<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, 2005

                                       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>
<CAPTION>
Table of Contents

                                                  PART I

<S>                                                                                                     <C>
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............11

Item 8A. Controls and Procedures. ......................................................................11

Item 8B. Other Information..............................................................................11

                                                 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.........................................................................13

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

Item 12. Certain Relationships and Related Transactions.................................................14

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

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

SIGNATURES..............................................................................................17

                                                    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 have been no bankruptcy, receiverships, or similar proceedings by or 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, 2005, we were a development-stage company focused on developing
a text messaging business. Between 2001 and December 31, 2004, we focused on
creating and providing the platforms for Internet businesses, where others pay
to use our sites and provide their own content. During 2005, we generated no
revenues from our products or services.

Subsequent to the year ended December 31, 2005, we did the following:

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.


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.

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

During 2005, 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 2005, no matters were submitted to our security
holders for a vote, through the solicitation of proxies or otherwise.


<page>

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 "SRSM". 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.

                     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

                      2004                  HIGH              LOW
                  -------------------------------------------------
                  1st Quarter               $9.20             $3.50
                  2nd Quarter               $15.00            $7.00
                  3rd Quarter               $14.70            $4.60
                  4th Quarter               $8.90             $3.00

(b)      As of December 31, 2005, we had 165 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,
2005. 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.

<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>
   $       5.00             2,000                  1.30                5.00          2,000             5.00
          50.00             1,000                  2.00               50.00          1,000            50.00
         150.00             1,000                  1.25              150.00          1,000           150.00
                            -----             ---------          ----------          -----       ----------
                            4,000                  1.46          $    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
                                               ======           ==========

                                       2

<page>

The weighted-average fair value of stock options granted to consultants during
the years ended December 31 2005 and 2004 and the weighted-average significant
assumptions used to determine those fair values, using a Black-Scholes option
pricing model are as follows:

                                                                2005      2004
                                                                -----    ------

Significant assumptions (weighted-average):
Risk-free interest rate at grant date                           2.07%     1.00%
Expected stock price volatility                                   93%       15%
Expected dividend payout                                           --        --
Expected option life-years (a)                                   2.00      0.92
(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 and $96,320 for the year ended December 31,
2005 and 2004, respectively.


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.


                                       3

<page>


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.

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

At December 31, 2005, 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, 2005 and December 31, 2004, we did not
receive any revenue and incurred expenses of $5,616,713 and $3,039,814
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 $5,616,713 for the year ended December 31, 2005
compared to $3,039,814 for the year ended December 31, 2004.

Our independent certified public accountants have stated in their report
included in our December 31, 2005 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.


                                       4
<page>


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. 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.

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 are developing the software for launch of Smart SMS. Expenses of this
development are expected to be $1,000,000 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 $40,000 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.


                                       5
<page>


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.


                                       9

<page>


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.

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-29 are the financial statements and notes
to financial statements that have been prepared in accordance with Item 310 of
Regulation S-B.


                                       10



<page>


                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2005 AND 2004

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

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)









<page>


                                          SMART SMS CORP.
                                   (FORMERLY AMERICAN IDC CORP.)
                                    A DEVELOPMENT STAGE COMPANY

                                   INDEX TO FINANCIAL STATEMENTS

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

Consolidated Balance Sheets at December 31, 2005 and 2004.....................................F-4

Consolidated Statements of Losses for the years ended December 31, 2005 and 2004
and for the period June 3, 1997 (date of inception) to December 31, 2005......................F-5

Consolidated Statements of Deficiency in Stockholders' Equity for the period June 3, 1997
(date of inception) to December 31, 2005...............................................F-6 - F-13

Consolidated Statements of Cash Flows for the years ended December 31, 2005 and 2004
and for the period June 3, 1997 (date of inception) to December 31, 2005.....................F-14

Notes to Consolidated Financial Statements.............................................F-15- F-29
</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,
2005 and 2004 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, 2005. 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, 2005 and 2004, 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, 2005, 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
July 16, 2007, except as to Note J, which is as of
August 08, 2007



                                       F-3

<page>

<TABLE>
<CAPTION>

                                                   SMART SMS CORP.
                                            (FORMERLY AMERICAN IDC CORP.)
                                             A DEVELOPMENT STAGE COMPANY
                                             CONSOLIDATED BALANCE SHEETS
                                             DECEMBER 31, 2005 AND 2004

