**UNITED STATES**

**SECURITIES ANDEXCHANGE COMMISSION**

**Washington, DC20549**

**FORM 10-K**

** **

**[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934**  

 

For the Fiscal Year Ended      December 31, 2008

 

[  ] TRANSITION REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

** **

For thetransition period from _______________ to _____________________

 

Commission filenumber: 333-151148

 

Hamptons Extreme, Inc.

(Exact name of registrant as specified in its charter)

 

DELAWARE                                      20-0587718

State or other jurisdiction of                   (I.R.S.Employer

incorporation or organization                  Identification No.)

 

509 S. San Clemente Street, Ventura,California                               93001

(Address of principal executiveoffices)                                          (Zip code)

 

Registrant’s Telephone Number, including area code: (805)754-9805

 

 

Securities Registered pursuant to Section 12(b) of the Act:

 

            Title of each class                                Nameof each exchange where registered

 

                        None                                                   Notapplicable

 

                                    Securities Registeredpursuant to Section 12(g) of the Act:

 

                                          None

 

Indicate by check mark if theregistrant is a well-known seasoned issuer as defined in Rule 405 of theSecurities Act 

o  Yes    x No

 

                Indicateby check mark if the registrant is not required to file reports pursuant toSection 13 or 15(d) of the Act.

oYes x No

 

Indicate by check mark whether the registrantis a shell company (as defined in Rule 12b-2 of the Act).   

Yes  x   Noo

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Theaggregate market value of voting and non-voting stock held by non-affiliates ofthe registrant as of March 18, 2009 was $52,000. 

There were 1,037,000 shares ofcommon stock outstanding as of March 18, 2009. 

DOCUMENTSINCORPORATED BY REFERENCE 

None

 

 

 

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TABLE OF CONTENTS

**Noble Medical Technologies, Inc.**

**FORM 10-K**

**INDEX**

 

|              |   |                                                                                                          |   |     |
|-------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|----------|
|         |   |                                                                                                          |   | **Page** |
| **PART I**        |   |                                                                                                          |   |     |
|              |   |                                                                                                          |
| Item 1.           |   | Business                                                                                                      |   |  2  |
| Item 1A.          |   | Risk Factors                                                                                                  |   | 5        |
|              |   |                                                                                                          |   |     |
| Item 2.           |   | Properties                                                                                                    |   | 12       |
| Item 3.           |   | Legal Proceedings                                                                                             |   | 12       |
| Item 4.           |   | Submission of Matters to a Vote of Security Holders                                                           |   | 12       |
|              |   |                                                                                                          |
| **PART II**       |   |                                                                                                          |   |     |
|              |   |                                                                                                          |
| Item 5.           |   | Market for Registrant's Common Equity, Related Stockholder Matters  and Issuer Purchases of Equity Securities |   | 12       |
| Item 6.           |   | Selected Financial Data                                                                                       |   | 12       |
| Item 7.           |   | Management’s Discussion and Analysis of Financial Condition and  Results of Operation                    |   | 14       |
| Item 7A.          |   | Quantitative and Qualitative Disclosures About Market Risk                                                    |   |     |
| Item 8.           |   | Financial Statements and Supplementary Data                                                                   |   | 16       |
| Item 9.           |   | Changes in and Disagreements With Accountants on Accounting and  Financial Disclosure                         |   | 16       |
| Item 9A.          |   | Controls and Procedures                                                                                       |   | 16       |
| Item 9B.          |   | Other Information                                                                                             |   | 16       |
|              |   |                                                                                                          |
| **PART**

**III** |   |                                                                                                          |   |     |
|              |   |                                                                                                          |
| Item 10.          |   | Directors, Executive Officers and Corporate Governance                                                        |   | 17       |
| Item 11.          |   | Executive Compensation                                                                                        |   | 18       |
| Item 12.          |   | Security Ownership of Certain Beneficial Owners and  Management and Related Stockholder Matters               |   | 18       |
| Item 13.          |   | Certain Relationships and Related Transactions, and  Director Independence                                    |   | 19       |
| Item 14.          |   | Principal Accounting Fees and Services                                                                        |   | 19       |
|              |   |                                                                                                          |
| **PART**

**IV**  |   |                                                                                                          |   |     |
|              |   |                                                                                                          |
| Item 15.          |   | Exhibits, Financial Statement Schedules                                                                       |   | 20       |
|              |   | Index to Consolidated Financial Statements                                                                    |   |     |
|              |   | Index to Exhibits                                                                                             |   |     |
|              |   | Signatures                                                                                                    |   |     |

 

-I- 

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**Part I**

 

#   

 

 
| **I** | **Business    Item 1.** |
|-------|-----------------------------------|

**GENERAL**

 

####                             DESCRIPTION OF BUSINESS

** **

**FORWARDLOOKING STATEMENT INFORMATION**

 

Certain statements made inthis Report on From 10-K are “forward-looking statements” regarding the plansand objectives of management for future operations. Such statements involveknown and unknown risks, uncertainties and other factors that may cause ouractual results, performance or achievements to be materially different from anyfuture results, performance or achievements expressed or implied by suchforward-looking statements. The forward-looking statements included herein arebased on current expectations that involve numerous risks and uncertainties.Our plans and objectives are based, in part, on assumptions involving judgmentswith respect to, among other things, future economic, competitive and marketconditions, technological developments related to surfboarding and relatedactivities, and future business decisions, all of which are difficult orimpossible to predict accurately and many of which are beyond our control.

