<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, 2004

                                       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 April
27th, 2006: $5,648,727 based upon an average bid ask price of $.015 per share
and 376,581806 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 April 27, 2006, we had 446,371,361
shares of common stock issued and outstanding.


<PAGE>

<TABLE>
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.........................................1

Item 6. Management's Discussion and Analysis or Plan of Operation. ......................................2

Item 7. Financial Statements.............................................................................9

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

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

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

                                                 PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act..................................................................10

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

Item 11. Security Ownership of Certain Beneficial Owners and Management and
           Related Stockholder Matters..................................................................12

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

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

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

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

                                                    i
</TABLE>

<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

General
-------

Smart SMS Corp. (the "COMPANY") was incorporated in Florida on June 3, 1997 as
Future Projects VIII Corp. On July 20, 2000, we changed our name to AMERICAN IDC
CORP. Subsequently, on October 31, 2005, we changed our name to SMART SMS CORP.
There 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, 2004, we were a development-stage company focused on developing
online interactive businesses, such as dating sites, portals, and music
downloading sites. 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 2004, we generated no revenues from
our products or services. Subsequent to December 31, 2004, we abandoned our
online interactive business and entered the text messaging business.

LICENSING AGREEMENTS

On April 27, 2004, we 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 we 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, we 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, we paid to the Licensor $10,000 in cash, and issued 5,000,000
shares of our restricted common stock, valued at $250,000. 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.

On October 28, 2004, we entered into a License Agreement with Omni Media
Distribution, Inc. ("OMNI"), a Nevada corporation. Omni acquires independent
feature films, TV Series, documentaries, short films, animations and family
programming from numerous worldwide sources. Pursuant to the License Agreement,
we agreed to license Omni's content library for a period of five years in
exchange for 3,000,000 shares of restricted common stock 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.

On December 11, 2004 we signed a letter of understanding with Smart
Entertainment Inc. ("SEI") incorporated under the laws of the County of Iceland.
We subsequently renegotiated with SEI and amended the terms on various
occasions. Subsequently, we entered into a final and definitive licensing
agreement with SEI, which agreement superseded any and all previous agreements
and understandings.

Subsequent to the year ended December 31, 2004 we renegotiated the terms of our
agreements with SEI and its sole shareholder Halldor Sanne, as follows:

i)       We agreed to acquire a 10% of equity interest in the capital stock of
         SEI, for a total consideration of $200,000. SEI had no assets and
         liabilities and no operations at the date of the acquisition.


                                        1

<PAGE>

ii)      Effective March 1, 2005 SEI and its sole shareholder, Halldor Sanne,
         granted exclusive rights to us 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. As
         consideration for the licensing rights we issued 40,000,000 shares of
         common stock to SEI.

iii)     We issued 5,000,000 shares of common stock to Halldor Sanne and made a
         payment of $4,700 in exchange for fees due to SEI and Halldor Sanne for
         technical services rendered.

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

During 2004, 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 2004, no matters were submitted to our security
holders for a vote, through the solicitation of proxies or otherwise.

PART II

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

(a)      Our shares of common stock are quoted on the Pink Sheets market under
         the ticker symbol "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.

                     2003                   HIGH              LOW
                  -------------------------------------------------
                  1st Quarter               $0.49             $0.04
                  2nd Quarter               $0.26             $0.03
                  3rd Quarter               $0.22             $0.08
                  4th Quarter               $0.16             $0.04

                      2004                  HIGH              LOW
                  -------------------------------------------------
                  1st Quarter               $0.092            $0.035
                  2nd Quarter               $0.150            $0.070
                  3rd Quarter               $0.147            $0.046
                  4th Quarter               $0.089            $0.030

(b)      As of December 31, 2004, we had twenty-four (24) 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)      As of December 31, 2004, we had equity compensation plans aggregated as
         follows:


                                       2

<PAGE>

<TABLE>
<S>     <C>
                                NUMBER OF SECURITIES TO BE    WEIGHTED AVERAGE EXERCISE      NUMBER OF SECURITIES
                                  ISSUED UPON EXERCISE OF       PRICE OF OUTSTANDING        REMAINING AVAILABLE FOR
                                    OUTSTANDING OPTIONS         OPTIONS, WARRANTS AND        FUTURE ISSUANCE UNDER
                                    WARRANTS AND RIGHTS                RIGHTS              EQUITY COMPENSATION PLANS
        PLAN CATEGORY                                                                        (EXCLUDING SECURITIES
                                                                                            REFLECTED IN COLUMN (A)

                                            (a)                         (b)                          (c)
------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security holders

2004 Non-Qualified Stock &      6,000,000 shares of common          Market price                       0
Stock Option Plan                          stock

October 2004 Non-Qualified         16,500,000 shares of             Market price                       0
Stock & Stock Option Plan              common stock

Equity compensation plans not
approved by security holders
------------------------------- ---------------------------- ---------------------------- ----------------------------
            TOTAL                       22,500,000                  MARKET PRICE                       0
</TABLE>

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, 2004, 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. 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 $5,582,353. 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, 2004 and December 31, 2003, we did not
receive any revenue and incurred expenses of $3,039,814 and $1,718,647
respectively, stemming from general, selling, and administrative expenses and an
impairment loss of $490,000 and $33,000 during the year ended December 31, 2004
and 2003, respectively. We incurred a loss from operations of $3,039,814 for the
year ended December 31, 2004 compared to $1,685,647 for the year ended December
31, 2003.

Our independent certified public accountants have stated in their report
included in our December 31, 2004 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 $28,360 and $49,972, net of cash repayments, to us
for working capital purposes as of December 31, 2004 and December 31, 2003,
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 2005.

