<PAGE>

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

                                   FORM 10-KSB

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                                   (Mark One)

       |X|         ANNUAL REPORT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934.

                   For the fiscal year ended December 31, 2006

                                       OR

       |_|         TRANSITION REPORT PURSUANT TO SECTION 13 OR
                   15(d)OF THE SECURITIES EXCHANGE ACT OF 1934.

             For the transition period from _______ to ___________.


                        COMMISSION FILE NUMBER: 000-31541


                                 SMART SMS CORP.
--------------------------------------------------------------------------------
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)


            FLORIDA                                              65-0941058
--------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF                                (IRS EMPLOYER
 INCORPORATION OR ORGANIZATION)                              IDENTIFICATION NO.)

            11301 OLYMPIC BOULEVARD, SUITE 680 LOS ANGELES, CA 90064
--------------------------------------------------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (310) 445-2599
--------------------------------------------------------------------------------
                            ISSUER'S TELEPHONE NUMBER

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                    Name of each exchange on which registered

         None                                             None

Securities registered pursuant to Section 12(g) of the Exchange Act:

                          $.001 PAR VALUE COMMON STOCK
--------------------------------------------------------------------------------
                                (title of class)


<PAGE>


Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ ] No [X]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

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

State issuer's revenues for its most recent fiscal year.  $Nil

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of
September 20, 2007 was $6,191,908 based upon an average bid ask price of $.80
per share and 7,739,885 shares held by non-affiliates of the issuer.

Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. At September 20, 2007, we had
35,739,885 shares of common stock issued and outstanding.


<PAGE>

<TABLE>
<S>     <C>
                                             Table of Contents

                                                  PART I


Item 1. Description of Business..........................................................................1

Item 2. Description of Property. ........................................................................1

Item 3. Legal Proceedings................................................................................1

Item 4. Submission of Matters to a Vote of Security Holders..............................................1

                                                  PART II

Item 5. Market for Common Equity and Related Stockholder Matters.........................................2

Item 6. Management's Discussion and Analysis or Plan of Operation. ......................................3

Item 7. Financial Statements............................................................................10

Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure............10

Item 8A. Controls and Procedures. ......................................................................10

Item 8B. Other Information..............................................................................10

                                                 PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act..................................................................11

Item 10. Executive Compensation.........................................................................12

Item 11. Security Ownership of Certain Beneficial Owners and Management and
           Related Stockholder Matters..................................................................13

Item 12. Certain Relationships and Related Transactions.................................................13

Item 13. Exhibits.......................................................................................14

Item 14. Principal Accountant Fees and Services.........................................................15

SIGNATURES..............................................................................................16

                                                    i
</TABLE>

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

General
-------

Smart SMS Corp. (the "COMPANY") was incorporated in Florida on June 3, 1997 as
Future Projects VIII Corp. On July 20, 2000, we changed our name to AMERICAN IDC
CORP. Subsequently, on October 31, 2005, we changed our name to SMART SMS CORP.
There has been no bankruptcy, receiverships, or similar proceedings by us. There
has been no material reclassification, merger, consolidation, or purchase or
sale of any significant assets not in the ordinary course of business.

Our principal executive offices are located at: 11301 Olympic Boulevard, Suite
680, Los Angeles, CA 90064.

Business History
----------------

At December 31, 2006, we were a development-stage company focused on developing
a text messaging business. Between 2001 and December 31, 2006, we focused on
creating and providing the platforms for Internet businesses, where others pay
to use our sites and provide their own content. During 2006, we generated no
revenues from our products or services.

License Agreements
------------------

During the first quarter of fiscal year 2006, the Company re-negotiated the
terms of its agreements with Smart Entertainment Inc. and its sole shareholder
Halldor Sanne, as follows:

     o    Effective March 1, 2005 Smart Entertainment Inc. and its sole
          shareholder, Halldor Sanne, have granted the Company exclusive rights
          for a 99 year period to utilize the Smart SMS technical platform,
          logo, and marketing and promotional material for North America,
          Central America and South America.

     o    The Company agreed to issue 50,000 shares of its common stock to
          Halldor Sanne or any other name requested by Halldor Sanne to settle
          all technical support services and consulting fees due at December 31,
          2005 , in the amount of $180,000, as claimed by Halldor Sanne. These
          shares were issued during the first quarter of 2006. After the
          issuance of the agreed upon shares, the Company had no further
          relationship with Smart Entertainment Inc, except the right to use the
          Smart SMS technical platform, logo, and marketing and promotional
          material as described above.

Equity
------

On July 7, 2006, the Board of Directors of the Company passed a resolution to
amend the Articles of Incorporation to combine the Company's $.001 par value
common stock on a one (1) for one hundred (100) basis. At the effective date,
every one hundred (100) shares of common stock which are issued and outstanding
shall be automatically converted into one (1) share of $.001 par value common
stock; provided, however, that the Company shall issue one (1) full share of
$.001 par value common stock to its stockholders for any fractional interest
remaining after the combination of all shares of common stock into a lesser
number of shares.

On August 1, 2006 the Company amended its Articles of Incorporation to:

     o    Change its authorized level of capital stock to 35,000,000 shares,
          subdivided as 25,000,000 shares of Preferred stock (10,000,000 shares
          were designated as Series A Convertible Preferred Stock) and
          10,000,000 shares of common stock.

     o    The affect a one for one hundred (1 for 100) "reverse" stock split on
          the Company's common stock.

On December 19, 2006, the holders of over two-thirds of the voting power of the
Series A Convertible Preferred Stock voted to amend the Certificate of
Designation, Powers, Preferences, and Rights of the Series A Convertible
Preferred Stock of Smart SMS Corp. The amendment reduced the designation and
amount of Series A Convertible Preferred Stock from 10,000,000 to 729,501
shares, reduced the voting rights from 100 votes per share of Series A to 10
votes per share of Series A, changed the conversion basis from 100 common per
Series A to 10 shares of common stock for each share of Series A, and eliminated
the corporation's right to redeem each share of Series A. On December 28, 2006,
the Company amended its Articles of Incorporation to reflect these changes.


                                        1

<PAGE>

Appointment of Management
-------------------------

On February 2, 2006, the Company issued a press release announcing that Mr.
David Dadon will become a director and the new Chairman of the Board of
Directors. Mr. Dadon approved the press release, but has not returned the
Memorandum of Understanding or provided the information required by Item 404(a)
of Regulation S-B. Accordingly, the Company has terminated the offer. On March
27, 2007, the Company announced the appointment of Steaphan Weir to replace
Gordon Lee as the Chief Executive Officer. Gordon Lee is appointed as the
Chairman of the Board. On April 26, 2007, the Company announced the appointment
of Layne Bednar to Chief Operating Officer. On October 1, 2007, the Company
announced the retirement of Gordon Lee. On October 31, 2007, the Company
announced the appointment of Beth Ochoa to General counsel and Corporate
Secretary.

Employees and Consultants
-------------------------

During 2006, we had no full time employees. Our research and development costs
were not meaningful.

ITEM 2.  DESCRIPTION OF PROPERTIES.

We are currently operating out of offices located at 11301 Olympic Boulevard,
Suite 680, Los Angeles, CA 90064. We do not pay any rent for use of this space.

ITEM 3.  LEGAL PROCEEDINGS.

There are no legal proceedings reportable pursuant to this section. As of the
date of this Form 10-KSB, we have not been served with notice of any legal
proceedings and do not contemplate undertaking any legal proceedings.

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

During the fourth quarter of 2006, no matters were submitted to our security
holders for a vote, through the solicitation of proxies or otherwise.



PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(a)      Our shares of common stock are quoted on the Pink Sheets market under
         the ticker symbol "STMC". We are not aware of any established trading
         market for our common stock. The table below sets forth the high and
         low bid information for each quarter within the last two years. The
         quotations reflect inter-dealer prices, without retail mark-up,
         mark-down or commission and may not represent actual transactions.

                     2006                   HIGH              LOW
                  -------------------------------------------------
                  1st Quarter               $3.24             $3.40
                  2nd Quarter               $1.70             $1.75
                  3rd Quarter               $1.88             $1.88
                  4th Quarter               $1.00             $1.25

                     2005                   HIGH              LOW
                  -------------------------------------------------
                  1st Quarter               $4.90             $1.90
                  2nd Quarter               $5.00             $1.40
                  3rd Quarter               $5.00             $1.80
                  4th Quarter               $6.40             $1.50

(b)      As of December 31, 2006, we had 8,139,644 shareholders of record of the
         common stock.

(c)      No dividends on outstanding common stock have been paid within the last
         two (2) fiscal years, and interim periods. We do not anticipate or
         intend to pay dividends in the foreseeable future.

(d)      The Company did not grant stock options to employees as of December 31,
         2006. The following table summarizes the changes in options outstanding
         and the related prices for the shares of the Company's common stock
         issued to the Company consultants, after giving effect to 1:100 reverse
         split in common stock subsequent to the date of the financial
         statements (Note D and J). These options were granted in lieu of cash
         compensation for services performed to consultants.


                                       2

<PAGE>

<TABLE>
                              Options Outstanding                                  Options Exercisable
                              -------------------                                  --------------------
                                          Weighted Average        Weighed                       Weighted
                          Number       Remaining Contractual      Average         Number        Average
   Exercise Prices     Outstanding          Life (Years)       Exercise Price  Exercisable   Exercise Price
   ---------------     -----------          ------------       --------------  -----------   --------------
<S>                         <C>                    <C>                 <C>           <C>               <C>
   $       5.00             2,000                  0.30                5.00          2,000             5.00
          50.00             1,000                  1.00               50.00          1,000            50.00
         150.00             1,000                  0.25              150.00          1,000           150.00
                            -----             ---------          ----------          -----       ----------
                            4,000                  0.46          $    52.50          4,000       $    52.50
                            =====             =========          ==========          =====       ==========
</TABLE>

Transactions involving options issued to non-employees are summarized as
follows:

                                                            Weighted Average
                                         Number of Shares    Price Per Share
                                         ----------------    ---------------

     Outstanding at January 1, 2004             4,000           $    75.00
                                               ======           ==========
        Granted                                 1,750                 5.00
        Exercised                                  --                   --
        Canceled or expired                    (2,000)              150.00
     --------------------------------          ------           ----------
     Outstanding at December 31, 2004           3,750           $    56.00
                                               ======           ==========
        Granted                                 2,000                 5.00
        Exercised                                  --                   --
        Cancelled                              (1,750)                5.00
                                               ------           ----------
     Outstanding at December 31, 2005           4,000           $    52.50
                                               ======           ==========
        Granted                                    --                   --
        Exercised                                  --                   --
        Cancelled                                  --                   --
                                               ------           ----------
     Outstanding at December 31, 2006           4,000           $    52.50
                                               ======           ==========


The weighted-average fair value of stock options granted to consultants during
the years ended December 31 2005 and the weighted-average significant
assumptions used to determine those fair values, using a Black-Scholes option
pricing model are as follows:


                                       3

<PAGE>

                                                                     2005

Significant assumptions (weighted-average):
Risk-free interest rate at grant date                                2.07%
Expected stock price volatility                                        93%
Expected dividend payout                                                --
Expected option life-years(a)                                         2.00

(a) The expected option/warrant life is based on contractual expiration dates.


Compensation expenses charged to operations in connection with granting the
options to consultants were $805 for the year ended December 31, 2005.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Forward Looking Statements
--------------------------

This report on Form 10-KSB contains certain forward-looking statements within
the meaning of Section 21e of the Securities Exchange Act of 1934, as amended,
and other applicable securities laws. All statements other than statements of
historical fact are "forward-looking statements" for purposes of these
provisions, including any projections of earnings, revenues, or other financial
items; any statements of the plans, strategies, and objectives of management for
future operation; any statements concerning proposed new products, services, or
developments; any statements regarding future economic conditions or
performance; statements of belief; and any statement of assumptions underlying
any of the foregoing. Such forward-looking statements are subject to inherent
risks and uncertainties, and actual results could differ materially from those
anticipated by the forward-looking statements.

Critical Accounting Policies
----------------------------

The preparation of our financial statements in conformity with accounting
principles generally accepted in the United States requires us to make estimates
and judgments that affect our reported assets, liabilities, revenues, and
expenses, and the disclosure of contingent assets and liabilities. We base our
estimates and judgments on historical experience and on various other
assumptions we believe to be reasonable under the circumstances. Future events,
however, may differ markedly from our current expectations and assumptions.
While there are a number of significant accounting policies affecting our
consolidated financial statements; we believe the following critical accounting
policies involve the most complex, difficult and subjective estimates and
judgments:

Stock-Based Compensation
------------------------

In December 2002, the FASB issued SFAS No. 148 "ACCOUNTING FOR STOCK-BASED
COMPENSATION - TRANSITION AND DISCLOSURE". This statement amends SFAS No. 123
"ACCOUNTING FOR STOCK-BASED COMPENSATION", providing alternative methods of
voluntarily transitioning to the fair market value based method of accounting
for stock based employee compensation. FAS 148 also requires disclosure of the
method used to account for stock-based employee compensation and the effect of
the method in both the annual and interim financial statements. The provisions
of this statement related to transition methods are effective for fiscal years
ending after December 15, 2002, while provisions related to disclosure
requirements are effective in financial reports for interim periods beginning
after December 31, 2002.

We elected to continue to account for stock-based compensation plans using the
intrinsic value-based method of accounting prescribed by APB No. 25, "ACCOUNTING
FOR STOCK ISSUED TO EMPLOYEES," and related interpretations. Under the
provisions of APB No. 25, compensation expense is measured at the grant date for
the difference between the fair value of the stock and the exercise price.

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued
FASB Statement No. 123R (revised 2004), "SHARE-BASED PAYMENT" which is a
revision of FASB Statement No. 123, "ACCOUNTING FOR STOCK-BASED COMPENSATION".
Statement 123R supersedes APB opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES", and amends FASB Statement No. 95, "STATEMENT OF CASH FLOWS".
Generally, the approach in Statement 123R is similar to the approach described
in Statement 123. However, Statement 123R requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the
income statement based on their fair values. Pro-forma disclosure is no longer
an alternative. On April 14, 2005, the SEC amended the effective date of the
provisions of this statement. The effect of this amendment by the SEC is that we
will have to comply with Statement 123R and use the Fair Value based method of
accounting no later than the first quarter of 2006. We do not anticipate that
the implementation of this standard will have a material impact on our financial
position, results of operations or cash flows.


                                       4

<PAGE>

Liquidity and Capital Resources
-------------------------------

At December 31, 2006, we had not had revenue from operations in each of the last
two fiscal years. It is unlikely that we can satisfy our cash requirements
without raising additional funds in the next twelve months. While no source of
additional funds has been identified, it is likely that such funds will raised
from the sale of securities, especially our common stock. Modest funds may be
secured through short term loans or advances from our principal stockholder.

In early 2005, we elected to abandon our focus on the online interactive
business and entered the text messaging business. We do not anticipate spending
a large amount of funds on product research and development during the next
twelve months. Further, we do not expect to purchase significant amounts of
equipment for our operations during the next twelve months. Moreover, we do not
expect to make a significant change in the number of employees during the next
twelve months.

During each of our last two fiscal years, we failed to report meaningful results
from our efforts and focus on the online interactive business or text messaging
business. As such, the past results do not indicate what to expect in future
periods, but do report our lack of success in generating sales, operating income
or earnings from our business model with a focus on the online interactive
business. Since our inception in 1997, we have accumulated losses of
$11,209,066. These losses have been funded primarily through the sale of our
securities to investors in private offerings or by issuing our securities in
exchange for services rendered by our employees, consultants and advisors.
Issuing shares in lieu of cash payments allows us to continue to operate without
incurring additional losses.

Results of Operation
--------------------

During the years ended December 31, 2006 and December 31, 2005, we did not
receive any revenue and incurred expenses of $13,119,609 and $5,616,713
respectively, stemming from general, selling, and administrative expenses and an
impairment loss of $490,000 during the year ended December 31, 2004. We incurred
a loss from operations of $13,119,609 for the year ended 2006 compared to
$5,616,713 for the year ended December 31, 2005.

Our independent certified public accountants have stated in their report
included in our December 31, 2006 Form 10-KSB, that we have incurred operating
losses since inception, and that we are dependent upon management's ability to
develop profitable operations and resolve our liquidity problems. These factors,
among others, may raise doubt about our ability to continue as a going concern.

Plan of Operation
-----------------

During the next twelve months, we plan to concentrate our efforts on developing
our text messaging services known as SMS and MMS and identifying specific
markets and clients for these services. We intend to rely on the experience and
expertise of our management to study the market for these services. We have
contracted with a SMS company in Norway to participate in the development and
design of SMARTSMSCORP.com. They are contracted to provide their programming
expertise to create a working, navigational, music downloading site. These
programmers will continue to provide us with technical support and 24/7 customer
service for our SMS platform..

Because we remain essentially a start-up development company with limited
capital resources, it may be necessary for our officers and shareholders to
either advance funds to us, or to accrue expenses until such time as an
additional financing can be made. Our Chief Executive Officer and principal
shareholders have advanced $270,536 and $28,360, net of cash repayments, to us
for working capital purposes as of December 31, 2005 and December 31, 2004,
respectively. No formal repayment terms or arrangements exist. Our Chief
Executive Office has signed a statement that he has not advanced any funds in
2006. Management intends to hold expenses to a minimum and to obtain services on
a contingency basis when possible until our product development and marketing
reaches a point when additional financing will be possible. Further, our Chief
Executive Officer will defer any cash compensation until such time as we begin
to earn revenues from operations.

It is clear to us that present funding is not sufficient for the launch of our
operations, and that we must interest investors in one or more secondary capital
formation programs before we can launch. We do not have any available credit,
bank financing or other external sources of liquidity. Due to historical
operating losses, our operations have not been a source of liquidity. We will
need to obtain additional capital in order to continue operations. In order to
obtain capital, we may need to sell additional shares of our common stock or
borrow funds from private lenders. There can be no assurance that we will be
successful in obtaining additional funding.


                                       5

<PAGE>

Management is now engaged in evaluating the feasibility of further limited
offerings or private placements, whether to develop a program for investors
involving royalties or profit participation in actual product sales, with
investments tied to specific products, or whether to attempt to register
securities for sale, pursuant to Section 5 of the SECURITIES ACT OF 1933. It is
the conclusion of management that significant additional capital formation is
necessary to launch operations successfully.

