**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549








**FORM
      10-KSB**








Annual
      Report Under Section 13 or 15(d) of the Securities Exchange Act of
      1934








For
      the
      Fiscal Year Ended: December 31, 2006








Commission
      File No.000-52690








**Art
      Design, Inc.**


(Exact
      Name of Small Business Issuer as specified in its charter)








**Colorado**
            **86-1061005**(State
                or Other Jurisdiction
            (IRS
                Employer File Number)of
                Incorporation)





**3636
                S. Jason****Englewood,
                Colorado**
            **80113**(Address
                of Principal Executive Offices)
            (Zip
                Code)








**(303)
      781-7280**


(Registrant's
      telephone number, including area code)








Securities
      to be Registered Pursuant to Section 12(b) of the Act: None








Securities
      to be Registered Pursuant to Section 12(g) of the Act:





Common
      Stock, $.0.001 per share par value








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





Indicate
      by check mark whether the Registrant (1) has filed all Reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes: [X]     No: [ ]




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is 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. [X]





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





Registrant's
      revenues for its most recent fiscal year were $-0-. State the aggregate market
      value of the voting stock held by nonaffiliates computed by reference to the
      price at which the stock was sold, or the average bid and asked prices of such
      stock, as of a specified date within the past 60 days: $-0-.  The number of
      shares outstanding of the Registrant's common stock, as of the latest
      practicable date, August 1, 2007, was 10,820,600.








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            1
            -*











**FORM
      10-KSB**


Art
      Design, Inc.





**INDEX**


PagePART
                IItem
                1. Description of Business
            3Item
                2. Description of Property
            12Item
                3. Legal Proceedings
            13Item
                4. Submission of Matters to a Vote of Security Holders
            13PART
                IIItem
                5. Market for Common Equity, Related Stockholder Matters and Issuer
                Purchases of Equity Securities
            13Item
                6. Management's Discussion and Analysis of Financial Condition and
                Results
                of Operations
            14Item
                7. Financial Statements
            F-1Item
                8. Changes in and Disagreements with Accountants onAccounting and
                Financial Disclosures
            33Item
                8A. Controls and Procedures
            33Item
                8B. Other Information
            33PART
                IIIItem
                9. Directors, Executive Officers, Promoters and Control Persons;
                Compliance with Section 16(a) of the Exchange Act
            33Item
                10. Executive Compensation
            35Item
                11. Security Ownership of Certain Beneficial Owners and
                Management
            35Item
                12. Certain Relationships and Related Transactions
            36Item
                13. Exhibits and Reports on Form 8-K
            37Item
                14. Principal Accountant Fees and Services
            37Financial
                Statements pages
            F-1 
                - F-14Signatures
            38








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            2
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References
      in this document to “us," "we," or "Company" refer to Art Design,
      Inc.





Forward-Looking
      Statements





The
      following discussion contains forward-looking statements regarding us, our
      business, prospects and results of operations that are subject to certain risks
      and uncertainties posed by many factors and events that could cause our
      actual


business,
      prospects and results of operations to differ materially from those that may
      be
      anticipated by such forward-looking statements. Factors that may affect such
      forward-looking statements include, without limitation: our ability to
      successfully develop new products and services for new markets; the impact
      of
      competition on our revenues, changes in law or regulatory requirements that
      adversely affect or preclude clients from using us for certain applications;
      delays our introduction of new products or services; and our failure to keep
      pace with our competitors.








When
      used
      in this discussion, words such as "believes", "anticipates", "expects",
      "intends" and similar expressions are intended to identify forward-looking
      statements, but are not the exclusive means of identifying forward-looking
      statements. Readers are cautioned not to place undue reliance on these
      forward-looking statements, which speak only as of the date of this report.
      We
      undertake no obligation to revise any forward-looking statements in order to
      reflect events or circumstances that may subsequently arise. Readers are urged
      to carefully review and consider the various disclosures made by us in this
      report and other reports filed with the Securities and Exchange Commission
      that
      attempt to advise interested parties of the risks and factors that may affect
      our business.








**PART
      I**





**Item
      1. DESCRIPTION OF BUSINESS.**








(a)
      RISK
      FACTORS





*You
      should carefully consider the risks and uncertainties described below
      and**the other information in this document before deciding to invest
      in
      shares of**our common stock.*





*The
      occurrence of any of the following risks could materially and
      adversely**affect our business, financial condition and operating result.
      In this case,**the trading price of our common stock could decline and
      you might lose all or**part of your investment.*





**Risks
      Associated With our Company:**





**We
      have had a history of losses and may not be able to develop
      profitability.**




We
      had a
      net loss of $13,021 on revenues of $34,316 for the fiscal year ended December
      31, 2006, compared to a net loss of $8,953 on revenues of $62,009 for the fiscal
      year ended December 31, 2005.  We cannot assure you that we will generate
      profits in the future, even if our sales increase dramatically. We will need
      to
      generate greater revenues and improved margins to achieve and maintain
      profitability in the future. If our operating losses continue on a long-term
      basis, we may experience a shortage of working capital that could adversely
      affect our business or our ability to continue our business, in which case
      our
      stock price may decline, perhaps significantly, and you could lose the value
      of
      your investment.







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            3
            -*





**We
      have had a history of declining revenues and may not be able to develop
      profitability.**





We
      had
      revenues of $34,316 for the fiscal year ended December 31, 2006, compared to
      revenues of $62,009 for the fiscal year ended December 31, 2005. We have had
      lower annual revenues for the past few years. We cannot assure you that our
      sales will increase. We must generate greater revenues and improved margins
      to
      achieve and maintain profitability in the future. If our revenues continue
      to
      decline, we may experience a shortage of working capital that could adversely
      affect our business or our ability to continue our business, in which case
      our
      stock price may decline, perhaps significantly, and you could lose the value
      of
      your investment.





**Because
      we had incurred continuing operating losses, our accountants have expressed
      doubts about our ability to continue as a going concern.**




For
      the
      fiscal year ended December 31, 2006, our accountants have expressed doubt about
      our ability to continue as a going concern as a result of our continued net
      losses. Our ability to achieve and maintain profitability and positive cash
      flow
      is dependent upon:





            our
                ability to locate clients who will purchase our products and use
                our
                 services; and






            our
                ability to generate revenues.





Based
      upon current plans, we expect to incur operating losses in future periods
      because we will be incurring expenses and not generating sufficient revenues.
      We
      expect approximately $33,000 in operating costs over the next twelve months.
      We
      cannot guarantee that we will be successful in generating sufficient revenues
      or
      other funds in the future to cover these operating costs. Failure to generate
      sufficient revenues will cause us to go out of business.




**Our
      limited operating history makes it difficult for us to evaluate our future
      business prospects and make decisions based on those estimates of our future
      performance.**





The
      concept for our business model was developed in 2002. Even though we have
      operated as a corporation for some time, we have a limited operating history,
      based upon limited revenues and a lack of profitability. These factors make
      it
      difficult to evaluate our business on the basis of historical operations. As
      a
      consequence, our past results may not be indicative of future results. Although
      this is true for any business, it is particularly true for us because of our
      limited operating history. Reliance on historical results may hinder our ability
      to anticipate and timely adapt to increases or decreases in sales, revenues
      or
      expenses. For example, if we overestimate our future sales for a particular
      period or periods based on our historical growth rate, we may increase our
      overhead and other operating expenses to a greater degree than we would have
      if
      we correctly anticipated the lower sales level for that period and reduced
      our
      controllable expenses accordingly. If we make poor budgetary decisions as a
      result of unreliable historical data, we could be continue to incur losses,
      which may result in a decline in our stock price.




**We
      have no experience as a public company.**





We
      have
      never operated as a public company. We have no experience in complying with
      the
      various rules and regulations which are required of a public company. As a
      result, we may not be able to operate successfully as a public company, even
      if
      our operations are successful. We plan to comply with all of the various rules
      and regulations which are required of a public company. However, if we cannot
      operate successfully as a public company, your investment may be materially
      adversely affected. Our inability to operate as a public company could be the
      basis of your losing your entire investment in us.








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            4
            -*





**Our
      clients have no obligation to purchase from us, which may result in sudden
      declines in sales.**





Our
      client mix currently consists of approximately ninety percent commercial and
      professional business offices, and ten percent high-end residential homes.
      We do
      not have supply agreements or other volume commitments that are binding on
      our
      clients, and our sales originate solely from individual purchase orders that
      we
      negotiate with our individual clients. As a consequence, our clients are not
      obligated to purchase any amount of our products and they may choose to stop
      or
      decrease their level of product purchases from us at any time, without giving
      us
      prior notice. This could cause our sales to fluctuate, and we could experience
      a
      sudden and unexpected decline in sales. We could experience unexpected
      operational losses if our client sales were to decline significantly without
      notice.





**We
      currently rely upon two clients for a majority of our sales, which means that
      we
      could be severally impacted by the loss of one or both of
      them.**





Our
      revenue projections are subject to greater uncertainty than if we had volume
      commitments from one or more of our largest clients. Our two top clients in
      fiscal year 2006 accounted for approximately 62% of our revenues and
      approximately 52% of our revenues in fiscal year 2005. We could be severally
      impacted by the loss of one or both of them. As long as we rely upon a few
      clients for a majority of our sales, we could be subject to uncertain revenue
      results, if we lose a major client. We cannot assure you that these clients,
      or
      any of our clients, will continue to purchase our products in significant
      volume, or at all.