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
--------------------------------

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151, "INVENTORY COSTS-- AN AMENDMENT OF ARB NO. 43, CHAPTER 4". This Statement
amends the guidance in ARB No. 43, Chapter 4, "INVENTORY PRICING," to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4,
previously stated that ". . . UNDER SOME CIRCUMSTANCES, ITEMS SUCH AS IDLE
FACILITY EXPENSE EXCESSIVE SPOILAGE, DOUBLE FREIGHT, AND REHANDLING COSTS MAY BE
SO ABNORMAL AS TO REQUIRE TREATMENT AS CURRENT PERIOD CHARGES. . . ." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "SO ABNORMAL." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities. This Statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. Management does not believe the
adoption of this Statement will have any immediate material impact on our
business.

In December 2004, the FASB issued SFAS No.152, "ACCOUNTING FOR REAL ESTATE
TIME-SHARING TRANSACTIONS--AN AMENDMENT OF FASB STATEMENTS NO. 66 AND 67" ("SFAS
152") The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, "ACCOUNTING FOR SALES OF REAL ESTATE", to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, "ACCOUNTING FOR REAL
ESTATE TIME-SHARING TRANSACTIONS". This Statement also amends FASB Statement No.
67, "ACCOUNTING FOR COSTS AND INITIAL RENTAL OPERATIONS OF REAL ESTATE
PROJECTS", to state that the guidance for (a) incidental operations and (b)
costs incurred to sell real estate projects does not apply to real estate
time-sharing transactions. The accounting for those operations and costs is
subject to the guidance in SOP 04-2. This Statement is effective for financial
statements for fiscal years beginning after June 15, 2005 with earlier
application encouraged. 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, 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.

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.


                                       7

<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.


                                       8

<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-24 are the financial statements and notes
to financial statements that have been prepared in accordance with Item 310 of
Regulation S-B.


                                       9

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2004 AND 2003

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

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)



                                      F-1

<PAGE>

<TABLE>
<S>     <C>
                                         SMART SMS CORP.
                                  (FORMERLY AMERICAN IDC CORP.)

                                  INDEX TO FINANCIAL STATEMENTS


                                                                                             PAGE
Report of Registered Independent Certified Public Accounting Firm.............................F-3

Balance Sheets at December 31, 2004 and 2003..................................................F-4

Statements of Losses for the years ended December 31, 2004 and 2003
and for the period June 3, 1997 (date of inception) to December 31, 2004......................F-5

Statements of Deficiency in Stockholders' Equity for the period June 3, 1997
(date of inception) to December 31, 2004................................................F-6 - F-9

Statements of Cash Flows for the years ended December 31, 2004 and 2003
and for the period June 3, 1997 (date of inception) to December 31, 2004.....................F-10

Notes to Financial Statements.........................................................F-11 - F-25


                                               F-2
</TABLE>

<PAGE>

                    RUSSELL BEDFORD STEFANOU MIRCHANDANI 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 balance sheets of Smart SMS Corp. (formerly
American IDC Corp.), a development stage company, as of December 31, 2004 and
2003 and the related 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, 2004. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Smart SMS Corp. as of December
31, 2004 and 2003, 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, 2004,
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in the Note H 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 H. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


                                   /s/ RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                                   --------------------------------------------
                                       Russell Bedford Stefanou Mirchandani LLP
                                       Certified Public Accountants

McLean, Virginia
December 9, 2005


                                       F-3

<PAGE>

<TABLE>
                                                    SMART SMS CORP.
                                             (FORMERLY AMERICAN IDC CORP.)
                                              A DEVELOPMENT-STAGE COMPANY
                                                    BALANCE SHEETS
                                               DECEMBER 31, 2004 AND 2003


                                                                                         2004                2003
                                                                                     -------------      -------------
<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                                        $          --      $         237
  Accounts payable and accrued liabilities                                                 233,714            357,613
  Other advances                                                                            22,000                 --
  Advances from officer (Note B)                                                            27,627             33,757
  Notes payable to officer (Note B and C)                                                  175,000                 --
  Advances from shareholders (Note B)                                                        5,490             40,659
                                                                                     -------------      -------------
  Total current liabilities                                                                463,831            432,266

 COMMITMENTS AND CONTINGENCIES (Note G)                                                         --                 --

(DEFICIENCY IN) STOCKHOLDERS' EQUITY (Note C) Common stock, par value $.001 per
  share; 250,000,000 and
    50,000,000 shares authorized at December 31, 2004 and 2003, respectively;
    76,351,605 and 22,564,000 shares issued and outstanding at December 31, 2004
    and December
    31, 2003, respectively                                                                  76,352             22,564
  Additional paid-in-capital                                                             4,931,748          2,015,609
  Common stock subscription                                                                111,400             72,100
  Accumulated deficit during development stage                                          (5,582,353)        (2,542,539)
                                                                                     -------------      -------------
  (Deficiency in) stockholders' equity                                                    (462,853)          (432,266)

 Total Liabilities and (Deficiency in) Stockholders' Equity                          $         978      $          --
                                                                                     =============      =============


                                     See accompanying notes to financial statements

                                                          F-4

<PAGE>

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


                                                                                  For the period from
                                                                                     June 3, 1997
                                               For the year ended December 31,    (date of inception)
                                              --------------------------------          through
                                                   2004              2003          December 31, 2004
                                               ------------      ------------      -----------------
Costs and Expenses:
 Selling, General and Administrative           $  2,549,814      $  1,685,647      $       5,092,353

 Impairment Loss (Note B and G)                     490,000            33,000                523,000
                                               ------------      ------------      -----------------
Total Operating Expense                           3,039,814         1,718,647              5,615,353

Loss from Operations                             (3,039,814)       (1,718,647)            (5,615,353)


Other Income (Note B)                                    --            33,000                 33,000

Provision for Income Tax                                 --                --                     --
                                               ------------      ------------      -----------------

Net Loss                                       $ (3,039,814)     $ (1,685,647)     $      (5,582,353)
                                               ============      ============      =================

Loss per common share (basic and assuming
dilution) (Note F)                             $      (0.07)     $      (0.11)
                                               ============      ============

Weighted average common shares outstanding       43,591,279        14,977,699
                                               ============      ============


                           See accompanying notes to financial statements.