We do not intend to use any employees, with the possible exception of part-time
clerical assistance on an as-needed basis, until we begin to earn revenues from
operations. Outside advisors or consultants will be used only if they can be
obtained for a minimal cost or on a deferred payment basis. Management is
confident that we will be able to operate in this manner as we continue to
develop our business plan during the next twelve months.

We developed software in January, 2006 for the launch of Smart SMS. Expenses of
this Development came to $8,700 during 2006.

We do not anticipate the sale of any significant property, plant or equipment
during the next twelve months. We do not anticipate the acquisition of any
significant property, plant or equipment during the next 12 months, other than
computer equipment and peripherals used in our day-to-day operations. We believe
we have sufficient resources available to meet these acquisition needs.

Cash Requirements and Need for Additional Funds
-----------------------------------------------

We anticipate $1,000,000 cash will be required for the next twelve months to
develop our operations.

We are committed to pay over $250,000.00 in consulting expenses over the next
twelve months for development of our operations. Required management, legal and
professional services during that period are believed capable of being secured
for deferred payment or payment in new investment shares of common stock. The
exception to the previous statement is that our auditor cannot lawfully or
properly be compensated otherwise than by payment for services in cash as billed
by such independent auditor. This cash requirement is foreseen to be not less
than $10,000 or more than $60,000 during the next twelve months. This minimal
funding will be obtained by borrowing, possibly with a guarantee from our
officers, directors or principal shareholder. There is no assurance possible
that even these minimal requirements for cash can be met. The failure to
maintain current auditing of the corporate affairs would result in our failure
to meet our intention to file periodic reports, voluntarily or otherwise, at the
close of our next fiscal year. Management may advance the expenses of our audit,
legal and professional requirements.

Recent Accounting Pronouncements
--------------------------------

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued
FASB Statement No. 123R (revised 2004), "SHARE-BASED PAYMENT" which is a
revision of FASB Statement No. 123, "ACCOUNTING FOR STOCK-BASED COMPENSATION".
Statement 123R supersedes APB opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES", and amends FASB Statement No. 95, "STATEMENT OF CASH FLOWS".
Generally, the approach in Statement 123R is similar to the approach described
in Statement 123. However, Statement 123R requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the
income statement based on their fair values. Pro-forma disclosure is no longer
an alternative. On April 14, 2005, the SEC amended the effective date of the
provisions of this statement. The effect of this amendment by the SEC is that we
will have to comply with Statement 123R and use the Fair Value based method of
accounting no later than the first quarter of 2006. We do not anticipate that
the implementation of this standard will have a material impact on our financial
position, results of operations or cash flows.

On December 16, 2004, FASB issued Statement of Financial Accounting Standards
No. 153, "EXCHANGES OF NONMONETARY ASSETS", an amendment of APB Opinion No. 29,
"ACCOUNTING FOR NONMONETARY TRANSACTIONS" ("SFAS 153"). This statement amends
APB Opinion 29 to eliminate the exception for nonmonetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. Under SFAS 153, if a
nonmonetary exchange of similar productive assets meets a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at fair value resulting in recognition of any gain or loss. SFAS 153 is
effective for nonmonetary transactions in fiscal periods that begin after June
15, 2005. We do not anticipate that the implementation of this standard will
have a material impact on our financial position, results of operations or cash
flows.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "ACCOUNTING FOR
CONDITIONAL ASSET RETIREMENT OBLIGATIONS, AN INTERPRETATION OF FASB STATEMENT
NO. 143," which requires an entity to recognize a liability for the fair value
of a conditional asset retirement obligation when incurred if the liability's
fair value can be reasonably estimated. We are required to adopt the provisions
of FIN 47 no later than the second quarter of our fiscal 2006. We do not expect
the adoption of this Interpretation to have a material impact on our
consolidated financial position, results of operations or cash flows.


                                       6

<PAGE>

In May 2005 the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 154, "Accounting CHANGES AND ERROR CORRECTIONS, A REPLACEMENT OF APB OPINION
NO. 20 AND FASB STATEMENT NO. 3." SFAS 154 requires retrospective application to
prior periods' financial statements for changes in accounting principle, unless
it is impracticable to determine either the period-specific effects or the
cumulative effect of the change. SFAS 154 also requires that retrospective
application of a change in accounting principle be limited to the direct effects
of the change. Indirect effects of a change in accounting principle, such as a
change in non-discretionary profit-sharing payments resulting from an accounting
change, should be recognized in the period of the accounting change. SFAS 154
also requires that a change in depreciation, amortization, or depletion method
for long-lived, non-financial assets be accounted for as a change in accounting
estimate effected by a change in accounting principle. SFAS 154 is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. Early adoption is permitted for accounting changes and
corrections of errors made in fiscal years beginning after the date this
Statement is issued. We do not expect the adoption of this SFAS to have a
material impact on our consolidated financial position, results of operations or
cash flows.

On February 16, 2006 the Financial Accounting Standards Board (FASB) issued SFAS
155, "Accounting for Certain Hybrid Instruments," which amends SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities," and SFAS 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." SFAS 155 allows financial instruments that have embedded
derivatives to be accounted for as a whole (eliminating the need to bifurcate
the derivative from its host) if the holder elects to account for the whole
instrument on a fair value basis. SFAS 155 also clarifies and amends certain
other provisions of SFAS 133 and SFAS 140. This statement is effective for all
financial instruments acquired or issued in fiscal years beginning after
September 15, 2006. The Company does not expect its adoption of this new
standard to have a material impact on its financial position, results of
operations or cash flows.

In March 2006, the FASB issued FASB Statement No. 156, Accounting for Servicing
of Financial Assets - an amendment to FASB Statement No. 140. Statement 156
requires that an entity recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
service contract under certain situations. The new standard is effective for
fiscal years beginning after September 15, 2006. The Company does not expect its
adoption of this new standard to have a material impact on its financial
position, results of operations or cash flows.

In September 2006, the FASB issued SFAS 157, FAIR VALUE MEASUREMENTS , which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles ("GAAP"), and expands disclosures about
fair value measurements. The Company will be required to adopt SFAS 157
effective for the fiscal year beginning April 1, 2008. The requirements of SFAS
157 will be applied prospectively except for certain derivative instruments that
would be adjusted through the opening balance of retained earnings in the period
of adoption. The Company is currently evaluating the impact of the adoption of
SFAS 157 on the Company's consolidated financial statements, and the management
believes that the adoption of SFAS 157 will not have a significant impact on the
Company's consolidated results of operations or financial position.

In September 2006, the SEC issued Staff Accounting Bulletin 108, CONSIDERING THE
EFFECTS OF PRIOR YEAR MISSTATEMENTS WHEN QUANTIFYING MISSTATEMENTS IN CURRENT
YEAR FINANCIAL STATEMENTS (`SAB 108'). SAB 108 provides interpretive guidance on
how the effects of the carryover or reversal of prior year financial statement
misstatements should be considered in quantifying a current year misstatement.
SAB 108 is effective for financial statements covering the first fiscal year
ending after November 15, 2006. The Company does not anticipate any material
impact to its financial condition or results of operations as a result of the
adoption of SAB 108.

In September 2006 the FASB issued its Statement of Financial Accounting
Standards 158 "Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans". This Statement improves financial reporting by requiring
an employer to recognize the overfunded or underfunded status of a defined
benefit postretirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income of a business entity or changes in unrestricted net assets of a
not-for-profit organization. This Statement also improves financial reporting by
requiring an employer to measure the funded status of a plan as of the date of
its year-end statement of financial position, with limited exceptions. The
effective date for an employer with publicly traded equity securities is as of
the end of the fiscal year ending after December 15, 2006. The Company does not
expect adoption of this standard will have a material impact on its financial
position, operations or cash flows.


                                       7

<PAGE>

In December 2006, the FASB issued FSP EITF 00-19-2, Accounting for Registration
Payment Arrangements ("FSP 00-19-2") which addresses accounting for registration
payment arrangements. FSP 00-19-2 specifies that the contingent obligation to
make future payments or otherwise transfer consideration under a registration
payment arrangement, whether issued as a separate agreement or included as a
provision of a financial instrument or other agreement, should be separately
recognized and measured in accordance with FASB Statement No. 5, Accounting for
Contingencies. FSP 00-19-2 further clarifies that a financial instrument subject
to a registration payment arrangement should be accounted for in accordance with
other applicable generally accepted accounting principles without regard to the
contingent obligation to transfer consideration pursuant to the registration
payment arrangement. For registration payment arrangements and financial
instruments subject to those arrangements that were entered into prior to the
issuance of EITF 00-19-2, this guidance shall be effective for financial
statements issued for fiscal years beginning after December 15, 2006 and interim
periods within those fiscal years. The Company does not expect adoption of this
standard will have a material impact on its financial position, operations or
cash flows.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Liabilities" ("SFAS No. 159"). SFAS No. 159 provides
companies with an option to report selected financial assets and liabilities at
fair value, and establishes presentation and disclosure requirements designed to
facilitate comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities. The new guidance is
effective for fiscal years beginning after November 15, 2007. The Company is
currently evaluating the potential impact of the adoption of SFAS No. 159 on its
financial position and results of operations.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF STOCK
---------------------------------------------------------------------

Our business of involves a number of risks and uncertainties that could cause
actual results to differ materially from results projected in any
forward-looking statement, or statements made in this report. These risks and
uncertainties include, but are not necessarily limited to, the risks set forth
below. Our securities are speculative, and investment in our securities involves
a high degree of risk and the possibility that the investor will suffer the loss
of the entire amount invested.

LIMITED OPERATING HISTORY; ANTICIPATED LOSSES; UNCERTAINTY OF FUTURE RESULTS

We were organized in 1997, and have no operating history upon which an
evaluation of our business and prospects can be based. Our prospects must be
evaluated with a view to the risks encountered by a company in an early stage of
development, particularly in light of the uncertainties relating to the
acceptance of our business model.

We will be incurring costs to develop and market our Premium SMS business, to
establish marketing relationships, and to build an administrative organization.
There can be no assurance that we will be profitable on a quarterly or annual
basis. In addition, as we expand our business network and marketing operations,
we will likely need to increase our operating expenses, broaden our customer
support capabilities, and increase our administrative resources. To the extent
that such expenses are not subsequently followed by commensurate revenues, our
business, results of operations and financial condition will be materially
adversely affected.

NEED FOR ADDITIONAL FINANCING

It is likely that revenues from our operations may not be sufficient to finance
our initial operating cost to reach breakeven. As a result, we will need to
raise or find additional capital. While we expect to be able to meet our
financial obligations for approximately the next twelve months, there is no
assurance that, after such period, we will be operating profitably. If we are
not, there can be no assurance that any required capital would be obtained on
terms favorable to us. Failure to obtain adequate additional capital on
favorable terms could result in significant delays in the expansion of new
services and market share and could even result in the substantial curtailment
of existing operations and services to clients.

UNPREDICTABILITY OF FUTURE REVENUES; POTENTIAL FLUCTUATIONS IN QUARTERLY
RESULTS.

As a result of our lack of operating history and the emerging nature of the
market in which we compete, we are unable to forecast our revenues accurately.
Our current and future expense levels are based largely on our
investment/operating plans and estimates of future revenue and are to a large
extent based on our own estimates. Sales and operating results generally depend
on the volume of, timing of, and ability to obtain customers, orders for
services received, and revenues there from generated. These are, by their
nature, difficult at best to forecast.


                                       8

<PAGE>

We may be unable to adjust spending in a timely manner to compensate for any
unexpected revenue shortfall or delay. Accordingly, any significant shortfall or
delay in revenue in relation to our planned expenditures would have an immediate
adverse affect on our business, financial condition, and results of operations.
Further, in response to changes in the competitive environment, we may from time
to time make certain pricing, service, or marketing decisions that could have a
material adverse effect on our business, financial condition, operating results,
and cash flows.

DEVELOPING MARKET; ACCEPTANCE OF THE MOBILE INTERNET AS A MEDIUM FOR BUSINESS
JUST NOW BEING PROVEN.

Our long-term viability is substantially dependent upon the continued widespread
acceptance and use of Premium SMS business in terms of the sales of both
products and services to businesses and individuals. The mobile Internet has
experienced, and is expected to continue to experience, significant growth in
the number of users and amount of traffic. There can be no assurance that the
Internet infrastructure will continue to be able to support the demands placed
on it by this continued growth. In addition, delays in the development or
adoption of new standards and protocols to handle increased levels of Internet
activity or increased governmental regulation could slow or stop the growth of
the Internet as a viable medium for business commerce. Moreover, critical issues
concerning the commercial use of the Internet (including security, reliability,
accessibility and quality of service) remain unresolved and may adversely affect
the growth of Internet use or the attractiveness of its use for business
commerce.

The failure of the necessary infrastructure to further develop in a timely
manner, or the failure of the Internet to continue to develop rapidly as a valid
medium for business would have a material adverse effect on our business,
financial condition, operating results, and cash flows.

UNPROVEN ACCEPTANCE OF THE COMPANY'S SERVICES AND/OR PRODUCTS

We are still in its development stage. As a result, we do not know with any
certainty whether ours services and/or products will be accepted within the
business marketplace. If our services and/or products prove to be unsuccessful
within the marketplace, or if we fail to attain market acceptance, it could
materially adversely affect our financial condition, operating results, and cash
flows.

DEPENDENCE ON KEY PERSONNEL

Our performance and operating results are substantially dependent on the
continued service and performance of our officers and directors. We intend to
hire additional technical, sales, and other personnel as we move forward with
our business model. Competition for such personnel is intense, and there can be
no assurance that we can retain our key technical employees, or that we will be
able to attract or retain highly qualified technical and managerial personnel in
the future. The loss of the services of any of our key employees or our
inability to attract and retain the necessary technical, sales, and other
personnel could have a material adverse effect upon our business, financial
condition, operating results, and cash flows. We do not currently maintain "KEY
MAN" insurance for any of its key employees.

COMPETITION

The online wallpaper, downloading ring tones and music services market in which
we will operate is very competitive. Many competitors have substantially
greater, financial, technical, marketing, and distribution resources than us.

In all of our proposed markets we will compete against a large number of
companies of varying sizes and resources. There are an increasing number of
competitive services and products offered by a growing number of companies.
Increased competition in any service or product area may result in a loss of a
client, reduction in sales revenue, or additional price competition, any of
which could have a material adverse effect on our operating results. In
addition, existing competitors may continue to broaden their service and/or
product lines and other potential competitors may enter or increase their
presence in the online dating market, resulting in greater competition for us.

It is possible that new competitors or alliances among competitors may emerge
and rapidly acquire market share. Increased competition may result in reduced
operating margins and/or loss of market share, either of which could materially
adversely affect our business, results of operations and financial condition.
There can be no assurance that we will be able to compete successfully against
current or future competitors or alliances of such competitors, or that
competitive pressures faced by us will not materially adversely affect our
business, financial condition, operating results and cash flows.


                                       9

<PAGE>

RISKS OF POTENTIAL GOVERNMENT REGULATION AND OTHER LEGAL UNCERTAINTIES RELATING
TO THE INTERNET

We are not currently subject to direct federal, state, or local regulation in
the United States and Canada other than regulations applicable to businesses
generally or directly applicable to electronic commerce. However, because the
Internet is becoming increasingly popular, it is possible that a number of laws
and regulations may be adopted with respect to the Internet. These laws may
cover issues such as user privacy, freedom of expression, pricing, content, and
quality of products and services, taxation, advertising, intellectual property
rights and information security. Furthermore, the growth of electronic commerce
may prompt calls for more stringent consumer protection laws. The adoption of
such consumer protection laws could create uncertainty in Internet usage and
reduce the demand for all products and services.

In addition, we are not certain how our business may be affected by the
application of existing laws governing issues such as property ownership,
copyrights, encryption, and other intellectual property issues, taxation, libel,
obscenity, and export or import matters. It is possible that future applications
of these laws to our business could reduce demand for our products and services
or increases the cost of doing business as a result of litigation costs or
increased service delivery costs.

Because our services will likely be available over the Internet in multiple
states, and possibly foreign countries, other jurisdictions may claim that we
are required to qualify to do business and pay taxes in each state or foreign
country. Our failure to qualify in other jurisdictions when we are required to
do so could subject us to penalties and could restrict our ability to enforce
contracts in those jurisdictions. The application of laws or regulations from
jurisdictions whose laws do not currently apply to our business may have a
material adverse affect on our business, results of operations and financial
condition.

INTELLECTUAL PROPERTY RIGHTS

As part of our confidentiality procedures, we expect to enter into nondisclosure
and confidentiality agreements with our key employees and any consultants and/or
business partners and will limit access to and distribution of our technology,
documentation, and other proprietary information.

Despite our efforts to protect any intellectual property rights we may have,
unauthorized third parties, including competitors, may from time to time copy or
reverse-engineer certain portions of our technology and use such information to
create competitive services and/or products.

It is possible that the scope, validity, and/or enforceability of our
intellectual property rights could be challenged by other parties, including
competitors. The results of such challenges before administrative bodies or
courts depend on many factors, which cannot be accurately assessed at this time.
Unfavorable decisions by such administrative bodies or courts could have a
negative impact on our intellectual property rights. Any such challenges,
whether with or without merit, could be time consuming, result in costly
litigation and diversion of resources, and cause service or product delays. If
such events should occur our business, operating results and financial condition
could be materially adversely affected.

ITEM 7.  FINANCIAL STATEMENTS.

Set forth below at pages F-1 through F-32 are the financial statements and notes
to financial statements that have been prepared in accordance with Item 310 of
Regulation S-B.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

None. Management has used the accounting firm of Russell Bedford Stefanou &
Mirchandani LLP, or its predecessors during the two most recent fiscal years.
There have been no changes in accountants or disagreements with accountants on
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures.

ITEM 8A. CONTROLS AND PROCEDURES.

(a)      As of the end of the period covered by this report, the Chief Executive
         Officer and the Chief Financial Officer made an evaluation of our
         disclosure controls and procedures (as defined in ss.240.13a-15(e) or
         240.15d-15(e) of the SECURITIES EXCHANGE ACT). Based on the evaluation
         of these controls and procedures required by paragraph (b) of Rule
         13a-15 or 15d-15 under the Exchange Act, in his opinion, the disclosure
         controls and procedures are effective.

(b)      During the most recent fiscal year, there have not been any changes in
         our internal controls over financial reporting or in other factors that
         have materially affected, or are reasonably likely to materially
         affect, our internal controls over financial reporting.

ITEM 8B.  OTHER INFORMATION.

None.


                                       10

<PAGE>

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

(a)      The following table furnishes the information concerning our directors
         and officers as of December 31, 2006. Our directors are elected every
         year and serve until their successors are elected and qualify.