 

Although we believe that ourassumptions underlying the forward-looking statements are reasonable, any ofthe assumptions could prove inaccurate and, therefore, there can be noassurance that the forward-looking statements included in this Annual Report onForm 10-K will prove to be accurate. In light of the significant uncertaintiesinherent in the forward-looking statements included herein particularly in viewof the current state of our operations, the inclusion of such informationshould not be regarded as a statement by us or any other person that ourobjectives and plans will be achieved. Factors that could cause actual resultsto differ materially from those expressed or implied by such forward-lookingstatements include, but are not limited to, the factors set forth herein underthe headings “Our Proposed Business,” “Risk Factors” and “Plan of Operations.”

 

**OUR PROPOSED BUSINESS**

 

Hamptons Extreme, Inc. (“we” “us” or “the company”) wasformed in 2007 to engage in the design, manufacture, distribution and marketingof surfboards and related equipment.  We believed that the exit of certainlarge manufacturers from the market due to the costs of complying with environmentalregulations presented us with a unique market opportunity.   We believed thatif we were able to have our stock included on the OTCBB we thereafter mightraise an additional $625,000 to $2,150,000 in private equity capital, rentmanufacturing space, purchase the required equipment and design and producesurfboards and related equipment.  We can not be certain that we will be ableto raise additional funds and become operational as we have no present orproposed commitments for the necessary financing and our efforts in this regardhave not been successful to date.  Even if we were to obtain financing,approximately three to four months would pass from the receipt of financinguntil we began manufacturing operations as equipment would have to be purchasedand installed and qualified personnel located and hired.  In view of recenteconomic conditions we have also intensified our efforts to locate a mergerpartner and enter a different line of business.

 

We were incorporated in March 2007, under the laws of theState of Delaware and have not commenced manufacturing, marketing or sales ofour product. Our headquarters are presently located at 509 S. San ClementeStreet, Ventura, California 93001, which is the residence of our ChiefExecutive Officer, and our telephone number is (805) 754-9805. We aredeveloping a web site at hamptonsextremesurf.com to help in marketing ourproducts. Any information that may appear on our web site should not be deemedto be a part of this report.

 

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We intend to begin manufacturingoperations within the next six months contingent on the receipt of additionalfinancing of between $625,000 and $2,125,000, which to date has not occurred. Our primary focus will be to develop a state of the art regulatory compliantmanufacturing facility to produce surfboards with what we believe to beenhanced and superior performance characteristics.

 
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**Overview**
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Weintend to develop, manufacture and market vacuum mold composite surfboards. Webelieve that our product will be accepted by the market due to themanufacturing void left by the closure of Clark Foam, the former world leaderin surfboard blank manufacturing.  Clark Foam was faced with the decision tocompletely redevelop their product and business model, or close, due tonumerous violations of EPA environmental codes. If we receive financing and areable to commence production, we will produce surfboards that will offer theconsumer a more environmentally sound alternative to traditional polyurethanesurfboard blanks, as well as provide a longer lasting more durable product. Ifwe receive the proceeds of financing, we will secure office space, hirenecessary personnel, further develop the designs of our products, manufactureour products, and seek out partnerships with local, national, international,and internet surfboard retailers to enhance our distribution effort.  All ofthe following discussion assumes that we are able to receive financing whichcan not be assured.  If we do not receive financing, we will not becomeoperational and may be forced to liquidate or enter into a different line ofbusiness. 
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**Industry Overview**
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Management believes that surfing is a rapidly growing sport that will continue to grow for the foreseeable future.  Industry estimates are that retail sales increased from $ 6.52 Billion in 2004 to $ 7.46 Billion in 2006, where surfboards accounted for 17% of sales in 2006, up from 11.6% in 2004 (Leisure Trends in the Media, “Surf’s Up. By A Lot”).  In December 2005, the major manufacturer of surfboard blanks, Clark Foam, ceased operations because its use of materials in manufacture violated State of California and Federal regulations relating to volatile organic compounds (“VOC”).  We believe that he closure of Clark Foam created an opportunity for new manufacturers and the manufacture of surfboards in the US is now characterized by numerous small manufacturers rather than one large dominant manufacturer.  The Company believes that its design advantages will give it a chance to become a new major manufacturer in this growing market..  Our surfboards will be manufactured without the use of Toluene Di Isocynate, commonly called TDI, which became subject to state and federal regulation and since we plan to purchase equipment compatible with manufacture without the use of TDI we will not be required to incur capital expense to comply with existing regulations.  See, “Our Proposed Business – Government Regulation”
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**Proposed Products and Services**
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Assuming we receive financing and become operational, our proposed surfboard line will retail for about $700 to $800 and at about a 40% discount at wholesale.  We have executed a lease for a manufacturing facility of about  2,625 square feet in Camarillo, California for  $3,300 per month.  We have cancelled this lease without any liablity to us..  We plan to open a retail surf shop at the same location as our manufacturing facility and to sell through wholesale channels through distributors and directly to other surf shops.  We may also engage in web based sales and marketing for our products.  We do not plan to market surfboards competitive to ours in our shop, but may offer related apparel and other surf boarding products.  Although we have not conducted any formal studies, we believe that the there is a significant market for our proposed products and that our price points are reasonable.  If our pricing structure does not prove to be reasonable we may be forced to lower our prices and our operating results would be adversely affected.
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**Planned Sales and Marketing**
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Assuming we receive financing and are able to become operational, our marketing effort will be a vital part of our operation. We will market direct to retail customers using our retail shop and a possible web site selling effort as well as through other retail channels that may buy from us directly or through wholesalers and distributors.  We also intend to place advertising in periodicals targeted to the surfing community.  Accordingly, we have allocated a significant portion of our operating budget to this marketing effort that may include hiring marketing personnel.  Our recently leased factory location was in an industrial park near two freeways with easy access to certain California beaches that we believe will be an important part of our market.  However, we have surrendered this lease without liability to us.
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**Possible Manufacturing Operations and Suppliers**

