INFORMATION

Item 1 - FINANCIAL STATEMENTS		3

Consolidated Financial Statements:		3
Balance Sheets		4
Statement of Operations		6
Statement of Cash Flows		7
Statement of Shareholders’ Equity		9
Notes To The Financial Statements		10

Item 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS		19

Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		31

Item 4T - CONTROLS AND PROCEDURES		31

Part II - OTHER INFORMATION

Item 1 - LEGAL PROCEEDINGS		31

Item 1A - RISK FACTORS		32

Item 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		33

Item 3 - DEFAULTS UPON SENIOR SECURITIES		33

Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		34

Item 5 - OTHER INFORMATION		34

Item 6 – EXHIBITS		34

CERTIFICATIONS 31.1 & 31.2

PART 1 – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

International Silver, Inc.

(An Exploration Stage Company)

Consolidated Financial Statements

For the Six Months Ended June 30, 2009

(Unaudited)

and

For the Year Ended December 31, 2008

(Audited)

International Silver, Inc.

(An Exploration Stage Company)

Consolidated Balance Sheets

	As At
	June 30,			December 31,
	2009			2008
	(Unaudited)			(Audited)

ASSETS

CURRENT ASSETS
Cash	$	24,921		$	50,274
Accounts receivables, net		54,614			31,688
Employee advances		354			2,317
Prepaid expenses		487			1,005
Total Current Assets	$	80,376		$	85,284

PROPERTY AND EQUIPMENT-Note C
Land	$	0		$	0
Machinery and equipment		2,042			2,042
Furniture & fixtures		3,500			3,500
Vehicles		0			1,125
	$	5,542		$	6,667
Less accumulated depreciation		(5,542	)		(6,355	)
Total Property and Equipment	$	0		$	312

OTHER ASSETS
Deferred financing costs - Note D	$	40,000		$	40,000
Investment in securities - Note E		25,000			25,000
Total Other Assets	$	65,000		$	65,000

TOTAL ASSETS	$	145,376		$	150,596

See accompanying notes to the consolidated financial statements

International Silver, Inc

(An Exploration Stage Company)

Consolidated Balance Sheets

	As At
	June 30,			December 31,
	2009			2008
	(Unaudited)			(Audited)

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	9,436		$	2,732
Accrued expenses		82,318			82,648
Total Current Liabilities	$	91,754		$	85,380

N0N-CONTROLLING INTEREST	$	(3,530	)	$	(3,255	)

SHAREHOLDERS' EQUITY
Common stock
authorized shares - 500,000,000
Par value $0.0001 per Share
issued & o/s at 12/31/08 - 15,011,753
issued & o/s at 06/30/09 - 15,011,753		1,501			1,501
Additional paid-in capital		808,978			808,978
Less: Treasury Stock - 30,000 shares		(30,000	)		(30,000	)
Accumulated deficit during exploration stage		(723,327	)		(712,008	)
Total Shareholders' Equity	$	57,152		$	68,471

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	145,376		$	150,596

See accompanying notes to the consolidated financial statements

International Silver, Inc.

(An Exploration Stage Company)

Consolidated Statements of Operations

													Exploration Stage
	Three Months Ended						Six Months Ended						(June 16, 2006
	June 30,			June 30,			June 30,			June 30,			through
	2009			2008			2009			2008			June 30, 2009)
				(Restated)						(Restated)
REVENUES
Consulting	$	35,540		$	28,050		$	70,450		$	57,870		$	294,519
Other		176			1,045			176			5,436		$	16,441
Total Revenues	$	35,716		$	29,095		$	70,626		$	63,306		$	310,960

Operating Expenses
Production Costs	$	0		$	0		$	0		$	0		$	0
Exploration costs		1,200			12,623			6,663			15,488		$	254,479
General and administration
Consulting fees		4,890			2,322			7,590			2,322		$	52,010
Professional fees		9,410			22,000			15,410			23,500		$	126,254
Rent		1,755			3,610			1,896			12,918		$	71,205
All other general & administrative		29,393			38,829			50,458			66,506		$	336,536
Depreciation and depletion		0			93			94			186		$	752
Total operating expenses	$	46,648		$	79,477		$	82,111		$	120,920		$	841,236

Operating Income/(Loss)	$	(10,932	)	$	(50,382	)	$	(11,485	)	$	(57,614	)	$	(530,276	)

OTHER INCOME (EXPENSES)
Interest Expense		(29	)		(2,256	)		(109	)		(3,010	)		(22,607	)
Total other income/(expense)	$	(29	)	$	(2,256	)	$	(109	)	$	(3,010	)	$	(22,607	)

PROVISION FOR INCOME TAXES
Income tax Benefit		152,384			71,851			152,384			71,851
Tax Valuation allowance		(152,384	)		(71,851	)		(152,384	)		(71,851	)

NET INCOME/(LOSS)	$	(10,961	)	$	(52,638	)	$	(11,594	)	$	(60,624	)		(552,883	)

Less: Non-Controlling Interest		168			163			275			357		$	3,724

Net Income/(Loss)-Parent	$	(10,793	)	$	(52,475	)	$	(11,319	)	$	(60,267	)	$	(549,159	)

Accumulated Deficit
Beginning of Period	$	(712,534	)	$	(472,002	)	$	(712,008	)	$	(464,210	)

End of Period	$	(723,327	)	$	(524,477	)	$	(723,327	)	$	(524,477	)

Basic and Diluted
Income/(Loss) per Share	$	(0.001	)	$	(0.004	)	$	(0.001	)	$	(0.004	)

Weighted Average Shares
Outstanding		15,011,753			14,601,186			15,011,753			14,601,186

See accompanying notes to the consolidated financial statements

International Silver, Inc.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

	Six Months Ended						Exploration Stage
	June 30,			June 30,			(June 16, 2006 through
	2009			2008			June 30, 2008)
	(Unaudited)			(Unaudited)			(Unaudited)
				(Restated)

CASH FLOWS FROM OPERATING ACTIVITIES
Net Income/(Loss)	$	(11,319	)	$	(60,267	)	$	(549,685	)
Adjustments used to reconcile net (loss)
to net cash (used) by operating activities:
Non-controlling Interest in Subsidiary		(275	)		(357	)	$	(3,637	)
Depreciation and depletion		94			186		$	1,000
Issuance of common stock
In exchange for land		0			0		$	30,000
In exchange for services		0			20,000		$	121,500
In exchange for exploration costs		0			0		$	55,385
Changes in operating assets and liabilities
Decrease/(Increase) in accounts receivable		(22,926	)		32,302		$	127,958
Decrease/(Increase) in employee receivable		1,963			0		$	(354	)
Decrease/(Increase) in prepaid expenses		518			522		$	11,335
(Decrease)/Increase in accounts payable		6,704			25,156		$	(12,799	)
(Decrease)/Increase in accrued expenses		(330	)		(27,827	)	$	24,237
Net Cash Flows (used by) Operating Activities	$	(25,571	)	$	(10,285	)	$	(195,060	)