                                                 F-5

<PAGE>

                                                           SMART SMS CORP.
                                                    (FORMERLY AMERICAN IDC CORP.)
                                                     A DEVELOPMENT-STAGE COMPANY
                                          STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                              FOR THE PERIOD JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2004

                                                                                                       Deficit
                                                                                                     Accumulated
                                                                   Additional        Common            During
                                     Common          Stock          Paid in           Stock          Development
                                     Shares          Amount         Capital        Subscription         Stage            Total
                                  ------------    ------------    ------------     -------------     ------------     ------------
Issuance of common stock to
Founders in June 1997 in
exchange for services at
$.0004 per share                     5,000,000    $      5,000    $     (3,000)    $          --     $         --     $      2,000

Net Loss                                    --              --              --                --           (2,000)          (2,000)
                                  ------------    ------------    ------------     -------------     ------------     ------------

BALANCE AT DECEMBER 31, 1997         5,000,000           5,000          (3,000)               --           (2,000)              --
                                  ============    ============    ============     =============     ============     ============

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

 BALANCE AT DECEMBER 31, 1998        5,000,000    $      5,000    $     (3,000)    $          --     $     (2,000)    $         --
                                  ============    ============    ============     =============     ============     ============

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

 BALANCE AT DECEMBER 31, 1999        5,000,000    $      5,000    $     (3,000)    $          --     $     (2,800)    $       (800)
                                  ============    ============    ============     =============     ============     ============
Issuance of common stock to
consultants in September 2000
in exchange for services at
$.10 per share                         100,000             100           9,900                --               --           10,000

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

 BALANCE AT DECEMBER 31, 2000        5,100,000    $      5,100    $      6,900     $          --     $    (18,510)    $     (6,510)
                                  ============    ============    ============     =============     ============     ============
Issuance of common stock to
consultants in December 2001
at $.75 per share in exchange
for prepaid service fees               100,000             100          74,900                --               --           75,000

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

 BALANCE AT DECEMBER 31, 2001        5,200,000    $      5,200    $     81,800     $          --     $    (59,823)    $     27,177
                                  ============    ============    ============     =============     ============     ============
Issuance of common stock to
consultants in July 2002 in
exchange for services at
$.50 per share                         300,000             300         149,700                --               --          150,000

Issuance of common stock to
consultants in October 2002
in exchange for services
at $.85 per share                      300,000             300         254,700                --               --          255,000

Shares issued in October 2002
for cash at $.30 per share,
net of costs                           100,000             100          29,890                --               --           29,990

Issuance of common stock to
consultants in November 2002
in exchange for services at
$.35 per share                         110,000             110          38,390                --               --           38,500

Issuance of common stock to
consultants in December 2002
in exchange for services at
$.43 per share                         240,000             240         102,960                --               --          103,200

Shares issued in December 2002
for cash at $.25 per share             100,000             100          24,900           (20,000)              --            5,000

Stock options issued in
exchange for services rendered              --              --          51,900                --               --           51,900

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

 BALANCE AT DECEMBER 31, 2002        6,350,000    $      6,350    $    734,240     $     (20,000)    $   (856,892)    $   (136,302)
                                  ============    ============    ============     =============     ============     ============

                                           See accompanying notes to financial statements

                                                                 F-6

<PAGE>

                                                           SMART SMS CORP.
                                                    (FORMERLY AMERICAN IDC CORP.)
                                                     A DEVELOPMENT-STAGE COMPANY
                                    STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (CONTINUED)
                              FOR THE PERIOD JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2004

                                                                                                        Deficit
                                                                                                      Accumulated
                                                                    Additional        Common            During
                                     Common          Stock           Paid in           Stock          Development
                                     Shares          Amount          Capital        Subscription         Stage            Total
                                 -------------    -------------    -------------    -------------    -------------    -------------
 BALANCE FORWARD                     6,350,000    $       6,350    $     734,240    $     (20,000)   $    (856,892)   $    (136,302)
                                 =============    =============    =============    =============    =============    =============
Issuance of common stock to
consultants in January 2003
in exchange for services at
approximately $.30 per share           495,000              495          149,168               --               --          149,663

Issuance of common stock to
consultants in March 2003 in
exchange for services at
approximately $.03 per share         1,300,000            1,300           37,700               --               --           39,000

Issuance of common stock in
March 2003 in exchange for
start-up costs at $0.03 per
share                                2,000,000            2,000           58,000               --               --           60,000

Issuance of common stock to
consultants in May 2003 in
exchange for services at
approximately $.03 per share         1,510,000            1,510           43,790               --               --           45,300

Issuance of common stock to
consultants in June 2003 in
exchange for services at
approximately $.03 per share           410,000              410           11,890               --               --           12,300

Issuance of common stock in
June 2003 in exchange for
start-up costs at $0.03 per
share                                1,200,000            1,200           34,800               --               --           36,000

Issuance of common stock in
July 2003 for cash at $.05
per share, net of costs                100,000              100            4,900               --               --            5,000

Issuance of common stock to
consultants in July 2003 in
exchange for services at
approximately $.11 per share         6,729,000            6,729          756,099               --               --          762,828

Issuance of common stock to
consultants in August 2003 in
exchange for services at
approximately $.07 per share         1,397,000            1,397           98,128               --               --           99,525