                                                                                         2005              2004
                                                                                     ------------      ------------
<S>                                                                                  <C>               <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                            $        --       $        978
                                                                                     ------------      ------------

Total Assets                                                                         $        --       $        978
                                                                                     ============      ============

LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Cash disbursed in excess of available funds                                          $        192      $         --
Accounts payable and accrued liabilities                                                  308,870           233,714
Convertible debenture (Note C)                                                             10,000                --
Other advances                                                                             36,800            22,000
Advances from related party (Note B)                                                        5,490            33,117
Note payable, related party (Note B)                                                           --           175,000
                                                                                     ------------      ------------
                                                                                          361,352           463,831

COMMITMENTS AND CONTINGENCIES (Note H)                                                         --                --

(DEFICIENCY IN) STOCKHOLDERS' EQUITY (Note D) Preferred stock, par value $0.001
per share; authorized 25,000,000
Preferred stock, Series A; par value $0.001 per share; authorized 10,000,000
320,000 and -0- shares issued and outstanding as of December 31, 2005 and 2004, respectively.
(Liquidation preference $640,000)
                                                                                             320                --
Common stock, $0.001 par value; authorized 75, 000,000
2,933,714 and 763,516 shares issued and outstanding as of (Note J)
December 31, 2005 and 2004, respectively                                                    2,934               764
Additional paid in capital                                                             11,364,697         5,007,336
Common stock subscriptions                                                                 37,078           111,400
Deferred compensation                                                                    (557,315)               --
Accumulated deficit during development stage                                          (11,209,066)       (5,582,353)
                                                                                     ------------      ------------
(Deficiency in) stockholders' equity                                                     (361,352)         (462,853)

Total liabilities and (deficiency in) stockholders' equity                           $         --      $        978
                                                                                     ============      ============
</TABLE>

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



                                       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
                                                     2005                  2004    December 31, 2005
                                                 ------------      ------------      ------------
<S>                                              <C>               <C>               <C>
Operating expenses:

Selling, general and administrative              $  5,616,713      $  2,549,814      $ 10,709,066

Impairment loss (Note H)                                   --           490,000           523,000
                                                 ------------      ------------      ------------

  Total operating expenses                          5,616,713         3,039,814        11,232,066


Loss from operations                               (5,616,713)       (3,039,814)      (11,232,066)


Other income, net                                          --                --            33,000

Interest (expense), net (Note C)                      (10,000)               --           (10,000)
                                                 ------------      ------------      ------------


Net income before provision for income taxes       (5,626,713)       (3,039,814)      (11,209,066)


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

NET LOSS                                         $ (5,626,713)     $ (3,039,814)     $(11,209,066)
                                                 ============      ============      ============

Loss per common share (basic and assuming
dilution): (Note G)
                                                 $      (3.00)     $      (6.97)
                                                 ============      ============
Weighted average common shares outstanding
(basic and assuming dilution)                       1,876,332           435,913
                                                 ============      ============

</TABLE>

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

                                       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, 2005



                                                                                                                         Common
                                                    Preferred stock              Common stock           Additional        Stock
                                                  Shares       Amount        Shares        Amount     Paid in Capital  Subscription
                                                ------------     ------     --------      --------      -----------    -----------
<S>                                             <C>             <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>


[table continued]

<TABLE>
<CAPTION>

                                                                      Deficit
                                                                    Accumulated
                                                                      During
                                                   Deferred        Development
                                                 Compensation         Stage           Total
                                                -------------     ------------     -----------
<S>                                              <C>               <C>              <C>
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
                                                  =============     ============     ===========
</TABLE>




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

                                       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, 2005



                                                                                                                        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>


[table continued]

<TABLE>
<CAPTION>
                                                                 Accumulated
                                                                   During
                                                   Deferred      Development
                                                 Compensation       Stage           Total
                                                 ------------       -----           -----

<S>                                               <C>            <C>              <C>
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)
                                                  ===========     ===========       =========
</TABLE>






The accompanying notes are an integral part of the consolidated
financial statements
                                       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, 2005




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

<S>                                           <C>       <C>               <C>        <C>            <C>               <C>
Balance, December 31, 2002                       --     $    --           63,500     $       63     $  740,527        $  (20,000)