CASH FLOW FROM INVESTMENT ACTIVITIES
Purchase of equipment	$	0		$	0		$	(6,668	)
Deferred financing cost		0			0		$	(40,000	)
Purchase option on land		0			(90,000	)	$	(90,000	)
Purchase of land		0			0		$	(90,000	)
Net Cash Flows from Investment Activities	$	0		$	(90,000	)	$	(226,668	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Common Stock:
Cancellation of Debt	$	0		$	0		$	(168,093	)
Recharacterization of debt to equity		0			0		$	265,072
Net Proceeds from stock issuance		0			0		$	80,000
Sale of mining property
For treasury stock		0			0		$	(30,000	)
Exchange for marketable securities		0			0		$	(25,000	)
Return of deed of trust - mining property		0			0		$	90,000
Disposal of vehicle		218			0		$	218
Borrowings from related parties		0			90,000		$	152,980
Net Cash Flows from Financing Activities	$	218		$	90,000		$	365,177

Net (Decrease) in Cash	$	(25,353	)	$	(10,285	)	$	(56,551	)

Beginning Cash Balance	$	50,274		$	51,283		$	31,630

Ending Cash Balance	$	24,921		$	40,998		$	(24,921	)

See accompanying notes to the consolidated financial statements

International Silver, Inc.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

	Six Months Ended				Exploration Stage
	June 30,		June 30,		(June 16, 2006 through
	2009		2008		June 30, 2009)

Supplemental disclosures on non-cash financing activities:

The Company issued shares of its common stock in exchange for the following:

For services rendered:
Director services	$	0	$	0	$	9,000
Legal and professional services		0		20,000		95,000
Stock transfer agent services		0		0		5,500
Accounting services		0		0		4,000
Geology and engineering		0		0		8,000
Sub-total	$	0	$	20,000	$	121,500
For land		0		0		30,000
For exploration costs		0		0		55,385
For contributed capital		0		0		265,072
Total non-cash issuances of stock	$	0	$	20,000	$	471,957

The Company relinquished its mining property in exchange for the following:

For repurchase of its common stock		0		0		(30,000	)
For marketable securities in another company		0		0		(25,000	)
For deed of trust in the mining property		0		0		90,000

See accompanying notes to the consolidated financial statements

International Silver, Inc.

(An Exploration Stage Enterprise)

Consolidated Statement of Shareholders' Equity

													Accumulated
													Deficit
	Common				Treasury						Additional		During
	Stock				Stock						Paid-In		Exploration
	Shares		Amount		Shares			Amount			Capital		Stage			Total

At June 16, 2006		12,000,000	$	1,200							$	257,322	$	(266,414	)	$	(7,892	)

Shares issued for cash		1,100,000		110								79,890					80,000
Shares issued for services		30,000		3								29,997					30,000
Shares exchanged for debt		300,000		30								55,355					55,385
Parent Co.														(72,844	)		(72,844	)
Non-controlling Interest														(296	)		(296	)

At December 31, 2006		13,430,000	$	1,343							$	422,564	$	(339,554	)	$	84,353

Shares issued for cash		260,000		26								79,974					80,000
Shares issued for services		500,000		50								21,450					21,500
Shares exchanged for debt		336,186		33								168,060					168,093
Net Income/(Loss)
Parent Co.														(124,952	)		(124,952	)
Non-controlling Interest														(2,266	)		(2,266	)

At December 31, 2007		14,526,186	$	1,452							$	692,048	$	(466,772	)	$	226,728

Shares issued for services		150,000		15								19,985					20,000
Shares exchanged for debt		335,567		34								96,945					96,979
Shares repurchased						(30,000	)		(30,000	)							(30,000	)
Net Income/(Loss)
Parent Co.														(247,798	)		(247,798	)
Non-controlling Interest														(693	)		(693	)

At December 31, 2008		15,011,753	$	1,501		(30,000	)	$	(30,000	)	$	808,978	$	(715,263	)	$	65,216

Net Income/(Loss)
Parent Co.														(526	)		(526	)
Non-controlling Interest														(107	)		(107	)

At March 31, 2009		15,011,753	$	1,501		(30,000	)	$	(30,000	)		808,978		(715,896	)		64,583

Net Income/(Loss)
Parent Co.														(10,793	)		(10,793	)
Non-controlling Interest														(168	)		(168	)

At June 30, 2009		15,011,753	$	1,501		(30,000	)	$	(30,000	)	$	808,978	$	(726,857	)	$	53,622

See accompanying notes to the consolidated financial statements

International Silver, Inc.

Notes to Consolidated Financial Statements

Note A - Organization and Business

General

International Silver, Inc., an exploration stage company, as set forth in Statement of Financial Accounting Standards, “SFAS” No. 7, Accounting and Reporting by Development Stage Enterprises” and “Industry Guide 7” of the Securities and Exchange Commission’s Guides for the Preparation of Registration Statements and with the Society for Mining, Metallurgy and Exploration’s “Guide for Reporting Exploration Information, Mineral Resources, and Mineral Reserves” dated March 1, 1999. The Company’s strategy consists of acquiring and exploring high-grade silver properties throughout North and South America.

Condensed Financial Statements

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position for the periods ended June 30, 2009 and December 31, 2008 and results of operations and cash flows for the comparative periods at June 30, 2009 and June 30, 2008 and for the comparative periods June 30, 2009 and June 30, 2008 have been made.

Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2008 audited financial statements. The results of operations for the period ended June 30, 2009 are not necessarily indicative of the operating results for the full year.

Going Concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) initiating an initial public offering.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other resources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note B - Summary of Significant Accounting Policies

Principles of Consolidation

The financial statements include the accounts of International Silver, Inc. and its subsidiary Metals Preciosos Atlas, S.A. de C.V., Mexico. The Company’s financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The Company has elected to adopt U.S. currency as the functional currency for the accounting of its Mexican subsidiary. All inter-company transactions and balances have been eliminated.

Use of Estimates

Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant areas requiring the use of management estimates include the determination of mineral ore quantities and the depletion expense calculation, if applicable, useful lives of property and equipment for depreciation, impairment valuations and calculation of any deferred taxes. Actual results may differ from those estimates, and such differences may be material to the financial statements.

Foreign Currency

The functional currency for our foreign subsidiary is U.S. dollars. The Company has elected to use the “remeasurement method”, also referred to as the “monetary/nonmonetary method” pursuant to FAS 52. This method translates monetary assets at the current rate, while nonmonetary assets, liabilities and equity are translated at their appropriate historical rates. Where the local currency is used to record transactions, any material currency translation gains or losses would be included as an element of comprehensive income in the statement of operations and in the equity section of the balance sheet.