Issuance of common stock to
related parties in September
2003 in exchange for previously
incurred debts at $.05 per share       230,000              230           11,270               --               --           11,500

Issuance of common stock to
consultants in September 2003
in exchange for services at
approximately $.06 per share           335,000              335           17,552               --               --           17,887

Issuance of common stock to
consultants in October 2003
in exchange for services at
approximately $.05 per share           172,000              172            7,728               --               --            7,900

Issuance of common stock in
November 2003 for cash at
$.06 per share, net of costs           100,000              100            5,900               --               --            6,000

Issuance of common stock to
consultants in December 2003
in exchange for services at
approximately $.10 per share           236,000              236           23,364               --               --           23,600

Common stock subscription                   --               --               --           92,100               --           92,100

Stock options issued in
exchange for services (Note D)              --               --           21,080               --               --           21,080

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

BALANCE AT DECEMBER 31, 2003        22,564,000    $      22,564    $   2,015,609    $      72,100    $  (2,542,539)   $    (432,266)
                                 =============    =============    =============    =============    =============    =============

                                           See accompanying notes to financial statements

                                                                 F-7

<PAGE>

                                                           SMART SMS CORP.
                                                    (FORMERLY AMERICAN IDC CORP.)
                                                     A DEVELOPMENT-STAGE COMPANY
                                    STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (CONTINUED)
                              FOR THE PERIOD JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2004


                                                                                                        Deficit
                                                                                                      Accumulated
                                                                    Additional        Common            During
                                     Common          Stock           Paid in           Stock          Development
                                     Shares          Amount          Capital        Subscription         Stage            Total
                                 -------------    -------------    -------------    -------------    -------------    -------------
BALANCE FORWARD                     22,564,000    $      22,564    $   2,015,609    $      72,100    $  (2,542,539)   $    (432,266)
                                 =============    =============    =============    =============    =============    =============
Issuance of common stock to
consultants in February 2004
in exchange for services at
approximately $.03 per share         8,200,000            8,200          245,800               --               --          254,000

Issuance of common stock to
consultants in March 2004 in
exchange for services fees at
approximately $.07 per share           215,000              215           15,075               --               --           15,290

Stock options granted in March
2004 issued in exchange for
services (Note D)                           --               --           96,320               --               --           96,320

Issuance of common stock to
consultants in April 2004 in
exchange for services and
accrued fees at approximately
$.05 per share                       1,845,000            1,845           87,455               --               --           89,300

Issuance of common stock to
consultants in April 2004 in
exchange for related party
advances at $.03 per share           1,355,300            1,356           39,303               --               --           40,659

Issuance of common stock to
consultants in April 2004 in
exchange for license fees at
$.06 per share                       1,000,000            1,000           59,000               --               --           60,000

Issuance of common stock to
consultants in May 2004 in
exchange for services at
approximately $.09 per share         2,045,455            2,045          175,950               --               --          177,995

Issuance of common stock in
June 2004 in connection with
private placement at $.06 per
share, net of costs and fees           250,000              250           14,750               --               --           15,000

Issuance of common stock to
consultants in June 2004 in
exchange for services at
approximately $.08 per share           391,667              392           29,108               --               --           29,500

Cancellation of shares issued
to Company officer in exchanges
for services in prior years           (700,000)            (700)        (174,300)              --               --         (175,000)

Issuance of common stock to
consultants in July 2004 in
exchange for services at
approximately $.08 per share         2,134,183            2,134          172,571               --               --          174,705

Issuance of common stock in
July 2004 in connection with
private placement at $.08 per
share, net of costs and fees           330,000              330           25,420               --               --           25,750

Issuance of common stock to
consultants in August 2004 in
exchange for services at
approximately $.06 per share           950,000              950           58,550               --               --           59,500

Issuance of common stock to
officers in August 2004 in
exchange for management fees
and officer advances at $.05
per share                            4,000,000            4,000          196,000               --               --          200,000

Issuance of common stock in
August 2004 in connection with
private placement at $.05 per
share, net of costs and fees           400,000              400           20,200               --               --           20,600

Issuance of common stock to
consultants in September 2004
in exchange for services at
approximately $.06 per share           796,000              796           48,887               --               --           49,683

                                           See accompanying notes to financial statements

                                                                 F-8

<PAGE>

                                                           SMART SMS CORP.
                                                    (FORMERLY AMERICAN IDC CORP.)
                                                     A DEVELOPMENT-STAGE COMPANY
                                    STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (CONTINUED)
                              FOR THE PERIOD JUNE 3, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2004


                                                                                                        Deficit
                                                                                                      Accumulated
                                                                    Additional        Common            During
                                     Common          Stock           Paid in           Stock          Development
                                     Shares          Amount          Capital        Subscription         Stage            Total
                                 -------------    -------------    -------------    -------------    -------------    -------------
Issuance of common stock in
September 2004 in connection
with private placement at $.05
per share, net of costs and fees       100,000              100            4,900               --               --            5,000

Issuance of common stock in
October 2004 in connection with
private placement at $.05 per
share, net of costs and fees         2,100,000            2,100          112,900               --               --          115,000

Issuance of common stock to
consultants in October 2004 in
exchange for services fees at
approximately $.06 per share        10,335,000           10,335          564,890               --               --          575,225

Issuance of common stock in
November 2004 in exchange for
license fees at approximately
$.05 per share                       8,000,000            8,000          422,000               --               --          430,000

Issuance of common stock to
consultants in November 2004 in
exchange for services at
approximately $.09 per share         5,600,000            5,600          484,400               --               --          490,000

Issuance of common stock in
December 2004 in connection
with private placement at $.03
per share, net of costs and fees     1,125,000            1,125           34,775               --               --           35,900