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        $  (20,000)
                                             ======     =======       ==========     ==========     ==========        ==========

</TABLE>

[table continued]

<TABLE>
<CAPTION>
                                                               Deficit
                                                              Accumulated
                                                                 During
                                                 Deferred     Development
                                               Compensation      Stage          Total
                                               ------------  ------------     -----------

<S>                                            <C>             <C>             <C>
Balance, December 31, 2002                     $      --       $ (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                                     $     --     $   (856,892)     $   210,961
                                               ========     ============      ===========
</TABLE>




The accompanying notes are an integral part of the consolidated financial
statements
                                       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, 2005




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

<S>                                             <C>              <C>                 <C>         <C>              <C>
Balance forward                                           --     $        --         133,650     $       133      $  1,087,720

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                                 --              --              --              --                --

Issuance of stock options in exchange for
services rendered                                         --              --              --              --            21,080


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


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

</TABLE>

[table continued]

<TABLE>
<CAPTION>

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

<S>                                              <C>              <C>              <C>                 <C>
Balance forward                                  $   (20,000)     $        --      $      (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               --                   --             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                       $    72,100      $        --      $    (2,542,539)    $     (432,266)
                                                 ===========      ===========      ===============     ==============

</TABLE>



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


                                       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, 2005




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

<S>                                            <C>              <C>                  <C>          <C>            <C>
Balance, December 31, 2003                              --      $        --          225,640      $      226     $ 2,037,947

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
                                               ===========      ===========      ===========      ==========     ===========
</TABLE>

[table continued]


<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, 2005

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

<S>                                             <C>              <C>                 <C>               <C>
Balance, December 31, 2003                      $    72,100      $            --     $  (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                                        $    72,100      $            --     $  (2,542,539)    $    170,798
                                                ===========      ===============     =============     ============
</TABLE>



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

                                      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, 2005




                                                   Preferred stock                   Common stock              Additional
                                                 Shares         Amount          Shares          Amount       Paid in 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>

[table continued]

<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, 2005


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

<S>                                             <C>              <C>              <C>                 <C>
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)
                                                ===========      ===========      ===============     ==============

</TABLE>


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

                                      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, 2005




                                                     Preferred stock                 Common stock              Additional
                                                  Shares         Amount         Shares           Amount      Paid in 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>


[table continued]

<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, 2005

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

<S>                                            <C>              <C>              <C>              <C>
Balance, December 31, 2004                     $   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)                                --               --               --           17,512
Common stock issued in January 2005 in

exchange for common stock subscribed
(Note D)                                           (12,500)              --               --               --

Common stock issued in February 2005 in
exchange for services rendered at $4.90
per share (Note D)                                      --               --               --           53,900

Common stock issue in February 2005 in
exchange for prepaid services at $4.90
per share (Note D)                                      --          (98,000)              --               --

Sale of common stock in March 2005 at
$1.00 per share (Note D)                                --               --               --           10,000

Common stock issued in March 2005 in
exchange for cash and stock subscription
(Note D)                                           (26,800)              --               --           15,000

Sale of common stock in March 2005 at
$3.00 per share (Note D)                                --               --               --           20,000

Common stock issued in March 2005 in
exchange for licensing fees at $2.10 per
share (Note D)                                          --               --               --        840,000

Common stock issued in March 2005 in
exchange for services rendered at $2.50
per share (Note D)                                      --               --               --           30,000

Common stock issued in March 2005 in
exchange for service rendered at
approximately $2.32 per share (Note D)                  --               --               --           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)               --               --               --        1,156,875
Options issued in April 2005 for services

rendered                                                --               --               --              805
                                               -----------      -----------      -----------      -----------
Subtotal                                       $    12,100      $   (98,000)     $(5,582,353)     $ 1,646,739
                                               ===========      ===========      ===========      ===========
</TABLE>



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

                                      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, 2005



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

<S>                                                   <C>           <C>                <C>           <C>             <C>
Balance forward                                              --     $         --       1,741,642     $      1,742    $    7,313,250

Common stock issued in April 2005 in exchange for
services rendered at $1.50 per share (Note D)                --               --         170,000              170           254,830

Common stock issued in April 2005 in exchange for
accrued service fees at $1.50 per share (Note D)             --               --          70,000               70           104,930