**We
      are implementing a strategy to grow and expand our business, which is expensive
      and may not generate increases in our revenues.**





We
      intend
      to expand our business, and we plan to incur expenses associated with our growth
      and expansion. Although we recently raised funds through public and private
      offerings to implement our growth strategy, these funds may not be adequate
      to
      offset all of the expenses we incur in expanding our business. We will need
      to
      generate greater revenues to offset expenses associated with our growth, and
      we
      may be unsuccessful in achieving greater revenues, despite our attempts to
      grow
      our business. If our growth strategies do not result in increased revenues,
      we
      may have to abandon our plans for further growth or may even reduce the current
      size of our operations.




**We
      may need to raise additional funds, and these funds may not be available when
      we
      need them.**




Based
      on
      our current plans, we have adjusted our operating expenses so that cash
      generated from operations and from working capital financing is expected to
      be
      sufficient for the foreseeable future to fund our operations at our currently
      forecasted levels. This has not always been the case, since we have had a
      history of losses. To try to operate at a break-even level based upon our
      current level of anticipated business activity, we believe that we must generate
      approximately $36,000 in revenue per year. However, if our forecasts are
      inaccurate, we will need to raise additional funds. On the other hand, we may
      choose to scale back our operations to operate at break-even with a smaller
      level of business activity, while adjusting our overhead to meet the revenue
      from current operations. In addition, we expect that we will need to raise
      additional funds if we decide to pursue more rapid expansion, the development
      of
      new or enhanced services and products, appropriate responses to competitive
      pressures, or the acquisition of complementary businesses or technologies,
      or if
      we must respond to unanticipated events that require us to make additional
      investments. . We cannot assure that additional financing will be available
      when
      needed on favorable terms, or at all. If these funds are not available when
      we
      need them, then we may need to change our business strategy and reduce our
      rate
      of growth.








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            5
            -*





**We
      must effectively manage the growth of our operations, or we may outgrow our
      current infrastructure.**





As
      of
      December 31, 2006, we had two employees. If we experience rapid growth of our
      operations, we could see a backlog of client orders. We can resolve these
      capacity issues by hiring additional personnel and upgrading our infrastructure.
      However, we cannot guarantee that sufficient additional personnel will be
      available or that we will find suitable technology to aid our growth. In any
      case, we will continue pursuing additional sales growth for our company.
      Expanding our infrastructure will be expensive, and will require us to train
      our
      workforce, and improve our financial and managerial controls to keep pace with
      the growth of our operations.




**Because
      we are small and do not have much capital, we must limit our operations. A
      company in our industry with limited operations has a smaller opportunity to
      be
      successful.**





Because
      we are small and do not have much capital, we must limit our operations. We
      must
      limit our operations to the State of Colorado as the only geographical area
      in
      which we operate. Because we may have to limit our operations, we may not
      generate sufficient sales to make a profit. If we do not make a profit, we
      may
      have to suspend or cease operations.





**Because
      our current officers and directors are involved with other businesses in the
      same industry, the manner in which we operate may create the possibility of
      a
      conflict of interest.**





All
      of
      our officers and directors are also involved with other businesses in the same
      industry. Mr. and Mrs. Sheehan own the Accessory Warehouse, Inc. Mrs. Gregarek
      is an independent contractor for interior design work. These other arrangements
      could create conflict of interest with respect to our operations. Each of our
      officers and directors is aware of their responsibilities with respect to
      corporate opportunities and plans to operate our Company in such a manner as
      to
      minimize the effect of any conflict of interest. Each officer and director
      has
      agreed to contract with the Company on the same or better terms and conditions
      than each would with unaffiliated third parties and to deal with the public
      for
      interior design work only through the Company. Each of these officers and
      directors will use their best judgments to resolve all potential conflicts.
      The
      other related business activities of our officers and directors involve sales
      limited to design professionals. We cannot guarantee that any potential
      conflicts can be avoided.





**Our
      success will be dependent upon our management.**





Our
      success will be dependent upon the decision making of our directors and
      executive officers. These individuals intend to commit as much time as necessary
      to our business, but this commitment is no assurance of success. The loss of
      any
      or all of these individuals, particularly Mr. and Mrs. Sheehan, could have
      a
      material, adverse impact on our operations. We have no written employment
      agreements with any officers and directors, including Mr. and Mrs. Sheehan.
      We
      have not obtained key man life insurance on the lives of any of these
      individuals.








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            6
            -*





**We
      face substantial competition from numerous sources, many of which have access
      to
      better resources.**





Competition
      in sale of art work and interior design services is intense. We compete with
      a
      diverse group of competitors ranging from internet businesses to traditional
      brick-and-mortar companies, many of which have greater resources than we do.
      We
      believe that barriers to entry in this business are not significant and start-up
      costs are relatively low, so our competition may increase in the future. Our
      belief that there are minimal barriers to entry is based on our observation
      that
      operations such as ours do not require the ownership of warehouses, showrooms
      or
      factories to operate, which we think is because (i) our direct ship business
      can
      be operated with minimal warehousing needs and costs, which are significantly
      less than traditional models, (ii) wholesale product orders can be placed after
      receipt of client orders, in order to further reduce warehousing needs, (iii)
      samples can be shown to clients at little or no cost, without the necessity
      of
      showroom space for actual product, (iv) if a competitor wants showroom space,
      it
      is typically available for lease at competitive rates in most United States
      markets, and (v) all manufacturing can be done by third party suppliers, so
      there is no need to own or lease a manufacturing facility. New competitors
      may
      be able to launch new businesses similar to ours, and current competitors
      may replicate our business model, at a relatively low cost. If competitors
      with significantly greater resources than ours decide to replicate our business
      model, they may be able to quickly gain recognition and acceptance of their
      business methods, products and services through marketing and promotion. We
      may
      not have the resources to compete effectively with current or future
      competitors. If we are unable to effectively compete, we will lose sales to
      our
      competitors and our revenues will decline.





**Our
      directors have the ability to significantly influence any matters to be decided
      by the stockholders, which may prevent or delay a change in control of our
      company.**





The
      current members of our Board of Directors beneficially own, in the aggregate,
      approximately 78.5% of our common stock, on a fully diluted basis. As a result,
      if they choose to vote in concert, our directors are collectively able to
      significantly influence the outcome of any corporate matters submitted to our
      stockholders for approval, including any transaction that might cause a change
      in control, such as a merger or acquisition. It is unlikely that stockholders
      in
      favor of a matter, which is opposed by the Board of Directors, would be able
      to
      obtain the number of votes necessary to overrule the vote of the Board of
      Directors. Further, the control by the directors means that they may make
      decisions for us with which you may disagree or that you may feel is not in
      our
      best interests.





**We
      may need to substantially increase our marketing efforts in order to grow our
      business, which is expensive.**





In
      order
      to grow our business, we will need to develop and maintain widespread
      recognition and acceptance of our company, our business model, our services
      and
      our products. We believe that we have presented our service and product offering
      to only a small percentage of the potential market. Currently, we rely primarily
      on word of mouth from our existing clients and contacts we develop personally
      through industry events to promote and market ourselves. In order to
      successfully grow our company, we may need to significantly increase our
      financial commitment to creating awareness and acceptance of our company among
      retailers, which would be expensive. In fiscal year 2005, marketing and
      advertising expenses were negligible. If we fail to successfully market and
      promote our business, we could lose current clients to our competitors, or
      our
      growth efforts may be ineffective. If we incur significant expenses promoting
      and marketing ourselves, it could cause our profitability to
      decline.








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            7
            -*





**Our
      business is not diversified, which could result in significant fluctuations
      in
      our operating results.**





All
      of
      our business is involved in the marketing of art work products and interior
      design services, and, accordingly, is dependent upon trends in the interior
      design sector. Downturns in the interior design sector could have a material
      adverse effect on our business. A downturn in the interior design sector may
      reduce our stock price, even if our business is successful.





**Risks
      Associated With our Securities:**




**Buying
      low-priced penny stocks is very risky and speculative.**





Our
      common stock is defined as a penny stock under the Securities and Exchange
      Act
      of 1934, and rules of the Commission. The Exchange Act and such penny stock
      rules generally impose additional sales practice and disclosure requirements
      on
      broker-dealers who sell our securities to persons other than certain accredited
      investors who are, generally, institutions with assets in excess of $5,000,000
      or individuals with net worth in excess of $1,000,000 or annual income exceeding
      $200,000, or $300,000 jointly with spouse, or in transactions not recommended
      by
      the broker-dealer. For transactions covered by the penny stock rules, a
      broker-dealer must make a suitability determination for each purchaser and
      receive the purchaser's written agreement prior to the sale. In addition, the
      broker-dealer must make certain mandated disclosures in penny stock
      transactions, including the actual sale or purchase price and actual bid and
      offer quotations, the compensation to be received by the broker-dealer and
      certain associated persons, and deliver certain disclosures required by the
      Commission. Consequently, the penny stock rules may affect the ability of
      broker-dealers to make a market in or trade our common stock and may also affect
      your ability to resell any shares you may purchase in the public
      markets.





**Our
      common stock currently has no trading market and there** **is
      no guarantee a trading market will ever develop for our
      securities.**





There
      is
      presently no demand for our common stock. While we do intend to apply for
      quotation in the Over-the-Counter Bulletin Board, we cannot guarantee that
      our
      application will be approved and our stock listed and quoted for sale. If no
      market is ever developed for our common stock, it will be difficult for you
      to
      sell any shares you purchase. In such a case, you may find that you are unable
      to achieve any benefit from your investment or liquidate your shares without
      considerable delay, if at all. In addition, if we fail to have our common stock
      quoted on a public trading market, your common stock will not have a
      quantifiable value and it may be difficult, if not impossible, to ever resell
      your shares, resulting in an inability to realize any value from your
      investment.