Issuance of common stock to
consultants in December 2004 in
exchange for services at
approximately $.06 per share         3,315,000            3,315          182,185               --               --          185,500

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

Net loss                                    --               --               --               --       (3,039,814)      (3,039,814)
                                 -------------    -------------    -------------    -------------    -------------    -------------
BALANCE AT DECEMBER 31, 2004        76,351,605    $      76,352    $   4,931,748    $     111,400    $  (5,582,353)   $    (462,853)
                                 =============    =============    =============    =============    =============    =============

                                           See accompanying notes to financial statements

                                                                 F-9

<PAGE>

                                                         SMART SMS CORP.
                                                  (FORMERLY AMERICAN IDC CORP.)
                                                   A DEVELOPMENT-STAGE COMPANY
                                                    STATEMENTS OF CASH FLOWS


                                                                                                             For the period from
                                                                                                              June 3, 1997 (date
                                                                        For the year ended December 31          of inception)
                                                                     ------------------------------------          through
                                                                          2004                 2003           December 31, 2004
                                                                     ---------------      ---------------      ---------------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss from development stage operations                           $    (3,039,814)     $    (1,685,647)     $    (5,582,353)

Adjustments to reconcile net loss from development stage
  operations to cash used for operating activities:
Common stock issued in exchange for services rendered (Note C)             1,995,398            1,158,003            3,712,101
Impairment of license fees paid with common stock (Note C and G)             490,000                   --              490,000
Other income received in forms of restricted securities (Note B)                  --               33,000               33,000
Impairment loss (Note B)                                                          --              (33,000)             (33,000)
Stock options issued in exchange for services rendered (Note D)               96,320               21,080              169,300
Common Stock issued in exchange for start-up costs (Note C)                       --               96,000               96,000
Write off prepaid service fees previously paid by common stock                    --                   --               75,000
Changes in assets and liabilities:
Cash disbursed in excess of available fund                                      (237)                (198)                  --
Accounts payable and accrued expenses                                        152,401              257,690              510,014
                                                                     ---------------      ---------------      ---------------
NET CASH USED IN OPERATING ACTIVITIES                                       (305,932)            (153,072)            (529,938)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock and stock subscription,
  net of costs                                                               256,550              103,100              394,640
Proceeds from other advances, net of repayments                               22,000                   --               22,000
Proceeds from officer and related party advances, net of
repayments                                                                    28,360               49,972              114,276
                                                                     ---------------      ---------------      ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                    306,910              153,072              530,916

NET INCREASE IN CASH AND EQUIVALENTS                                             978                   --                  978

Cash and cash equivalents at the beginning of the period                          --                   --                   --
                                                                     ---------------      ---------------      ---------------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD                   $           978      $            --      $           978
                                                                     ===============      ===============      ===============

Supplemental Disclosures of Cash Flow Information

Cash paid during the period for interest                             $            --      $            --      $            --
Income taxes paid                                                                 --                   --                   --
Common stock issued in exchange for services                               1,995,398            1,158,003            3,712,101
Common stock issued in exchange for license fee                              490,000                   --              490,000
Stock options issued in exchange for services rendered                        96,320               21,080              169,300
Common stock issued in exchange for prepaid expenses                              --                   --               75,000
Common Stock issued for start-up costs                                            --               96,000               96,000
Other income received in forms of restricted securities                           --               33,000               33,000
Common stock issued in exchange for accrued management fees                  240,000                   --              240,000
Common stock issued in exchange for accrued service fees                      36,300                   --               36,300
Common stock issued in exchange for officer advances                          29,000                   --               29,000
Common stock issued in exchange for officer and related
  party advances                                                              40,659               11,500               52,159


                                         See accompanying notes to financial statements

                                                               F-10
</TABLE>

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF 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.
Subsequent to the date of financial statements, the Company changed its name to
Smart SMS Corp. The Company is in the development stage, as defined by Statement
of Financial Accounting Standards No. 7 ("SFAS No. 7") and its efforts have been
principally focused on developing online interactive businesses, such as dating
sites, portals, and music downloading sites. Between 2001 and December 31, 2004,
the Company focused on creating and providing the platforms for Internet
businesses, where others pay to use its sites and provide their own content. 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, 2004 the Company has accumulated losses of
$5,582,353.

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.

Property and Equipment
----------------------

Property and equipment is stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the assets.

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 undercounted cash flows. Should an 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 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
------------

Income taxes are provided based on the liability method for financial reporting
purposes in accordance with the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." Under this method deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be removed or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the statements
of operations in the period that includes the enactment date.


                                      F-11

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Net Loss Per Common Share
-------------------------

The Company computes earnings per share under Statement of 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 the exercise
of the Company's stock options and warrants (calculated using the treasury stock
method). During the years ended December 31, 2004 and 2003 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.

Use of Estimates
----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

Revenue Recognition
-------------------

For revenue from product sales, the Company recognizes revenue in accordance
with Staff Accounting Bulletin No. 104, REVENUE RECOGNITION ("SAB104"), which
superceded Staff Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL
STATEMENTS ("SAB101").

For revenue from product sales, the Company recognizes revenue in accordance
with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). 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.

SAB 104 incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. This issue addresses determination of
whether an arrangement involving more than one deliverable contains more than
one unit of accounting and how the arrangement consideration should be measured
and allocated to the separate units of accounting. EITF 00-21 became effective
for revenue arrangements entered into in periods beginning after June 15, 2003.
For revenue arrangements occurring on or after August 1, 2003, the Company
revised its revenue recognition policy to comply with the provisions of EITF
00-21.


                                      F-12

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

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, 2004 and 2003 and for the period from June 3, 1997 (date of
inception) to December 31, 2004.

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, 2004 and 2003
and for the period from June 3, 1997 (date of inception) to December 31, 2004.