Common stock issued in August 2005 in exchange
for services rendered at $3.90 per share (Note D)            --               --         231,330              231           901,956

Sale of common stock in August 2005 at $1.55 per
share (Note D)                                               --               --           9,000                9            13,991

Sale of common stock in October 2005 at $1.21 per
share (Note D)                                               --               --          53,000               53            94,047

Common stock issued in October 2005 in exchange
for services rendered at $1.60 per share (Note D)            --               --         107,833              108           172,425

Common stock issued in October 2005 in exchange
for service fees at $1.60 per share (Note D)                 --               --          54,000               54            86,346

Sale of common stock in November 2005 at $1.00
per share (Note D)                                           --               --         132,900              133           132,767

Sale of common stock in November 2005 at $0.67
per share (Note D)                                           --               --          30,000               30            19,970

Common stock issued in November 2005 in exchange
for service fees at $4.00 per share (Note D)                 --               --         208,009              208           831,831

Sale of common stock in November 2005 at $0.50
per share (Note D)                                           --               --          20,000               20             9,980

Sale of common stock in December 2005 at $1.00
per share (Note D)                                           --               --          30,000               30            29,970

Common stock issued in December 2005 in exchange
for service fees at $4.80 per share (Note D)                 --               --          76,000               76           364,724

Issuance of series A preferred stock in exchange
for services rendered at $3.20 per share (Note D)       320,000              320             --                --         1,023,680


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

Beneficial conversion feature of convertible
debenture (Note C)                                           --               --              --               --            10,000


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

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

Balance, December 31, 2005                              320,000     $        320      2,933,714     $      2,934      $ 11,364,697
                                                     ==========     ============    ============     ============    ==============
</TABLE>


[table continued]


<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, 2005

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

<S>                                                     <C>             <C>               <C>               <C>
Balance forward                                         $     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)                     --              --                --           255,000

Common stock issued in April 2005 in exchange for
accrued service fees at $1.50 per share (Note D)                  --              --                --           105,000

Common stock issued in August 2005 in exchange
for services rendered at $3.90 per share (Note D)                 --              --                --           902,187

Sale of common stock in August 2005 at $1.55 per
share (Note D)                                                    --              --                --            14,000

Sale of common stock in October 2005 at $1.21 per
share (Note D)                                               (30,000)             --                --            64,100

Common stock issued in October 2005 in exchange
for services rendered at $1.60 per share (Note D)                 --              --                --           172,533

Common stock issued in October 2005 in exchange
for service fees at $1.60 per share (Note D)                      --          (8,000)               --            78,400

Sale of common stock in November 2005 at $1.00
per share (Note D)                                                --              --                --           132,900

Sale of common stock in November 2005 at $0.67
per share (Note D)                                                --              --                --            20,000

Common stock issued in November 2005 in exchange
for service fees at $4.00 per share (Note D)                      --        (707,320)               --           124,719

Sale of common stock in November 2005 at $0.50
per share (Note D)                                                --              --                --            10,000

Sale of common stock in December 2005 at $1.00
per share (Note D)                                                --              --                --            30,000

Common stock issued in December 2005 in exchange
for service fees at $4.80 per share (Note D)                      --              --                -            364,800

Issuance of series A preferred stock in exchange
for services rendered at $3.20 per share (Note D)                 --              --                --         1,024,000


Common stock subscription                                       54,978            --                --            54,978

Beneficial conversion feature of convertible
debenture (Note C)                                                --              --                --            10,000


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

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

Balance, December 31, 2005                              $     37,078    $   (557,315)     $(11,209,066)     $   (361,352)
                                                        ============    ============      ============      ============
</TABLE>




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

                                      F-13
<page>


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

                                                                                                 For the period from
                                                                                                 June 3, 1997 (date of
                                                               For the year ended December 31,    inception) through
                                                                   2005              2004          December 31, 2005
                                                               ------------      ------------    ----------------------
<S>                                                            <C>               <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                       $ (5,626,713)     $ (3,039,814)          $(11,209,066)
Adjustments to reconcile net loss to cash used in
operating activities:

Common stock issued in exchange for services rendered             2,888,479         1,995,398              6,600,580

Common stock issued in exchange for    license fee                  840,000           490,000              1,330,000

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

Preferred stock issued for compensation                             766,272                --                766,272
Beneficial conversion feature attributable to
convertible debenture charged to interest expense                    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            96,320                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              (237)                   192