Concentration of Credit Risk

Our cash equivalents and prepaid expenses (and trade receivables when recorded) are exposed to concentrations of credit risk. We manage and control risk by maintaining cash with major financial institutions. Management believes that the financial institutions are financially sound and the risk of loss is low.

Concentrations and Economic Vulnerability

Concentrations and economic vulnerability include reliance on several areas containing our mining prospects in isolated regions of Mexico, limited financial capacity of related parties and/or others to continue funding operations.

Fair Value of Financial Instruments

Due to their short-term nature, the carrying value of our current financial assets and liabilities approximates their fair values. The fair value of our borrowings, if recalculated based on current interest rates, would not significantly differ from the recorded amounts.

Cash and Cash Equivalents

For the statement of cash flows, any liquid investments with a maturity of three months or less at the time of acquisition are considered to be cash equivalents.

Accounts Receivables

Accounts receivables are stated, net of an allowance for uncollectible accounts, based on prior experience. At June 30, 2009 account receivables were $54,614, net of an allowance for uncollectible accounts in the amount of $2,760. At December 31, 2008, accounts receivables were $31,688, net of an allowance for uncollectible accounts of $4,608.

Inventories

In-process inventories represent ore that is currently in the process of being converted to a saleable product. In-process inventories, if any, are valued at the lower of average production cost or net realizable value. At June 30, 2009 there were no inventories on hand.

In November 2004, the FASB issued SFAS No. 151, which revised ARB No. 43, relating to inventory costs. This revision is to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage). This Statement requires that these items be recognized as a current period charge regardless of whether they meet the criterion specified in ARB 43. In addition, this Statement requires the allocation of fixed production overheads to the costs of conversion be based on normal capacity of the production facilities. This Statement is effective for financial statements for fiscal years beginning after June 15, 2005.

Property and Equipment

Property and equipment are recorded at cost. Maintenance and repair costs are charged to expense as incurred, and renewals and improvements that extend the useful life of assets are capitalized. Depreciation on property and equipment is computed using the straight-line method over the assets' estimated useful lives as follows:

Mining equipment		7 years
Vehicles		3 years
Office equipment		5 years

No depreciation expense was recorded for the three-month period ended June 30, 2009. For the six-month period ended June 30, 2008, depreciation expense was $94.

Mineral Development

Costs associated with the acquisition of mineral interests, in the exploration stage, are “expensed”. Mineral exploration costs are also “expensed” as incurred. Mine infrastructure development costs incurred prior to establishing proven and probable reserves are expensed. When it otherwise becomes probable that infrastructure costs will not be recoverable, they are impaired. When it has been determined that a mineral property can be economically developed, the costs incurred to develop such property, including costs to further delineate the ore body and remove overburden to initially expose the ore body, are capitalized as incurred. These costs will then be amortized using the units-of-production method over the estimated life of the ore body based on estimated recoverable ounces of proven and probable reserves.

To the extent that any development costs benefit an entire mineralized property, they are amortized over the estimated life of the property. The specific capitalized cost bases subject to depletion are calculated on a formula based on the number of tons of ore that are expected to be mined divided by the total tons in proven and probable reserves in the property. To date, no development has occurred, nor has depletion has been taken, since production has not commenced.

Mineral Interests and Property

Mineral interests include the costs of acquired mineral rights and royalty interests in production, development and exploration stage properties.

Production stage mineral interests represent interests in operating properties that contain proven and probable reserves. Development stage mineral interests represent interests in properties under development that contain proven and probable reserves. Exploration stage mineral interests represent interests in properties that are believed to potentially contain mineralized material.

Mineral interests related to mining properties in the production stage are amortized over the life of the related property using the Units of Production method in order to match the amortization with the expected underlying future cash flows. Development stage mineral interests are not amortized until such time as the underlying property is converted to the production stage. At June 30, 2009, all mineral interests were in the exploration stage.

Impairment of Long-Lived Assets

The company adheres to the Statement of Financial Standard ("SFAS") No. 144, "Accounting for the Impairment and Disposal of Long-Lived Assets," which requires that long-lived assets to be held and used be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows are less than the carrying amount of the asset and would be calculated based on discounted cash flows. At June 30, 2009, no assets were impaired.

Revenue Recognition and Production Costs

Revenue is recognized when the price is determinable, upon delivery and transfer of title of product to the customer and when the collection of sales proceeds is assured. Production costs of silver, gold and other precious metals sold include labor and related direct and indirect costs of mine and plant operations. Production costs are charged to operations as incurred. At June 30, 2009, there had been no production from any of the Company's properties.

Reclamation and Remediation Costs (Asset Retirement Obligations)

The Company has adopted SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. Since the Company’s activities are in the exploration and feasibility stage, there is no legal or contractual obligation for reclamation or remediation of our mines or mining interests. As a result, the adoption of SFAS No. 143 does not currently have a material impact on our financial position, results of operations or cash flows.

Earnings (Loss) Per Share

Basic income (loss) per share is computed by dividing income (loss) attributable to the common shareholders by the weighted-average number of common shares outstanding for the reporting period. Diluted net income per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect is to reduce a loss or increase earnings per share. The Company has no potential common stock instruments, which would result in diluted income (loss) per share as of June 30, 2009 and June 30, 2008.

Income Taxes

The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes” (“SFAS 109”). SFAS 109 is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, SFAS 109 generally considers all expected future events other than enactments of changes in the tax law or rates. Income tax information is disclosed in Note E to the consolidated financial statements.

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax assets are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The total deferred tax asset is 35% of the cumulative net operating loss.

Net deferred tax assets consists of the following components:

	June 30,			December 31,
	2009			2008
Deferred Tax Asset	$	152,384		$	150,621
Valuation account		(152,384	)		(150,621	)
Net Deferred Tax Asset	$	0		$	0

At June 30, 2009, The company had net operating loss carry forwards of $432,183 for federal income tax purposes and $438,471 for state income tax purposes that may be offset against future taxable income from years 2009 through 2027. No tax benefit has been reported in the June 30, 2009 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

Statement of Cash Flows Information and Supplemental Non-Cash Financing Activities

There were minimal interest payments during for the six-month period ended June 30, 2009 and for the year ended December 31, 2008. “Non-cash" investing and financing transactions during the reported periods related primarily to the issuance of common stock in exchange for legal and other professional services and for mineral interests and stock issued to a related party for cancellation of indebtedness, as disclosed in Note G.

Certain Equity Instruments

In June 2003, the FASB approved Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity" (“ SFAS No. 150”). SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. At June 30, 2009, the Company is not impacted by this requirement.

Comprehensive Income

Standards of Financial Accounting Standards No. 130 (“SFAS 130”), "Reporting Comprehensive Income", requires companies to classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of a statement of financial position. For the periods ended June 30, 2009 and June 30, 2008, the Company did not have any material items of comprehensive income.