<TABLE>
         NAME                 AGE      TITLE                                                    TERM
<S>                            <C>     <C>                                                      <C>
         GORDON F. LEE         59      Chief Executive Officer, Secretary, CFO, Director        Annual
</TABLE>

         The following table sets forth the portion of their time the Officers
         and Directors devote to the Company:

                  Gordon Lee                   75%

         The term of office for each director is one (1) year, or until his/her
         successor is elected at our annual meeting and is qualified. The term
         of office for each officer is at the pleasure of the board of
         directors.

         The board of directors does not have a nominating committee. Therefore,
         the selection of persons or election to the board of directors was
         neither independently made nor negotiated at arm's length.

(b) Identification of Certain Significant Employees.

         Our directors and executive officers handle strategic matters and
         critical decisions.

(c) Family Relationships.

         None

(d) Business Experience.

         The following is a brief account of the business experience of each
         director and executive officer of the Company, including principal
         occupations and employment during that period and the name and
         principal business of any corporation or other organization in which
         such occupation and employment were carried on.

         GORDON F. LEE has been our chief executive officer, chief financial
         officer, secretary and sole Director since March 28, 2000. From 1991 to
         March 1998, Mr. Lee served as the President of USA Video Corporation,
         one of the first companies to offer video on demand and high quality
         digitizing and compression services. From March 1998 to March 1999, Mr.
         Lee served as the President of Glassmaster Industries, a company
         working on the development of a bullet resistant glass coating
         technology, which was eventually sold off to other companies for
         commercial development. From March 1999 through the present, Mr. Lee
         has served as President of Bentley Commerce Corp., a barter company.
         From March 2000 to present, Mr. Lee continues to serve as Bentley's CFO
         and Chairman. Mr. Lee has also served in the past five years on the
         Board of Directors of companies such as Laser Vision Inc. and Future
         Media Technologies.

(e)      Directors' Compensation

         Directors who are also officers of the registrant do not receive cash
         compensation for services as a director.

(f)      Audit Committee Financial Experts

         We do not have an audit committee financial expert serving on its audit
         committee as we are still in the development stage.

(g)      Involvement in Legal Proceedings

         During the past five years, no director or officer has been:

         o        a general partner or executive officer of a business against
                  which a bankruptcy petition was filed;

         o        convicted in a criminal proceeding or is currently subject to
                  a pending criminal proceeding;

         o        subject to any order, judgment or decree of any court of
                  competent jurisdiction permanently or temporarily enjoining,
                  barring, suspending him/her from, or otherwise limiting
                  his/her involvement in, any type of business, securities or
                  banking activities; or

         o        found by a court of competent jurisdiction (in a civil
                  action), the SEC or the Commodity Futures Trading Commission
                  to have violated a federal or state securities or commodities
                  law.


                                       11

<PAGE>

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the SECURITIES EXCHANGE ACT OF 1934, as amended (the "EXCHANGE
ACT"), requires the registrant's officers and directors, and persons who own
more than 10% of a registered class of the registrant's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
registrant with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than 10% shareholders are required by the Securities and
Exchange Commission regulation to furnish to registrant with copies of all
Section 16(a) documents they file.

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the registrant under Rule 16-a-3(e) and Form 5 and amendments thereto furnished
to the registrant with respect to its most recent fiscal year, and any
representation referred to in paragraph (b)(2)(i) of Item 405 of Regulation S-B,
management believes all required reports were made during the fiscal year ended
December 31, 2005.

CODE OF ETHICS

We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. Such code of ethics will be
provided to any person without charge upon request, by sending such request to
us at our principal office.

ITEM 10.  EXECUTIVE COMPENSATION.

(a) Compensation.

This table sets forth all compensation paid by us for all services provided up
to December 31, 2005 to each of our executive officers.

<TABLE>
<S>     <C>
                                                                           LONG TERM COMPENSATION
                            SUMMARY COMPENSATION                       AWARDS                    PAYOUTS
                               ANNUAL COMPENSATION
                                                   OTHER                    SECURITIES
    NAME AND                                      ANNUAL      RESTRICTED    UNDERLYING               ALL OTHER
    PRINCIPAL                                     COMPEN-       STOCK      OPTIONS/SARS     LTIP      COMPEN-
    POSITION       YEAR     SALARY      BONUS     SATION       AWARD(S)         (#)        PAYOUTS    SATION
                               $          $          $            $              $            $          $

LEE, GORDON
CEO, CFO,
SECRETARY &        2006       -0-        -0-        -0-          -0-            -0-          -0-         -0-
DIRECTOR           2005       -0-        -0-        -0-          -0-            -0-          -0-         -0-

</TABLE>


                                       12

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

(a)      This table sets out beneficial owners of five percent (5%) or greater
         of our common stock. The following sets forth information with respect
         to ownership by holders of more than five percent (5%) of our common
         stock known by the registrant based upon 2,933,714 shares of common
         stock outstanding at December 31, 2005.

<TABLE>
<S>     <C>
                                  NAME AND ADDRESS OF
 TITLE OF CLASS                    BENEFICIAL OWNER                          INTEREST          PERCENTAGE OF CLASS
----------------- ---------------------------------------------------- ---------------------   --------------------

                  GORDON F. LEE
Common            11301 Olympic Boulevard, Suite 680
                  Los Angeles, CA   90064                                      703,900              8.8%

All Directors and Officers as a group                                          703,900              8.8%

b)       The following table sets forth information with respect to our Series A
         Convertible Preferred stock beneficially owned by each officer and
director at December 31, 2006.

                                  NAME AND ADDRESS OF
 TITLE OF CLASS                    BENEFICIAL OWNER                          INTEREST          PERCENTAGE OF CLASS
----------------- ---------------------------------------------------- ---------------------   --------------------

                  GORDON F. LEE
Series A          11301 Olympic Boulevard, Suite 680
Preferred         Los Angeles, CA   90064                                      550,000               75.3%

</TABLE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company's officer and principal shareholders have advanced funds to the
Company for working capital purposes year ended December 31, 2005 and December
31, 2004. No formal repayment terms or arrangements exist. The Chief Operating
Officer has signed a statement that he has not advanced any funds to the Company
in 2006.

In June 2004, the Company purchased 7,000 shares of previously issued common
stock from its Chief Executive Officer in exchange for a promissory note in the
amount of $175,000. The promissory note was payable on demand and non-interest
bearing. The Company canceled the 7,000 shares of common stock upon the return
of shares by its Chief Executive Officer.

In March 2005, the Company issued an aggregate of 462,750 shares of common
stock, fair valued at $1,156,875, to its Chief Executive Officer in exchange for
the previously issued note payable of $175,000 and repayment of officer advances
in the amount of $100,435. The remaining $881,440 was accounted for as officer
compensation and charged to operations in March 2005.

Additionally, during the year ended December 31, 2005, the Company's Chief
Executive Officer personally settled $60,000 of stock subscription payable with
an investor on behalf of the Company. The Company accounted for the $60,000 of
stock subscription settled by its Chief Executive Officer as advances from
officers. In November 2005, the Company issued an aggregate of 300,000 shares of
the Series A preferred stock to its Chief Executive Officer in settling all of
the officer advances, management and director fees and liabilities due to the
officer as of November 2005, and each share of the preferred stock is
convertible to one hundred shares of the Company's common stock. The converted
common shares are subject to stock split adjustment. The fair value of the
preferred stock at issuance, based on the underlying common stock, was
approximated $960,000. The issuance of preferred shares to the Company's Chief
Executive Officer settled an aggregate of $257,728 of officer advances, and the
remaining $702,272 was accounted for officer compensation and was charged to
operations in November 2005.

At December 31, 2005, the Company has no liabilities due to its officers, and
total amount due to other shareholders was $5,490. At December 31, 2006, the
Company has no liabilities due to its officers, and total amount due to other
Shareholders was $14,000.


                                       13

<PAGE>

ITEM 13.  EXHIBITS.

The exhibits listed below are furnished in accordance with Item 601 of
Regulation S-B.

EXHIBIT
NUMBER                               DESCRIPTION
--------------------------------------------------------------------------------
3.1          Articles of Amendment and Articles of Incorporation (1)
3.2          By-laws of the registrant (1)
3.3          Articles of Amendment (Name change to Smart SMS Corp. and increase
               authorized shares) (8)
4.1          Designation of the Series A Convertible Preferred Stock (8)
10.1         July 2003 Non-Qualified Stock & Stock Option Plan (2)
10.2         2004 Non-Qualified Stock & Stock Option Plan (3)
10.3         October 2004 Non-Qualified Stock & Stock Option Plan (4)
10.4         License Agreement dated October 25, 2004 with Omni Media
               Distribution, Inc. (6)
10.5         Employment Agreement with Gordon F. Lee (7)
14           Code of Ethics (5)
31.1         Certification of the Chief Executive Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002
31.2         Certification of the Chief Financial Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002
32.1         Certification of the Chief Executive Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002
32.2         Certification of the Chief Financial Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002

(1)   Incorporated by reference from the Company's registration statement on
      Form 10-SB filed September 15, 2000, SEC File No. 0-31541, Accession No.
      1019687-0-1308.
(2)   Incorporated by reference from the Company's registration statement on
      Form S-8 filed July 25, 2003, SEC File No. 333-107366, Accession No.
      1019687-3-1516.
(3)   Incorporated by reference from the Company's registration statement on
      Form S-8 filed April 16, 2004, SEC File No. 333-114539, Accession No.
      1019687-4-828.
(4)   Incorporated by reference from the Company's registration statement on
      Form S-8 filed October 8, 2004, SEC File No. 333-119614, Accession No.
      1019687-4-2212.
(5)   Incorporated by reference from the Company's Form 10-KSB filed March 29,
      2004, SEC File No. 0-31541, Accession No. 1019687-4-622.
(6)   Incorporated by reference from the Company's Form 8-K filed November 3,
      2004, SEC File No. 0-31541, Accession No. 1019687-4-2381.
(7)   Incorporated by reference from the Company's Form 10-QSB filed November
      15, 2004, SEC File No. 0-31541, Accession No. 1019687-4-2502.
(8)   Incorporated by reference from the Company's Form 8-K filed December 2,
      2005, SEC File No. 0-31541, Accession No. 1019687-5-3319.


                                       14

<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(1)      Audit Fees

         The aggregate fees billed for each of the last two fiscal years for
         professional services rendered by the principal accountant for the
         audit of our annual financial statements and review of financial
         statements included in our Form 10-KSB or services that are normally
         provided by the accountant in connection with statutory and regulatory
         filings or engagements for those fiscal years was $30,500 and $52,500,
         respectively.

(2)      Audit-Related Fees

         There were no fees billed in each of the last two fiscal years for
         assurance and related services by the principal accountant that are
         reasonably related to the performance of the audit or review of our
         financial statements and not reported under Item 1.

(3)      Tax Fees

         There were no fees for professional services rendered by the principal
         accountant for tax compliance, tax advice and tax planning during the
         last two fiscal years.

(4)      All Other Fees

         There were no fees for products and services provided by the principal
         accountant, other than services listed in Items 1 to 3 above, during
         the last two fiscal years.

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

We currently do not have a designated Audit Committee, and accordingly, our
Board of Directors' policy is to pre-approve all audit and permissible non-audit
services provided by the independent auditors. These services may include audit
services, audit-related services, tax services and other services. Pre-approval
is generally provided for up to one year and any pre-approval is detailed as to
the particular service or category of services and is generally subject to a
specific budget. The independent auditors and management are required to
periodically report to our Board of Directors regarding the extent of services
provided by the independent auditors in accordance with this pre-approval, and
the fees for the services performed to date. The Board of Directors may also
pre-approve particular services on a case-by-case basis.


                                       15

<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

November 30, 2007

                                     SMART SMS CORP.



                                     By: /s/ STEAPHAN WEIR
                                         -----------------
                                     Name:  STEAPHAN WEIR
                                     Title: Chief Executive Officer,
                                            Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.


                                     By: /s/ STEAPHAN WEIR
                                         -----------------
                                     Name:  STEAPHAN WEIR
                                     Title: Chief Executive Officer,
                                            Chief Financial Officer & Director
                                     November 30, 2007


                                       16

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2006 AND 2005

                         FORMING A PART OF ANNUAL REPORT
                 PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)






<page>


<TABLE>
<CAPTION>
                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT STAGE COMPANY

                          INDEX TO FINANCIAL STATEMENTS


                                                                                             PAGE
                                                                                             ----
<S>                                                                                             <C>
Report of Registered Independent Certified Public Accounting Firm.............................F-3

Consolidated Balance Sheets at December 31, 2006 and 2005.....................................F-4

Consolidated Statements of Losses for the years ended December 31, 2006 and 2005
and for the period June 3, 1997 (date of inception) to December 31, 2006......................F-5

Consolidated Statements of Deficiency in Stockholders' Equity for the period
June 3, 1997 (date of inception) to December 31, 2006..................................F-6 - F-15

Consolidated Statements of Cash Flows for the years ended December 31, 2006 and 2005
and for the period June 3, 1997 (date of inception) to December 31, 2006.....................F-16

Notes to Consolidated Financial Statements.............................................F-17- F-32
</TABLE>

<page>

                                    RBSM LLP
                          CERTIFIED PUBLIC ACCOUNTANTS



        REPORT OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM


Board of Directors
Smart SMS Corp
(formerly American IDC Corp.)
Los Angeles, CA 90064


We have audited the accompanying consolidated balance sheets of Smart SMS Corp.
(formerly American IDC Corp.), a development stage company, as of December 31,
2006 and 2005 and the related consolidated statements of losses, deficiency in
stockholders' equity and cash flows for the years then ended and for the period
June 3, 1997 (date of inception) through December 31, 2006. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based upon
our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Smart SMS Corp. as
of December 31, 2006 and 2005, and the results of its operations and its cash
flows for the years then ended and from June 3, 1997 (date of inception) to
December 31, 2006, in conformity with accounting principles generally accepted
in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in the Note I to the
accompanying financial statements, the Company is in the development stage and
has not established a source of revenues. This raises substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to this matter are described in Note I. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


                                               /s/ RBSM LLP
                                               ------------
                                                   RBSM LLP
                                                   Certified Public Accountants

McLean, Virginia
November 20, 2007



                                       F-3

<page>

<TABLE>

                                                  SMART SMS CORP.
                                           (FORMERLY AMERICAN IDC CORP.)
                                            A DEVELOPMENT STAGE COMPANY
                                            CONSOLIDATED BALANCE SHEETS
                                             DECEMBER 31, 2006 AND 2005

                                                                                        2006              2005
                                                                                    ------------      ------------
<S>                                                                                 <C>               <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                           $        330      $       --
                                                                                    ------------      ------------

Total Assets                                                                        $        330      $       --
                                                                                    ============      ============

LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Cash disbursed in excess of available funds                                         $       --        $        192

Accounts payable and accrued liabilities                                                 250,163           308,870

Convertible debenture (Note C)                                                            10,000            10,000

Other advances                                                                            50,500            36,800

Advances from related party (Note D)                                                       9,968             5,490
                                                                                    ------------      ------------

Total current Liabilities                                                                320,631           361,352

COMMITMENTS AND CONTINGENCIES

(DEFICIENCY IN) STOCKHOLDERS' EQUITY
Preferred stock, par value $0.001 per share; authorized 25,000,000 (Note D & J):
Preferred stock, series A; par value $0.001 per share; authorized 10,000,000
  shares; 730,000 and 320,000 issued and outstanding as of December 31, 2006 and
  2005, respectively (Liquidation value of $1,460,000 and $640,000 as of December
  31, 2006, 2005, respectively), (Note D)                                                    730               320
Common stock, $0.001 par value; authorized 75,000,000 shares;
  8,139,644 and 2,933,714 shares issued and outstanding as of
  December 31, 2006 and 2005, respectively (Note J)                                        8,140             2,934

Additional paid in capital (Note D)                                                   24,177,671        11,334,697

Common stock subscriptions (Note D)                                                       12,100            67,078

Deferred compensation (Note D)                                                          (189,667)         (557,315)

Accumulated deficit during development stage                                         (24,329,275)      (11,209,066)
                                                                                    ------------      ------------

(Deficiency in) stockholders' equity                                                    (320,301)         (361,352)

Total liabilities and (deficiency in) stockholders' equity                          $        330      $       --
                                                                                    ============      ============

The accompanying notes are an integral part of the consolidated financial statements
</TABLE>

                                                        F-4

<page>

<TABLE>
<CAPTION>


                                          SMART SMS CORP.
                                   (FORMERLY AMERICAN IDC CORP.)
                                    A DEVELOPMENT STAGE COMPANY
                                 CONSOLIDATED STATEMENTS OF LOSSES

                                                                                  For the period from
                                                                                 June 3, 1997 (date of
                                                     Year ended December 31,      inception) through
                                                    2006               2005        December 31, 2006
                                                 ------------      ------------      ------------
<S>                                              <C>               <C>               <C>
Operating expenses:
Selling, general and administrative              $ 13,119,609      $  5,616,713      $ 23,828,675

Impairment loss                                          --                --             523,000
                                                 ------------      ------------      ------------

  Total operating expenses                         13,119,609         5,616,713        24,351,675


Loss from operations                              (13,119,609)       (5,616,713)      (24,351,675)

Other income (expense)                                                                     33,000

Interest (expense), net                                  (600)          (10,000)          (10,600)
                                                 ------------      ------------      ------------


Net income before provision for income taxes      (13,120,209)       (5,626,713)      (24,329,275)


Provision for income taxes                               --                --                --
                                                 ------------      ------------      ------------

NET LOSS                                         $(13,120,209)     $ (5,626,713)     $(24,329,275)
                                                 ============      ============      ============

Loss per common share (basic and assuming
dilution)
                                                 $      (2.43)     $      (3.00)
                                                  ============      ============
Weighted average common shares outstanding
(basic and assuming dilution)                       5,405,577         1,876,332
                                                  ============      ============

The accompanying notes are an integral part of the consolidated financial statements
</TABLE>

                                                F-5


<page>


<TABLE>
<CAPTION>

                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                   CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006



                                                                                                                        Common
                                                   Preferred stock              Common stock           Additional       Stock
                                                 Shares         Amount      Shares        Amount     Paid in Capital Subscription
                                               ------------     ------     --------      --------      -----------     -------
<S>                                                             <C>          <C>         <C>           <C>             <C>
Common stock issued to founders in June
1997 for services at $0.04 per share
(Note D)                                               --       $ --         50,000      $     50      $     1,950     $  --

Net loss                                               --         --           --            --               --          --
                                               ------------     ------     --------      --------      -----------     -------