**The
      over-the-counter market for stock such as ours has had extreme price and volume
      fluctuations.**





The
      securities of companies such as ours have historically experienced extreme
      price
      and volume fluctuations during certain periods. These broad market fluctuations
      and other factors, such as new product developments and trends in the our
      industry and in the investment markets generally, as well as economic conditions
      and quarterly variations in our operational results, may have a negative effect
      on the market price of our common stock.





**All
      of our common stock is restricted but could become eligible for resale under
      Rule 144; this could cause the market price of our common stock to drop
      significantly, even if our business is doing well.**





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            8
            -*





Of
      our
      total outstanding shares, 10,300,000 or approximately 95% are restricted from
      immediate resale but may be sold into the market subject to volume and manner
      of
      sale limitations under Rule 144 beginning in May, 2007. This could cause the
      market price of our common stock to drop significantly, even if our business
      is
      doing well. We have outstanding 10,820,600 shares of common stock outstanding
      at
August
      1, 2007. This includes the common shares which we sold to the public
      in
      our recent public offering, which may be resold in the public market
      immediately.





As
      restrictions on resale end, the market price of our stock could drop
      significantly if the holders of restricted shares sell them or are perceived
      by
      the market as intending to sell them.





**We
      do not expect to pay dividends on common stock.**





We
      have
      not paid any cash dividends with respect to our common stock, and it is unlikely
      that we will pay any dividends on our common stock in the foreseeable future.
      Earnings, if any, that we may realize will be retained in the business for
      further development and expansion.





(b)
      NARRATIVE DESCRIPTION OF THE BUSINESS





Art
      Design, Inc. was incorporated in the State of Colorado on January 16, 2002.
      We
      are a provider of custom framed artwork, accessories and interior design
      consulting. We market and sell our products and services to commercial and
      professional business offices, along with residential clients. We believe we
      have developed a presence in the State of Colorado for creating custom framed
      mirrors, art, and design furnishings.




Our
      headquarters are located at 3636 S. Jason, Englewood, Colorado 80113. Our phone
      number at our headquarters is (303) 781-7280. Our fiscal year end is December
      31.





(c)
      OPERATIONS





**Overview
      of our Operations**




We
      believe that we have created a business model that enables us to provide
      products and services to our clients in a more convenient, efficient and
      economical manner. We sell our products and services directly to the public
      and
      not through design professionals.




Mr.
      and
      Mrs. Sheehan operate a private company known as the Accessory Warehouse. This
      company markets art work, accessories, and furniture exclusively to design
      industry professionals. The original concept of our Company was to have a
      business which markets art work, accessories, furniture, and interior design
      consulting to the public.





We
      plan
      to purchase most, if not all, of our products from Accessory Warehouse. These
      products will be purchased under the same or better terms and conditions which
      Accessory Warehouse would give to unaffiliated third parties.





We
      established our business strategy on the premise that on site consulting to
      the
      public is a valuable service. We believe that most people do not have the time
      or expertise to furnish their offices or living spaces with art, mirrors, or
      other accessories.





We
      provide products that we believe share an aesthetic appeal and possess
      distinctive design elements. We combine these products with our interior design
      consulting, to give our clients a complete package of goods and services. We
      provide detailed information regarding the designer and key design and
      functional elements about each product. We obtain our merchandise from select
      domestic designers and manufacturers that meet our requirements for design,
      quality, packaging, and consistency of production and flow. We believe that
      our
      individual assortment of products serves as a competitive
      advantage.








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            9
            -*





We
      believe our success requires the development and maintenance of a broad base
      of
      residential and commercial clients. Our clients include commercial and
      professional business offices, along with high end homes. We target educated
      consumers focused on quality of life and interested in self-enrichment.
      Historically, our residential customers have been almost as likely to be male
      as
      female, have spanned a wide range of ages and typically have had household
      incomes greater than $75,000. We sell to the following commercial clients,
      who
      we believe are representative of our commercial client base in a number of
      different industries, including: architects, doctors, lawyers, and
      accountants.





**Industry
      Overview**




We
      believe that businesses have begun to place more emphasis on design. A November
      2003 article in Fortune magazine highlighted organizational initiatives at
      several major corporations, which have created new positions for design
      professionals and promoted other design professionals, reflecting the growing
      importance of design in selling their products or services.





We
      believe small businesses, which account for all of our commercial sales,
      historically have also had difficulties gaining access to design furnishings.
      We
      believe that the design furnishings industry has generally marketed and sold
      most design products in a manner that effectively excludes small businesses
      as
      buyers. Factors that contribute to the exclusion of small businesses from the
      market for design products include: the imposition of minimum order requirements
      that often exceed such buyers’ requirements, limited physical presence of
      product sellers in smaller markets; and lack of interest from product
      distributors to sell to smaller buyers, among others. We believe this large
      segment of the commercial market has traditionally been underserved and will
      continue to be particularly receptive to our product offerings.




We
      believe our business model makes design-oriented products available for
      convenient purchase to a broad array of residential and commercial consumers,
      helping us further expand and penetrate the market for design
      products.





**Operations,
      Management and Employees**





We
      believe that initially operating from one location will be central to our
      overall success. We sell to the public through direct contact with our
      employees. Our plan is to concentrate our operations in the State of Colorado.
      We have no plans to operate in additional locations.




We
      have
      two full-time employees, not including our two officers. As we expand, we intend
      to hire additional employees. However, we have no present plans to do so. We
      may
      hire part-time help as needed from time-to-time for specific
      projects.





While
      our
      Mr. and Mrs. Sheehan have had extensive experience in our business, we must
      eventually recruit additional personnel. We will strive to maintain quality
      and
      consistency through the careful training and supervision of personnel and the
      establishment of, and adherence to, high standards relating to personnel
      performance and client service. We believe that we will be able to attract
      high
      quality, experienced personnel by paying competitive wages and
      salaries.





(d)
      MARKETS





We
      plan
      to market through direct contact with prospective clients. We have no sales
      representative who solicits potential clients. However, Mr. and Mrs. Sheehan,
      along with Mrs. Gregarek, plan to use their contacts to continue to generate
      the
      clients and will attempt to develop repeat business from every
      project.








*-
            10
            -*





(e)
      RAW MATERIALS





The
      use
      of raw materials is not a material factor in our operations at the present
      time.
      We do not expect raw materials to be a material factor in the
      future.





(f)
      CUSTOMERS AND COMPETITION





The
      market for residential and commercial furnishings is fragmented with no single
      company holding a dominant market position. The market includes numerous smaller
      specialty retailers, as well as department stores, larger mass merchandisers
      and
      interior design stores, with department stores commanding a decreasing
      percentage of the furnishings industry compared to specialty retailers. In
      recent years, the industry has been characterized by consolidation, the
      withdrawal of certain retailers from the marketplace and a de-emphasis by
      traditional department stores on upscale merchandise, leaving fewer large
      competitors focused exclusively on this segment of the furnishings
      market.




We
      face
      competition from several sources, including the following:





            design
                companies selling solely through catalog and
                online;






            regional
                retailers specializing in design;





All
      of
      our competitors are larger than us and have substantially greater financial,
      marketing and other resources than we do.




The
      U.S.
      retail industry, along with the catalog and online commerce sectors are highly
      competitive, dynamic in nature and have undergone significant change over the
      past several years. Our ability to anticipate and respond successfully to these
      changes is critical to our long-term growth. If we are unable to maintain or
      increase our market share or compete effectively in the furnishings market,
      our
      business, financial condition and operating results would be adversely
      affected.




We
      believe that the ability to compete successfully is determined by a variety
      of
      factors, including quality of product selection, effective product presentation,
      client service and pricing. We believe that we can compete favorably on the
      basis of these factors.





We
      also
      believe that we offer our clients flexibility and cost savings because our
      overhead is lower than many of our competitors. However, we cannot guarantee
      that we will be able to successfully compete.





Our
      two
      top clients in fiscal year 2006 accounted for approximately 63% of our revenues.
      In fiscal year 2005 our two top clients accounted for approximately 52% of
      our
      revenues. A part of our strategy is to expand the number of clients. We plan
      to
      particularly focus on this aspect of our business in the next twelve
      months.





(g)
      BACKLOG





At
      December 31, 2006, we had no backlogs.








*-
            11
            -*





(h)
      EMPLOYEES





We
      have
      two full-time employees, not including our two officers. As we expand, we intend
      to hire additional employees. However, we have no present plans to do so. We
      may
      hire part-time help as needed from time-to-time for specific projects. We do
      not
      pay salaries to our two officers. However, we reimburse them for any
      out-of-pocket expenses they incur on our behalf. In addition, in the future,
      we
      may approve the payment of salaries for our management, but currently, no such
      plans have been approved. We do not currently pay for vacation, holidays or
      provide major medical coverage. None of our officers or directors is a party
      to
      any employment agreement. However, we may adopt such plans in the
      future.





(i)
      PROPRIETARY INFORMATION





We
      do not
      currently have any patent or trademark protection. If we determine it is
      feasible to file for such trademark protection, we still have no assurance
      that
      doing so will prevent competitors from using the same or similar names, marks,
      concepts or appearance.