Derivative Instruments

In June 1998, the FASB issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. This statement as amended by SFAS No. 137 is effective for fiscal years beginning after June 15, 2000. Currently, the Company does not have any derivative financial instruments and does not participate in hedging activities. Therefore, SFAS No. 133 did not have an impact on its financial position or results of operations for the periods ended June 30, 2009 and December 31, 2008.

Stock-Based Compensation

In December 2004, the Financial Accounting Standards Board, or FASB, issued SFAS No. 123R "Share-Based Payment," a revision to FASB No. 123. SFAS No. 123R replaces existing requirements under SFAS No. 123 and APB Opinion No. 25, and requires “public” companies to recognize the cost of employee services received in exchange for equity instruments, based on the grant-date fair value of those instruments, with limited exceptions. SFAS No. 123R also affects the pattern in which compensation cost is recognized, the accounting for employee share purchase plans, and the accounting for income tax effects of share-based payment transactions. For small-business filers, SFAS No.123R is effective for interim periods beginning after December 15, 2005.

Non-Monetary Exchanges

In December 2004, the FASB issued SFAS No. 153. This Statement addresses the measurement of exchanges of non-monetary assets. The guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions, is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. This Statement amends APB No. Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. This Statement is effective for financial statements for fiscal years beginning after June 15, 2005. Earlier application is permitted for non-monetary asset exchanges incurred during fiscal years beginning after the date that this Statement was issued. The exchange of the Company’s common stock for a 98% interest in Metales Preciosos Atlas, S.A. de C.V. is covered under Note G.

Note C – Property, Plant and Equipment

Property, plant and equipment, exclusive of mineral interests which are reported under Note J - Exploration Costs, as required by Industry Guide 7, are comprised of the following:

	June 30,			December 31,
	2009			2008

Office equipment and computers	$	5,542		$	5,542
Vehicles		1,125			1,125
Less: accumulated depreciation		( 5,543	)		( 6,355	)
Less: accumulated impairment		0			0
Net Total	$	0		$	312

Note D – Deferred Financing Costs

On August 31, 2008, the Company contracted DME Capital, LLC for the purpose of obtaining venture capital and/or a joint venture agreement. The Company paid DME Capital, LLC a due diligence fee of $40,000.

At June 30, 2009, no definite financing resources have been committed.

Note E – Investment in Securities

During 2008, the Company relinquished its holdings in the Tecoma Mining District back to the original seller, in return for the shares in common stock that were part of the consideration given on the original purchase of the property As a result, the Company obtained 25,000 shares of the common stock of Atlas Precious Metals Inc., a privately-held and related company to International Silver, Inc. These shares were originally held by the Company’s shareholder/officer, who transferred these shares to the seller of the Tecoma Mining District property, in exchange for a note from the Company (Refer to Note H) . At June 30, 2009, the fair value of these securities were estimated at $1.00/share or $25,000.

Note F - Income Taxes

The Company has reported (for income tax purposes) net operating losses for 2008, 2007 and prior years as follows:

Net Operating Loss carry-forward to FYE 12/31/99	$	171,725
Net Operating Income - Year 2000 (Applied)		( 63,853	)
Net Operating Loss carry-forward to Year 2001		107,872
Net Operating Loss - Year 2001		179,246
Net Operating Loss carry-forward to Year 2002		287,118
Net Operating Loss - Year 2002		25,497
Net Operating Loss carry-forward to Year 2003		312,615
Net Operating Income - Year 2003 (Applied)		(172,247	)
Net Operating Loss carry-forward to Year 2004		140,368
Net Operating Income - Year 2004		( 37,634	)
Net Operating Loss carry-forward to Year 2005		102,734
Net Operating Loss - Year 2005		3,774
Net Operating Loss carry-forward to Year 2006		106,508
Net Operating Income - Year 2006 (Applied)		(4,693	)
Net Operating Loss carry-forward to Year 2007		101,815
Net Operating Loss - Year 2007		111,921
Net Operating Loss carry-forward to Year 2008		213,736
Net Operating Loss - Year 2008		213,791
Net Operating Loss carry-forward to Year 2009	$	427,527

Pursuant to the provisions of the Internal Revenue Code, the Company has elected to forego the carry-back provisions, allowable under the IRS regulations, for the stated accounting periods.

As of June 30, 2009 and December 31, 2008, the Company recorded a deferred tax benefit of $152,384, but due to a going-concern issue, Management made an allowance for a provision of an equal amount, should the Company not be able to avail itself of that tax benefit. No permanent or temporary timing differences between book and tax income have occurred through June 30, 2009.

Note G – Shareholders’ Equity

The Company was incorporated on September 4, 1992 with the initial issuance of 1,000 shares of common stock at a par value of $1.00 per share. On June, 2006 the Board of Directors adopted a new business strategy to change its emphasis from providing engineering services to conducting mine exploration and development. As a result, the Board of Directors amended its Articles of Incorporation to authorize 500,000,000 shares of common stock, at a par value of $0.0001 to allow for equity financing. Additionally, the Board of Directors passed a resolution to effectuate a stock split of 12,000 to 1. On July 24, 2006, the shareholders of record (3) were given their new share distribution of 4,000,000 shares each.

Also during 2006, additional shares of common stock were issued in exchange for services (1,100,000), in exchange for land (30,000) and in exchange for 98% interest in the holdings of Metales Preciosos Atlas, S.A. de C.V., a Mexican subsidiary (300,000 shares).

During 2007, the Company conducted a private placement with an additional 260,000 shares of common stock issued at $0.50 per share to various individuals for cash, 500,000 shares of common stock for services rendered and also issued 336,186 shares, at $0.50 per share, to cancel Company indebtedness, as explained in Note G.

During 2008, the Company issued 150,000 shares of common stock for services and an additional 335,567 shares of common stock to cancel Company indebtedness. In addition, the Company repurchased 30,000 of its own shares in common stock upon relinquishing its holdings in the Tecoma Mining District. These shares are being held in Treasury as of June 30, 2009.

No activity has occurred during the first quarter ended June 30, 2009. At June 30, 2009, the Company had authorized 500,000,000 shares of common stock and 15,011,753 shares had been issued and are outstanding.

Note H - Related Party Transactions

A shareholder loan of $90,000 was made in year 2008 so that the company could avail itself of an option to purchase mineral properties in the state of California. The principal part of this loan was also cancelled upon the receipt of an equivalent value in shares of common stock in the Company. Accrued interest, on this note which is 10% per annum at date of conversion, was $7,496.

A recapitulation of the loan activity follows:

	At June 30,		At December 31,
	2009		2008
Loans to Company	$	0	$	90,000
Repayments		0		( 90,000	)
Loan Balance	$	0	$	0

Accrued Interest	$	79,748	$	79,748

Note I - Litigation

At June 30, 2009 there were no outstanding legal issues.