Liquidity
---------

As shown in the accompanying financial statements, the Company has incurred a
net loss of $5,582,353 from its inception through December 31, 2004 The
Company's current liabilities exceeded its current assets by $462,853 as of
December 31, 2004.

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
and related party receivables. 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.

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.


                                      F-13

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

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

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 ("SFAS No. 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 charge 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, 2004 and 2003 and will adopt
the interim disclosure provisions for its financial reports for the subsequent
periods. The Company does not have any awards of stock-based employee
compensation issued and outstanding at December 31, 2004.

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.

Reclassifications
-----------------

Certain reclassifications have been made in prior year's financial statements to
conform to classifications used in the current year.

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

In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS
151, Inventory Costs-- an amendment of ARB No. 43, Chapter 4. This Statement
amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4,
previously stated that ". . . under some circumstances, items such as idle
facility expense excessive spoilage, double freight, and rehandling costs may be
so abnormal as to require treatment as current period charges. . . ." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities. This Statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. Management does not believe the
adoption of this Statement will have any immediate material impact on the
Company.


                                      F-14

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

New Accounting Pronouncements (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 first quarter of 2006. 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 December 2004, the FASB issued SFAS No.152, "Accounting for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67" ("SFAS
152) The amendments made by Statement 152 This Statement amends FASB Statement
No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real
Estate Time-Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing
transactions. The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005 with earlier application encouraged.
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, 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.
Management is assessing the implications of this revised standard, which may
materially impact the Company's results of operations in the third quarter of
fiscal year 2005 and thereafter.

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.


                                      F-15

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

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

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 second quarter of its 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 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. 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.

NOTE B - RELATED-PARTY TRANSACTIONS

The Company's officer and principal shareholders have advanced funds to the
Company for working capital purposes during December 31, 2004 and 2003. No
formal repayment terms or arrangements exist. During the year ended December 31,
2004 and 2003, the Company issued an aggregate of 1,867,065 and 230,000 shares
of common stock, valued at $69,659 and $11,500, respectively, as repayments of
officer and related party advances (Note C). Total amount due to officer and
shareholders is $33,117 and $74,416 at December 31, 2004 and 2003, respectively.
In June 2004, the Company purchased 700,000 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 700,000 shares of common stock upon the return
of shares by its Chief Executive Officer (Note C).

In June 2003, the Company entered into a consulting agreement ("Agreement") with
Bentley Communications Corp. ("Bentley"), an entity controlled by the Company's
President at the time the Agreement was entered into. Pursuant to the Agreement,
the Company received 10 million shares of Bentley's restricted common stock,
valued at $33,000, to provide consulting services to Bentley over a six-month
period commencing July 1, 2003. The Company accounted for the shares received as
restricted securities under Other Assets and deferred income. As of December 31,
2003, the Company recognized $33,000 of other income in connection with the
Agreement. During the year ended December 31, 2003, the Company recorded a
charge for the impairment of the restricted stock received pursuant to the
Agreement, because the estimated fair value of the assets was less than the
carrying value. Considerable management judgment is necessary to estimate fair
value. Accordingly, actual results could vary significantly from managements'
estimates. Based upon the evaluation, the Company recognized an impairment loss
of $33,000 or $ (.00) per share during the year ended December 31, 2003.


                                      F-16

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE C - CAPITAL STOCK

On October 4, 2004, the Company amended the Articles of Incorporation increasing
the Company's authorized shares of common stock from 50,000,000 shares to
250,000,000 shares with a par value of $.001 per share. As of December 31, 2004
and 2003, the Company has issued and outstanding 76,351,605 shares and
22,564,000 shares of common stock, respectively. Subsequent to the date of the
financial statements, the Company's board of directors passed a resolution to
create the Company's Series A Convertible Preferred Stock, and increase the
authorized common stock to 1,000,000,000 shares (Note I).

On June 3, 1997, the Company issued 5,000,000 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 100,000 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 100,000 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 300,000 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 300,000 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 100,000 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 110,000 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 240,000 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 100,000 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 495,000 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-17


<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE C - CAPITAL STOCK (CONTINUED)

In March 2003, the Company issued an aggregate of 1,300,000 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 2,000,000 shares of common stock at $0.03 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 1,510,000 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 1,200,000 shares of common stock at
$0.03 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 410,000 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 100,000 shares of common stock
for $5,000 of cash, net of costs and fees. The Company also issued an aggregate
of 6,729,000 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 1,397,000 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 230,000 shares of common
stock to a related party in exchange for $11,500 of previously incurred debt.
The Company issued an aggregate of 335,000 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 172,000 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.


                                      F-18


<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE C - CAPITAL STOCK (CONTINUED)

In November 2003, the Company issued an aggregate of 100,000 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 236,000 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 362,000 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 100,000 shares of common stock subscribed and
issued in December 2002.

In February 2004, the Company issued an aggregate of 200,000 shares of common
stock to consultants in exchange for service fees of $14,000. The Company also
issued an aggregate of 8,000,000 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 215,000 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 3,145,000 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 1,355,300 shares of
common stock to a related party in exchange for $40,659 of debt due to the
related party. The Company also issued 1,000,000 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 2,045,455 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 391,667 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 250,000 shares of common stock to an investor in exchange for $15,000 of
cash, net of costs and fees.


                                      F-19


<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE C - CAPITAL STOCK (CONTINUED)

In June 2004, the Company purchased 700,000 shares of previously issued common
stock from its Chief Executive Officer in exchange for a promissory note in the
amount of $175,000. The 700,000 shares of common stock were accordingly canceled
by the Company. Subsequent to the date of the financial statements, the Company
issued to its Chief Executive Officer the newly created Series A Preferred Stock
in exchange for the promissory note (Note I).