(j)
      GOVERNMENT REGULATION





We
      are
      not subject to any material government or industry regulation.




(k)
      RESEARCH AND DEVELOPMENT





We
      have
      never spent any amount in research and development activities.





(l)
      ENVIRONMENTAL COMPLIANCE





Since
      we
      only act in the capacity of an intermediary, we do not expect environmental
      laws
      to have any material impact on us.





(m)
      SUBSEQUENT EVENTS





On
      June
      18, 2007 we closed our public offering. We sold a total of 520,600 shares at
      a
      price of $.25 per share, for a total of $130,150.





(n)
      HOW
      TO OBTAIN OUR SEC FILINGS





We
      file
      annual, quarterly, and special reports, proxy statements, and other information
      with the Securities Exchange Commission (SEC). Reports, proxy statements and
      other information filed with the SEC can be inspected and copied at the public
      reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549.
      Such
      material may also be accessed electronically by means of the SEC's website
      at
      www.sec.gov.





Our
      investor relations department can be contacted at our principal executive office
      located at our principal office, 3636 S. Jason, Englewood, Colorado 80113.
      Our
      phone number at our headquarters is (303) 781-7280. We currently have no
      website.








**ITEM
      2. DESCRIPTION OF PROPERTY.**





We
      currently own various items of office equipment. We rent office and production
      space under a verbal month to month lease at a cost of $500 per month from
      Accessory Warehouse, an entity owned by Kathy and Todd Sheehan, who are our
      principal shareholders. This office and production space is located at 3636
      S.
      Jason, Englewood, Colorado 80113. We currently carry no inventory and have
      no
      other property. We own no real estate nor have plans to acquire any real
      estate.





*-
            12
            -*











**ITEM
      3. LEGAL PROCEEDINGS.**





We
      are
      not a party to any material legal proceedings, nor is our property the subject
      of any material legal proceeding.








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





We
      held
      no shareholders meeting in the fourth quarter of our fiscal year.








**PART
      II**








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





(a)
      PRINCIPAL MARKET OR MARKETS





There
      is
      currently no public trading market for our securities. We intend to apply to
      have our common stock listed for quotation on the Over-the-Counter Bulletin
      Board.





(b)
      APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK





As
      of
      August 1, 2007, we had a total of 10,820,600 shares of our Common Stock
      outstanding. The number of holders of record of our common stock at that date
      was one hundred.





(c)
      DIVIDENDS





Holders
      of common stock are entitled to receive such dividends as may be declared by
      our
      Board of Directors. No dividends on the common stock were paid by us during
      the
      periods reported herein nor do we anticipate paying dividends in the foreseeable
      future.





(d)
      THE
      SECURITIES ENFORCEMENT AND PENNY STOCK REFORM ACT OF 1990





The
      Securities Enforcement and Penny Stock Reform Act of 1990 requires additional
      disclosure and documentation related to the market for penny stock and for
      trades in any stock defined as a penny stock. Unless we can acquire substantial
      assets and trade at over $5.00 per share on the bid, it is more likely than
      not
      that our securities, for some period of time, would be defined under that Act
      as
      a "penny stock." As a result, those who trade in our securities may be required
      to provide additional information related to their fitness to trade our shares.
      These requirements present a substantial burden on any person or brokerage
      firm
      who plans to trade our securities and would thereby make it unlikely that any
      liquid trading market would ever result in our securities while the provisions
      of this Act might be applicable to those


securities.





Any
      broker-dealer engaged by the purchaser for the purpose of selling his or her
      shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities
      and
      Exchange Act. Rather than creating a need to comply with those rules, some
      broker-dealers will refuse to attempt to sell penny stock.





The
      penny
      stock rules require a broker-dealer, prior to a transaction in a penny stock
      not
      otherwise exempt from those rules, to deliver a standardized risk disclosure
      document prepared by the Commission, which:





*-
            13
            -*





-
            contains
                a description of the nature and level of risk in the market for penny
                stocks in both public offerings and secondary trading;


-
            contains
                a description of the broker's or dealer's duties to the customer
                and of
                the rights and remedies available to the customer with respect to
                a
                violation to such duties or other requirements of the Securities
                Act of
                1934, as amended;





-
            contains
                a brief, clear, narrative description of a dealer market, including
                "bid"
                and "ask" prices for penny stocks and the significance ofthe spread
                between the bid and ask price;


-
            contains
                a toll-free telephone number for inquiries on disciplinary
                actions;





-
            defines
                significant terms in the disclosure document or in the conduct of
                trading
                penny stocks; and





-
            contains
                such other information and is in such form (including language, type,
                size
                and format) as the Securities and Exchange Commission shall require
                by
                rule or regulation;





The
      broker-dealer also must provide, prior to effecting any transaction in a penny
      stock, to the customer:





-
            the
                bid and offer quotations for the penny
                stock;





-
            the
                compensation of the broker-dealer and its salesperson in the
                transaction;





-
            the
                number of shares to which such bid and ask prices apply, or other
                comparable information relating to the depth and liquidity of the
                market
                for such stock; and





-
            monthly
                account statements showing the market value of each penny stock held
                in
                the customer's account.





In
      addition, the penny stock rules require that prior to a transaction in a penny
      stock not otherwise exempt from those rules; the broker-dealer must make a
      special written determination that the penny stock is a suitable investment
      for
      the purchaser and receive the purchaser's written acknowledgment of the receipt
      of a risk disclosure statement, a written agreement to transactions involving
      penny stocks, and a signed and dated copy of a written suitability statement.
      These disclosure requirements will have the effect of reducing the trading
      activity in the secondary market for our stock because it will be subject to
      these penny stock rules. Therefore, stockholders may have difficulty selling
      their securities.








**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF
      OPERATIONS**





Certain
      statements in this Management’s Discussion and Analysis of Financial Condition
      and Results of Operations that are not historical facts are forward-looking
      statements such as statements relating to future operating results, existing
      and
      expected competition, financing and refinancing sources and availability and
      plans for future development or expansion activities and capital expenditures.
      Such forward-looking statements involve a number of risks and uncertainties
      that
      may significantly affect our liquidity and results in the future and,
      accordingly, actual results may differ materially from those expressed in any
      forward-looking statements. Such risks and uncertainties include, but are not
      limited to, those related to effects of competition, leverage and debt service
      financing and refinancing efforts, general economic conditions, and changes
      in
      applicable laws or regulations. The following discussion and analysis should
      be
      read in conjunction with the consolidated financial statements and notes thereto
      appearing elsewhere in this report.








*-
            14
            -*





**Critical
      Accounting Policies**





We
      have
      identified the following policies below as critical to our business and results
      of operations. For further discussion on the application of these and other
      accounting policies, see Note 1 to the accompanying audited financial statements
      for the year ended December 31, 2006, included elsewhere in this Prospectus.
      Our
      reported results are impacted by the application of the following accounting
      policies, certain of which require management to make subjective or complex
      judgments. These judgments involve making estimates about the effect of matters
      that are inherently uncertain and may significantly impact quarterly or annual
      results of operations. For all of these policies, management cautions that
      future events rarely develop exactly as expected, and the best estimates
      routinely require adjustment. Specific risks associated with these critical
      accounting policies are described in the following paragraphs.





**Use
      of Estimates in the Preparation of Financial Statements**





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





**Results
      of Operations**





We
      have a
      history of losses. Furthermore, our losses may continue into the future. We
      have
      never had a profitable fiscal year, including the fiscal year ended December
      31,2006.





We
      have
      had declining revenues for each of the reporting periods. The changes in
      revenues from year to year have been a direct result of our marketing efforts,
      or lack thereof, and the number of clients and projects we
      generate.





Our
      accountants have expressed doubt about our ability to continue as a going
      concern as a result of our continued net losses. Our ability to achieve and
      maintain profitability and positive cash flow is dependent upon our ability
      to
      locate clients who will purchase our products and use our services and our
      ability to generate revenues.





Comparing
      our operations, we had sales-net of returns of $34,316 for the twelve months
      ended December 31, 2006. This compares with sales-net of returns of $62,009
      for
      the twelve months ended December 31, 2005.





Our
      costs
      of goods for the twelve months ended December 31, 2006 was $22,621, or
      approximately 66% of sales-net of returns. Our costs of goods for the fiscal
      year ended December 31, 2005 was $54,183,or approximately 87% of sales-net
      of
      returns. Costs of goods sold include all direct costs incurred in selling
      products. We do not separate sales of different product lines into operating
      segments.





The
      difference between total sales-net of returns and costs of goods is gross
      profit. Our gross profit for the twelve months ended December 31, 2006 was
      $11,695. This compares with gross profit for the fiscal year ended December
      31,
      2005 was $7,826.





To
      the
      extent that we market more products and fewer consulting services in connection
      with our sales, our cost of goods is a much larger factor, which tends to reduce
      our gross profitability. We make a higher gross profit from our consulting
      services than from our product sales. In addition, some product sales have
      higher profit margins. Our higher gross profit in 2005 is a reflection of both
      higher profit margins on product and more consulting services as a part of
      overall sales.








*-
            15
            -*





Operating
      expenses, which includes depreciation and general and administrative expenses
      for the twelve months ended December 31, 2006 was $24,733. This compares to
      operating expenses for the twelve months ended December 31, 2005 of $16,806.
      The
      major components of operating expenses include professional fees, salaries
      and
      associated payroll costs, rent and telephone expenses.





