Colorado
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86-1061005
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(State
or Other Jurisdiction
|
(IRS
Employer File Number)
|
of
Incorporation)
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3636
S. Jason
|
|
Englewood, Colorado
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80113
|
(Address
of Principal Executive Offices)
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(Zip
Code)
|
Large
accelerated filer
[]
|
Accelerated
filer []
|
Non-accelerated
filer [] (Do not check if a smaller reporting
company)
|
Smaller
reporting company [X]
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PART
I
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|
Item
1. Business
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3
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Item
1A. Risk Factors
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7
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Item
2. Property
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12
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Item
3. Legal Proceedings
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13
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Item
4. Submission of Matters to a Vote of Security Holders
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13
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PART
II
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|
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
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13
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Item
6. Selected Financial Data
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15
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Item
7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
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15
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Item
7A. Quantitative and Qualitative Disclosures About Market
Risk
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20
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Item
8. Financial Statements and Supplementary Data
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20
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Item
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
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32
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Item
9A(T). Controls and Procedures
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32
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Item
9B. Other Information
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33
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PART
III
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Item
10. Directors, Executive Officers and Corporate Governance
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34
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Item
11. Executive Compensation
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36
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Item
12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
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36
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Item
13. Certain Relationships and Related Transactions, and Director
Independence
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37
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Item
14. Principal Accountant Fees and Services
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37
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Item
15. Exhibits Financial Statement Schedules
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37
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Financial
Statements pages
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20
- 31
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Signatures
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39
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·
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design
companies selling solely through catalog and
online;
|
·
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regional
retailers specializing in design;
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·
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our
ability to locate clients who will purchase our products and use our
services; and
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·
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our
ability to generate substantial
revenues.
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Closing
Bid Price
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|||||||||
2008
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High
|
Low
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|||||||
First
Quarter
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$
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.25
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$
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.05
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|||||
Second
Quarter
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$
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.25
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$
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.05
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|||||
Third
Quarter
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$
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.25
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$
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.05
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|||||
Fourth
Quarter
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$
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.25
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$
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.05
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-
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contains
a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading;
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-
|
contains
a description of the broker's or dealer's duties to the customer and of
the rights and remedies available to the customer with respect to a
violation to such duties or other requirements of the Securities Act of
1934, as amended;
|
-
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contains
a brief, clear, narrative description of a dealer market, including "bid"
and "ask" prices for penny stocks and the significance of the spread
between the bid and ask price;
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-
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contains
a toll-free telephone number for inquiries on disciplinary
actions;
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-
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defines
significant terms in the disclosure document or in the conduct of trading
penny stocks; and
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-
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contains
such other information and is in such form (including language, type, size
and format) as the Securities and Exchange Commission shall require by
rule or regulation;
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-
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the
bid and offer quotations for the penny
stock;
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-
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the
compensation of the broker-dealer and its salesperson in the
transaction;
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-
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the
number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
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-
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monthly
account statements showing the market value of each penny stock held in
the customer's account.
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1.
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Cease
operations and go out of business;
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2.
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Continue
to seek alternative and acceptable sources of
capital;
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3.
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Bring
in additional capital that may result in a change of control;
or
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4.
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Identify
a candidate for acquisition that seeks access to the public marketplace
and its financing sources.
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Page
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|
REPORT
OF INDEPENDENT REGISTERED
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|
PUBLIC
ACCOUNTING FIRM
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22
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CONSOLIDATED
FINANCIAL STATEMENTS
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|
Consolidated balance
sheets
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23
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Consolidated statements of
operations
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24
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Consolidated statements of
stockholders’ equity
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25
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Consolidated statements of cash
flows
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26
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Notes to consolidated financial
statements
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28
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ART
DESIGN, INC.
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||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||
Dec.
31, 2007
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Dec.
31, 2008
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|||||||
ASSETS
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||||||||
Current
assets
|
||||||||
Cash
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$ | 112,664 | $ | 80,390 | ||||
Accounts
receivable
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19,230 | 223 | ||||||
Total current
assets
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131,894 | 80,613 | ||||||
Accounts
receivable - related party
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7,290 | |||||||
Fixed
assets
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13,269 | 13,269 | ||||||
Less
accumulated depreciation
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(11,234 | ) | (11,654 | ) | ||||
Other
assets
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2,759 | - | ||||||
12,084 | 1,615 | |||||||
Total
Assets
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$ | 143,978 | $ | 82,228 | ||||
LIABILITIES
& STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
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$ | 984 | $ | - | ||||
Accounts payable -
related party
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29,135 | 309 | ||||||
Note
payable - related party
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34,201 | 34,201 | ||||||
Total current
liabilties
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64,320 | 34,510 | ||||||
Total
Liabilities
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64,320 | 34,510 | ||||||
Stockholders'
Equity
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||||||||
Preferred
stock, $.10 par value;
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||||||||
1,000,000
shares authorized;
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||||||||
No
shares issued & outstanding
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- | - | ||||||
Common
stock, $.001 par value;
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||||||||
50,000,000
shares authorized;
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||||||||
10,820,600
shares
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||||||||
issued
& outstanding
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10,821 | 10,821 | ||||||
Additional
paid in capital
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163,165 | 185,218 | ||||||
Accumulated
deficit
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(94,328 | ) | (148,321 | ) | ||||
Total
Stockholders' Equity
|
79,658 | 47,718 | ||||||
Total
Liabilities and Stockholders' Equity
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$ | 143,978 | $ | 82,228 |
ART
DESIGN, INC.
|
||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||
Year
Ended
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Year
Ended
|
|||||||
Dec.