Note J- Office Leases

The Company rents (subleases) its administrative offices from an affiliate in Tucson, Arizona and is billed an allocated portion ($500 per month), commencing October 1, 2008 based on percentage of floor space occupied. The foreign exploration office located in Hermosillo, Sonora, Mexico has no lease and is rented on a month-to-month basis at $500 per month. Rental expense for all administrative offices for the period ended June 30, 2009 was $4,352 and for the period ended December 31, 2008 was $4,496.

Note K – Exploration Costs

Acquired mineral interests are presented as “exploration costs” as required by Industry Guide 7. Exploration costs incurred since inception as of June 30, 2009 are $254,479. Exploration costs incurred for the periods ended June 30, 2009 and June 30, 2008 are $6,663 and $15,488, respectively.

ITEM 2 – MANAGEMENT DISCUSSION’S AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Management Discussion and Analysis Section

Forward-Looking Statements

This Management’s Discussion and Analysis should be read in conjunction with our financial statements and its related notes. The terms “we,” “our” or “us” refer to International Silver, Inc. This discussion contains forward-looking statements based on our current expectations, assumptions, and estimates. The words or phrases “believe,” “expect,” “may,” “anticipates,” or similar expressions are intended to identify “forward-looking statements.” The results shown herein are not necessarily indicative of the results to be expected in any future periods. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties pertaining to our business, included the risk factors contained herein.

We are an exploration stage company that engages in minerals exploration activities in the United States and Mexico involving silver, gold, zinc, copper and other minerals. To-date, we have not generated any revenues from any of these activities since approximately June, 2006, when we switched our emphasis in our business plan and commenced our mineral exploration business. To date, our exploration activities have been limited to the exploration and purchasing of mineral interests in the United States and Mexico.

Financial Condition and Changes in Financial Condition

At June 30, 2009, we had cash resources of $24,921 and receivables of $54,614, which along with revenues generated from engineering consultation, is sufficient to continue our exploration activities to meet our maturing obligations. Our continued activities, long-term, are dependent on obtaining adequate financing as explained below. Our financial condition as of June 30, 2009, as compared to December 31, 2008 is summarized as follows:

Assets

As of June 30, 2009, we had total assets of $145,376 compared to total assets of $150,596 as of December 31, 2008, representing an decrease of 3% or $5,220. Current assets comprise primarily of accounts receivable, while other assets are comprised of deferred financing costs (due diligence fee) of $40,000 for the purpose of procuring funds and an investment in securities not-available-for-sale in the amount of $25,000.

	At June 30, 2009		At December 31, 2008		Net Incr./(Decr.)
Current Assets :
Cash	$	24,921	$	50,274	$	(25,353	)
Accounts Receivable		54,614		31,688		22,926
Employee Advance		354		2,317		( 1,963	)
Prepaid Expenses		487		1,005		(518	)
Current Assets	$	80,376	$	85,284	$	(4,908	)

Property, Plant & Equip.	$	0	$	312	$	(312	)
Other Assets		65,000		65,000		0
Total Assets	$	145,376	$	150,596	$	(5,220

Cash decreased by 50% or $25,353 to $24,921 at June 30, 2009, compared to $50,274 at December 31, 2008. This decrease is attributable to administrative expenses and exploration costs related to on-going exploration activities.

Accounts Receivable increased by 72% or $22,926 to $54,614 at June 30, 2009, compared to $31,688 at December 31, 2008.

Liabilities and Shareholders’ Equity

	At June 30, 2009			At December 31, 2008			Net Incr./(Decr.)
Liabilities
Accounts Payable	$	9,436		$	2,732		$	6,704
Accrued Expenses		82,318			82,648			( 330	)

Total Liabilities	$	91,754		$	85,380		$	6,374
Non-Controlling Interest		(3,530	)		(3,255	)		(275	)

Shareholders’ Equity

Capital Stock	$	810,479		$	810,479		$	0
Accumulated Deficit		(723,327	)		(712,008	)		(11,319	)
Treasury Stock		(30,000	)		(30,000)			0

Shareholder’s Equity	$	57,152		$	68,471		$	(11,319	)

Total Liabilities	$	145,376		$	150,596		$	(5,220	)

Total liabilities increased by 7% or $6,374 to $91,754 at June 30, 2009, compared to $85,380 at December 31, 2008. This slight increase is due to additional vendor payables at June 30, 2009 than December 31, 2008.

Shareholders’ Equity decreased by $11,319 to $57,152 as of June 30, 2009, compared to $68,471 as of December 31, 2008. This decrease represents the loss from operations of $11,319 for the period ended June 30, 2009.

Liquidity and Capital Resources

Working capital decreased by $11,282 to $(11,378) at June 30, 2009, compared to $(96) at December 31, 2008. The reduction in cash of $25,353 to meet maturing obligations and increased payables of $6,704 offset by the increase in receivables of $22,926 resulted in the decrease in working capital.

Net cash flows from operating activities decreased by 147% or $15,068 to ($25,353) for the six months ended June 30, 2009 as compared to ($10,285) for the comparative six months ended June 30, 2008. This decrease is primarily due to the net increase in receivables of $55,841, a net decrease in payable of $18,452, issuance of stock for services of $20,000, net of an increase in general & administrative expenses of $48,948 and accrued expenses of $27,497 for the comparable period ended June 30, 2008. Although there was a reduction in general and administrative expenses, collections from receivables were lower than the comparable six month period. In addition the payment of invoices resulted in the overall $15,068 reduction in net cash flows from operating activities, as compared to the six months ended June 30, 2008.

No investment or financing activities occurred during the six months ended June 30, 2009. For the six months ended June 30, 2008, we borrowed $90,000 from a related party (shareholder/officer) so that the Company could place an option towards the purchase of mining property, resulting in no cash flow.

Our business plan does not reflect, nor do we anticipate, any revenues during our exploration phase, aside from ongoing engineering services rendered to an affiliate and others. We do not anticipate any other type of revenue until we confirm previously demonstrated mineralization, obtain operating permits, and construct mining and processing facilities at either our US or Mexican properties or both.