Accounts payable and accrued liabilities                            197,668           152,401                707,682
                                                               ------------      ------------           ------------

Net cash used in operating activities:                             (667,292)         (305,932)            (1,197,230)


CASH FLOWS FROM INVESTING ACTIVITIES                                    --                 --                     --

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock and stock
subscription                                                        370,978           256,550                765,618

Proceeds from convertible debenture                                  10,000              --                   10,000

Proceeds from other advances, net of repayments                      14,800            22,000                 36,800
Proceeds from advances from related party, net of
repayments                                                          270,536            28,360                384,812
                                                               ------------      ------------           ------------

Net cash provided by financing activities                           666,314           306,910              1,197,230


Net increase (decrease) in cash and cash equivalents                   (978)              978                     --

Cash and cash equivalents-beginning of the year                         978                --                     --
                                                               ------------      ------------           ------------

Cash and cash equivalents-end of year                          $         --      $        978           $         --
                                                               ============      ============           ============


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest                       $         --      $         --           $         --

Income taxes paid                                                        --                --                     --

Common stock issued in exchange for services                      2,888,479         1,995,398              6,600,580

Common stock issued in exchange for license fees                    840,000           490,000              1,330,000

Stock options issued in exchange for services                           805            96,320                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 in exchange for accrued service
fees                                                                122,512           276,300                398,812

Common stock issued in exchange for related party note              175,000                --                175,000
Stock subscription settled by related party                          60,000                --                 60,000
Common stock and preferred stock issued in exchange
for related party advances                                          358,163            52,159                410,322

</TABLE>

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


                                      F-14

<page>


                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

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, 2005, 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, 2005,
the Company has accumulated losses of $11,209,066.

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, 2005 and 2004, 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-15
<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

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,
2005 AND 2004, AND FOR THE PERIOD FROM JUNE 3, 1997 (DATE OF INCEPTION) TO
DECEMBER 31, 2005, 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 $5,626,713 during the year ended
December 31, 2005 and $3,039,814 during the year ended December 31, 2004. The
Company's current liabilities exceeded its current assets by $361,352 as of
December 31, 2005. For the period from inception through December 31, 2005, the
Company has accumulated losses of $11,209,066. Consequently, its operations are
subject to all risks inherent in the establishment of a new business enterprise.


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

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 ("SFAS 148"), "Accounting for Stock-Based Compensation-Transition and
Disclosure-an amendment of SFAS 123." This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company has chosen to continue to account for stock-based
compensation using the intrinsic value method prescribed in APB Opinion No. 25
and related interpretations. Accordingly, compensation expense for stock options
is measured as the excess, if any, of the fair market value of the Company's
stock at the date of the grant over the exercise price of the related option.
The Company has adopted the annual disclosure provisions of SFAS No. 148 in its
financial reports for the year ended December 31, 2005 and 2004..The Company
has no awards of stock-based employee compensation outstanding at December 31,
2005.

                                      F-16


<page>


                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Stock Based Compensation (Continued)
------------------------------------

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
the Company will have to comply with Statement 123R and use the Fair Value based
method of accounting no later than the its first quarter of fiscal 2006.
Management has determined that this statement will have not have a material
impact on Company's consolidated financial statements. Subsequent to the date of
the financial statements, effective January 1, 2006, the Company adopted the
fair value recognition provisions of SFAS 123R, using the modified-prospective
transition method.

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.

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, 2005 and 2004 and for the period from June 3, 1997 (date of
inception) to December 31, 2005.


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, 2005 and 2004
and for the period from June 3, 1997 (date of inception) to December 31, 2005.




                                      F-17

<page>




                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.


New Accounting Pronouncements
-----------------------------

On December 16, 2004, the Financial Accounting Standards Board ("FASB")
published Statement of Financial Accounting Standards No. 123 (Revised 2004),
SHARE-BASED PAYMENT ("SFAS 123R"). SFAS 123R requires that compensation cost
related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS 123R
include stock options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. The provisions of SFAS
123R are effective as of the first interim period that begins after June 15,
2005. Accordingly, the Company will implement the revised standard in the third
quarter of fiscal year 2005. Currently, the Company accounts for its share-based
payment transactions under the provisions of APB 25, which does not necessarily
require the recognition of compensation cost in the financial statements. The
Company does not anticipate that the implementation of this standard will have a
material impact on its 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. The Company does not anticipate that the implementation of this
standard will have a material impact on its 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. The Company is required to adopt the
provisions of FIN 47 no later than the first quarter of fiscal 2006. The Company
does not expect the adoption of this Interpretation to have a material impact on
its consolidated financial position, results of operations or cash flows.