We
      believe that operating expenses in current operations should remain fairly
      constant as product sales and consulting services improve. Each additional
      sale
      or service and correspondingly the gross profit of such sale or service have
      minimal offsetting operating expenses. Thus, additional sales could become
      profit at a higher return on sales rate as a result of not needing to expand
      operating expenses at the same pace.





We
      had a
      net loss of $13,021 for the twelve months ended December 31, 2006. This compares
      with a net loss of $8,953 for the fiscal year ended December 31,
      2005.





Based
      upon our current plans, we have adjusted our operating expenses so that cash
      generated from operations and from working capital is expected to be sufficient
      for the foreseeable future to fund our operations at our currently forecasted
      levels. This has not always been the case, since we have had a history of
      losses. To try to operate at a break-even level based upon our current level
      of
      anticipated business activity, we believe that we must generate approximately
      $36,000 in revenue per year. However, if our forecasts are inaccurate, we will
      need to raise additional funds. On the other hand, we may choose to scale back
      our operations to operate at break-even with a smaller level of business
      activity, while adjusting our overhead to meet the revenue from current
      operations. In addition, we expect that we will need to raise additional funds
      if we decide to pursue more rapid expansion, the development of new or enhanced
      services and products, appropriate responses to competitive pressures, or the
      acquisition of complementary businesses or technologies, or if we must respond
      to unanticipated events that require us to make additional investments. We
      cannot assure that additional financing will be available when needed on
      favorable terms, or at all.





We
      expect
      to incur operating losses in future periods because we will be incurring
      expenses and not generating sufficient revenues. We expect approximately $33,000
      in operating costs over the next twelve months. We cannot guarantee that we
      will
      be successful in generating sufficient revenues or other funds in the future
      to
      cover these operating costs. Failure to generate sufficient revenues or
      additional financing when needed could cause us to go out of
      business




**Liquidity
      and Capital Resources**





As
        of
        December 31, 2006, we had cash or cash equivalents of $31,173.
 
 Net
        cash
        used for operating activities was $4,774 for the period ended December 31,
        2006,
        compared to $9,812 for the period ended December 31, 2005. We anticipate
        that
        overhead costs in current operations will remain fairly constant as sales
        improve.
 
 Cash
        flows used by investing activities were $-0-for the period ended December
        31,
        2006 and 2005.
 
 Cash
        flows provided by financing activities accounted for $29,857 for the period
        ended December 31, 2006 compared to $-0- for the period ended December 31,
        2005.
        These cash flows were all related to sales of stock and deferred offering
        costs.





Over
      the
      next twelve months our capital costs will be approximately $10,000 to $12,000
      primarily to expand our current operations. We plan to buy additional equipment
      to be used in our operations.







*-
            16
            -*





We
      believe that our recent public offering will provide sufficient capital in
      the
      short term for our current level of operations. This is because we believe
      that
      we can attract sufficient additional product sales and services within our
      present organizational structure and resources to become profitable in our
      operations. Additional resources will be needed to expand into additional
      locations, which we have no plans to do at this time.





Otherwise,
      we do not anticipate needing to raise additional capital resources in the next
      twelve months.





Until
      current operations become cash flow positive, our officers and directors may
      be
      required to fund the operations to continue the business. At this time, other
      than our cash, we have no other resources on which to get cash if needed without
      their assistance.





Our
      principle source of liquidity is our operations. Our variation in revenues
      is
      based upon the level of our sales activity and will account for the difference
      between a profit and a loss. Also business activity is closely tied to the
      economy of Denver and the U.S. economy. A slow down in interior design work
      will
      have a negative impact to our business. In any case, we try to operate with
      minimal overhead. Our primary activity will be to seek to expand the interior
      design projects and, consequently, our sales. If we succeed in expanding our
      client base and generating sufficient sales, we will become profitable. We
      cannot guarantee that this will ever occur. Our plan is to build our company
      in
      any manner which will be successful.





**Plan
      of Operation**





Our
      plan
      for the twelve months immediately after the closing of our public offering
      is to
      operate at a profit or at break even. Our plan is to attract sufficient
      additional product sales and services within our present organizational
      structure and resources to become profitable in our operations.





Currently,
      we are conducting business in only one location in the Denver Metropolitan
      area.
      We have no plans to expand into other locations or areas. The timing of the
      completion of the milestones needed to become profitable are not directly
      dependent on the success of our public offering. We believe that we can achieve
      profitability as we are presently organized with sufficient
      business.




Other
      than the shares offered by this prospectus no other source of capital has been
      identified or sought.





If
      we are
      not successful in our operations we will be faced with several
      options:





1.
            Cease
                operations and go out of business;





2.
            Continue
                to seek alternative and acceptable sources of
                capital;





3.
            Bring
                in additional capital that may result in a change of control;
                or





4.
            Identify
                a candidate for acquisition that seeks access to the public marketplace
                and its financing sources.





Currently,
      we have sufficient capital to implement our proposed business operations or
      to
      sustain them for the next twelve months. If we can become profitable, we could
      operate at our present level indefinitely.





To
      date,
      we have never had any discussions with any possible acquisition candidate.
      However, if we cannot operate our business in a profitable manner, we may seek
      other opportunities, including, but not limited to, one or more
      acquisitions.





*-
            17
            -*





**Proposed
      Milestones to Implement Business Operations**




At
      the
      present time, we are operating from one location in the Denver Metropolitan
      area. Our plan is to make our operation profitable by the end of our next fiscal
      year. We estimate that we must generate approximately $3,000 in sales per month
      to be profitable.





We
      believe that we can be profitable or at break even by the end of the current
      fiscal year, assuming sufficient sales. Based upon our current plans, we have
      adjusted our operating expenses so that cash generated from operations and
      from
      working capital financing is expected to be sufficient for the foreseeable
      future to fund our operations at our currently forecasted levels. This has
      not
      always been the case, since we have had a history of losses. To try to operate
      at a break-even level based upon our current level of anticipated business
      activity, we believe that we must generate approximately $36,000 in revenue
      per
      year. However, if our forecasts are inaccurate, we will need to raise additional
      funds. On the other hand, we may choose to scale back our operations to operate
      at break-even with a smaller level of business activity, while adjusting our
      overhead to meet the revenue from current operations. In addition, we expect
      that we will need to raise additional funds if we decide to pursue more rapid
      expansion, the development of new or enhanced services and products, appropriate
      responses to competitive pressures, or the acquisition of complementary
      businesses or technologies, or if we must respond to unanticipated events that
      require us to make additional investments. We cannot assure that additional
      financing will be available when needed on favorable terms, or at
      all.





We
      expect
      to incur operating losses in future periods because we will be incurring
      expenses and not generating sufficient revenues. We expect approximately $33,000
      in operating costs over the next twelve months. We cannot guarantee that we
      will
      be successful in generating sufficient revenues or other funds in the future
      to
      cover these operating costs. Failure to generate sufficient revenues or
      additional financing when needed could cause us to go out of
      business




No
      commitments to provide additional funds have been made by management or current
      shareholders. There is no assurance that additional funds will be made available
      to us on terms that will be acceptable, or at all, if and when needed. We expect
      to continue to generate and increase sales, but there can be no assurance we
      will generate sales sufficient to continue operations or to expand.





We
      also
      are planning to rely on the possibility of referrals from clients and will
      strive to satisfy our clients. We believe that referrals will be an effective
      form of advertising because of the quality of service that we bring to clients.
      We believe that satisfied clients will bring more and repeat
      clients.





In
      the
      next 12 months, we do not intend to spend any funds on research and development
      and do not intend to purchase any large equipment.





**Recently
      Issued Accounting Pronouncements**





We
      do not
      expect the adoption of any recently issued accounting pronouncements to have
      a
      significant impact on our net results of operations, financial position, or
      cash
      flows.





**Seasonality**





We
      do not
      expect our sales to be impacted by seasonal demands for our products and
      services.








*-
            18
            -*





**Trends**





There
      are
      no known trends, events or uncertainties that have had or that are reasonably
      expected to have a material impact on the net sales or revenues or income from
      our proposed operations. Our management has not made any commitments, which
      will
      require any material financial resources.








**ITEM
      7. FINANCIAL STATEMENTS.**

















**FINANCIAL
      STATEMENTS**





**with**





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





























*F-1*








**ART
      DESIGN, INC.**





**FINANCIAL
      STATEMENTS**





**December
      31, 2005 and 2006**







*F-2*











**ART
      DESIGN, INC.**


**Financial
      Statements**











**TABLE
      OF CONTENTS**








PageREPORT
                OF INDEPENDENT REGISTEREDPUBLIC
                ACCOUNTING FIRM
            F-4FINANCIAL
                STATEMENTSBalance
                sheet
            F-5Statements
                of
                operations
            F-6Statements
                of stockholders’
                equity
            F-7Statements
                of cash
                flows
            F-8Notes
                to financial
                statements
            F-10








*F-3*








RONALD
      R.
      CHADWICK, P.C.


Certified
      Public Accountant


2851
      South Parker Road, Suite 720


Aurora,
      Colorado  80014


Telephone
      (303)306-1967


Fax
      (303)306-1944







**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**










Board
      of
      Directors


Art
      Design, Inc.


Englewood,
      Colorado





I
      have
      audited the accompanying balance sheet of Art Design, Inc. as of December 31,
      2006, and the related statements of operations, stockholders' equity and cash
      flows for the years ended December 31, 2005 and 2006. These financial statements
      are the responsibility of the Company's management. My responsibility is to
      express an opinion on these financial statements based on my audit.