Our auditors have issued a going concern opinion on our audited financial statements for the six months ended June 30, 2009, as we have an accumulated deficit of $723,327. These and other matters raise substantial doubt about our ability to continue as a going concern. We will have to supplement our currently available funds to satisfy our cash requirements for the immediate months by the continuation of providing engineering services and raising funds through an equity funding. We anticipate total spending requirements of approximately $9,289,500 pending adequate financing over the next twelve months, in the following areas:

$5,000,000 for property acquisitions;

$3,089,500 to proceed with the exploration of our properties and claims to determine whether there are commercially exploitable reserves of silver, gold, barite, lead, and zinc

$500,000 for working capital;

$200,000 for legal and accounting expenses; and

$500,000 for general and administrative expenses

We plan to undertake the following steps in our attempt to overcome our going concern qualification and our need for $9,289,500 of financing to accomplish our operational plan:

Contact broker-dealers to discuss and negotiate a broker dealer acting as an underwriter to conduct a public offering of our common stock sufficient to raise $10.0 million;

Contact other companies with sufficient financial resources to fund our operational activities to discuss and negotiate a joint venture arrangement or a merger transaction where we would combine our business interests and objectives;

Contact the fund managers of hedge funds and mutual funds to determine whether their interest in investing in our common stock sufficient to obtain adequate financing; and

Raise financing through a private placement of our common stock

Results of Operations

We incurred a loss $10,793 for the quarter ended June 30, 2009, compared to a loss of $52,475 for the quarter ended June 30, 2008. The decrease in losses is due to lower General and Administrative expenses during the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 in the areas of legal expense and salaries

An analysis of the major components of our results of operations is, as follows:

Revenues. During the quarter ended June 30, 2009 and June 30, 2008, we had revenues of $35,716 and $28,050, respectively. Revenues increased by 27% or $7,667, attributable to increased engineering services.

No revenue is being generated from mineral extraction activities, as we are still in the exploration stage.

Operating Loss. Operating losses decreased by 78% or $39,415 to ($10,967) for the quarter ended June 30, 2009, from ($50,382) for the quarter ended June 30, 2008. This decrease is primarily due to reduced exploration and legal costs and increased revenues, as shown above.

Exploration Expenses . Exploration costs decreased by $13,823 to $1,200 for the quarter ended June 30, 2009, from $12,623 for the comparable 2008 period. This decrease is mostly due to decreased exploration activity.

Depreciation and Depletion Expenses . There was no depreciation expense for the quarter ended June 30, 2009, as the only depreciable asset was disposed. Depreciation for the quarter ended June 30, 2008 was $93.

Interest Expense. Interest expense for the quarter ended June 30, 2009 was $29 compared to $2,256 for the quarter ended June 30, 2008.

Exploration Costs – Inception to Date

On June 16, 2006, our Board of Directors passed a resolution to change the nature of its operations from an engineering services company to an exploration company. Since converting our business plan to conducting exploration activities, we have engaged in the following exploration activities and incurred the following costs:

1) Hired a geotechnical consultant to assist launching an exploration program;
2) Commenced the development of an exploration plan;
3) Actively sought mineral interests containing precious metals; and
4) Acquired the following minerals interests:
a) Purchased BLM mineral claims – Calico District	$	12,770
b) Made option payment towards purchase price of $8 million of Langtry property	$	100,000
c) Acquired a 98% interest in Metales Preciosos, S.A. de C.V., a Mexican company, whose mineralized interests are:
1) El Cumbro property	$	14,260
2) El Cusito property	$	15,000
3) Canada de Oro property	$	15,000
4) La Moneda property	$	10,000
5) Exploration costs	$	86,249

Total acquisitions and exploration costs	$	253,279

Since the commencement of exploration activities, June 16, 2006 through June 30, 2009, we have incurred a total of $549,159 in expenditures, including general & administrative expenses comprised of salaries, rent, consulting fees, interest and travel expenditures. These expenditures account for approximately 76% of the accumulated deficit of $723,327 reflected in the Shareholders’ Equity section. Our prior activities as an engineering company accounts for the other portion of the deficit.

Uncertainties and Trends

Our operations, potential funding, and potential revenues are dependent now, and in the future, upon the following factors:

Price volatility in worldwide commodity prices, including silver, gold, and other minerals, which is affected by: (a) sale or purchase of silver by central banks and financial institutions; (b) interest rates; (c) currency exchange rates; (d) inflation or deflation; (e) speculation; and (f) fluctuating prices in worldwide and local commodities for petroleum-related products, chemicals, and solvents,

Global and regional supply and demand of silver, gold, and other minerals, including investment, industrial and jewelry demand;

Political and economic conditions of major silver, gold or other mineral-producing countries;

Threatened changes to the U.S. Mining Law that may cause increasing federal land royalties, or other unanticipated consequences and related increased costs of conduct in mining operations in the United States; and

Our Mexican properties are subject to foreign risk, such as passage of onerous regulatory exploration and mining requirements and availability of materials and supplies.

Off-Balance Sheet Arrangements

We have not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under whom we have:

an obligation under a guarantee contract,

a retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets,

any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, or

any obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by us and material to us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with us.

We do not have any off-balance sheet arrangements or commitments that have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material.

Changes in Accounting Policies

The significant accounting policies outlined within our Consolidated Financial Statements for the quarter ended June 30, 2009 have been applied consistently with the year ended December 31, 2008.

Recent Accounting Pronouncements

In April 2009, the FASB issued FSP No. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”). FSP FAS 157-4 provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly. Additionally, entities are required to disclose in interim and annual periods the inputs and valuation techniques used to measure fair value. This FSP is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP FAS 157-4 will have a material impact on its financial condition or results of operation.

In October 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active,” (“FSP FAS 157-3”), which clarifies application of SFAS 157 in a market that is not active. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FSP FAS 157-3 had no impact on the Company’s results of operations, financial condition or cash flows.

In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.” This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise’s involvement with variable interest entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. The Company adopted this FSP effective January 1, 2009. The adoption of the FSP had no impact on the Company’s results of operations, financial condition or cash flows.

In December 2008, the FASB issued FSP No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 requires additional fair value disclosures about employers’ pension and postretirement benefit plan assets consistent with guidance contained in SFAS 157. Specifically, employers will be required to disclose information about how investment allocation decisions are made, the fair value of each major category of plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This FSP is effective for fiscal years ending after December 15, 2009. The Company does not expect the adoption of FSP FAS 132(R)-1 will have a material impact on its financial condition or results of operation.

In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” and FASB Interpretation 46 (revised December 2003), “Consolidation of Variable Interest Entities − an interpretation of ARB No. 51,” as well as other modifications. While the proposed revised pronouncements have not been finalized and the proposals are subject to further public comment, the Company anticipates the changes will not have a significant impact on the Company’s financial statements. The changes would be effective March 1, 2010, on a prospective basis.

In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation of earnings per share under the two-class method as described in FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have material effect on our consolidated financial position and results of operations if adopted.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133. This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows.