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 affected 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. The Company does not expect the adoption of this SFAS to
have a material impact on its consolidated financial position, results of
operations or cash flows.


                                      F-18

<page>


                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


New Accounting Pronouncements (Continued)
-----------------------------------------

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-19

<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

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, 2005 and December
31, 2004. 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 officer and shareholders was $33,117 at December 31, 2004.
At December 31, 2005, the Company has no liabilities due to its officers, 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

Subsequent to the date of the financial statements (Note J), the Company
affected a one-for-one hundred (1 to 100) reverse stock split of its outstanding
shares of common stock, $0.001 par value. 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.

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 J).




                                      F-20

<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE D - CAPITAL STOCK (CONTINUED)

Preferred Stock (Continued)
---------------------------

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 J).

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.

Common Stock
------------

As of December 31, 2005 and December 31, 2004, the Company has issued and
outstanding 2,933,714 shares and 763,516 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.

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.

                                      F-21

<page>




                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (Continued)
------------------------

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.

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 (see above)
subscribed and issued in December 2002.



                                      F-22

<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (Continued)
------------------------

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.

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.



                                      F-23

<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (Continued)
------------------------

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.

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.


                                      F-24

<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE D - CAPITAL STOCK (CONTINUED)

Common Stock (Continued)
------------------------

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. The common shares subscribed have not been issued as of
December 31, 2005 and accordingly were accounted for as stock subscription
payable.


NOTE E - NON-EMPLOYEE STOCK OPTIONS

The Company did not grant stock options to employees as of December 31, 2005.
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.

<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>
   $       5.00             2,000                  1.30             $  5.00          2,000           $ 5.00
          50.00             1,000                  2.00               50.00          1,000            50.00
         150.00             1,000                  1.25              150.00          1,000           150.00
                            -----             ---------          ----------          -----       ----------
                            4,000                  1.46          $    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
                                               ======           ==========



                                      F-25

<page>




                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


NOTE E - NON-EMPLOYEE STOCK OPTIONS (CONTINUED)

The weighted-average fair value of stock options granted to consultants during
the years ended December 31 2005 and 2004 and the weighted-average significant
assumptions used to determine those fair values, using a Black-Scholes option
pricing model are as follows:

                                                                2005      2004
                                                                -----    ------

Significant assumptions (weighted-average):
Risk-free interest rate at grant date                           2.07%     1.00%
Expected stock price volatility                                   93%       15%
Expected dividend payout                                           --        --
Expected option life-years (a)                                   2.00      0.92
(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 and $96,320 for the year ended December 31,
2005 and 2004, respectively.

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.

For income tax reporting purposes, the Company's aggregate unused net operating
losses approximate $11,200,000, 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 $3,800,000. 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, 2005 are as follows:

          Non Current:
                 Net operating loss carryforward          $ 3,800,000
                 Valuation allowance                       (3,800,000)
                                                          -----------
                 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). :



                                                   2005                 2004
                                                ------------        -----------


Net loss available to common shareholders       $ (5,626,713)       $(3,039,814)
                                                ============        ===========

Basic and fully diluted loss per share          $      (3.00)       $     (6.97)
                                                ============        ===========

Weighted average common shares outstanding         1,876,332            435,913
                                                ============        ===========

For the years ended December 31, 2005 and 2004, -0- and 50,000 potential shares,
respectively were excluded from shares used to calculate diluted earnings per
share as their inclusion would reduce net losses per share.

                                      F-26

<page>




                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

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.