31, 2007
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Dec.
31, 2008
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|||||||
Sales
- net of returns
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$ | 80,265 | $ | 153,164 | ||||
Cost
of goods sold
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57,932 | 150,042 | ||||||
Gross
profit
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22,333 | 3,122 | ||||||
Operating
expenses:
|
||||||||
Amortization
& depreciation
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1,776 | 420 | ||||||
General
and administrative
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52,411 | 56,695 | ||||||
54,187 | 57,115 | |||||||
Gain
(loss) from operations
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(31,854 | ) | (53,993 | ) | ||||
Other
income (expense):
|
||||||||
- | - | |||||||
- | - | |||||||
Income
(loss) before
|
||||||||
provision
for income taxes
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(31,854 | ) | (53,993 | ) | ||||
Provision
for income tax
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- | - | ||||||
Net
income (loss)
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$ | (31,854 | ) | $ | (53,993 | ) | ||
Net
income (loss) per share
|
||||||||
(Basic
and fully diluted)
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$ | (0.00 | ) | $ | (0.01 | ) | ||
Weighted
average number of
|
||||||||
common
shares outstanding
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10,603,683 | 10,603,683 |
ART
DESIGN, INC.
|
||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
Common
Stock
|
Stock-
|
|||||||||||||||||||
Amount
|
Paid
in
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Accumulated
|
holders'
|
|||||||||||||||||
Shares
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($.001
Par)
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Capital
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Deficit
|
Equity
|
||||||||||||||||
Balances
at December 31, 2006
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10,300,000 | $ | 10,300 | $ | 72,899 | $ | (62,474 | ) | $ | 20,725 | ||||||||||
Issuance
of stock for cash - net
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- | |||||||||||||||||||
of
deferred offering costs of
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||||||||||||||||||||
$24,543
in 2006 and $20,820
|
||||||||||||||||||||
in
2007 - $45,363 total
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520,600 | 521 | 84,266 | 84,787 | ||||||||||||||||
Donated
services - officer
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6,000 | 6,000 | ||||||||||||||||||
Gain
(loss) for the period
|
(31,854 | ) | (31,854 | ) | ||||||||||||||||
Balances
at December 31, 2007
|
10,820,600 | $ | 10,821 | $ | 163,165 | $ | (94,328 | ) | $ | 79,658 | ||||||||||
Related
party debt relief
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16,646 | 16,646 | ||||||||||||||||||
Donated
services - officer
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2,000 | 2,000 | ||||||||||||||||||
Warrant
issuances - subsidiary
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3,407 | 3,407 | ||||||||||||||||||
Gain
(loss) for the period
|
(53,993 | ) | (53,993 | ) | ||||||||||||||||
Balances
at December 31, 2008
|
10,820,600 | $ | 10,821 | $ | 185,218 | $ | (148,321 | ) | $ | 47,718 |
ART
DESIGN, INC.
|
||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
Year
Ended
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Year
Ended
|
|||||||
Dec.
31, 2007
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Dec.
31, 2008
|
|||||||
Cash
Flows From Operating Activities:
|
||||||||
Net
income (loss)
|
$ | (31,854 | ) | $ | (53,993 | ) | ||
Adjustments
to reconcile net loss to
|
||||||||
net
cash provided by (used for)
|
||||||||
operating
activities:
|
||||||||
Amortization
& depreciation
|
1,776 | 420 | ||||||
Donated
services
|
6,000 | 5,407 | ||||||
Accounts
receivable
|
(10,950 | ) | 26,297 | |||||
Accrued
payables - related party
|
8,964 | (12,489 | ) | |||||
Accrued
payables
|
984 | (675 | ) | |||||
Other
assets
|
(2,759 | ) | 2,759 | |||||
Net cash provided by (used
for)
|
||||||||
operating
activities
|
(27,839 | ) | (32,274 | ) | ||||
Cash
Flows From Investing Activities:
|
||||||||
- | - | |||||||
Net
cash provided by (used for)
|
||||||||
investing
activities
|
- | - | ||||||
(Continued
On Following Page)
|
ART
DESIGN, INC.
|
||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
(Continued
From Previous Page)
|
||||||||
Year
Ended
|
Year
Ended
|
|||||||
Dec.