In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently uses the simplified method for “plain vanilla” share options and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements—an amendment of ARB No. 51. This statement amends ARB 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this statement was issued, limited guidance existed for reporting non-controlling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statement of financial position as liabilities or in the mezzanine section between liabilities and equity. This statement improves comparability by eliminating that diversity. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this statement is the same as that of the related Statement 141 (revised 2007). The Company adopted this Statement beginning March 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations’. This Statement replaces FASB Statement No. 141, Business Combinations, but retains the fundamental requirements in Statement 141. This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this statement is the same as that of the related FASB Statement No. 160, Non-controlling Interests in Consolidated Financial Statements. The Company adopted this statement beginning March 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities—Including an Amendment of FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities. Most of the provisions in FAS 159 are elective; however, an amendment to FAS 115 Accounting for Certain Investments in Debt and Equity Securities applies to all entities with available for sale or trading securities. Some requirements apply differently to entities that do not report net income. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157 Fair Value Measurements. The Company adopted SFAS No. 159 beginning March 1, 2008 and is currently evaluating the potential impact the adoption of this pronouncement will have on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this statement does not require any new fair value measurements. However, for some entities, the application of this statement will change current practice. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company adopted this statement March 1, 2008, and it is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.

PLAN OF OPERATIONS

Our Plan of Operations has been organized for each of our properties and claims to account for the similarities and differences in the location, geology, the prospective metals that may be hosted by each property or claim, and the current stage of exploration of each property and claim; accordingly, we have several Plans of Operations to account for those similarities and differences among our various properties and claims. Our Plans of Operations represent our Phase I exploration activities and are for a period of eighteen months. Based upon our analysis of the test results and feasibility studies, we will determine whether to proceed with Phase II exploration and development, which will consist of expanding identified ore blocks to the proven classification, permitting, and development. We cannot determine, predict, or assure whether we will be able to proceed with Phase II exploration and development activities regarding any of our properties or claims. Our exploration activities will be conducted under the overall direction of our Consulting Geologist, but each Plan of Operations described below will be directly managed and supervised by a Field Geologist that we hire.

Mexico Properties

A. The El Cumbro, El Cusito, and Canada de Oro Properties

We will explore the El Cumbro, El Cusito, and Canada de Oro Properties for silver, gold, lead, zinc, and copper at a total cost of $518,000.

Step	Time Period to Complete Task	Cost
Staffing:
Hire Field Geologist to manage exploration activities and manage workers.	12 months	$	65,000
Hire four workers to perform or assist in the tasks described below.	12 months	$	50,000
Administrative costs of Hermosillo Office, Administrative Manager and Secretary, rent, accounting and auditing	12 months	$	55,000
Exploration Phase I:
Repair obstructed access to the properties through bulldozing and grading in order that equipment and personnel will have full access to the property using a road contractor under the supervision of our Field Geologist.	1 month	$	50,000
We will cut trenches perpendicular across the veins by bulldozing and excavating to prepare to sample the veins at the surface expressions	3 months	$	0
Our Field Geologist will supervise sampling of trenches using the four helpers hired above	2 months	$	0
Our Field Geologist will supervise cleaning and repairing of existing adits to remove debris and permit unobstructed access for the purpose of conducting underground sampling	3 months	$	0
Our Field Geologist will supervise our helpers who will systematically sample the underground workings to determine mineralized areas using hammers and chisels to cut slots on five-foot centers.	2 months	$	0
Assay all samples, including trench samples, underground adit samples using a contract laboratory	3 months	$	10,000
Based on the above steps, our Field Geologist will generate a report with recommendations.	0.5 months	$	0

Sub-Total		$	230,000

Purchase of Exploration Equipment:
Back Hoe Tractor with Excavator, Used		$	85,000

20-yard Dump Truck, Used		$	60,000
Equipment Trailer, Used		$	10,000
20 KWH Generator		$	20,000
Air Compressor		$	10,000
Office Trailer, Used		$	10,000
Sample Preparation and Storage, Portable Building, Used Container		$	5,000
Fuel Tank, Portable, Used		$	5,000
Water Tank, Portable, Used		$	8,000
Misc. Tools		$	25,000
Light Duty Transportation, Van and Pick-up and one all terrain vehicle		$	50,000

Sub-total		$	288,000

Total		$	518,000

B. The La Moneda property

We will explore the La Moneda property for gold and silver at a total cost of $44,500. We will contract a Project Geologist who will supervise all work at the project and will use two temporary workers in the local area to assist with manual sampling for two months. At the end of the La Moneda sampling program, the Project Geologist will transfer to El Cumbro/El Cusito/Canada del Oro projects as Assistant to the Field Geologist. La Moneda is a second priority project and will be evaluated to determine if there is potential for future gold production.

Step	Time Period to Complete Task	Cost
Exploration Phase I:
Project Geologist to supervise trench excavations, sampling and sample reparation	2 months	$	6,000
Our Project Geologist will hire two temporary helpers to do hammer and chisel chip samplings	2 months	$	3,000
Purchase of Exploration Equipment:
All Terrain Vehicle for rough terrain		$	7,000
10 KWH Generator		$	7,500
Miscellaneous Tools		$	5,000
Project Geologist Pick-up		$	10,000
Trailer for Field Office		$	6,000
Sub-Total		$	44,500

The Leviathon property in San Bernardino County, California

We will explore the Leviathon property for silver and barite at a total cost of $2,527,000. We will use one Field Geologist, four workers and infrastructure for our Leviathon property. Equipment to be used to conduct the Leviathon exploration program is shown below:

Step	Time Period to Complete Task	Cost
Exploration Phase I:
Hire Project Geologist to manage exploration, sampling and sample preparation activities and workers	18 months	$	75,000
Our Project Geologist will hire 4 workers who will conduct sampling, drill core handling and cataloging, splitting and general sample preparation	12 months	$	144,000
Our Project Geologist will contract a local construction company to prepare access roads and drill pads in preparation for drilling and will supervise the work	2 months	$	50,000
Our Field Geologist will map the mineralized structures, which are visible at surface, to determine the strike and dip of the ore bodies, and based on this, will design our drilling program for the property. Since Leviathan is a series of wide veins, drilling will be designed to intercept the ore bodies from the surface by angling the holes.	3 months	$	0
Our Project Geologist will hire a drilling contractor to drill 5,000 meters at determined drill stations, probably split evenly between core and reverse circulation drilling.	3 months	$	1,000,000
Our Project Geologist will collect the drill samples, log and catalog them, and send them for sample preparation in anticipation of assaying. The samples will be split, with half stored in the storage building	4 months	$	20,000
Our Project Geologist will arrange contract assaying with an independent assay laboratory	4 months	$	100,000
Our Project Geologist will hire an independent mining engineer to design the mine based on the results of our drilling program	3 months	$	150,000
Our Project Geologist will hire an independent research firm to conduct metallurgical testing of the samples to determine the optimal recovery strategy and equipment	4 months	$	250,000
Our Project Geologist will hire an independent environmental engineering firm to conduct fauna, archeological, wild life, hydrology and base line studies to complete and submit project permit requests.	12 months	$	350,000
Sub-total		$	2,139,000