In July 2004, the Company issued an aggregate of 2,134,183 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 330,000 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 950,000 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 4,000,000 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 400,000 to an investor in
exchange for $20,600 of cash, net of costs and fees.

In September 2004, the Company issued an aggregate of 796,000 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 100,000 to an investor in exchange for $5,000 of cash, net of
costs and fees.

In October 2004, the Company issued an aggregate of 2,100,000 to investors in
exchange for $115,000 of proceeds, net of costs and fees. Additionally, the
Company issued an aggregate of 5,335,000 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 5,000,000
shares of common stock to Company Chief Executive Officer in exchange for
management fees of $200,000.

In November 2004 the Company issued 3,000,000 shares of common stock to Omni
Media Distribution, Inc. ("Omni") pursuant to Film Library License Agreement the
Company entered into in October 2004 (Note G). 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 5,000,000 shares of common stock to ETV Inc. pursuant to Exclusive
License Agreement the Company entered into in April 2004 (Note G). 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 5,600,000 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.


                                      F-20

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE C - CAPITAL STOCK (CONTINUED)

In December 2004 the Company issued an aggregate of 1,125,000 to investors in
exchange for $35,900 of proceeds, net of costs and fees. The Company also issued
an aggregate of 3,315,000 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 $32,600 in
December 2004 for 992,857 shares of common stock subscribed. The 992,857 shares
subscribed were issued to the investors subsequent to the date of the financial
statements.

NOTE D - NON-EMPLOYEE STOCK OPTIONS

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. These options were granted in lieu of cash compensation for
services performed to consultants.

<TABLE>
                              Options Outstanding                                  Options Exercisable
                              -------------------                                  -------------------
                                          Weighted Average        Weighed                       Weighted
                          Number       Remaining Contractual      Average         Number        Average
   Exercise Prices     Outstanding          Life (Years)       Exercise Price  Exercisable   Exercise Price
   ---------------     -----------          ------------       --------------  -----------   --------------
<S>                      <C>                     <C>               <C>           <C>             <C>
        $0.05            175,000                 0.09              $ 0.05        175,000         $ 0.05
         0.50            100,000                 3.00                0.50        100,000           0.50
         1.50            100,000                 2.25                1.50        100,000           1.50
                         -------                 ----              ------        -------         ------
                         375,000                 1.11              $ 0.56        375,000         $ 0.56
                         =======                 ====              ======        =======         ======

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

                                                                                          Weighted Average
                                                                       Number of Shares   Price Per Share
                                                                       ----------------   ---------------
       Outstanding at December 31, 2002                                      300,000         $  0.83
          Granted                                                            100,000            0.50
          Exercised                                                                -               -
          Canceled or expired                                                      -               -
                                                                         -----------         -------
       Outstanding at December 31, 2003                                      400,000         $  0.75
                                                                         ===========         =======
          Granted                                                            175,000            0.05
          Exercised                                                                -               -
          Canceled or expired                                              (200,000)            1.50
                                                                         -----------         -------
       Outstanding at December 31, 2004                                      375,000         $  0.56
                                                                         ===========         =======
</TABLE>

The weighted-average fair value of stock options granted to consultants during
the years ended December 31 2004 and 2003 and the weighted-average significant
assumptions used to determine those fair values, using a Black-Scholes option
pricing model are as follows:


                                      F-21

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE D - NON-EMPLOYEE STOCK OPTIONS (CONTINUED)

                                                             2004          2003
                                                             ----          ----
Significant assumptions (weighted-average):
Risk-free interest rate at grant date                        1.00%         2.63%
Expected stock price volatility                                15%          781%
Expected dividend payout                                         -             -
Expected option life-years (a)                                0.92          4.60

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

Compensation expenses charged to operations in connection with granting the
options were $96,320 and $21,080 for the year ended December 31, 2004 and 2003,
respectively. The Company did not grant stock options awards to employees during
the year ended December 31, 2004 and 2003.

NOTE E - 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 $5,580,000, which expire through 2024, subject to limitations
of Section 382 of the Internal Revenue Code, as amended. The deferred tax asset
related to the carryforward is approximately $1,897,000. 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, 2004 are as follows:

          Non Current:
                 Net operating loss carryforward                  $  1,897,000
                 Valuation allowance                                (1,897,000)
                                                                  ------------
                 Net deferred tax asset                           $          -
                                                                  ============

NOTE F - LOSSES PER SHARE

The following table presents the computation of basic and diluted losses per
share:

                                                 For the year ended December 31,
                                                 -------------------------------
                                                      2004              2003
                                                      ----              ----
Net loss available to common shareholders        $ (3,039,814)     $ (1,685,647)
                                                 =============     =============
Basic and fully diluted loss per share           $      (0.07)     $      (0.11)
                                                 =============     =============
Weighted average common shares outstanding         43,591,279        14,977,699
                                                 =============     =============


                                      F-22

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE F - LOSSES PER SHARE (CONTINUED)

For the years ended December 31, 2004 and 2003, 50,000 and -0- potential shares,
respectively were excluded from shares used to calculate diluted earnings per
share as their inclusion would reduce net losses per share.

NOTE G - 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 5,000,000 shares of its restricted common stock, valued at $250,000
(Note C). 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 $10,000 payment and the fair value of the restricted
shares issued during the year ended December 31, 2004 were accounted for as an
impairment loss and charged to operations during the year ended December 31,
2004.

On October 28, 2004, the Company entered into a License Agreement with Omni
Media Distribution, Inc. ("Omni"), a Nevada corporation. 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 3,000,000 shares of restricted common stock 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. The fair value of the
restricted shares issued 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 I).
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.