31, 2007
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Dec.
31, 2008
|
|||||||
Cash
Flows From Financing Activities:
|
||||||||
Deferred
offering costs
|
(20,820 | ) | - | |||||
Issuance
of common stock
|
130,150 | - | ||||||
Net cash provided by (used
for)
|
||||||||
financing
activities
|
109,330 | - | ||||||
Net
Increase (Decrease) In Cash
|
81,491 | (32,274 | ) | |||||
Cash
At The Beginning Of The Period
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31,173 | 112,664 | ||||||
Cash
At The End Of The Period
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$ | 112,664 | $ | 80,390 | ||||
Schedule of Non-Cash Investing and Financing
Activities
|
||||||||
In
2008 a Company officer donated $16,646 in receivables and $2,000
in
|
||||||||
services
to Company capital.
|
||||||||
Supplemental Disclosure
|
||||||||
Cash
paid for interest
|
$ | - | $ | - | ||||
Cash
paid for income taxes
|
$ | - | $ | - |
|
2007
|
2008
|
||||||
Furniture
&
Fixtures
|
$ | 2,560 | $ | 2,560 | ||||
Computers
|
6,511 | 6,511 | ||||||
Leasehold
Improvements
|
4,198 | 4,198 | ||||||
13,269 | 13,269 | |||||||
Less
accumulated
depreciation
|
(11,234 | ) | (11,654 | ) | ||||
Total
|
$ | 2,035 | $ | 1,615 |
Name
and Address
|
Age
|
Position(s)
|
Kathy
Sheehan
3636
S. Jason
Englewood,
Colorado 80113
|
47
|
President,
Chief Executive
Officer,
Treasurer, Chief
Financial
Officer and
Director
|
Todd
Sheehan
3636
S. Jason
Englewood,
Colorado 80113
|
54
|
Secretary
and Director
|
Rebecca
Gregarek
3636
S. Jason
Englewood,
Colorado 80113
|
54
|
Director
|
*
|
persons
who own more than 5% of our common
stock;
|
*
|
each
of our directors and each of our executive officers;
and
|
*
|
all
directors and executive officers as a
group.
|
Name
and Address
Beneficial
Owner
|
No.
of
Common
Shares
|
Percentage
of
Ownership(1)
|
|
Kathy
Sheehan(2)
|
5,150,000
|
47.6%
|
|
3636
S. Jason
|
|||
Englewood,
Colorado 80113
|
|||
|
|||
Todd
Sheehan(2)
|
5,150,000
|
47.6%
|
|
3636
S. Jason
|
|||
Englewood,
Colorado 80113
|
|||
|
|||
Rebecca
Gregarek(3)
|
3,350,000
|
30.9%
|
|
3636
S. Jason
|
|||
Englewood,
Colorado 80113
|
|||
All
Officers and
Directors
as a Group
(three
persons)
|
8,500,000
|
78.5%
|
(1)
|
All
shares of owned beneficially or of record.
|
|
(2)
|
Kathy
and Todd Sheehan are husband and wife. Kathy Sheehan owns 2,550,000 shares
of record. Todd Sheehan owns 2,450,000 shares of record. The minor
children of Mr. and Mrs. Sheehan own a total of 150,000 shares of
record.
|
(3)
|
Rebecca
Gregarek owns 3,200,000 shares of record. Her husband owns 100,000 shares
of record. Her minor child owns 50,000 shares of record. Her adult child
owns 50,000 shares of record, for which she disclaims beneficial
ownership.
|
Exhibit
Number
|
Description
|
3.1*
|
Articles
of Incorporation
|
3.2*
|
Amended
and Restated Articles of Incorporation
|
3.3*
|
Bylaws
|
10.1**
|
Promissory
Note dated December 31, 2004 with Mr. Todd
Sheehan
|
14**
|
Code
of Business Ethics
|
14.1
|
Revised
Code of Business Ethics
|
21.1**
|
List
of Subsidiaries
|
31.1
|
Certification
of CEO/CFO pursuant to Sec. 302
|
32.1
|
Certification
of CEO/CFO pursuant to Sec.
906
|
Art
Design, Inc.
|
|||
Date: November
19, 2009
|
By:
|
/s/
Kathy Sheehan
|
|
Kathy
Sheehan, President and Chief
Executive
and Financial Officer
|
Date: November
19, 2009
|
By:
|
/s/
Kathy Sheehan
|
|
Kathy
Sheehan
|
|||
Director,
Treasurer, Principal Accounting Officer,
and
Chief Executive and Financial Officer
|
|||
Date: November
19, 2009
|
By:
|
/s/
Todd Sheehan
|
|
Todd
Sheehan
|
|||
Director
and Secretary
|
|||
Date: November
19, 2009
|
By:
|
/s/
Rebecca Gregarek
|
|
Rebecca
Gregarek
|
|||
Director
|