Exploration Equipment Purchases:
Light Duty Transportation, 2 Pick-ups and 1 van	1 month	$	65,000
Office Trailer, used	12 months	$	15,000
Purchase steel building for sample preparation and storage	6 months	$	125,000
Purchase two core splitters	3 months	$	30,000
Purchase shelving for sample storage	2 months	$	25,000
Purchase diesel fuel tank	1 month	$	8,000
Purchase 20,000 gallon water head tank, Used	1 month	$	20,000
Purchase office furniture and equipment, including computers	1 month	$	30,000
Purchase a 20 kwh generator for water pumping and a 10 kwh generator for project power	1 month	$	30,000
Portable X-ray device for field assaying	1 month	$	40,000
Sub-Total		$	388,000

Total		$	2,527,000

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None

ITEM 4T. - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934, as amended ("Exchange Act") that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's 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 officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In accordance with Exchange Act Rule 13a-15(b), our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective, as of the end of the first quarter ending June 30, 2009, to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

Changes in internal controls

Our management, with the participation our Chief Executive Officer and Chief Financial Officer, performed an evaluation as to whether any change in our internal controls over financial reporting occurred during the financial quarter ending June 30, 2009. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in our internal controls over financial reporting during the financial quarter ending June 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None

ITEM 1A - RISK FACTORS

Risk Factors

In addition to the other information provided in this Form 10-Q, you should carefully consider the following risk factors (and others in our S-1 Registration Statement, which may be accessed at: www.sec.gov/Archives/edgar/data/1419482/000114420408011274/v104636_s1a.htmn ) in evaluating our business before purchasing our common stock. Our exploration activities are highly risky and speculative; accordingly, an investment in our common stock shares involves a high degree of risk. You should not invest in our common stock if you cannot afford to lose your entire investment. In considering an investment in our common shares, you should carefully consider the following risk factors together with all of the other information contained in our filings with the Securities and Exchange Commission, including our S-1 Registration Statement. Any of the following (along with other risk factors that are discussed in our S-1 Registration Statement, and which includes more expansive risk factor discussions pertaining to the risk factors discussed below), may cause our exploration activities, prospects, financial condition or results of operations to be negatively impacted, which may lead to the loss of all or part of your investment.

Risks Related to our Business Activities .

Our financial condition raises substantial doubt about our ability to continue as a going concern.

As of June 30, 2009, we have an accumulated deficit of $723,327. Our auditor has issued a going concern opinion that there is substantial doubt whether we can continue as an ongoing business. If we fail to obtain approximately $10 million of financing, we will be unable to pursue our planned business operations and will have to be curtailed or terminated, in which case you will lose part or all of your investment in our common stock.

Because our properties or claims may never have reserves or be profitable, your investment in our common shares may be negatively impacted.

None of the properties or claims on which we have the right to explore for silver and other precious metals is known to have any confirmed commercially mineable deposits of silver or other metals that may be mined at a profit. We may be unable to develop our properties at a profit, either because:

the deposits are not of the quality or size that would enable us to make a profit from actual mining activities; or

because it may not be economically feasible to extract metals from the deposits.

In either case, you may lose part or all of you entire investment.

Because we are an exploration stage company, we have no mining operations, and our future operations are subject to substantial risks, we may never be successful in conducting any future mining operations .

We are not a mining company, but rather a beginning stage exploration stage. We will be unable to generate revenues or make profits, unless we actually mine deposits, if any actually exist.

We lack an operating history in our current business plan and we have losses, which make it difficult for you to evaluate whether we will be able to continue our operations or ever be profitable.

In June 2006, we began our current business plan of conducting exploration for silver and other minerals — our short operating history has consisted of preliminary exploration activities and non-income-producing activities. Accordingly, we have no adequate operating history for you to evaluate our future success or failure.

Our management has conflicts of interest that may favor the interests of our management, but to the detriment of our minority shareholders’ interests.

Our officers and directors also serve as officers and/or directors of other mining exploration companies and are related by family relations to one another. As a result, their personal interests and those of the companies that they are affiliated with may come into conflict with our interests and those of our minority stockholders. We as well as the other companies that our officers and directors are affiliated with may present our officers and directors with business opportunities that are simultaneously desired. Additionally, we may compete with these other companies for investment capital, technical resources, key personnel and other things. You should carefully consider these potential conflicts of interest before deciding whether to invest in our shares of our common stock. We have not yet adopted a policy for resolving such conflicts of interests. Because the interests of our officers and the companies that they are affiliated with may disfavor our own interests and those of our minority stockholders, you should carefully consider these conflicts of interest before purchasing shares of our common stock.

The services of our President and Chief Executive Officer, Executive Vice President/Chief Financial Officer, Consulting Geologist, and our Vice President of Administration and Logistics, are essential to the success of our business; the loss of any of these personnel will adversely affect our business.

Our business depends upon the continued involvement of our officers, directors, and consulting geologist, each of whom have mining experience from 9 to 35 years. The loss, individually or cumulatively, of these personnel would adversely affect our business, prospects, and our ability to successfully conduct our exploration activities. Before you decide whether to invest in our common stock, you should carefully consider that the loss of their expertise, may negatively impact your investment in our common stock.

We may be denied the government licenses and permits or otherwise fail to comply with federal and state requirements for our exploration activities.

Our future exploration activities will require licenses, permits, or compliance with other state and federal requirements regarding prospecting, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Delays or failures to acquire required licenses or permits or successfully comply with the pertinent federal and state regulations will negatively impact our operations.

We do not carry any property or casualty insurance and do not intend to carry such insurance in the near future which may expose us to liabilities that will negatively affect our financial condition.

The search for valuable minerals exposes us to numerous hazards. As a result, we may become subject to liability for such hazards, including environmental pollution, cave-ins, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes or other hazards that we cannot insure against or which we may elect not to insure. At the present time we have no coverage to insure against these hazards, should we incur liabilities involving these hazards that may have a material adverse effect on our financial condition.

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

None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5 - OTHER INFORMATION

None

ITEM 6 - EXHIBITS

See Exhibit Index

SIGNATURES

Pursuant to the requirements 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 SILVER, INC.

/s/Harold R Shipes

Harold R. Shipes, Chief Executive Officer/Chairman of the Board

Dated: August 5, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated.

Signature	Title	Date

/s/ Harold R. Shipes	Chairman of the Board/Director	August 5, 2009
Harold R. Shipes	Chief Executive Officer
	(Principal Executive Officer)

/s/John A. McKinney	Chief Financial Officer	August 5, 2009
John A. McKinney	Executive Vice President
	(Principal Financial Officer)

EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION	PAGE

31.	Certification Pursuant to Rule 13a-14(a) under the Exchange Act

31.2	Certification Pursuant to Rule 13a-14(a) under the Exchange Act

32.1	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley act of 2002