                                      F-23

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE G - COMMITMENTS AND CONTINGENCIES (CONTINUED)

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 H - 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, 2004,
the Company has incurred a loss of $5,582,353, and the Company's current
liabilities exceeded its current assets by $462,853 as of December 31, 2004.
These factors among others may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time.

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

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

NOTE I - SUBSEQUENT EVENTS

Equity
------

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."

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.


                                      F-24

<PAGE>

                                 SMART SMS CORP.
                          (FORMERLY AMERICAN IDC CORP.)
                           A DEVELOPMENT-STAGE COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003

NOTE I - SUBSEQUENT EVENTS (CONTINUED)

Equity
------

On November 29, 2005, the Company agreed to issue 300,000 shares of its Series A
Convertible Preferred Stock (the "Series A Preferred") to its Chief Executive
Officer for services rendered and expenses advanced on behalf of the Company,
and 20,000 shares of Series A Preferred to its legal counsel for services
rendered. The issuance of Series A Preferred settled debt to its Chief Executive
Officer and its legal counsel in the amount of $300,000 and $20,000,
respectively.

Subsequent to the date of financial statements, the Company issued an aggregate
of 33,729,523 shares of common stock to investors in connection with private
placements. The Company also issued an aggregate of 143,290,233 shares of common
stock to its Chief Executive Officer and consultants in exchange for services
fees and accrued service fees. Additionally, the Company issued 40,000,000
shares of common stock to Smart Entertainment, Inc., to obtain the exclusive
license for the SMART SMS Technology.

Licensing Agreement
-------------------

Subsequent to the date of financial statements, the Company re-negotiated the
terms of its agreements with Smart Entertainment Inc. and its sole shareholder
Halldor Sanne, as follows:

         o        The Company agreed to acquire a 10% of equity interest in the
                  capital stock of Smart Entertainment Inc., for a total
                  consideration of $200,000. Smart Entertainment, Inc. had no
                  assets and liabilities and no operations at the date of the
                  acquisition.

         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. As
                  consideration for their licensing rights the Company has
                  issued forty million common shares to Smart Entertainment
                  Inc..

         o        The Company issued five million common shares to Halldor Sanne
                  and the payment of $4,700 to in exchange for any fees due to
                  Smart Entertainment Inc. and Halldor Sanne for technical
                  services rendered.


                                      F-25

<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, 2004. 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         53      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


                                       10

<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.

         ROBERT SCHUMACHER served as our president and chief operating officer
         from July 23, 2003 until August 15, 2004. During that time, Mr.
         Schumacher had overall supervision of our projects, including
         HotRazor.com project. Over the past decade, Mr. Schumacher launched a
         number of successful companies ranging from internet design, hosting
         and marketing, to online software, to the design of medical devices, as
         well as developing the marketing strategies and online presence for a
         host of other organizations. Among his many accomplishments, Mr.
         Schumacher was President of Centrum Corporation, a Washington, D.C.
         headquartered communications firm Mr. Schumacher founded, with offices
         in Europe. Centrum Corporation served a wide range of companies,
         national and international trade associations, and public service
         organizations, providing them with marketing, advertising, design,
         public relations, documentary film production and conference
         organization.

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

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


                                       11

<PAGE>

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the registrant under Rule 16-a-3(e) and Form 5 and amendments thereto furnished
to the registrant with respect to its most recent fiscal year, and any
representation referred to in paragraph (b)(2)(i) of Item 405 of Regulation S-B,
management believes all required reports were made during the fiscal year ended
December 31, 2004.

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, 2004 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 &        2004   (2)$240,000    -0-        -0-          -0-            -0-          -0-        -0-
DIRECTOR           2003      $240,000    -0-        -0-     (2)8,000,000        -0-          -0-        -0-

SCHUMACHER,
ROBERT
FORMER
PRESIDENT &        2004       -0-        -0-        -0-          -0-            -0-          -0-        -0-
CHIEF OPERATING    2003       -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 76,351,605 shares of common
         stock outstanding at December 31, 2004.


                                       12

<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                                   25,477,000                33.4%

b)       The following table sets forth information with respect to our common
         stock beneficially owned by each officer and director, and by all
         directors and officers as a group, at December 31, 2004.

                                  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                                   25,477,000                33.4%

TOTAL                                                                       25,477,000                33.4%
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Our Chief Executive Officer and principal shareholders advanced $28,360, net of
cash repayments, to us for working capital purposes during the year ended
December 31, 2004 and $49,972 as of December 31, 2003. No formal repayment terms
or arrangements exist. During the year ended December 31, 2004 and 2003, we
issued an aggregate of 1,867,065 and 230,000 shares of common stock,
respectively, as repayments of officer and related party advances. Total amount
due to officer and shareholders is $33,117 and $74,416 at December 31, 2004 and
2003, respectively. In June 2004, we purchased 700,000 shares of previously
issued common stock from our 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. We canceled the 700,000 shares of common stock
upon the return of shares by our Chief Executive Officer.

In June 2003, we entered into a consulting agreement ("CONSULTING AGREEMENT")
with Bentley Communications Corp. ("BENTLEY"), an entity controlled at that time
by our President. Pursuant to the Consulting Agreement, we received 10,000,000
shares of Bentley's restricted common stock, valued at $33,000, to provide
consulting services to Bentley over a six-month period commencing July 1, 2003.

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


                                       13

<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 were $30,550 and $26,600,
         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.


                                       14

<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.

April 27th, 2006

                                     SMART SMS CORP.



                                     By: /s/ GORDON F. LEE
                                         -----------------
                                     Name:  GORDON F. LEE
                                     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/ GORDON F. LEE
                                         -----------------
                                     Name:  GORDON F. LEE
                                     Title: Chief Executive Officer,
                                            Chief Financial Officer & Director
                                     April 27th, 2006


                                       15