I
      conducted my audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that I
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. 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.  I believe that my audit provides a
      reasonable basis for my opinion.





In
      my
      opinion, the financial statements referred to above present fairly, in all
      material  respects, the financial position of Art Design, Inc. as of
      December 31, 2006, and the results of its operations and its cash flows for
      the
      years ended December 31, 2005 and 2006 in conformity with accounting principles
      generally accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 5 to the financial
      statements the Company has suffered recurring losses from operations and has
      a
      working capital deficit that raise substantial doubt about its ability to
      continue as a going concern. Management's plans in regard to these matters
      are
      also described in Note 5. The financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.





Aurora,
      Colorado                                                                            
*/s/ Ronald R. Chadwick, P.C.*


April
      2,
      2007                                                                                  
RONALD R. CHADWICK, P.C.





*F-4*





**ART
      DESIGN, INC.**


**BALANCE
      SHEET**








**Dec.
                31, 2006****ASSETS****Current
                assets**Cash
            
            $
            31,173Accounts
                receivable
            
            
            10,400**Total
                current assets**
            
            
            41,573Accounts
                receivable - related party
            
            
            5,170Deferred
                offering costs
            
            
            24,543Fixed
                assets
            
            
            13,269Less
                accumulated depreciation
            
            
            (9,458
            )33,524**Total
                Assets**
            
            $
            75,097**LIABILITIES
                & STOCKHOLDERS' EQUITY****Current
                liabilities**Accounts
                payable -
                related party
            
            $
            20,171Note
                payable - related party
            
            
            34,201**Total
                current liabilties**
            
            
            54,372**Total
                Liabilities**
            
            
            54,372**Stockholders'
                Equity**Preferred
                stock, $.10 par value;1,000,000
                shares authorized;No
                shares issued & outstanding
            
            
            -Common
                stock, $.001 par value;50,000,000
                shares authorized;10,300,000
                sharesissued
                & outstanding
            
            
            10,300Additional
                paid in capital
            
            
            72,899Accumulated
                deficit
            
            
            (62,474
            )**Total
                Stockholders' Equity**
            
            
            20,725**Total
                Liabilities and Stockholders' Equity**
            
            $
            75,097







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





*F-5*








**ART
      DESIGN, INC.**


**STATEMENTS
      OF OPERATIONS**





**Year
                Ended**
            
            
            **Year
                Ended****Dec.
                31, 2005**
            
            
            **Dec.
                31, 2006**Sales
                - net of returns
            
            $
            62,009
            
            
            $
            34,316Cost
                of goods sold
            
            
            23,605Cost
                of goods sold - related party
            
            
            30,578
            
            
            
            22,621Gross
                profit
            
            
            7,826
            
            
            
            11,695Operating
                expenses:Amortization
                & depreciation
            
            
            1,027
            
            
            
            1,776General
                and administrative
            
            
            9,779
            
            
            
            16,957General
                and adm. - related party
            
            
            6,000
            
            
            
            6,00016,806
            
            
            
            24,733Gain
                (loss) from operations
            
            
            (8,980
            )
            
            
            (13,038
            )Other
                income (expense):Other
                income
            
            
            27
            
            
            
            1727
            
            
            
            17Income
                (loss) beforeprovision
                for income taxes
            
            
            (8,953
            )
            
            
            (13,021
            )Provision
                for income tax
            
            
            -
            
            
            
            -**Net
                income (loss)**
            
            $
            (8,953
            )
            
            $
            (13,021
            )**Net
                income (loss) per share**(Basic
                and fully diluted)
            
            $
            (8.95
            )
            
            $
            (0.00
            )Weighted
                average number ofcommon
                shares outstanding
            
            
            1,000
            
            
            
            5,833,750








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





*F-6*







**ART
      DESIGN, INC.**


**STATEMENTS
      OF STOCKHOLDERS' EQUITY**








Common
                StockAmount
            
            
            Paid
                in
            
            
            Accumulated
            
            
            Stockholders'Shares
            
            
            ($.001
                Par)
            
            
            Capital
            
            
            Deficit
            
            
            EquityBalances
                at December 31, 2004
            
            
            1,000
            
            
            $
            1
            
            
            $
            6,999
            
            
            $
            (40,500
            )
            
            $
            (33,500
            )Donated
                services - officer
            
            
            
            
            
            
            
            
            
            
            6,000
            
            
            
            
            
            
            
            6,000Gain
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (8,953
            )
            
            
            (8,953
            )Balances
                at December 31, 2005
            
            
            1,000
            
            
            $
            1
            
            
            $
            12,999
            
            
            $
            (49,453
            )
            
            $
            (36,453
            )Debt
                conversion
            
            
            4,899,000
            
            
            
            4,899
            
            
            
            4,900
            
            
            
            
            
            
            
            9,799Issuance
                of stock for cash
            
            
            5,400,000
            
            
            
            5,400
            
            
            
            49,000
            
            
            
            
            
            
            
            54,400Donated
                services - officer
            
            
            
            
            
            
            
            
            
            
            6,000
            
            
            
            
            
            
            
            6,000Gain
                (loss) for the period
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (13,021
            )
            
            
            (13,021
            )Balances
                at December 31, 2006
            
            
            10,300,000
            
            
            $
            10,300
            
            
            $
            72,899
            
            
            $
            (62,474
            )
            
            $
            20,725








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








*F-7*





**ART
      DESIGN, INC.**


**STATEMENTS
      OF CASH FLOWS**








**Year
                Ended**
            
            
            **Year
                Ended****Dec.
                31, 2005**
            
            
            **Dec.
                31, 2006****Cash
                Flows From Operating Activities:**Net
                income (loss)
            
            $
            (8,953
            )
            
            $
            (13,021
            )Adjustments
                to reconcile net loss tonet
                cash provided by (used for)operating
                activities:Amortization
                & depreciation
            
            
            1,027
            
            
            
            1,776Donated
                services
            
            
            6,000
            
            
            
            6,000Accounts
                receivable
            
            
            1,759
            
            
            
            (12,819
            )Accrued
                payables - related party
            
            
            (3,905
            )
            
            
            13,525Accrued
                payables
            
            
            235
            
            
            
            (235
            )Unearned
                revenue
            
            
            (5,975
            )
            
            
            -**Net
                cash provided by (used for)****operating
                activities**
            
            
            (9,812
            )
            
            
            (4,774
            )**Cash
                Flows From Investing Activities:**-
            
            
            
            -**Net
                cash provided by (used for)****investing
                activities**
            
            
            -
            
            
            
            -








(Continued
      On Following Page)








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








*F-8*







.**ART DESIGN, INC.**


**STATEMENTS
      OF CASH FLOWS**





(Continued
      From Previous Page)





**Year
                Ended**
            
            
            **Year
                Ended****Dec.
                31, 2005**
            
            
            **Dec.
                31, 2006****Cash
                Flows From Financing Activities:**Deferred
                offering costs
            
            
            
            
            
            (24,543
            )Issuance
                of common stock
            
            
            
            
            
            54,400**Net
                cash provided by (used for)****financing
                activities**
            
            
            -
            
            
            
            29,857**Net
                Increase (Decrease) In Cash**
            
            
            (9,812
            )
            
            
            25,083**Cash
                At The Beginning Of The Period**
            
            
            15,902
            
            
            
            6,090**Cash
                At The End Of The Period**
            
            $
            6,090
            
            
            $
            31,173Schedule
                Of Non-Cash Investing And Financing ActivitiesIn
                2006 the Company issued 4,899,000 shares valued at $9,799 for for
                related
                party debt relief.Supplemental
                DisclosureCash
                paid for interest
            
            $
            -
            
            
            $
            -Cash
                paid for income taxes
            
            $
            -
            
            
            $
            -











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





*F-9*





**ART
      DESIGN, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**December
      31, 2005 and 2006**








**NOTE
      1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





Art
      Design, Inc. (the “Company”), was incorporated in the State of Colorado on
      January 16, 2002. The Company sells art work and interior decorating to
      professional and business offices.





Use
      of
      Estimates





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





Cash
      and cash equivalents





The
      Company considers all highly liquid investments with an original maturity of
      three months or less as cash equivalents.




**Accounts
      receivable**




The
      Company reviews accounts receivable periodically for collectability and
      establishes an allowance for doubtful accounts and records bad debt expense
      when
      deemed necessary. At December 31, 2005 and 2006 the Company had no balance
      in
      its allowance for doubtful accounts.





Property
      and equipment





Property
      and equipment are recorded at cost and depreciated under accelerated methods
      over each item's estimated useful life.




**Revenue
      recognition**




Revenue
      is recognized on an accrual basis as earned under contract terms, generally
      when
      ordered products are shipped, and any corresponding consulting and design
      services have been rendered.




**Advertising
      costs**




Advertising
      costs are expensed as incurred. The Company had no advertising costs in 2005
      or
      2006.





*F-10*








**ART
      DESIGN, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**December
      31, 2005 and 2006**










**NOTE
      1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES  (Continued):**






Income
      tax





The
      Company is currently treated as an S-Corporation for income tax purposes, and
      therefore pays no income taxes at the corporate level.





Net
      income (loss) per share





The
      net
      income (loss) per share is computed by dividing the net income (loss) by the
      weighted average number of shares of common outstanding. Warrants, stock
      options, and common stock issuable upon the conversion of the Company's
      preferred stock (if any), are not included in the computation if the effect
      would be anti-dilutive and would increase the earnings or decrease loss per
      share.