Licensing Agreements
--------------------

On April 27, 2004, the Company entered into a Exclusive License Agreement with
Timeless Video, Inc., a California corporation ("TVI/CSI"), Digital Continuum,
Inc., a California corporation ("DCI") and ETV, Inc., a California corporation
("ETV"), (collectively, the "Licensor), whereby ACNI agreed to license a library
of over 10,000 classic films and television programs and a digital technology
solution for encoding, encrypting and broadcasting over the Internet, including
a proprietary Digital Continuum software. Under the licensing agreement, the
Company will license the Library and DC Software for use in North America for a
period of five years, renewable by mutual agreement of the parties. In
consideration for the license, the Company paid to the Licensor $10,000 in cash,
and issued 50,000 shares of its restricted common stock, valued at $250,000
(Note D). The license also included an exclusive two-year option to purchase the
licensed assets for $5,000,000 payable in cash or common stock, as determined by
the parties. Following the closing of the acquisition, there were no revenues
generated or further developments from this Exclusive License Agreement as of
December 31, 2004. The total considerations paid during the year ended December
31, 2004 were accounted for as an impairment loss and charged to operations.

On April 1, 2004, the Company issued 10,000 shares of common stock, valued at
$60,000 (Note D), to Omni Media Distribution, Inc. ("Omni"), a Nevada
corporation, pursuant to a Film Library License Agreement. On October 28, 2004,
the Company entered into another License Agreement with Omni. Omni acquires
independent feature films, TV Series, documentaries, short films, animations and
family programming from numerous worldwide sources. Pursuant to the License
Agreement, the company will license Omni's content library for a period of five
years in exchange for 30,000 shares of restricted common stock (Note D) and a
49% royalty paid to Omni from the net revenue derived from the use of the
licensed assets. These restricted shares, valued at $180,000, were issued to
Omni in November 2004. As of December 31, 2004, there were no revenues generated
or further developments from this License Agreement. Total considerations paid
during the year ended December 31, 2004 was accounted for as an impairment loss.

On December 11, 2004 the Company signed a letter of understanding with Smart
Entertainment Inc. ("Smart Entertainment") incorporated under the laws of the
County of Iceland. The Company and Smart Entertainment re-negotiated and amended
the terms on various occasions of the above mention letter of understanding.
Subsequent to the date of the financial statements, the Company and Smart
Entertainment entered into a final and definitive licensing agreement (Note J).
This agreement supersedes any and all previous agreements and understandings.
Any cash or share considerations paid by the Company to Smart Entertainment are
included as consideration in the final agreement.


Operating Leases
----------------

As of December 31, 2005 and 2004, 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.


Litigation
----------

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.

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, 2005,
the Company has incurred a loss of $11,209,066, and the Company's current
liabilities exceeded its current assets by $361,352 as of December 31, 2005.
These factors among others may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time.



                                      F-27

<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE I - GOING CONCERN MATTERS (CONTINUED)

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

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

     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    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.

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

          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.

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

     o    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.

Subsequent to the date of financial statements, the Company issued an aggregate
of 2,468,012 shares of common stock to investors in connection with private
placements. The Company also issued an aggregate of 30,120,645 shares of common
stock to consultants in exchange for services rendered and an aggregate of
217,500 shares of common stock for expenses and licensing on behalf of the
Company. Additionally, the Company issued 410,000 shares of its Series A
preferred stock to consultants in exchange for services.



                                      F-28


<page>



                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

NOTE J - SUBSEQUENT EVENTS (CONTINUED)

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.




                                      F-29



<page>


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.

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, 2005. 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


                                       11






<page>



(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.


                                       12


<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 &        2005
DIRECTOR           2004   (2)$240,000    -0-        -0-          -0-            -0-          -0-        -0-

SCHUMACHER,
ROBERT
FORMER
PRESIDENT &
CHIEF OPERATING    2004       -0-        -0-        -0-          -0-            -0-          -0-        -0-
OFFICER (1)
</TABLE>

(1)  Mr. Schumacher was President and Chief Operating Officer from July 23, 2003
     until August 15, 2004.
(2)  8,000,000 shares were issued in February 2004 in settlement of $240,000.00
     owed to Mr. Lee for his services as CEO and Chairman for fiscal 2003.


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.


                                       13


<page>

<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                                      552,750           18.9%

All Directors and Officers as a group                                          552,750           18.9%

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, 2005.

                                  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                                      300,000            94%

</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.

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.

Total amount due to officer and shareholders was $33,117 at December 31, 2004.
At December 31, 2005, the Company has no liabilities due to its officers, and
total amount due to other shareholders was $5,490.

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


                                       14


<page>



(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.


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 $17,766 and $30,550,
         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 28, 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 28, 2007


                                       16