Balance, December 31, 1997                             --         --         50,000            50            1,950        --

Net loss                                               --         --           --            --               --          --
                                               ------------     ------     --------      --------      -----------     -------

Balance, December 31, 1998                             --         --         50,000            50            1,950        --

Net loss                                               --         --           --            --               --          --
                                               ------------     ------     --------      --------      -----------     -------

Balance, December 31, 1999                             --         --         50,000            50            1,950        --
Common stock issued in September 2000 in
exchange for services rendered at $10.00
per share (Note D)                                     --         --          1,000             1            9,999        --

Net loss                                               --         --           --            --               --          --
                                               ------------     ------     --------      --------      -----------     -------

Balance, December 31, 2000                             --         --         51,000            51           11,949        --
Common stock issued in December 2001 in
exchange for services rendered at $75.00
per share (Note D)                                     --         --          1,000             1           74,999        --

Net loss                                               --         --           --            --               --          --
                                               ------------     ------     --------      --------      -----------     -------

Balance, December 31, 2001                             --       $ --         52,000      $     52      $    86,948     $  --
                                               ============     ======     ========      ========      ===========     =======


[Table continued]

<PAGE>

                                                                      Deficit
                                                                    Accumulated
                                                                      During
                                                     Deferred       Development
                                                   Compensation        Stage           Total
                                                  -------------     ------------     -----------

Common stock issued to founders in June
1997 for services at $0.04 per share
(Note D)                                          $        --       $       --       $     2,000

Net loss                                                   --             (2,000)         (2,000)
                                                  -------------     ------------     -----------

Balance, December 31, 1997                                 --             (2,000)           --

Net loss                                                   --               --              --
                                                  -------------     ------------     -----------

Balance, December 31, 1998                                 --             (2,000)           --

Net loss                                                   --               (800)           (800)
                                                  -------------     ------------     -----------

Balance, December 31, 1999                                 --             (2,800)           (800)
Common stock issued in September 2000 in
  exchange for services rendered at $10.00
  per share (Note D)                                       --               --            10,000

Net loss                                                   --            (15,710)        (15,710)
                                                  -------------     ------------     -----------

Balance, December 31, 2000                                 --            (18,510)         (6,510)
Common stock issued in December 2001 in
exchange for services rendered at $75.00
per share (Note D)                                         --               --            75,000

Net loss                                                   --            (41,313)        (41,313)
                                                  -------------     ------------     -----------

Balance, December 31, 2001                        $        --       $    (59,823)    $    27,177
                                                  =============     ============     ===========


The accompanying notes are an integral part of the consolidated financial statements
</TABLE>
                                                                F-6


<page>

<TABLE>
<CAPTION>

                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                   CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006



                                                                                                                         Common
                                                   Preferred stock             Common stock            Additional        Stock
                                                 Shares       Amount        Shares        Amount    Paid in Capital   Subscription
                                                 ------       ------        ------        ------    ---------------   ------------
<S>                                                        <C>              <C>        <C>             <C>           <C>
Balance, December 31, 2001                        --       $    --          52,000     $      52       $  86,948     $    --
Common stock issued in July 2002 in
exchange for services rendered at $50.00
per share (Note D)                                --            --           3,000             3         149,997          --
Common stock issued in October 2002 in
exchange for services rendered at $85.00
per share (Note D)                                --            --           3,000             3         254,997          --
Sale of common stock in October 2002 at
$30.00 per share, net (Note D)                    --            --           1,000             1          29,989          --
Common stock issued in November 2002 in
exchange for services rendered at $35.00
per share (Note D)                                --            --           1,100             1          38,499          --
Common stock issued in December 2002 in
exchange for services rendered at $43.00
per share (Note D)                                --            --           2,400             2         103,198          --
Sale of common stock in December 2002 at
$25.00 per share (Note D)                         --            --           1,000             1          24,999       (20,000)
Issuance of stock options in exchange for
services rendered                                 --            --            --            --            51,900          --

Net loss                                          --            --            --            --              --            --
                                                ------     ---------     ---------     ---------       ---------     ---------

Balance, December 31, 2002                        --       $    --          63,500       $    63        $ 740,527      $(20,000)
                                                ======     =========     =========     =========       =========     =========


[Table continued]
<PAGE>


                                                                  During
                                                  Deferred      Development
                                                Compensation       Stage           Total
                                                ------------       -----           -----

Balance, December 31, 2001                      $    --        $ (59,823)     $  27,177
Common stock issued in July 2002 in
exchange for services rendered at $50.00
per share (Note D)                                   --             --          150,000
Common stock issued in October 2002 in
exchange for services rendered at $85.00
per share (Note D)                                   --             --          255,000
Sale of common stock in October 2002 at
$30.00 per share, net (Note D)                       --             --           29,990
Common stock issued in November 2002 in
exchange for services rendered at $35.00
per share (Note D)                                   --             --           38,500
Common stock issued in December 2002 in
exchange for services rendered at $43.00
per share (Note D)                                   --             --          103,200
Sale of common stock in December 2002 at
$25.00 per share (Note D)                            --             --            5,000
Issuance of stock options in exchange for
services rendered                                    --             --           51,900

Net loss                                             --         (797,069)      (797,069)
                                                ---------      ---------      ---------

Balance, December 31, 2002                           --        $ (856,892)     $ 136,302)
                                                =========      =========      =========


The accompanying notes are an integral part of the consolidated financial statements
</TABLE>




                                                                F-7




<page>

<TABLE>
<CAPTION>
                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                   CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006




                                                                                                             Additional
                                                  Preferred stock                 Common stock                Paid in
                                                Shares       Amount           Shares          Amount          Capital
                                               -------     -----------      ----------     -----------      -----------

<S>                                                        <C>                  <C>        <C>              <C>
Balance, December 31, 2002                        --       $      --            63,500     $        63      $   740,527
Common stock issued in January 2003 in
exchange for services rendered at
approximately $30.00 per share(Note D)            --              --             4,950               5          149,658
Common stock issued in March 2003 in
exchange for services rendered at
approximately $3.00 per share (Note D)            --              --            13,000              13           38,987
Common stock issued in March 2003 in
exchange for startup costs at $3.00 per
share (Note D)                                    --              --            20,000              20           59,980
Common stock issued in May 2003 in
exchange for services rendered at
approximately $3.00 per share (Note D)            --              --            15,100              15           45,285
Common stock issued in June 2003 in
exchange for services rendered at
approximately $3.00 per share (Note D)            --              --             4,100               4           12,296
Common stock issued in June 2003 in
exchange for startup costs at $3.00 per
share (Note D)                                    --              --            12,000              12           35,988
Sale of common stock in July 2003 at $5.00
per share, net of costs (Note D)                  --              --             1,000               1            4,999
                                               -------     -----------      ----------     -----------      -----------

 Sub-total                                        --       $      --           133,650     $       133      $ 1,087,720
                                               =======     ===========      ==========     ===========      ===========


[Table continued]
<PAGE>


                                                                                 Accumulated
                                                  Common                           During
                                                  Stock         Deferred         Development
                                               Subscription   Compensation          Stage            Total
                                                 ---------     -------------     ------------     ------------

Balance, December 31, 2002                       $ (20,000)    $        --       $   (856,892)    $   (136,302)
Common stock issued in January 2003 in
exchange for services rendered at
approximately $30.00 per share(Note D)                --                --               --            149,663
Common stock issued in March 2003 in
exchange for services rendered at
approximately $3.00 per share (Note D)                --                --               --             39,000
Common stock issued in March 2003 in
exchange for startup costs at $3.00 per
share (Note D)                                        --                --               --             60,000
Common stock issued in May 2003 in
exchange for services rendered at
approximately $3.00 per share (Note D)                --                --               --             45,300
Common stock issued in June 2003 in
exchange for services rendered at
approximately $3.00 per share (Note D)                --                --               --             12,300
Common stock issued in June 2003 in
exchange for startup costs at $3.00 per
share (Note D)                                        --                --               --             36,000
Sale of common stock in July 2003 at $5.00
per share, net of costs (Note D)                      --                --               --              5,000
                                                 ---------     -------------     ------------     ------------

 Sub-total                                       $ (20,000)    $        --       $   (856,892)    $    210,961
                                                 =========     =============     ============     ============


The accompanying notes are an integral part of the consolidated financial statements
</TABLE>
                                                                F-8

<page>

<TABLE>
<CAPTION>


                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                   CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006




                                                                                                     Additional         Common
                                               Preferred stock              Common stock              Paid in           Stock
                                              Shares     Amount         Shares         Amount          Capital       Subscription
                                               -----     -------     -----------     -----------     -----------     -----------

<S>                                                      <C>             <C>         <C>             <C>             <C>
Balance forward                                 --       $  --           133,650     $       133     $ 1,087,720     $   (20,000)
Common stock issued in July 2003 in
exchange for services rendered at $11.00
per share (Note D)                              --          --            67,290              67         762,761            --
Common stock issued in August 2003 in
exchange for services rendered at $7.00
per share (Note D)                              --          --            13,970              14          99,511            --
Common stock issued in September 2003 in
exchange for related party debt at $ 5.00
per share (Note D)                              --          --             2,300               2          11,498            --
Common stock issued in September 2003 in
exchange for services rendered at $6.00
per share (Note D)                              --          --             3,350               4          17,883            --
Common stock issued in October 2003 in
exchange for services rendered at $5.00
per share (Note D)                              --          --             1,720               2           7,898            --
Sale of common stock in November 2003 at
$6.00 per share, net of costs (Note D)          --          --             1,000               1           5,999            --
Common stock issued in December 2003 in
exchange for services rendered at $10.00
per share (Note D)                              --          --             2,360               3          23,597            --

Common stock subscription                       --          --              --              --              --            92,100
Issuance of stock options in exchange for
services rendered                               --          --              --              --            21,080            --

Net loss                                        --          --              --              --              --              --
                                               -----     -------     -----------     -----------     -----------     -----------

Balance, December 31, 2003                      --      $   --           225,640     $       226     $ 2,037,947     $    72,100
                                               =====     =======     ===========     ===========     ===========     ===========

[Table continued]
<PAGE>

                                                                    During
                                                  Deferred        Development
                                                 Compensation        Stage            Total
                                                  -----------     -----------      -----------

Balance forward                                   $      --       $  (856,892)     $   210,961
Common stock issued in July 2003 in
exchange for services rendered at $11.00
per share (Note D)                                       --              --            762,828
Common stock issued in August 2003 in
exchange for services rendered at $7.00
per share (Note D)                                       --              --             99,525
Common stock issued in September 2003 in
exchange for related party debt at $ 5.00
per share (Note D)                                       --              --             11,500
Common stock issued in September 2003 in
exchange for services rendered at $6.00
per share (Note D)                                       --              --             17,887
Common stock issued in October 2003 in
exchange for services rendered at $5.00
per share (Note D)                                       --              --              7,900
Sale of common stock in November 2003 at
$6.00 per share, net of costs (Note D)                   --              --              6,000
Common stock issued in December 2003 in
exchange for services rendered at $10.00
per share (Note D)                                       --              --             23,600

Common stock subscription                                --              --             92,100
Issuance of stock options in exchange for
services rendered                                        --              --             21,080

Net loss                                                 --        (1,685,647)      (1,685,647)
                                                  -----------     -----------      -----------

Balance, December 31, 2003                        $      --       $(2,542,539)     $  (432,266)
                                                  ===========     ===========      ===========


The accompanying notes are an integral part of the consolidated financial statements
</TABLE>

                                                               F-9



<page>

<TABLE>
<CAPTION>

                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                   CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006



                                                                                                       Additional          Common
                                               Preferred stock             Common stock                 Paid in            Stock
                                             Shares      Amount        Shares           Amount          Capital        Subscription
                                              -----     --------     -----------      -----------      -----------      -----------

<S>                                                    <C>              <C>          <C>              <C>              <C>
Balance, December 31, 2003                      --     $   --           225,640      $       226      $ 2,037,947      $    72,100
Common stock issued in February 2004 in
exchange for services rendered at $3.00
per share (Note D)                              --         --            82,000               82          253,918             --
Common stock issued in March 2004 in
exchange for services rendered at $7.00
per share (Note D)                              --         --             2,150                2           15,288             --
Issuance of stock options in exchange for
services rendered                               --         --              --               --             96,320             --
Common stock issued in April 2004 in
exchange for services rendered at $5.00
per share (Note D)                              --         --            18,450               18           89,282             --
Common stock issued in April 2004 in
exchange for related party advances at
$3.00 per share (Note D)                        --         --            13,553               14           40,645             --
Common stock issued in April 2004 in
exchange for license fee at $6.00 per
share (Note D)                                  --         --            10,000               10           59,990             --
Common stock issued in May 2004 in
exchange for services rendered at
approximately $9.00 per share (Note D)          --         --            20,455               20          177,975             --
Sale of common stock in June 2004 at
$6.00 per share, net of costs (Note D)          --         --             2,500                3           14,997             --
Common stock issued in June 2004 in
exchange for services rendered at $8.00
per share (Note D)                              --         --             3,916                4           29,496             --
Common stock cancelled previously issued
to related party for services rendered in
prior year (Note B)                             --         --            (7,000)              (7)        (174,993)            --
                                              -----     --------     -----------      -----------      -----------      -----------

Subtotal                                        --     $   --           371,664      $       372      $ 2,640,865      $    72,100
                                              =====     ========     ===========      ===========      ===========      ===========


[Table continued]
<PAGE>

                                                               Deficit
                                                             Accumulated
                                                               During
                                                 Deferred    Development
                                                Compensation    Stage             Total
                                                 --------     -----------      -----------

Balance, December 31, 2003                      $   --       $(2,542,539)     $  (432,266)
Common stock issued in February 2004 in
exchange for services rendered at $3.00
per share (Note D)                                  --              --            254,000
Common stock issued in March 2004 in
exchange for services rendered at $7.00
per share (Note D)                                  --              --             15,290
Issuance of stock options in exchange for
services rendered                                   --              --             96,320
Common stock issued in April 2004 in
exchange for services rendered at $5.00
per share (Note D)                                  --              --             89,300
Common stock issued in April 2004 in
exchange for related party advances at
$3.00 per share (Note D)                            --              --             40,659
Common stock issued in April 2004 in
exchange for license fee at $6.00 per
share (Note D)                                      --              --             60,000
Common stock issued in May 2004 in
exchange for services rendered at
approximately $9.00 per share (Note D)              --              --            177,995
Sale of common stock in June 2004 at
$6.00 per share, net of costs (Note D)              --              --             15,000
Common stock issued in June 2004 in
exchange for services rendered at $8.00
per share (Note D)                                  --              --             29,500
Common stock cancelled previously issued
to related party for services rendered in
prior year (Note B)                                 --              --           (175,000)
                                                 --------     -----------      -----------

Subtotal                                        $   --       $(2,542,539)     $   170,798
                                                 ========     ===========      ===========


The accompanying notes are an integral part of the consolidated financial statements
</TABLE>
                                                               F-10


<page>

<TABLE>
<CAPTION>


                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                   CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006



                                                                                                            Additional
                                                   Preferred stock                  Common stock              Paid in
                                                 Shares        Amount           Shares         Amount         Capital
                                               -----------  -----------     -----------     -----------     ------------
<S>                                            <C>          <C>                 <C>         <C>             <C>
Balance forward                                $      --    $      --           371,664     $       372     $  2,640,865
Common stock issued in July 2004 in
exchange for services rendered at $8.00
per share (Note D)                                    --           --            21,342              22          174,683
Sale of common stock in July 2004 at $8.00
per share, net of costs (Note D)                      --           --             3,300               3           25,747
Common stock issued in August 2004 in
exchange for services rendered at $6.00
per share (Note D)                                    --           --             9,500              10           59,490
Common stock issued in August 2004 in
exchange for services  rendered and
advances to related party at $5.00 per
share (Note D)                                        --           --            40,000              40          199,960
Sale of common stock in August 2004 at
$5.00 per share, net of costs (Note D)                --           --             4,000               4           20,596
Common stock issued in September 2004 in
exchange for services rendered at $6.00
per share (Note D)                                    --           --             7,960               8           49,675
Sale of common stock in September 2004 at
$5.00 per share, net of costs (Note D)                --           --             1,000               1            4,999
Sale of common stock in October 2004 at
$5.00 per share, net of costs (Note D)                --           --            21,000              21          114,979
Common stock issued in October 2004 in
exchange for services rendered at $6.00
per share (Note D)                                    --           --           103,350             103          575,122
Common stock issued in November 2004 in
exchange for license fees at $5.00 per
share (Note D)                                        --           --            80,000              80          429,920
Common stock issued in November 2004 in
exchange for services rendered at $5.00
per share (Note D)                                    --           --            56,000              56          489,944
Sale of common stock in December 2004 at
$3.00 per share, net of costs (Note D)                --           --            11,250              11           35,889
Common stock issued in December 2004 in
exchange for services rendered at $6.00
per share (Note D)                                    --           --            33,150              33          185,467

Common stock subscription                             --           --              --              --               --

Net loss                                              --           --              --              --               --
                                               -----------  -----------     -----------     -----------     ------------


Balance, December 31, 2004                            --    $      --           763,516     $       764     $  5,007,336
                                               ===========  ===========     ===========     ===========     ============


[Table continued]
<PAGE>

                                                                                      Deficit
                                                                                    Accumulated
                                                 Common                               During
                                                 Stock            Deferred          Development
                                               Subscription      Compensation           Stage               Total
                                                 -----------      -----------      ---------------     --------------

Balance forward                                  $    72,100      $      --        $    (2,542,539)    $      170,798
Common stock issued in July 2004 in
exchange for services rendered at $8.00
per share (Note D)                                      --               --                   --              174,705
Sale of common stock in July 2004 at $8.00
per share, net of costs (Note D)                        --               --                   --               25,750
Common stock issued in August 2004 in
exchange for services rendered at $6.00
per share (Note D)                                      --               --                   --               59,500
Common stock issued in August 2004 in
exchange for services  rendered and
advances to related party at $5.00 per
share (Note D)                                          --               --                   --              200,000
Sale of common stock in August 2004 at
$5.00 per share, net of costs (Note D)                  --               --                   --               20,600
Common stock issued in September 2004 in
exchange for services rendered at $6.00
per share (Note D)                                      --               --                   --               49,683
Sale of common stock in September 2004 at
$5.00 per share, net of costs (Note D)                  --               --                   --                5,000
Sale of common stock in October 2004 at
$5.00 per share, net of costs (Note D)                  --               --                   --              115,000
Common stock issued in October 2004 in
exchange for services rendered at $6.00
per share (Note D)                                      --               --                   --              575,225
Common stock issued in November 2004 in
exchange for license fees at $5.00 per
share (Note D)                                          --               --                   --              430,000
Common stock issued in November 2004 in
exchange for services rendered at $5.00
per share (Note D)                                      --               --                   --              490,000
Sale of common stock in December 2004 at
$3.00 per share, net of costs (Note D)                  --               --                   --               35,900
Common stock issued in December 2004 in
exchange for services rendered at $6.00
per share (Note D)                                      --               --                   --              185,500