**Financial
      Instruments**




The
      carrying value of the Company’s financial instruments, as reported in the
      accompanying balance sheets, approximates fair value.




**Long-Lived
      Assets**




In
      accordance with Statement of Financial Accounting Standard 144 “Accounting for
      the Impairment or Disposal of Long-Lived Assets”, the Company regularly reviews
      the carrying value of intangible and other long-lived assets for the existence
      of facts or circumstances, both internally and externally, that may suggest
      impairment. If impairment testing indicates a lack of recoverability, an
      impairment loss is recognized by the Company if the carrying amount of a
      long-lived asset exceeds its fair value.




Products
      and services, geographic areas and major customers





The
      Company earns revenue from the sale of art products and design services, but
      does not separate sales of different product lines into operating segments.
      The
      Company does not separately report revenue from art products versus that from
      design and consulting services, as both are generally sold to the customer
      as
      part of a complete package, making separation impractical. In 2005 two customers
      accounted for 52% of sales, and in 2006 2customers
      accounted for 62% of sales.  All sales each year were domestic and to
      external customers.










*F-11*








**ART
      DESIGN, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**December
      31, 2005 and 2006**







**NOTE
      1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued):**





Recent
      Accounting Pronouncements





In
      March
      2005, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment". SFAS
      123(r) requires that the cost resulting from all share-based payment
      transactions be recognized in the financial statements. The Company has adopted
      the provisions of SFAS No. 123(r) which are effective in general for
      transactions entered into or modified after June 15, 2005. The adoption did
      not
      have a material effect on the results of operations of the Company.




In
      May
      2005, the Financial Accounting Standards Board (FASB) issued SFAS No. 154,
      “Accounting Changes and Error Corrections – A Replacement of APB Opinion No. 20
      and SFAS No. 3”. SFAS 154 changes the requirements for the accounting for and
      reporting of a change in accounting principle and applies to all voluntary
      changes in accounting principle. It also applies to changes required by an
      accounting pronouncement in the unusual instance that the pronouncement does
      not
      include specific transition provisions. SFAS 154 requires retrospective
      application to prior periods’ financial statements of changes in accounting
      principle, unless it is impracticable to determine either the period-specific
      effects or the cumulative effect of the change. The Company has adopted the
      provisions of SFAS No. 154, which are effective for accounting changes and
      correction of errors made in fiscal years beginning after December 15, 2005.
      The
      adoption did not have a material effect on the results of operations of the
      Company. In February 2006, the FASB issued SFAS No. 155 “Accounting for Certain
      Hybrid Financial Instruments – an amendment of FASB Statements No. 133 and 140”,
      to simplify and make more consistent the accounting for certain financial
      instruments. The Company has adopted the provisions of SFAS No. 155, which
      are
      effective in general for financial instruments acquired or issued in fiscal
      years beginning after September 15, 2006. The adoption did not have a material
      effect on the results of operations of the Company.




In
      March
      2006, the FASB issued SFAS No. 156 "Accounting for Servicing of Financial
      Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and
      Servicing of Financial Assets and Extinguishments of Liabilities". This
      statement requires all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value, if practicable, and permits
      for
      subsequent measurement using either fair value measurement with changes in
      fair
      value reflected in earnings or the amortization and impairment requirements
      of
      Statement No. 140. The Company has adopted the provisions of SFAS No. 156,
      which
      are effective in general for an entity's fiscal year beginning after September
      15, 2006. The adoption did not have a material effect on the results of
      operations of the Company.










*F-12*








**ART
      DESIGN, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**December
      31, 2005 and 2006**








**NOTE
      1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued):**







In
      December 2006, the FASB issued SFAS No. 157 “Fair Value Measurements”, to
      improve consistency and comparability in fair value measurements, and to expand
      related disclosures. The Company has adopted the provisions of SFAS No. 157,
      which are effective for financial statements for fiscal years beginning after
      November 15, 2007. The adoption did not have a material effect on the results
      of
      operations of the Company.







**NOTE
      2. RELATED PARTY TRANSACTIONS**





The
      Company has a note payable to a Company officer. The note is unsecured and
      payable upon demand. The note bears interest at 8% per annum if not paid
      promptly upon demand. The outstanding principal balance on the note was $44,000
      at December 31, 2005, and $34,201 at December 31, 2006.





The
      Company purchases materials from and pays occasional operating expenses to
      a  company related through common control. Cost of goods sold incurred
      from the related company was $30,578 and $22,621 in 2005 and 2006. The Company
      had related party payables at December 31, 2005 and 2006 of $6,646 and $20,171,
      for materials, services and rent advanced to the Company.





The
      Company also recorded compensation expense of $500 per month in 2005 and 2006
      for administrative and management services donated to the Company by an officer.
      Total donated services compensation expense for 2005 and 2006 was $6,000 each
      year.







*F-13*








**ART
      DESIGN, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**December
      31, 2005 and 2006**








**NOTE
      3. FIXED ASSETS**







Fixed
      asset values recorded at cost are as follows:


2005
            
            
            2006Furniture
                &
                Fixtures
            
            $
            2,560
            
            
            $
            2,560Computers
            
            
            6,511
            
            
            
            6,511Leasehold
                Improvements
            
            
            4,198
            
            
            
            4,19813,269
            
            
            
            13,269Less
                accumulated
                depreciation
            
            
            (7,682
            )
            
            
            (9,458
            )Total
            
            $
            5,587
            
            
            $
            3,811





Depreciation
      expense in 2005 and 2006  was $1,027 and $1,776.





**NOTE
      4. LEASE COMMITMENT**





The
      Company rents office and production space at $500 per month on a verbal month
      to
      month basis from a corporation under common control. Rent expense for 2005
      and
      2006 was $6,000 each year.





**NOTE
      5. GOING CONCERN**





The
      Company has suffered recurring losses from operations and has a large working
      capital deficit. These conditions raise substantial doubt about the Company’s
      ability to continue as a going concern. The Company may raise additional capital
      through the sale of its equity securities, through offerings of debt securities,
      or through borrowings from financial institutions. Management believes that
      actions presently being taken to obtain additional funding provide the
      opportunity for the Company to continue as a going concern.




**NOTE
      6.  STOCK OFFERING**





The
      Company is currently attempting to sell up to 800,000 shares of its common
      stock
      on a best efforts basis for $0.25 per share, or $200,000, under a Form SB-2
      offering. The costs of this offering through December 31, 2006 amounted to
      $24,543. This amount will reduce the offering proceeds if the offering is
      successful, or will be deducted as part of operations if the offering is
      unsuccessful.







*F-14*







**ITEM
      8. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.**





We
      did
      not have any disagreements on accounting and financial disclosures with our
      present accounting firm during the reporting period.





**ITEM
      8A. CONTROLS AND PROCEDURES.**





**Evaluation
      of Disclosure Controls and Procedures**





As
      of the
      end of the period covered by this annual report on Form 10-KSB, we evaluated
      the
      effectiveness of the design and operation of its disclosure controls and
      procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
      and 15d-15(e)). That evaluation was performed under the supervision and with
      the
      participation of our management, including our Chief Executive Officer and
      Chief
      Financial Officer. Based on that evaluation, our Chief Financial Officer
      concluded that our disclosure controls and procedures are effective in timely
      alerting him to material information required to be included in its periodic
      SEC
      filings.





**Changes
      in Internal Control over Financial Reporting**




We
      have
      made no significant change in our internal control over financial reporting
      during the most recent fiscal quarter covered by this annual report on Form
      10-KSB that has materially affected, or is reasonably likely to materially
      affect, our internal control over financial reporting.








**ITEM
      8B. OTHER INFORMATION.**





Nothing
      to report.





**PART
      III**








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





Our
      Directors and Executive Officers, their ages and positions held with us as
      of
      July 1, 2007 are as follows:





Name
                and Address
            Age
            Position(s)Kathy
                  Sheehan
              3636
                  S. Jason
              Englewood,
                  Colorado 80113
            44
            President,
                  Chief Executive
              Officer,
                  Treasurer, Chief
              Financial
                  Officer and
              DirectorTodd
                  Sheehan
              3636
                  S. Jason
              Englewood,
                  Colorado 80113
            52
            Secretary
                  and DirectorRebecca
                  Gregarek
              3636
                  S. Jason
              Englewood,
                  Colorado 80113
            51
            Director





The
      persons named above are expected to hold said offices/positions until the next
      annual meeting of our stockholders. These officers and directors are our only
      officers, directors, promoters and control persons. Todd and Kathy Sheehan
      are
      husband and wife.








*-
            33
            -*





**Background
      Information about Our Officers and Directors**





Kathy
      Sheehan has been the President Chief Executive Officer, Treasurer, Chief
      Financial Officer and a Director of our company since inception in January,
      2002. She has been the Chief Financial Officer, director and principal owner
      of
      Accessory Warehouse, Inc., a private company in the wholesale art framing
      manufacturing and home furnishing warehouse business, located in Denver,
      Colorado, from 1992 to the present. She attended Front Range Community College
      from 1980 to 1983. She has completed the Dale Carnegie Leadership Course. She
      will devote a minimum of forty hours per month to our operations.





Todd
      Sheehan has been the Secretary and Director of our company from inception in
      January, 2002. He has been the Chief Executive Officer, director and principal
      owner of Accessory Warehouse, Inc., a private company in the wholesale art
      framing manufacturing and home furnishing warehouse business, located in Denver,
      Colorado, from 1984 to the present. He does not hold an academic degree. He
      will
      devote a minimum of forty hours per month to our operations.





Rebecca
      Gregarek has been a Director of our company since May, 2006. She has been
      involved in the interior design business in various capacities since 1975.
      From
      2005 to the present, she has also been an Interior Design Consultant with By
      Design Group, Englewood, Colorado. From 2001-2005, she was associated with
      Home
      Builders Flooring, LLC- HBF Designs, Denver, Colorado. This group worked at
      the
      Shea Design Center in Highlands Ranch, Colorado to develop custom window
      Coverings and after-market sales for new home buyers. She oversaw a sales team
      in training and developing marketing and advertising strategies. Her group
      won
      the JD Powers Award for customer satisfaction for 2001, 2002 and 2003. Ms.
      Gregarek does not hold an academic degree but attended Arapahoe Community
      College, with courses in Interior Design. She is a Certified Window Fashion
      Designer and a member of American Society of Interior Designers. She will devote
      minimum of ten hours per month to carry out her responsibilities.





**Compliance
      with Section 16(a) of the Securities Exchange Act of 1934**





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s
      directors and executive officers, and persons who own more than 10% of a
      registered class of the Company’s outstanding equity securities to file with the
      Securities and Exchange Commission initial reports of ownership and reports
      of
      changes in ownership of Common Stock and other equity securities of the Company.
      Officers, directors and greater than 10% shareholders are required by SEC
      regulations to furnish the Company with copies of all Section 16(a) forms they
      file. We have nothing to report in this regard.





**Committees
      of the Board of Directors**





Currently,
      we do not have any committees of the Board of Directors.





**Director
      and Executive Compensation**





No
      compensation has been paid and no stock options granted to any of our officers
      or directors in the last three fiscal years.





**Employment
      Agreements**





We
      have
      no written employment agreements with any of our executive officers or key
      employees.





**Equity
      Incentive Plan**





We
      have
      not adopted an equity incentive plan, and no stock options or similar
      instruments have been granted to any of our officers or directors.








*-
            34
            -*





**Indemnification
      and Limitation on Liability of Directors**





Our
      Articles of Incorporation limit the liability of our directors to the fullest
      extent permitted by Colorado law. Specifically, our directors will not be
      personally liable to our company or any of its shareholders for monetary damages
      for breach of fiduciary duty as directors, except liability for (i) any breach
      of the director’s duty of loyalty to the corporation or its shareholders; (ii)
      acts or omissions not in good faith or which involve intentional misconduct
      or a
      knowing violation of law; (iii) voting for or assenting to a distribution in
      violation of Colorado Revised Statutes Section 7-106-401 or the articles of
      incorporation if it is established that the director did not perform his duties
      in compliance with Colorado Revised Statutes Section 7-108-401, provided that
      the personal liability of a director in this circumstance shall be limited
      to
      the amount of distribution which exceeds what could have been distributed
      without violation of Colorado Revised Statutes Section 7-106-401 or the articles
      of incorporation; or (iv) any transaction from which the director directly
      or
      indirectly derives an improper personal benefit. Nothing contained in the
      provisions will be construed to deprive any director of his right to all
      defenses ordinarily available to the director nor will anything herein be
      construed to deprive any director of any right he may have for contribution
      from
      any other director or other person.





At
      present, there is no pending litigation or proceeding involving any of our
      directors, officers, employees or agents where indemnification will be required
      or permitted. Insofar as indemnification for liabilities arising under the
      Securities Act of 1933 may be permitted to our directors, officers and
      controlling persons pursuant to the foregoing provisions, or otherwise, we
      have
      been advised that in the opinion of the Commission such indemnification is
      against public policy as expressed in the Securities Act of 1933 and is,
      therefore, unenforceable.







**Item
      10. EXECUTIVE COMPENSATION**





No
      compensation has been paid and no stock options granted to any of our officers
      or directors in the last three fiscal years. The Company recorded compensation
      expense of $500 per month in 2005 and 2006 for administrative and management
      services donated to the Company by Kathy Sheehan. Total donated services
      compensation expense for 2005 and 2006 was $6,000 each year.





**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT.**





The
      following table sets forth, as of August 1, 2007, information regarding the
      ownership of our common stock by:





*
            persons
                who own more than 5% of our common
                stock;





*
            each
                of our directors and each of our executive officers;
                and





*
            all
                directors and executive officers as a
                group.





We
      had
      10,820,600 shares issued and outstanding as of August
      1, 2007. The following table reflects our stock ownership as of that
      date. For the purposes of this table, we have used 10,820,600 shares as our
      total issued and outstanding.





*-
            35
            -*








**Name
                and Address**
              **Beneficial**
              **Owner**
            **No.
                of**
              **Common
                Shares**
            **Percentage**
              **of
                Ownership(1)**Kathy
                  Sheehan(2)3636
                  S. Jason
            5,150,000
            47.6%Englewood,
                Colorado 80113Todd
                  Sheehan(2)3636
                  S. Jason
            5,150,000
            47.6%Englewood,
                Colorado 80113Rebecca
                  Gregarek(3)3636
                  S. Jason
            3,350,000
            30.9%Englewood,
                Colorado 80113Sanders
                  Huttner Partnership651
                  Bering Dr. #2002
            700,000
            6.5%Houston,
                Texas 77057All
                Officers and
              Directors
                as a Group
              (three
                persons)
            8,500,000
            78.5%


____________





(1)
            All
                shares of owned beneficially or of record..(2)
            Kathy
                and Todd Sheehan are husband and wife. Kathy Sheehan owns 2,550,000
                shares
                of record. Todd Sheehan owns 2,450,000 shares of record. The minor
                children of Mr. and Mrs. Sheehan own a total of 150,000 shares of
                record.





(3)
            Rebecca
                Gregarek owns 3,200,000 shares of record. Her husband owns 100,000
                shares
                of record. Her minor child owns 50,000 shares of record. Her adult
                child
                owns 50,000 shares of record, for which she disclaims beneficial
                ownership.







**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**





The
      Company has a note payable to Mr. Todd Sheehan. The note is unsecured and
      payable upon demand. The note bears interest at 8% per annum if not paid
      promptly upon demand. The outstanding principal balance on the note was $44,000
      at December 31, 2005, and $34,201 at December 31, 2006.





The
      Company purchases materials from and pays occasional operating expenses to
      Accessory Warehouse, Inc., a company controlled by Mr. and Mrs. Sheehan. Cost
      of
      goods sold incurred from Accessory Warehouse, Inc. was $30,578 and $22,621
      in
      2005 and 2006. The Company had related party payables at December 31, 2005
      and
      2006 of $6,646 and $20,171, for materials, services and rent advanced to the
      Company.





The
      Company also recorded compensation expense of $500 per month in 2005 and 2006
      for administrative and management services donated to the Company by Mrs.
      Sheehan. Total donated services compensation expense for 2005 and 2006 was
      $6,000 each year.








*-
            36
            -*






**ITEM
      13. EXHIBITS AND REPORTS ON FORM 8-K.**





The
      following financial information is filed as part of this report:





(a)        (1)
      FINANCIAL STATEMENTS





(2)
      SCHEDULES





(3)
      EXHIBITS. The following exhibits
      required by Item 601 to be filed herewith are incorporated by reference
      to previously filed documents:





**Exhibit**
              **Number**
            **Description**3.1*
            Articles
                of Incorporation3.2*
            Amended
                and Restated Articles of Incorporation3.3*
            Bylaws31.1
            Certification
                of CEO/CFO pursuant to Sec. 30232.1
            Certification
                of CEO/CFO pursuant to Sec. 906





*
      Previously filed with Form SB-2 Registration Statement, July 25,
      2006.





(b)  Reports
      on Form 8-K. No reports were filed under cover of Form 8-K for the fiscal year
      ended December 31. 2006.








**ITEM
      14: PRINCIPAL ACCOUNTANT FEES AND SERVICES**





Our
        independent auditor, Ronald R. Chadwick, P.C., of Aurora, Colorado, Certified
        Public Accountants, billed an aggregate of $9,450 for the year ended
        December 31, 2006 for professional services rendered for the audit of the
        Company's annual financial statements and review of the financial statements
        included in its quarterly reports.


We
      do not
      have an audit committee and as a result our entire board of directors performs
      the duties of an audit committee. Our board of directors evaluates the scope
      and
      cost of the engagement of an auditor before the auditor renders audit and
      non-audit services.











*-
            37
            -*





**SIGNATURES**





In
      accordance with Section 12 of the Securities Exchange Act of 1934, the
      Registrant has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized on AUGUST
      3, 2007.








**Art
                Design, Inc.**Date:  AUGUST
                3, 2007
            By:
            /s/ 
                Kathy SheehanKathy
                Sheehan, President and Chief Executive and Financial
                Officer







Pursuant
      to the requirements of the Securities Act of 1933, this registration statement
      has been signed by the following persons in the capacities and on the dates
      indicated.








Date:  AUGUST
                3, 2007
            By:
            /s/ 
                Kathy SheehanKathy
                SheehanDirector,
                Treasurer, Principal Accounting Officer, and Chief Executive and
                Financial OfficerDate:  AUGUST
                3, 2007
            By:
            /s/ 
                Todd SheehanTodd
                SheehanDirector
                and SecretaryDate:  AUGUST
                3, 2007
            By:
            /s/ 
                Rebecca GregarekRebecca
                GregarekDirector










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            38
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