Common stock subscription                             39,300             --                   --               39,300

Net loss                                                --               --             (3,039,814)        (3,039,814)
                                                 -----------      -----------      ---------------     --------------


Balance, December 31, 2004                       $   111,400      $      --        $    (5,582,353)    $     (462,853)
                                                 ===========      ===========      ===============     ==============


The accompanying notes are an integral part of the consolidated financial statements

</TABLE>

                                                               F-11

<page>

<TABLE>
<CAPTION>
                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                   CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006



                                                                                                           Additional
                                                  Preferred stock                  Common stock             Paid in
                                               Shares           Amount         Shares          Amount        Capital
                                               ------           ------         ------          ------        -------
<S>                                           <C>             <C>               <C>         <C>             <C>
Balance, December 31, 2004                    $      --       $      --         763,516     $       764     $ 5,007,336
Stock subscriptions settled by related
party (Note B)                                       --              --            --              --              --
Common stock issued in January 2005 in
exchange for accrued service fees at
$4.40 per share (Note D)                             --              --           3,980               4          17,508
Common stock issued in January 2005 in
exchange for common stock subscribed
(Note D)                                             --              --           7,500               7          12,493
Common stock issued in February 2005 in
exchange for services rendered at $4.90
per share (Note D)                                   --              --          11,000              11          53,889
Common stock issue in February 2005 in
exchange for prepaid services at $4.90
per share (Note D)                                   --              --          20,000              20          97,980
Sale of common stock in March 2005 at
$1.00 per share (Note D)                             --              --          10,000              10           9,990
Common stock issued in March 2005 in
exchange for cash and stock subscription
(Note D)                                             --              --          33,229              33          41,767
Sale of common stock in March 2005 at
$3.00 per share (Note D)                             --              --           6,667               7          19,993
Common stock issued in March 2005 in
exchange for licensing fees at $2.10 per
share (Note D)                                                                  400,000             400         839,600
Common stock issued in March 2005 in
exchange for services rendered at $2.50
per share (Note D)                                   --              --          12,000              12          29,988
Common stock issued in March 2005 in
exchange for service rendered at
approximately $2.32 per share (Note D)               --              --          11,000              11          25,489
Common stock issued in March 2005 to
related party in exchange for services
rendered, note payable, and previously
incurred debt at $2.50 per share (Note D)            --              --         462,750             463       1,156,412
Options issued in April 2005 for services
rendered                                             --              --            --              --               805
                                              -----------     -----------    ----------     -----------     -----------

Subtotal                                             --       $      --       1,741,642     $     1,742     $ 7,313,250
                                              ===========     ===========    ==========     ===========     ===========

[Table continued]
<PAGE>

                                                                                                  Accumulated
                                                 Additional     Common                              During
                                                  Paid in        Stock           Deferred         Development
                                                  Capital     Subscription     Compensation          Stage              Total
                                                  -------     ------------     ------------          -----              -----

Balance, December 31, 2004                       $ 5,007,336     $   111,400      $      --        $(5,582,353)     $  (462,853)
Stock subscriptions settled by related
party (Note B)                                          --           (60,000)            --               --            (60,000)
Common stock issued in January 2005 in
exchange for accrued service fees at
$4.40 per share (Note D)                              17,508            --               --               --             17,512
Common stock issued in January 2005 in
exchange for common stock subscribed
(Note D)                                              12,493         (12,500)            --               --               --
Common stock issued in February 2005 in
exchange for services rendered at $4.90
per share (Note D)                                    53,889            --               --               --             53,900
Common stock issue in February 2005 in
exchange for prepaid services at $4.90
per share (Note D)                                    97,980            --            (98,000)            --               --
Sale of common stock in March 2005 at
$1.00 per share (Note D)                               9,990            --               --               --             10,000
Common stock issued in March 2005 in
exchange for cash and stock subscription
(Note D)                                              41,767         (26,800)            --               --             15,000
Sale of common stock in March 2005 at
$3.00 per share (Note D)                              19,993            --               --               --             20,000
Common stock issued in March 2005 in
exchange for licensing fees at $2.10 per
share (Note D)                                       839,600            --               --               --            840,000
Common stock issued in March 2005 in
exchange for services rendered at $2.50
per share (Note D)                                    29,988            --               --               --             30,000
Common stock issued in March 2005 in
exchange for service rendered at
approximately $2.32 per share (Note D)                25,489            --               --               --             25,500
Common stock issued in March 2005 to
related party in exchange for services
rendered, note payable, and previously
incurred debt at $2.50 per share (Note D)          1,156,412            --               --               --          1,156,875
Options issued in April 2005 for services
rendered                                                 805            --               --               --                805
                                              -  -----------     -----------      -----------      -----------      -----------

Subtotal                                         $ 7,313,250     $    12,100      $   (98,000)     $(5,582,353)     $ 1,646,739
                                                 ===========     ===========      ===========      ===========      ===========


The accompanying notes are an integral part of the consolidated financial statements

</TABLE>


                                                               F-12
<page>

<TABLE>
<CAPTION>

                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                          STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006



                                                              Preferred stock                     Common stock
                                                          Shares          Amount              Shares          Amount
                                                       ------------     ------------     ------------     ------------
<S>                                                    <C>              <C>                 <C>           <C>
Balance forward                                        $       --       $       --          1,741,642     $      1,742
Common stock issued in April 2005 in exchange for
services rendered at $1.50 per share (Note D)                  --               --            170,000              170
Common stock issued in April 2005 in exchange for
accrued service fees at $1.50 per share (Note D)               --               --             70,000               70
Common stock issued in August 2005 in exchange
for services rendered at $3.90 per share (Note D)              --               --            231,330              231
Sale of common stock in August 2005 at $1.55 per
share (Note D)                                                 --               --              9,000                9
Sale of common stock in October 2005 at $1.21 per
share (Note D)                                                 --               --             53,000               53
Common stock issued in October 2005 in exchange
for services rendered at $1.60 per share (Note D)              --               --            107,833              108
Common stock issued in October 2005 in exchange
for service fees at $1.60 per share (Note D)                   --               --             54,000               54
Sale of common stock in November 2005 at $1.00
per share (Note D)                                             --               --            132,900              133
Sale of common stock in November 2005 at $0.67
per share (Note D)                                             --               --             30,000               30
Common stock issued in November 2005 in exchange
for service fees at $4.00 per share (Note D)                   --               --            208,009              208
Sale of common stock in November 2005 at $0.50
per share (Note D)                                             --               --             20,000               20
Sale of common stock in December 2005 at $1.00
per share (Note D)                                             --               --             30,000               30
Common stock issued in December 2005 in exchange
for service fees at $4.80 per share (Note D)                   --               --             76,000               76
Issuance of series A preferred stock in exchange
for services rendered at $3.20 per share (Note D)           320,000              320             --               --

Common stock subscription                                      --               --               --               --
Beneficial conversion feature of convertible
debenture (Note C)                                             --               --               --               --

Amortization of deferred compensation                          --               --               --               --

Net loss                                                       --               --               --               --
                                                       ------------     ------------     ------------     ------------

Balance, December 31, 2005                                  320,000     $        320        2,933,714     $      2,934
                                                       ============     ============     ============     ============



[Table continued]
<PAGE>

                                                                                                        Deficit
                                                                                                      Accumulated
                                                                                                         during
                                                          Paid in        Stock          Deferred       Development
                                                           Capital    Subscription    Compensation       Stage         Total
                                                        ------------  ------------    ------------    -------------   ------------

Balance forward                                         $  7,313,250  $     12,100    $    (98,000)   $ (5,582,353)   $  1,646,739
Common stock issued in April 2005 in exchange for
services rendered at $1.50 per share (Note D)                254,830          --              --              --           255,000
Common stock issued in April 2005 in exchange for
accrued service fees at $1.50 per share (Note D)             104,930          --              --              --           105,000
Common stock issued in August 2005 in exchange
for services rendered at $3.90 per share (Note D)            901,956          --              --              --           902,187
Sale of common stock in August 2005 at $1.55 per
share (Note D)                                                13,991          --              --              --            14,000
Sale of common stock in October 2005 at $1.21 per
share (Note D)                                                94,047       (30,000)           --              --            64,100
Common stock issued in October 2005 in exchange
for services rendered at $1.60 per share (Note D)            172,425          --              --              --           172,533
Common stock issued in October 2005 in exchange
for service fees at $1.60 per share (Note D)                  86,346          --            (8,000)           --            78,400
Sale of common stock in November 2005 at $1.00
per share (Note D)                                           132,767          --              --              --           132,900
Sale of common stock in November 2005 at $0.67
per share (Note D)                                            19,970          --              --              --            20,000
Common stock issued in November 2005 in exchange
for service fees at $4.00 per share (Note D)                 831,831          --          (707,320)           --           124,719
Sale of common stock in November 2005 at $0.50
per share (Note D)                                             9,980          --              --              --            10,000
Sale of common stock in December 2005 at $1.00
per share (Note D)                                            29,970          --              --              --            30,000
Common stock issued in December 2005 in exchange
for service fees at $4.80 per share (Note D)                 364,724          --              --              --           364,800
Issuance of series A preferred stock in exchange
for services rendered at $3.20 per share (Note D)          1,023,680          --              --              --         1,024,000

Common stock subscription                                       --          54,978            --              --            54,978
Beneficial conversion feature of convertible
debenture (Note C)                                            10,000          --              --              --            10,000

Amortization of deferred compensation                           --            --           256,005            --           256,005

Net loss                                                        --            --              --        (5,626,713)     (5,626,713)
                                                        ------------  ------------    ------------    ------------    ------------

Balance, December 31, 2005                              $ 11,364,697  $     37,078    $   (557,315)    (11,209,066)   $   (361,352)
                                                        ============  ============    ============    ============    ============



The accompanying notes are an integral part of the consolidated financial statements
</TABLE>

                                                               F-13

<page>

<TABLE>
<CAPTION>
                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                          STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006



                                                                                                                        Additional
                                                                Preferred stock                  Common stock            Paid in
                                                             Shares        Amount            Shares         Amount        Capital
                                                            -------     ------------       ---------     ------------   ------------

<S>                                                         <C>           <C>             <C>           <C>            <C>
Balance, December 31, 2005                                  320,000       $        320    2,933,714     $      2,934   $  11,364,697
Common stock issued in February 2006 in exchange
for services rendered at $4.00 per share (Note D)              --               --         1,000,000            1,000      3,999,000
Common stock issued in February 2006 in exchange
for services rendered at $4.20 per share (Note D)              --               --           530,000              530      2,225,470
Sale of common stock in March 2006 at $1.00 per
share (Note D)                                                 --               --            25,000               25         24,930
Collection of common stock subscription receivable
(Note D)                                                       --               --              --               --             --
Common stock issued in exchange for common stock
subscribed                                                     --               --            65,000               65         54,913
Common stock issued in March 2006 in exchange for
services rendered at $3.00 per share (Note D)                  --               --           131,500              131        394,368
Common stock issued in March 2006 in exchange for
accrued liabilities (Note D)                                   --               --            50,000               50        179,950
Preferred stock issued in March 2006 in exchange
for services rendered at $3.00 per share (Note D)            20,000               20            --               --           59,980
Common stock issued in April 2006 in exchange for
services rendered at $1.50 per share (Note D)                  --               --            10,390               11         15,575
Common stock issued in April 2006 in exchange for
license fees at $1.50 per share (Note D)                       --               --            35,000               35         52,465
Common stock issued in May 2006 in exchange for
services rendered at $1.20 per share (Note D)                  --               --           235,000              235        281,765
Common stock issued in May 2006 in exchange for
license fees at $1.20 per share (Note D)                       --               --            45,000               45         53,955
Preferred stock issued in April 2006 in exchange
for services rendered at $2.90 per share (Note D)            30,068               30            --               --           87,167
Preferred stock issued in May  2006 in exchange
for services rendered and deferred compensation at
$1.50 per share (Note D)                                    283,000              283            --               --          424,217
Preferred stock issued in May  2006 in exchange
for services rendered at $1.90 per share (Note D)            41,750               42            --               --           79,283
Preferred stock issued in June 2006 in exchange
for services rendered at $1.50 per share (Note D)            35,182               35            --               --           52,738
Sale of common stock in June 2006 at $1.00 per
share (Note D)                                                 --               --            10,000               10          9,990

Common stock subscriptions                                     --               --              --               --             --
                                                       ------------     ------------    ------------     ------------   ------------

Subtotal                                                    730,000     $        730       5,070,604     $      5,071   $ 19,360,463
                                                       ============     ============    ============     ============   ==========

[Table continued]
<PAGE>

                                                                                                Deficit
                                                                                               accumulated
                                                              Common                             During
                                                              Stock            Deferred        Development
                                                           Subscription      Compensation         Stage                Total
                                                           ------------      ------------      ------------       ------------

Balance, December 31, 2005                                $     37,078   $      (557,315)      $ (11,209,066)     $   (361,352)
Common stock issued in February 2006 in exchange
for services rendered at $4.00 per share (Note D)                  --                --                 --           4,000,000
Common stock issued in February 2006 in exchange
for services rendered at $4.20 per share (Note D)                  --                --                 --           2,226,000
Sale of common stock in March 2006 at $1.00 per
share (Note D)                                                     --                --                 --              24,955
Collection of common stock subscription receivable
(Note D)                                                         30,000              --                 --              30,000
Common stock issued in exchange for common stock
subscribed                                                      (54,978)             --                 --                --
Common stock issued in March 2006 in exchange for
services rendered at $3.00 per share (Note D)                      --                --                 --             394,499
Common stock issued in March 2006 in exchange for
accrued liabilities (Note D)                                       --                --                 --             180,000
Preferred stock issued in March 2006 in exchange
for services rendered at $3.00 per share (Note D)                  --                --                 --              60,000
Common stock issued in April 2006 in exchange for
services rendered at $1.50 per share (Note D)                      --                --                 --              15,586
Common stock issued in April 2006 in exchange for
license fees at $1.50 per share (Note D)                           --                --                 --              52,500
Common stock issued in May 2006 in exchange for
services rendered at $1.20 per share (Note D)                      --                --                 --             282,000
Common stock issued in May 2006 in exchange for
license fees at $1.20 per share (Note D)                           --             (54,000)              --                --
Preferred stock issued in April 2006 in exchange
for services rendered at $2.90 per share (Note D)                  --                --                 --              87,197
Preferred stock issued in May  2006 in exchange
for services rendered and deferred compensation at
$1.50 per share (Note D)                                           --            (312,500)              --             112,000
Preferred stock issued in May  2006 in exchange
for services rendered at $1.90 per share (Note D)                  --                --                 --              79,325
Preferred stock issued in June 2006 in exchange
for services rendered at $1.50 per share (Note D)                  --                --                 --              52,773
Sale of common stock in June 2006 at $1.00 per
share (Note D)                                                     --                --                 --              10,000

Common stock subscriptions                                       55,652              --                 --              55,652
                                                            ------------      ------------      ------------       ------------

Subtotal                                                   $     67,752      $   (923,815)     $(11,209,066)      $  7,301,135
                                                           ============      ============      =============      =============

The  accompanying notes are an integral part of the consolidated financial statements

</TABLE>


                                      F-14

<page>

<TABLE>
<CAPTION>

                                                          SMART SMS CORP.
                                                   (FORMERLY AMERICAN IDC CORP.)
                                                    A DEVELOPMENT STAGE COMPANY
                                          STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                          FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2006



                                                                                                                          Common
                                            Preferred stock                Common stock                Additional         Stock
                                         Shares        Amount          Shares            Amount      Paid in Capital   Subscription
                                        ---------     ----------    ------------     ------------     ------------     ------------
<S>                                       <C>         <C>              <C>           <C>              <C>              <C>
Balance forward                           730,000     $      730       5,070,604     $      5,071     $ 19,360,463     $     67,752
Fractional shares issued in
conjunction with reverse split
(Note D)                                     --             --                14             --               --               --
Common stock issued in August 2006
in exchange for services rendered
at $1.15 per share (Note D)                  --             --            10,000               10           11,490             --
Common stock issued in August 2006
for common stock subscribed                  --             --            96,374               96           77,719          (55,652
Common stock issued in September
2006 in exchange for services
rendered at $1.85 per share (Note D)         --             --            64,285               64          118,862             --
Common stock issued in September
2006 in exchange for services
rendered at $1.97 per share (Note D)         --             --         1,240,000            1,240        2,441,560             --
Sale of common stock in September
2006                                         --             --           214,496              215           78,285             --
Common stock issued in September
2006 in exchange for expenses paid
at $1.00 per share (Note D)                  --             --            10,000               10            9,990             --
Common stock issued in September
2006 in exchange for services
rendered at $1.87 per share (Note D)         --             --           500,000              500          934,500             --
Common stock issued in October 2006
in exchange for services rendered
at $2.00 per share (Note D)                  --             --            15,000               15           29,985             --
Common stock issued in November
2006 in exchange for services
rendered at $1.90 per share (Note D)         --             --           279,484              279          530,740             --
Common stock issued in November
2006 in exchange for services
rendered at $1.70 per share (Note D)         --             --           182,500              183          310,067             --
Sale of common stock in November
2006                                         --             --           103,587              104           72,563             --
Common stock issued in November
2006 in exchange for expenses paid           --             --            62,500               62           49,938             --
Common stock issued in December
2006 in exchange for expenses paid
(Note D)                                     --             --            20,800               21           20,779             --
Common stock issued in December
2006 in exchange for services fees
at $1.60 per share                           --             --            10,000               10           15,990             --
Common stock issued in December
2006 in exchange for services
rendered at $1.25 per share (Note D)         --             --            20,000               20           24,980             --
Sale of common stock in December
2006                                         --             --           240,000              240           89,760             --
Amortization of deferred
compensation                                 --             --              --               --               --               --

Net loss                                     --             --              --               --               --               --
                                        ---------     ----------    ------------     ------------     ------------     ------------

Balance, December 31, 2006                730,000     $      730       8,139,644     $      8,140     $ 24,177,671     $     12,100
                                        =========     ==========    ============     ============     ============     ============

[Table continued]
<PAGE>

                                                               Deficit
                                                             accumulated
                                                               During
                                             Deferred       Development
                                            Compensation        Stage            Total
                                           ------------      ------------      ------------

Balance forward                            $   (923,815)     $(11,209,066)     $  7,301,135
Fractional shares issued in
conjunction with reverse split
(Note D)                                           --                --                --
Common stock issued in August 2006
in exchange for services rendered
at $1.15 per share (Note D)                        --                --              11,500
Common stock issued in August 2006
for common stock subscribed                        --                --              22,163
Common stock issued in September
2006 in exchange for services
rendered at $1.85 per share (Note D)               --                --             118,926
Common stock issued in September
2006 in exchange for services
rendered at $1.97 per share (Note D)               --                --           2,442,800
Sale of common stock in September
2006                                               --                --              78,500
Common stock issued in September
2006 in exchange for expenses paid
at $1.00 per share (Note D)                        --                --              10,000
Common stock issued in September
2006 in exchange for services
rendered at $1.87 per share (Note D)               --                --             935,000
Common stock issued in October 2006
in exchange for services rendered
at $2.00 per share (Note D)                        --                --              30,000
Common stock issued in November
2006 in exchange for services
rendered at $1.90 per share (Note D)               --                --             531,019
Common stock issued in November
2006 in exchange for services
rendered at $1.70 per share (Note D)               --                --             310,250
Sale of common stock in November
2006                                               --                --              72,667
Common stock issued in November
2006 in exchange for expenses paid                 --                --              50,000
Common stock issued in December
2006 in exchange for expenses paid
(Note D)                                           --                --              20,800
Common stock issued in December
2006 in exchange for services fees
at $1.60 per share                              (16,000)             --                --
Common stock issued in December
2006 in exchange for services
rendered at $1.25 per share (Note D)               --                --              25,000
Sale of common stock in December
2006                                               --                --              90,000
Amortization of deferred
compensation                                    750,148              --             750,148

Net loss                                           --         (13,120,209)      (13,120,209)
                                           ------------      ------------      ------------

Balance, December 31, 2006                 $   (189,667)     $ 24,329,275)     $   (320,301)
                                           ============      ============      ============



The accompanying notes are an integral part of the consolidated financial statements

                                                               F-15
</TABLE>

<page>


<TABLE>
<CAPTION>
                                                      SMART SMS CORP.
                                               (FORMERLY AMERICAN IDC CORP.)
                                                A DEVELOPMENT STAGE COMPANY
                                                  STATEMENTS OF CASH FLOWS

                                                                                                  For the period
                                                                                                       from
                                                                                                 June 3, 1997 (date
                                                                                                        of
                                                         For the year ended December 31           inception) through
                                                               2006              2005             December 31, 2006
                                                           ------------      ------------         ------------------
<S>                                                        <C>               <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                   $(13,120,209)     $ (5,626,713)         $(24,329,275)
Adjustments to reconcile net loss to cash used in
operating activities:
Common stock issued in exchange for services rendered        11,318,580         2,888,479            17,919,160
Common stock issued for expenses                                 30,800              --                  30,800
Common stock issued for license fee                             106,500           840,000             1,436,500
Amortization of deferred compensation                           750,148           256,005             1,006,153
Preferred stock issued for compensation                         391,295           766,272             1,157,567
Beneficial conversion feature attributable to
convertible debenture                                              --              10,000                10,000
Other income received in the form of restricted
securities                                                         --                --                  33,000
Impairment loss                                                    --                --                 (33,000)
Stock options issued in exchange for services rendered             --                 805               170,105
Common stock issued in exchange for start up costs                 --                --                  96,000
Write off of services fees previously paid with common
stock                                                              --                --                  75,000
Increase (decrease) in:
Cash in excess of available funds                                  (192)              192                  --
Accounts payable and accrued liabilities                        121,294           197,668               828,976
                                                           ------------      ------------          ------------
Net cash used in operating activities:                         (401,784)         (667,292)           (1,599,014)


CASH FLOWS FROM INVESTING ACTIVITIES                               --                --                    --

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock and stock
subscriptions                                                   383,936           370,978             1,149,554
Proceeds from convertible debenture                                --              10,000                10,000
Proceeds from other advances, net of repayments                  13,700            14,800                50,500
Proceeds from advances from related party, net of
repayments                                                        4,478           270,536               389,290
                                                           ------------      ------------          ------------

Net cash provided by financing activities                       402,114           666,314             1,599,344


Net increase (decrease) in cash and cash equivalents                330              (978)                  330
Cash and cash equivalents-beginning of the period                  --                 978                  --
                                                           ------------      ------------          ------------

Cash and cash equivalents-end of period                    $        330      $       --            $        330
                                                           ============      ============          ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION


Cash paid during the period for interest                   $       --        $       --            $       --

Income taxes paid                                                  --                --                    --

Common stock issued in exchange for services                 11,318,580         2,888,479            17,919,160
Common stock issued in exchange for license fees                106,500           840,000             1,436,500
Common stock issued for expenses                                 30,800              --                  30,800
Stock options issued in exchange for services                      --                 805               170,105
Common stock issued in exchange for prepaid services               --                --                  75,000
Common stock issued for start up costs                             --                --                  96,000
Other income received in form of restricted securities             --                --                  33,000
Common stock issued for accrued management fees                    --             240,000               728,000
Common stock issued in exchange for accrued service fees           --              36,300               158,258
Common stock issued in exchange for officer advances                               29,000               129,435
Common stock issued in exchange for related party note             --             175,000               175,000
Common stock issued in exchange for related party advances         --              40,659                40,659

The accompanying notes are an integral part of the consolidated financial statements
</TABLE>

                                      F-16

<page>


                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of
the accompanying financial statements follows.

Business and Basis of Presentation

On June 3, 1997, Smart SMS Corp., formerly American IDC Corp., (the "Company")
was incorporated under the laws of the state of Florida as Future Projects VIII
Corp. On July 20, 2000, the Company changed its name to American IDC Corp. On
October 25, 2005, the Company changed its name to Smart SMS Corp. During the
year ended December 31, 2005, the Company formed the following subsidiaries:

         o        Smart SMS Mexico, LLC, a Nevada limited liability company,
                  formed on April 4, 2005.

         o        Smart SMS Latino USA, Inc., a Nevada corporation, formed on
                  April 19, 2005.

         o        Smart Hustle Inc., a Nevada corporation, formed on April 19,
                  2005.

         o        China Techmedia Corp, a Nevada corporation, formed on May 9,
                  2005.

         o        Smart Measures, LLC, a Nevada limited liability company,
                  formed on June 2, 2005.

At December 31, 2006, all the subsidiaries were inactive. The consolidated
financial statements include the accounts of the Company and the above mentioned
subsidiaries. Significant intercompany transactions have been eliminated in
consolidation. The Company is in the development stage, as defined by Statement
of Financial Accounting Standards No. 7 ("SFAS No. 7") and is engaged in
developing text messaging services. To date, the Company has generated no sales
revenues, has incurred expenses and has sustained losses. Consequently, its
operations are subject to all the risks inherent in the establishment of a new
business enterprise. For the period from inception through December 31, 2006,
the Company has accumulated losses of $24,329,275.

Reclassification

Certain reclassifications have been made to conform to prior periods' data to
the current presentation. These reclassifications had no effect on reported
losses.

Revenue Recognition

Revenues are recognized in the period that services are provided. For revenue
from product sales, the Company recognizes revenue in accordance with Staff
Accounting Bulletin No. 104, REVENUE RECOGNITION ("SAB104"), which superseded
Staff Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS
("SAB101"). SAB 101 requires that four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred; (3) the selling price is fixed and determinable; and (4)
collectibility is reasonably assured. Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling prices
of the products delivered and the collectibility of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The Company defers any revenue for which the product has not been
delivered or is subject to refund until such time that the Company and the
customer jointly determine that the product has been delivered or no refund will
be required. At December 31, 2006 and 2005, the Company has not generated any
revenues.

SAB 104 incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"), MULTIPLE
DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple products,
services and/or rights to use assets. The effect of implementing EITF 00-21 on
the Company's financial position and results of operations was not significant.

Estimates

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

Cash and cash equivalents

For purposes of the Statements of Cash Flows, the Company considers all highly
liquid debt instruments purchased with a maturity date of three months or less
to be cash equivalents.


                                      F-17

<page>


                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property and Equipment

Property and equipment are stated at cost. When retired or otherwise disposed,
the related carrying value and accumulated depreciation are removed from the
respective accounts and the net difference less any amount realized from
disposition, is reflected in earnings. For financial statement purposes,
property and equipment are recorded at cost and depreciated using the
straight-line method over their estimated useful lives.

Long-Lived Assets

The Company has adopted Statement of Financial Accounting Standards No. 144
("SFAS 144"). The Statement requires that long-lived assets and certain
identifiable intangibles held and used by the Company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses, or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted undiscounted cash flows. Should impairment in value be indicated, the
carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. SFAS No. 144 also requires assets to be disposed of be reported at
the lower of the carrying amount or the fair value less costs to sell.

Income Taxes

The Company has implemented the provisions on Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires
that income tax accounts be computed using the liability method. Deferred taxes
are determined based upon the estimated future tax effects of differences
between the financial reporting and tax reporting bases of assets and
liabilities given the provisions of currently enacted tax laws.

Net Loss Per Common Share

The Company computes earnings per share under Financial Accounting Standard No.
128, "Earnings Per Share" ("SFAS 128"). Net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock and
dilutive common stock equivalents outstanding during the year. Dilutive common
stock equivalents consist of shares issuable upon conversion of convertible
preferred shares and the exercise of the Company's stock options and warrants
(calculated using the treasury stock method). During the year ended December 31,
2006 and 2005, and for the period from June 3, 1997 (date of inception) to
December 31, 2006, common stock equivalents are not considered in the
calculation of the weighted average number of common shares outstanding because
they would be anti-dilutive, thereby decreasing the net loss per common share.

Liquidity

To date the Company has generated no revenues, has incurred expenses, and has
sustained losses. As shown in the accompanying consolidated financial
statements, the Company incurred a net loss of $13,120,209 during the year ended
December 31, 2006 and $5,626,713 during the year ended December 31, 2005. The
Company's current liabilities exceeded its current assets by $320,301 as of
December 31, 2006. For the period from inception through December 31, 2006, the
Company has accumulated losses of $24,329,275. Consequently, its operations are
subject to all risks inherent in the establishment of a new business enterprise.

Stock Based Compensation

Prior to the January 1, 2006 adoption of the Financial Accounting Standards
Board ("FASB") Statement No. 123(R), "Share-Based Payment" ("SFAS 123R"), the
Company accounted for stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations. Accordingly,
because the stock option grant price equaled the market price on the date of
grant, and any purchase discounts under the Company's stock purchase plans were
within statutory limits, no compensation expense was recognized by the Company
for stock-based compensation. As permitted by SFAS No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"), stock-based compensation was included as
a pro forma disclosure in the notes to the consolidated financial statements.




                                      F-18

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock Based Compensation (continued)

Effective January 1, 2006, the beginning of the Company's first fiscal quarter
of 2006, the Company adopted the fair value recognition provisions of SFAS 123R,
using the modified-prospective transition method. Under this transition method,
stock-based compensation expense was recognized in the consolidated financial
statements for granted, modified, or settled stock options. Compensation expense
recognized included the estimated expense for stock options granted on and
subsequent to January 1, 2006, based on the grant date fair value estimated in
accordance with the provisions of SFAS 123R, and the estimated expense for the
portion vesting in the period for options granted prior to, but not vested as of
January 1, 2006, based on the grant date fair value estimated in accordance with
the original provisions of SFAS 123. Results for prior periods have not been
restated, as provided for under the modified-prospective method.

SFAS 123(R) requires forfeitures to be estimated at the time of grant and
revised, if necessary, in subsequent periods if actual forfeitures differ from
those estimates. In the Company's pro forma information required under SFAS 123
for the periods prior to fiscal 2006, the Company accounted for forfeitures as
they occurred.

Upon adoption of SFAS 123(R), the Company is using the Black-Scholes
option-pricing model as its method of valuation for share-based awards granted
beginning in fiscal 2006, which was also previously used for the Company's pro
forma information required under SFAS 123. The Company's determination of fair
value of share-based payment awards on the date of grant using an option-pricing
model is affected by the Company's stock price as well as assumptions regarding
a number of highly complex and subjective variables. These variables include,
but are not limited to the Company's expected stock price volatility over the
term of the awards, and certain other market variables such as the risk free
interest rate.
The following table shows the effect on net earnings and earnings per share had
compensation cost been recognized based upon the estimated fair value on the
grant date of stock options for the year ended December 31 2005, in accordance
with SFAS 123, as amended by SFAS No. 148 "Accounting for Stock-Based
Compensation - Transition and Disclosure:

<TABLE>
<CAPTION>
                                                                        Year ended
                                                                     December 31, 2005
<S>                                                                   <C>
        Net loss                                                      $  (5,626,713)
        Deduct: stock-based compensation expense, net of tax                   --
                                                                      -------------

        Pro forma net loss                                            $  (5,626,713)
                                                                      =============


        Net loss per common share -- basic (and fully diluted):
             As reported                                              $       (3.00)
             Deduct: stock-based compensation expense, net of tax
                                                                      -------------

             Pro forma                                                $       (3.00)
                                                                      =============
</TABLE>


The Company had no employee stock options issued and outstanding at December 31,
2006. All prior awards of stock options were vested in prior years.

Concentrations of credit risk

Financial instruments and related items, which potentially subject the Company
to concentrations of credit risk, consist primarily of cash, cash equivalents.
The Company places its cash and temporary cash investments with credit quality
institutions. At times, such investments may be in excess of the FDIC insurance
limit.




                                      F-19

<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income taxes

The Company follows Statement of Financial Accounting Standard No.109,
Accounting for Income Taxes (SFAS No.109) for recording the provision for income
taxes. Deferred tax assets and liabilities are computed based upon the
difference between the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when the related
asset or liability is expected to be realized or settled. Deferred income tax
expenses or benefits are based on the changes in the asset or liability during
each period. If available evidence suggests that it is more likely than not that
some portion or all of the deferred tax assets will not be realized, a valuation
allowance is required to reduce the deferred tax assets to the amount that is
more likely than not to be realized. Future changes in such valuation allowance
are included in the provision for deferred income taxes in the period of change.
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not related to an
asset or liability are classified as current or non-current depending on the
periods in which the temporary differences are expected to reverse

Advertising

The Company follows the policy of charging the costs of advertising to expenses
as incurred. The Company incurred no advertising costs during the years ended
December 31, 2006 and 2005 and for the period from June 3, 1997 (date of
inception) to December 31, 2006.

Research and Development

The Company accounts for research and development costs in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs".
Under SFAS 2, all research and development costs must be charged to expense as
incurred. Accordingly, internal research and development costs are expensed as
incurred. Third-party research and developments costs are expensed when the
contracted work has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both present and
future products are expensed in the period incurred. The Company incurred no
research and development costs during the years ended December 31, 2006 and 2005
and for the period from June 3, 1997 (date of inception) to December 31, 2006.

Comprehensive Income

Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income," establishes standards for reporting and displaying of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The Company does not have any items of comprehensive
income in any of the periods presented.

Segment Information

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131") establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making decisions
how to allocate resources and assess performance. The information disclosed
herein materially represents all of the financial information related to the
Company's principal operating segment.




                                      F-20

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New Accounting Pronouncements

On February 16, 2006 the Financial Accounting Standards Board (FASB) issued SFAS
155, "Accounting for Certain Hybrid Instruments," which amends SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities," and SFAS 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." SFAS 155 allows financial instruments that have embedded
derivatives to be accounted for as a whole (eliminating the need to bifurcate
the derivative from its host) if the holder elects to account for the whole
instrument on a fair value basis. SFAS 155 also clarifies and amends certain
other provisions of SFAS 133 and SFAS 140. This statement is effective for all
financial instruments acquired or issued in fiscal years beginning after
September 15, 2006. The Company does not expect its adoption of this new
standard to have a material impact on its financial position, results of
operations or cash flows.

In March 2006, the FASB issued FASB Statement No. 156, Accounting for Servicing
of Financial Assets - an amendment to FASB Statement No. 140. Statement 156
requires that an entity recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
service contract under certain situations. The new standard is effective for
fiscal years beginning after September 15, 2006. The Company does not expect its
adoption of this new standard to have a material impact on its financial
position, results of operations or cash flows.

In September 2006, the FASB issued SFAS 157, FAIR VALUE MEASUREMENTS , which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles ("GAAP"), and expands disclosures about
fair value measurements. The Company will be required to adopt SFAS 157
effective for the fiscal year beginning April 1, 2008. The requirements of SFAS
157 will be applied prospectively except for certain derivative instruments that
would be adjusted through the opening balance of retained earnings in the period
of adoption. The Company is currently evaluating the impact of the adoption of
SFAS 157 on the Company's consolidated financial statements, and the management
believes that the adoption of SFAS 157 will not have a significant impact on the
Company's consolidated results of operations or financial position.

In September 2006, the SEC issued Staff Accounting Bulletin 108, CONSIDERING THE
EFFECTS OF PRIOR YEAR MISSTATEMENTS WHEN QUANTIFYING MISSTATEMENTS IN CURRENT
YEAR FINANCIAL STATEMENTS (`SAB 108'). SAB 108 provides interpretive guidance on
how the effects of the carryover or reversal of prior year financial statement
misstatements should be considered in quantifying a current year misstatement.
SAB 108 is effective for financial statements covering the first fiscal year
ending after November 15, 2006. The Company does not anticipate any material
impact to its financial condition or results of operations as a result of the
adoption of SAB 108.

In September 2006 the FASB issued its Statement of Financial Accounting
Standards 158 "Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans". This Statement improves financial reporting by requiring
an employer to recognize the overfunded or underfunded status of a defined
benefit postretirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income of a business entity or changes in unrestricted net assets of a
not-for-profit organization. This Statement also improves financial reporting by
requiring an employer to measure the funded status of a plan as of the date of
its year-end statement of financial position, with limited exceptions. The
effective date for an employer with publicly traded equity securities is as of
the end of the fiscal year ending after December 15, 2006. The Company does not
expect adoption of this standard will have a material impact on its financial
position, operations or cash flows.

In December 2006, the FASB issued FSP EITF 00-19-2, Accounting for Registration
Payment Arrangements ("FSP 00-19-2") which addresses accounting for registration
payment arrangements. FSP 00-19-2 specifies that the contingent obligation to
make future payments or otherwise transfer consideration under a registration
payment arrangement, whether issued as a separate agreement or included as a
provision of a financial instrument or other agreement, should be separately
recognized and measured in accordance with FASB Statement No. 5, Accounting for
Contingencies. FSP 00-19-2 further clarifies that a financial instrument subject
to a registration payment arrangement should be accounted for in accordance with
other applicable generally accepted accounting principles without regard to the
contingent obligation to transfer consideration pursuant to the registration
payment arrangement. For registration payment arrangements and financial
instruments subject to those arrangements that were entered into prior to the
issuance of EITF 00-19-2, this guidance shall be effective for financial
statements issued for fiscal years beginning after December 15, 2006 and interim
periods within those fiscal years. The Company does not expect adoption of this
standard will have a material impact on its financial position, operations or
cash flows.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Liabilities" ("SFAS No. 159"). SFAS No. 159 provides
companies with an option to report selected financial assets and liabilities at
fair value, and establishes presentation and disclosure requirements designed to
facilitate comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities. The new guidance is
effective for fiscal years beginning after November 15, 2007. The Company is
currently evaluating the potential impact of the adoption of SFAS No. 159 on its
financial position and results of operations.

                                      F-21

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE B - RELATED PARTY TRANSACTIONS

The Company's officer and principal shareholders have advanced funds to the
Company for working capital purposes year ended December 31, 2006 and December
31, 2005. No formal repayment terms or arrangements exist.

In June 2004, the Company purchased 7,000 (Note D) shares of previously issued
common stock from its Chief Executive Officer in exchange for a promissory note
in the amount of $175,000. The promissory note was payable on demand and
non-interest bearing. The Company canceled the 7,000 (Note D) shares of common
stock upon the return of shares by its Chief Executive Officer.

In March 2005, the Company issued an aggregate of 462,750 (Note D) shares of
common stock, fair valued at $1,156,875, to its Chief Executive Officer in
exchange for the previously issued note payable of $175,000 and repayment of
officer advances in the amount of $100,435. The remaining $881,440 was accounted
for as officer compensation and charged to operations in March 2005.

Additionally, during the year ended December 31, 2005, the Company's Chief
Executive Officer personally settled $60,000 of stock subscription payable with
an investor on behalf of the Company. The Company accounted for the $60,000 of
stock subscription settled by its Chief Executive Officer as advances from
officers. In November 2005, the Company issued an aggregate of 300,000 shares of
the Series A preferred stock to its Chief Executive Officer in settling all of
the officer advances, management and director fees and liabilities due to the
officer as of November 2005, and each share of the preferred stock is
convertible to one hundred shares of the Company's common stock. The converted
common shares are subject to stock split adjustment (Note D). The fair value of
the preferred stock at issuance, based on the underlying common stock, was
approximated $960,000. The issuance of preferred shares to the Company's Chief
Executive Officer settled an aggregate of $257,728 of officer advances, and the
remaining $702,272 was accounted for officer compensation and was charged to
operations in November 2005.

Total amount due to shareholders was $5,490 at December 31, 2005. At December
31, 2006, the total due officers was $4,478 and total amount due to other
shareholders was $5,490.

NOTE C - CONVERTIBLE NOTE PAYABLE

On March 7, 2005, the Company issued a promissory note to a consultant in
exchange for accrued service fees of $10,000. The Company granted the noteholder
an option to convert the $10,000 of principal, payable on demand, to 7,500 (Note
D) shares of the Company's unregistered common stock. The Company accounted for
the notes payable and stock purchase rights in accordance with APB No. 14,
"Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants"
("APB 14") and Emerging Issues Task Force Issue 98-5, Accounting for Convertible
Securities with a Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios ("EITF 98-5"). The fair value of the company's restricted
common stock at the time the conversion option was granted approximated $24,000
for the 7,500 (Note D) shares of common stock. The Company recognized and
measured an imbedded beneficial conversion feature, in the amount of $10,000,
presented in the convertible note to additional paid in capital and a discount
against the convertible note. The convertible note is payable on demand,
accordingly the debt discount attributed to the beneficial conversion feature
was charged to interest expense at issuance of the note. The Company recorded a
non-cash interest expense in the amount of $10,000 during the year ended
December 31, 2005 in connection with this convertible note.

NOTE D - CAPITAL STOCK

On July 7, 2006, the Board of Directors of the Company passed a resolution to
amend the Articles of Incorporation to combine the Company's $.001 par value
common stock on a one (1) for one hundred (100) basis. At the effective date,
every one hundred (100) shares of common stock which are issued and outstanding
shall be automatically converted into one (1) share of $.001 par value common
stock; provided, however, that the Company shall issue one (1) full share of
$.001 par value common stock to its stockholders for any fractional interest
remaining after the combination of all shares of common stock into a lesser
number of shares.

On August 1, 2006 the Company amended its Articles of Incorporation to:

         o        Change its authorized level of capital stock to 35,000,000
                  shares, subdivided alets 25,000,000 shares of Preferred stock
                  (10,000,000 shares were designated as Series A Convertible
                  Preferred Stock) and 10,000,000 shares of common stock.

         o        The affect a one for one hundred (1 for 100) "reverse" stock
                  split on the Company's common stock.

All references in the financial statements and the notes to financial
statements, number of shares, and share amounts have been retroactively restated
to reflect the reverse split.



                                      F-22

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE D - CAPITAL STOCK (CONTINUED)

Preferred Stock

On November 23, 2005, the Company's board of directors passed a resolution to
create the Company's Series A Convertible Preferred Stock (the "Series A
Preferred"). The Articles of Incorporation, as amended, provide that the Company
shall have the authority to issue One Billion Twenty Five Million
(1,025,000,000) shares of capital stock, of which Twenty Five Million
(25,000,000) shall be shares of Preferred Stock with a par value of $0.001 per
share ("Preferred Stock"), and One Billion (1,000,000,000) shall be shares of
Common Stock with a par value of $0.001 per share ("Common Stock"). The board of
directors, by resolution only and without further action or approval, may cause
the Company to issue such Preferred Stock in one or more series and to establish
the designation, voting powers, other powers, preferences and rights of each
series of Preferred Stock. Subsequent to the date of the financial statements,
the authorized common stock was reduced to 10,000,000 shares (Note H).

The Series A Preferred consists of 10,000,000 authorized shares, ranks senior to
the common stock and all other series of Preferred Stock, has a liquidation
preference of $2.00 per share, votes with the common stock, but on a 100:1
basis, and participate in common stock dividends when, as, and if declared by
the board of directors, at the rate of $.20 per share. Additionally, each share
of Series A Preferred converts, at the option of the holder, into 100 shares of
common stock, contains adjustment provisions, protective provisions, and is
redeemable by the Corporation at $2.00 per share, plus 10% interest from the
issue date. Subsequent to the date of the financial statements, the conversion
rate was amended to one share of preferred stock for ten shares of common stock
(Note H).

In November 2005, the Company issued an aggregate of 300,000 of Series A
preferred stock to its Chief Executive Officer in exchange for officer advances
and officer compensations (Note B). The Company also issued an aggregate of
20,000 shares of preferred shares to a consultant in exchange for services
rendered. Total fair value of the preferred stock at issuance, based on the
underlying common stock, was $1,024,000. The issuance of preferred shares
settled an aggregate of $257,728 of officer advances, and the remaining $766,272
was accounted for as officer and consultant compensations and was charged to
operations during the year ended December 31, 2005.

In March 2006, the Company issued an aggregate of 20,000 shares of Series A
preferred stock to consultants in exchange for services rendered. The fair value
of the preferred stock at issuance, based on the underlying common stock, was
$60,000. Compensation cost of $60,000 was charged to operations during the year
ended December 31, 2006.

In May 2006, the Company issued an aggregate of 354,818 shares of Series A
preferred stock to consultants in exchange for services fees and deferred
compensations. The fair value of the preferred stock at issuance, based on the
underlying common stock, was $591,022. Compensation expenses of $278,522 were
charged to operations in May 2006, and the remaining $312,500 was accounted for
as deferred compensation and amortized through the terms of the service
agreement.

In June 2006, the Company issued an aggregate of 35,182 shares of Series A
preferred stock to consultants in exchange for services rendered. The fair value
of the preferred stock at issuance, based on the underlying common stock, was
$52,773. The issuance of the preferred shares was charged to operations during
the year ended December 31, 2006.

Total number of Series A preferred shares issued and outstanding at December 31,
2006 and 2005 was 730,000 shares and 320,000 shares, respectively.

Common Stock

As of December 31, 2006 and 2005, the Company has issued and outstanding
8,139,644 shares and 2,933,714 shares of common stock, respectively.

On June 3, 1997, the Company issued 50,000 shares of common stock to its
founders for services and expenses in connection with services provided and
expenses incurred in forming the Company.

In September 2000, the Company issued 1,000 shares of common stock to a
consultant for services in the amount of $10,000. Valuation of common stock
issued for services was based upon the value of the services rendered, which did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered.

In December 2001, the Company issued 1,000 shares of common stock to a
consultant in exchange for prepaid services fees of $75,000. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered.


                                      F-23

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (continued)

In July 2002, the Company issued an aggregate of 3,000 shares of common stock to
consultants in exchange for services fees of $150,000. Valuation of common stock
issued for services was based upon the value of the services rendered, which did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered.


In October 2002, the Company issued an aggregate of 3,000 shares of common stock
to consultants in exchange for services fees of $255,000. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered.

In October 2002, the Company issued 1,000 shares of common stock to an investor
in exchange for $29,990, net of costs and fees.

In November 2002, the Company issued an aggregate of 1,100 shares of common
stock to consultants in exchange for services fees of $38,500. Valuation of
common stock issued for services was based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered.

In December 2002, the Company issued an aggregate of 2,400 shares of common
stock to consultants in exchange for services fees of $103,200. Valuation of
common stock issued for services was based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered.

In December 2002, an investor agreed to purchase 1,000 shares of the Company's
common stock in the amount of $25,000. As of December 31, 2002, the Company
received $5,000 of proceeds from the stock subscription and the remaining
$20,000 was recorded as stock subscription receivable.

In January 2003, the Company issued an aggregate of 4,950 shares of common stock
to consultants in exchange for services fees of $149,663. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered.

In March 2003, the Company issued an aggregate of 13,000 shares of common stock
to consultants in exchange for services fees of $39,000. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered. Additionally, the Company
issued 20,,000 shares of common stock at $3.00 per share to purchase a website
domain which the Company plans to integrate to its future growth and development
of online services and products. Valuation of common stock issued was based upon
the value of the website domain acquired, which did not differ materially from
the fair value of the Company's common stock during the same period. Start-up
costs of $60,000 were charged to income during the year ended December 31, 2003.

In May 2003, the Company issued an aggregate of 15,100 shares of common stock to
consultants in exchange for services fees of $45,300. Valuation of common stock
issued for services was based upon the value of the services rendered, which did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered.

In June 2003, the Company issued additional 12,000 shares of common stock at
$3 per share to purchase the website domain which the Company plans to
integrate to its future growth and development of online services and products.
Valuation of common stock issued was based upon the value of the website domain
acquired, which did not differ materially from the fair value of the Company's
common stock during the same period. Additional start-up costs of $36,000 were
charged to income during the year ended December 31, 2003.

In June 2003, the Company issued an aggregate of 4,100 shares of common stock to
consultants in exchange for services fees of $12,300. Valuation of common stock
issued for services was based upon the value of the services rendered, which did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered.

In July 2003, the Company issued an aggregate of 1,000 shares of common stock
for $5,000 of cash, net of costs and fees. The Company also issued an aggregate
of 67,290 shares of common stock to consultants in exchange for service fees of
$762,828. Valuation of common stock issued for services was based upon the value
of the services rendered, which did not differ materially from the fair value of
the Company's common stock during the period the services were rendered.



                                      F-24

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (continued)

In August 2003, the Company issued an aggregate of 13,970 shares of common stock
to consultants in exchange for service fees of $99,525. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered.

In September 2003, the Company issued an aggregate of 2,300 shares of common
stock to a related party in exchange for $11,500 of previously incurred debt.

The Company issued an aggregate of 3,350 shares of common stock to consultants
in exchange for service fees of $17,887. Valuation of common stock issued for
services was based upon the value of the services rendered, which did not differ
materially from the fair value of the Company's common stock during the period
the services were rendered.

In October 2003, the Company issued an aggregate of 1,720 shares of common stock
to consultants in exchange for service fees of $7,900. Valuation of common stock
issued for services was based upon the value of the services rendered, which did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered.

In November 2003, the Company issued an aggregate of 1,000 shares of common
stock to an investor for $6,000 of cash, net of costs and fees.

In December 2003, the Company issued an aggregate of 2,360 shares of common
stock to consultants in exchange for service fees of $23,600. Valuation of
common stock issued for services was based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered.

Additionally, two investors agreed to purchase an aggregate of 3,620 shares of
the Company's common stock in the amount of $72,100. As of December 31, 2003,
the Company received $72,100 of proceeds from the stock subscription but common
stock has not been issued. The Company recorded the $72,100 of proceeds received
as stock subscription payable. As of December 31, 2003, the Company also
received proceeds of $20,000 for 1,000 shares of common stock subscribed and
issued in December 2002.

In February 2004, the Company issued an aggregate of 2,000 shares of common
stock to consultants in exchange for service fees of $14,000. The Company also
issued an aggregate of 80,000 shares of common stock to the Company's Chief
Executive Officer in exchange for $240,000 of accrued management fees. All
valuation of common stock issued for services was based upon the value of the
services rendered, which did not differ materially from the fair value of the
Company's common stock during the period the services were rendered.

In March 2004, the Company issued an aggregate of 2,150 shares of common stock
to consultants in exchange for service fees of $15,290. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered.

In April 2004, the Company issued an aggregate of 18,450 shares of common stock
to consultants in exchange for service fees of $53,000 and accrued service fees
of $36,300. Valuation of common stock issued for services was based upon the
value of the services rendered, which did not differ materially from the fair
value of the Company's common stock during the period the services were
rendered. Additionally, the Company issued an aggregate of 13,553 shares of
common stock to a related party in exchange for $40,659 of debt due to the
related party. The Company also issued 10,000 shares of common stock to Omni
Media Distribution, Inc. ("Omni") pursuant to Film Library License Agreement the
Company entered into on April 1, 2004. The shares issued to Omni were based on
the fair value of the Company's common stock at the time the agreement was
entered into and the shares were issued. License fees of $60,000 were charged to
operations during the year ended December 31, 2004.

In May 2004, the Company issued an aggregate of 20,455 shares of common stock to
consultants in exchange for service fees of $177,995. Valuation of common stock
issued for services was based upon the value of the services rendered, which did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered.

In June 2004, the Company issued an aggregate of 3,916 shares of common stock to
consultants in exchange for service fees of $29,500. Valuation of common stock
issued for services was based upon the value of the services rendered, which did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered. Additionally, the Company issued 2,500
shares of common stock to an investor in exchange for $15,000 of cash, net of
costs and fees.


                                      F-25

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (continued)

In June 2004, the Company purchased 7,000 shares of previously issued common
stock from its Chief Executive Officer in exchange for a promissory note in the
amount of $175,000. The 7,000 shares of common stock were accordingly canceled
by the Company. This promissory was repaid in March 2005 with issuance the
Company's common stock.

In July 2004, the Company issued an aggregate of 21,342 shares of common stock
to consultants in exchange for service fees of $174,705. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered. Additionally, the Company
issued 3,300 shares to investors in exchange for $25,750 of cash received in
June 30, 2004, net of costs and fees.

In August 2004, the Company issued an aggregate of 9,500 shares of common stock
to consultants in exchange for service fees of $59,500. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered. The Company also issued an
aggregate of 40,000 shares of common stock to Company's Chief Executive Officer
in exchange for management fees of $171,000 and $29,000 of officer advances.
Additionally, the Company issued 4,000 shares of common stock to an investor in
exchange for $20,600 of cash, net of costs and fees.

In September 2004, the Company issued an aggregate of 7,960 shares of common
stock to consultants in exchange for service fees of $49,683. Valuation of
common stock issued for services was based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered. Additionally, the
Company issued 1,000 shares of common stock to an investor in exchange for
$5,000 of cash, net of costs and fees.

In October 2004, the Company issued an aggregate of 21,000 shares of common
stock to investors in exchange for $115,000 of proceeds, net of costs and fees.
Additionally, the Company issued an aggregate of 53,350 shares of common stock
to consultants in exchange for service fees of $375,225. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered. The Company also issued an
aggregate of 50,000 shares of common stock to Company Chief Executive Officer in
exchange for management fees of $200,000.

In November 2004 the Company issued 30,000 shares of common stock to Omni Media
Distribution, Inc. ("Omni") pursuant to Film Library License Agreement the
Company entered into in October 2004. The shares issued to Omni were based on
the fair value of the Company's common stock at the time the agreement was
entered into and the shares were issued. License fees of $180,000 were charged
to operations during the year ended December 31, 2004. The Company also issued
50,000 shares of common stock to ETV Inc. pursuant to Exclusive License
Agreement the Company entered into in April 2004. The shares issued to ETV Inc.
were based on the fair value of the Company's common stock at the time the
agreement was entered into and the shares were issued. License fees of $250,000
were charged to operations during the year ended December 31, 2004. The Company
also issued an aggregate of 56,000 shares of common stock to consultants in
exchange for service fees of $490,000. Valuation of common stock issued for
services was based upon the value of the services rendered, which did not differ
materially from the fair value of the Company's common stock during the period
the services were rendered.

In December 2004 the Company issued an aggregate of 11,250 shares of common
stock to investors in exchange for $35,900 of proceeds, net of costs and fees.
The Company also issued an aggregate of 33,150 shares of common stock to
consultants in exchange for service fees of $185,500. Valuation of common stock
issued for services was based upon the value of the services rendered, which did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered. Additionally, the Company received
proceeds of $39,300 in December 2004 for common stock subscribed. The shares
subscribed were issued to the investors in January and March of 2005.

In January 2005, the Company issued an aggregate of 3,980 shares of common stock
to consultants in exchange for accrued service fees of $17,512. Valuation of
common stock issued for services was based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered. Additionally, the
Company issued 7,500 shares of common stock, valued at $12,500, to an investor
in exchange for common stock subscribed in prior periods.

In February 2005, the Company issued an aggregate of 31,000 shares of common
stock to consultants in exchange for service fees of $53,900 and deferred
compensation of $98,000. Valuation of common stock issued for services was based
upon the value of the services rendered, which did not differ materially from
the fair value of the Company's common stock during the period the services were
rendered.



                                      F-26

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (continued)

In March 2005, the Company issued an aggregate of 23,000 shares of common stock
to consultants in exchange for service fees of $55,500. Valuation of common
stock issued for services was based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered. Additionally, the Company
issued an aggregate of 49,896 shares of common stock to investors in exchange
for $45,000 of cash, net of costs and fees, and $26,800 of common stock
subscribed in prior periods. The Company also issued an aggregate of 462,750
shares of common stock to Company's Chief Executive Officer in exchange for
officer compensations of $881,440, note payable of $175,000 and $100,435 of
officer advances (Note B). The Company also issued 400,000 shares of common
stock to Smart Entertainment Inc. to purchase the exclusive license. The shares
issued to Smart Entertainment Inc. were based on the fair value of the Company's
common stock at the time the agreement was entered into and the shares were
issued. The Company's management determined at the time of the transaction,
there were no material intangible assets that could be capitalized in accordance
with FAS No.141. Accordingly, license fees of $840,000 were charged to
operations during the year ended December 31, 2005.

In April 2005, the Company issued an aggregate of 70,000 shares of common stock
to consultants in exchange for accrued service fees of $105,000. The Company
also issued an aggregate of 170,000 shares of common stock to a consultant in
exchange for investor relations and financial communications service fees of
$255,000. Valuation of common stock issued for services was based upon the value
of the services rendered, which did not differ materially from the fair value of
the Company's common stock during the period the services were rendered.

In August 2005, the Company issued an aggregate of 231,330 shares of common
stock to consultants in exchange for service fees of $902,187. Valuation of
common stock issued for services was based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered. Additionally, the
Company issued an aggregate of 9,000 shares of common stock to an investor in
exchange for $14,000 of proceeds, net of costs and fees.

In October 2005, the Company issued an aggregate of 161,833 shares of common
stock to consultants in exchange for service fees of $250,933 and deferred
compensation of $8,000. The valuation of the common stock issued for services
was based on the services rendered and did not differ materially from the fair
value of the Company's common stock during the period the services were
rendered. Additionally, the Company issued an aggregate of 53,000 shares of
common stock to an investor in exchange for $64,100 of proceeds, net of costs
and fees, and subscription receivable of $30,000.

In November 2005, the Company issued an aggregate of 208,009 shares of common
stock to consultants in exchange for service fees of $124,719 and deferred
compensation of $707,320. The valuation of the common stock issued for services
was based on the services rendered and did not differ materially from the fair
value of the Company's common stock during the period the services were
rendered. Additionally, the Company issued an aggregate of 182,900 shares of
common stock to investors in exchange for $162,900 of proceeds, net of costs and
fees.

In December 2005, the Company issued an aggregate of 76,000 shares of common
stock to consultants in exchange for service fees of $364,800. The valuation of
the common stock issued for services was based on the services rendered and did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered. Additionally, the Company issued an
aggregate of 30,000 shares of common stock to investors in exchange for $30,000
of proceeds, net of costs and fees.

During the year ended December 31, 2005, the Company amortized shares issued in
exchange for deferred compensation and charged to operations an aggregate amount
of $256,005. Total deferred compensation at December 31, 2005 to be amortized
through November 2006 amounted $557,315. Additionally, during the year ended
December 31, 2005, Company received proceeds in aggregate of $54,978 for common
stock subscribed.

In February 2006, the Company issued an aggregate of 1,530,000 shares of common
stock to consultants in exchange for service fees of $6,226,000. The valuation
of the common stock issued for services was based on the services rendered and
did not differ materially from the fair value of the Company's common stock
during the period the services were rendered.

In March 2006, the Company issued an aggregate of 181,500 shares of common stock
to consultants in exchange for service fees of $394,499and settlement of accrued
liabilities of $180,000 (Note F). The valuation of the common stock issued for
services was based on the services rendered and did not differ materially from
the fair value of the Company's common stock during the period the services were
rendered. Additionally, the Company issued an aggregate of 25,000 shares of
common stock to investors in exchange for $24,955 of proceeds, net of costs and
fees. The Company also issued an aggregate of 65,000 shares of common stock in
exchange for $54,978 of common stock subscribed during the year ended December
31, 2005. The Company received proceeds of $30,000 in connection with common
stock subscribed in October 2005.

                                      F-27

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (continued)


In April 2006, the Company issued an aggregate of 45,390 shares of common stock
to consultants in exchange for $15,586 of service fees and $52,500 of license
fees. The valuation of the common stock issued for services and licensing was
based on the value of services rendered and licenses provided and did not differ
materially from the fair value of the Company's common stock during the period
the services and licenses were rendered.

In May 2006, the Company issued an aggregate of 280,000 shares of common stock
to consultants in exchange for $282,000 of service fees and $54,000 of license
fees. The valuation of the common stock issued for services and licensing was
based on the value of services rendered and licenses provided and did not differ
materially from the fair value of the Company's common stock during the period
the services and licenses were rendered.

In June 2006, the Company issued an aggregate of 10,000 shares of common stock
to investors in exchange for $10,000 of proceeds, net of costs and fees. The
Company also received aggregate proceeds of $55,652 in exchange for common stock
subscribed.

In August 2006, the Company issued an aggregate of 10,000 shares of common stock
to consultants in exchange for services of $11,500. The valuation of the common
stock issued for services was based on the services rendered and did not differ
materially from the fair value of the Company's common stock during the period
the services were rendered. Additionally, the Company issued an aggregate of
96,374 shares of common stock to investors in exchange for $22,163 of proceeds,
net of costs and fees, and $55,652 of common stock subscribed in June 2006.

In September 2006, the Company issued an aggregate of 1,804,285 shares of common
stock to consultants in exchange for service fees of $3,496,727. The valuation
of the common stock issued for services was based on the services rendered and
did not differ materially from the fair value of the Company's common stock
during the period the services were rendered. Additionally, the Company issued
an aggregate of 10,000 shares of common stock in exchange for office expenses of
$10,000. The Company issued an aggregate of 214,496 shares of common stock to
investors in exchange for $78,500 of proceeds, net of costs and fees.

In October 2006, the Company issued an aggregate of 15,000 shares of common
stock to consultants in exchange for service fees of $30,000. The valuation of
the common stock issued for services was based on the services rendered and did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered.

In November 2006, the Company issued an aggregate of 524,484 shares of common
stock to consultants in exchange for service fees of $891,270. The valuation of
the common stock issued for services was based on the services rendered and did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered. Additionally, the Company issued an
aggregate of 103,587 shares of common stock to investors in exchange for $72,666
of proceeds, net of costs and fees.

In December 2006, the Company issued an aggregate of 30,000 shares of common
stock to consultants in exchange for service fees of $41,000. The valuation of
the common stock issued for services was based on the services rendered and did
not differ materially from the fair value of the Company's common stock during
the period the services were rendered. Additionally, the Company issued an
aggregate of 20,800 shares of common stock in exchange for office expenses of
$20,800. The Company issued an aggregate of 240,000 shares of common stock to
investors in exchange for $90,000 of proceeds, net of costs and fees.

During the year ended December 31, 2006, the Company amortized shares issued in
exchange for deferred compensation and charged to operations an aggregate amount
of $750,148. Total deferred compensation at December 31, 2007 to be amortized
through June 2008 amounted $135,667.

NOTE E - NON-EMPLOYEE STOCK OPTIONS
The Company did not grant stock options to employees as of December 31, 2006.
The following table summarizes the changes in options outstanding and the
related prices for the shares of the Company's common stock issued to the
Company consultants, after giving effect to 1:100 reverse split in common stock
subsequent to the date of the financial statements (Note D and J). These options
were granted in lieu of cash compensation for services performed to consultants.




                                      F-28

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006


NOTE E - NON-EMPLOYEE STOCK OPTIONS (CONTINUED)
<TABLE>
<CAPTION>
                              Options Outstanding                                  Options Exercisable
                              -------------------                                  -------------------
                                          Weighted Average        Weighed                       Weighted
                          Number       Remaining Contractual      Average         Number        Average
   Exercise Prices     Outstanding          Life (Years)       Exercise Price  Exercisable   Exercise Price
   ---------------     -----------          ------------       --------------  -----------   --------------
<S>        <C>                  <C>                      <C>             <C>          <C>              <C>
           $   5.00             2,000                    0.30          $ 5.00         2,000           $5.00
              50.00             1,000                    2.00           50.00         1,000           50.00
             150.00             1,000                     .25          150.00         1,000          150.00
                                -----                    ----          ------         -----          ------
                                4,000                    0.40         $ 52.50         4,000         $ 52.50
                                =====                    ====         =======         =====         =======
</TABLE>

Transactions involving options issued to non-employees are summarized as
follows:
<TABLE>
<CAPTION>
                                                                                      Weighted Average
                                                                Number of Shares      Price Per Share

<S>                                                                  <C>                 <C>
       Outstanding at January 1, 2004                                4,000               $   75.00
                                                                     =====               =========
          Granted                                                    1,750                    5.00
          Exercised                                                      -                       -
          Canceled or expired                                      (2,000)                  150.00
                                                                   -------               ---------
       Outstanding at December 31, 2004                              3,750               $   56.00
                                                                     =====               =========
          Granted                                                    2,000                    5.00
          Exercised                                                      -                       -
          Cancelled                                                (1,750)                    5.00
                                                                   -------               ---------
       Outstanding at December 31, 2005                              4,000               $   52.50
                                                                     =====               =========
          Granted                                                        -                       -
          Exercised                                                      -                       -
          Cancelled                                                      -                       -
                                                                         -                       -
       Outstanding at December 31, 2006                              4,000               $   52.50
                                                                     =====               =========
</TABLE>

The weighted-average fair value of stock options granted to consultants during
the year ended December 31 2005 and the weighted-average significant assumptions
used to determine those fair values, using a Black-Scholes option pricing model
are as follows:

                                                                       2005
Significant assumptions (weighted-average):
Risk-free interest rate at grant date                                    2.07%
Expected stock price volatility                                            93%
Expected dividend payout                                                     -
Expected option life-years (a)                                            2.00
(A) THE EXPECTED OPTION/WARRANT LIFE IS BASED ON CONTRACTUAL
 EXPIRATION DATES.

Compensation expenses charged to operations in connection with granting the
options to consultants were $805 for the year ended December 31, 2005.

NOTE F - INCOME TAXES

The Company has adopted Financial Accounting Standard No. 109, which requires
the recognition of deferred tax liabilities and assets for the expected future
tax consequences of events that have been included in the financial statement or
tax returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between financial statements and tax bases of
assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse. Temporary differences between taxable
income reported for financial reporting purposes and income tax purposes are
insignificant.




                                      F-29

<page>


                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE F - INCOME TAXES (CONTINUED)

For income tax reporting purposes, the Company's aggregate unused net operating
losses approximate $24,400,000, which expire through 2025, subject to
limitations of Section 382 of the Internal Revenue Code, as amended. The
deferred tax asset related to the carryforward is approximately $7,300,000. The
Company has provided a valuation reserve against the full amount of the net
operating loss benefit, since in the opinion of management based upon the
earnings history of the Company, it is more likely than not that the benefits
will not be realized. Due to significant changes in the Company's ownership, the
Company's future use of its existing net operating losses may be limited.

Components of deferred tax assets as of December 31, 2006 are as follows:

          Non Current:
                 Net operating loss carryforward     $ 7,300,000
                 Valuation allowance                  (7,300,000)
                                                     -----------
                 Net deferred tax asset              $      --
                                                     ===========

NOTE G - LOSS PER SHARE

The following table presents the computation of basic and diluted losses per
share, after giving effect to 1:100 reverse split in common stock subsequent to
the date of the financial statements (Note D and J). :


                                                            2006

Net loss available to common shareholders                $(13,120,209)
                                                         ===========

Basic and fully diluted loss per share                   $     (2.43)
                                                         ===========

Weighted average common shares outstanding                 5,405,577
                                                         ===========

For the years ended December 31, 2006 there were no potential dilutive
shares outstanding.

NOTE H - COMMITMENTS AND CONTINGENCIES

Consulting Agreements

The Company has consulting agreements with outside contractors to provide
marketing and financial advisory services. The Agreements are generally for a
term of 12 months from inception and renewable automatically from year to year
unless either the Company or Consultant terminates such engagement by written
notice.

License Agreements

In February 2006, the Company re-negotiated the terms of its agreements with
Smart Entertainment Inc. and its sole shareholder Halldor Sanne, as follows:

o        Effective March 1, 2005 Smart Entertainment Inc. and its sole
         shareholder, Halldor Sanne, have granted the Company exclusive rights
         for a 99 year period to utilize the Smart SMS technical platform, logo,
         and marketing and promotional material for North America, Central
         America and South America.

o        The Company agreed to issue 50,000 shares of its common stock to
         Halldor Sanne or any other name requested by Halldor Sanne to settle
         all technical support services and consulting fees due at December 31,
         2005 , in the amount of $180,000, as claimed by Halldor Sanne. These
         shares were issued in March 2006 (Note D). After the issuance of the
         agreed upon shares, the Company had no further relationship with Smart
         Entertainment Inc, except the right to use the Smart SMS technical
         platform, logo, and marketing and promotional material as described
         above.





                                      F-30

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006


NOTE H - COMMITMENTS AND CONTINGENCIES (CONTINUED)

Litigation

On or about February 2, 2006, the Company entered into an oral consulting
agreement with Mr. David Dadon where Mr. Dadon agreed to provide services to the
Company as the new Chairman of the Board of Directors, in exchange for 1,500,000
(post-split) restricted shares of the Company's common stock. On or about
February 15, 2006, the Company provided the required consideration to Mr. Dadon
by issuing 1,500,000 restricted common shares of the Company. On or about March
1, 2006, the Company retracted the consulting agreement due to non performance.
On or about March 15, 2006, the Company demanded Mr. Dadon to return the shares
issued as the agreement has been terminated. Subsequent to the date of the
financial statements (on or about February 14, 2007), the Company contacted
Interwest Transfer Company to put a freeze on the 1,500,000 shares issued to Mr.
Dadon, and Interwest Transfer Company refused to put a freeze on the stock.
Subsequent to the date of the financial statements (on or about April 18, 2007),
the Company filed a Complaint against David Dadon and Interwest Transfer Company
in Los Angeles County Superior Court for breach of oral contract, and seeking
return of the shares or an award of general damages in sum of $100,000, with
interest thereon at the legal rate from the date of breach of contract, and any
related legal costs and fees. The court has scheduled an initial case management
review and conference in August 2007. As this litigation is in its initial
stages, the Company can make no assurances with respect to the outcome of this
matter or the recovery of the shares.

The Company is subject to other legal proceedings and claims, which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters should not have a material adverse effect on its financial position,
results of operations or liquidity.


Operating Leases

As of December 31, 2006 and 2005, the Company had no operating leases. The
Company did not lease office facilities and was operating out of its Chief
Executive Officer's home office.

NOTE I - GOING CONCERN MATTERS

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the accompanying
financial statements during the period June 3, 1997 through December 31, 2006,
the Company has incurred a loss of $24,329,275, and the Company's current
liabilities exceeded its current assets by $320,301 as of December 31, 2006.
These factors among others may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time.

The Company's existence is dependent upon management's ability to develop
profitable operations and resolve its liquidity problems. Management anticipates
the Company will attain profitable status and improve its liquidity through the
continued developing, marketing and selling of its products and additional
equity investment in the Company. The accompanying financial statements do not
include any adjustments that might result should the Company be unable to
continue as a going concern.

In order to improve the Company's liquidity, the Company is actively pursuing
additional equity financing through discussions with investment bankers and
private investors. There can be no assurance the Company will be successful in
its effort to secure additional equity financing. If operations and cash flows
continue to improve through these efforts, management believes that the Company
can continue to operate. However, no assurance can be given that management's
actions will result in profitable operations or the resolution of its liquidity
problems.

NOTE J - SUBSEQUENT EVENTS






                                      F-31

<page>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

NOTE J - SUBSEQUENT EVENTS (CONTINUED)

Equity

o        On August 1, 2007, the Board of Directors passed a resolution to amend
         the Articles of Incorporation to amend Article Four to read "the
         capital stock of this corporation shall consist of one hundered million
         (100,000,000) shares of capital stock of which twenty five million
         (25,000,000) shall be shares of preferred stock with a par value of
         $.001 per share ("preferred stock"), and 75 million (75,000,000) shall
         be shares of common stock with a par value of $.001 per share ("common
         stock"). The board of directors, by resolution only and without further
         action or approval , may cause the corporation to issue such preferred
         stock in one or more series and to establish the designation, voting
         powers, peferences and rights of each rights of each series of
         preferred red stock."

o        On August 6, 2007 company received $13,000,000 in outside funding
         through the sale of senior secured notes to be used for acquisitions.
         In connection with such sale, STMC also issued 13,000,000 shares of its
         common stock with a Rule 144 restrictive legend. The investment was
         made by 3V Capital Management, LLC as trading advisor for Distressed
         High Yield Trading Opportunities Fund, Ltd. 3V Capital Management, LLC
         and Stagg Capital Group, LLC have until December 14, 2007 to have
         exclusive rights to purchase an additional $7,000,000 of senior secured
         notes and common stock on the same terms as the August 06, 2007
         financing.

o        On August 8, 2007 the company concurrent with the $13,000,000 financing
         from 3V Capital Management, LLC and Stagg Capital Group, LLC, Smart SMS
         Corp. acquired Kevlertech, Inc. d/b/a Millennium Information &
         Technology Consultants ("MIT Consultants") for $12,000,000 cash and
         15,000,000 shares of the company common stock with a Rule 144
         restrictive legend.

o        Subsequent to the date of financial statements from January 2007 to
         June 2007 the Company issued an aggregate of 1,656,333 shares of common
         stock to investors for $ 647,500 in connection with private placements.
         The Company also issued an aggregate of 25,284,986 shares of common
         stock to consultants in exchange for services rendered and an aggregate
         of 56,700 shares of common stock for expenses and licensing fee
         incurred on behalf of the Company.


Appointment of Management

On March 27, 2007, the Company announced the appointment of Steaphan Weir to
replace Gordon Lee as the Chief Executive Officer. Gordon Lee is appointed as
the Chairman of the Board. On April 26, 2007, the Company announced the
appointment of Layne Bednar to Chief Operating Officer.


                                      F-32