 

In 2008 we executed a leasefor a 2,625 square foot manufacturing facility in Camarillo, California.  Dueto our inability to raise funds, we surrendered this facility to the Landlordin January 2009.  If we are in a position to begin manufacturing operations, webelieve we can locate alternative suitable space or execute a new lease for ourformer space on similar terms. In the manufacture of surfboards, a foam blankis hand shaped using hand tools to our specifications.  Then the hand shapedblank is processed in a vacuum molding machine where we add the epoxy resin.During the vacuum molding process, the epoxy resin is mixed with a catalyst andformed around the blank. At this point the board is set on a wooden drying rackto cure. The board then cures over a five day period in which it is then readyto be packed and shipped.  Assuming we become fully operational, our principalsupplier of blanks will be HomeBlown US, which has orally indicated tomanagement that it is willing to enter into a supply relationship with us.HomeBlown US is the creator and manufacturer of Biofoam, an environmentallyfriendly shaping foam, manufactured entirely from plant based compounds. Inkeeping with our environmental goals we wish to exclusively use Biofoam in allof our surfboards. HomeBlown US is located in San Diego, California making itreadily accessible to serve the needs of our company. HomeBlown US’s blanksrange in size from 6’ 2” to 10’ 8” and are priced from $43.70 to $108.74 perblank when purchased in quantities from 101 to 200.  We believe that the costsfor these blanks is compatible with our proposed pricing structure  In additionto blanks, the other key component of making vacuum composite epoxy surfboardsis epoxy resin. We intend to purchase our supplies of this product from WestSystemÆ. West System’sÆ’s epoxy is a versatile, high quality, two part epoxy that iseasily modified for a wide range of coating and adhesive applications. It isused for construction and repairs requiring superior moisture resistance andhigh strength. It bonds to fiberglass, wood metal, fabrics, and other compositematerials, and is especially suited for marine applications. We plan to useWest System’sÆ #105 epoxy resin, wholesaling for $447.86 per 5.29 gallons. As ahardening agent we will be using West System’sÆ  #206 slow hardener for $120.81per .94 gallon.  These processes are compatible with our proposed coststructure.  We also believe that similar products are available fromalternative suppliers at comparable prices.  We intend to purchase our rawmaterials on open purchase orders and not through any formal supply contracts.

 

#               Competition

 

We currently have nooperations and will not have operations unless we receive financing.  Due torecent economic conditions, the likelihood of our receiving financing has beensubstantially reduced.  Until we have operations we will not compete withanyone.  We intend to compete in a fractured and highly competitive surfboardmanufacture market.  As a competitor faces competitive pressure it may seek tosell surfboards at prices that undercut our price structure in order to meetcash flow needs or to increase market share.  Our future competitors such asSurftech, Aviso and Firewire are companies with established names, solid marketniches, wide arrays of product offerings and marketing networks.  We intend tocompete based upon the array of products offered and our unique designs as wellas on price and service.  

 

######             Government Regulation

 

Management believes that theissues which caused Clark Foam, the largest surfboard foam blank manufacturerin the world, to cease operations was the regulation of a toxic chemical in usecalled Toluene Di Isocynate, commonly called TDI used in its foam blanks.. Mostcompanies using this chemical have already left California; in 1999, thefederal Environmental Protection Agency (EPA) implemented a slightly weakerversion of California's existing anti-TDI law, while California itselfinstituted stronger laws. Clark Foam was found continually in violation of (Cal/OSHA regulation *GISO 5155*).  We believethat our proposed use of BioFoam will avoid these regulatory issues.  However,we can not predict the impact of future regulations relating to environmentalmatters and their impact upon our operations.  Furthermore, we can not seek tofill any void in manufacturing capacity unless and until we receive financing,which is not assured.  

 

 

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#               Employees

 

As of December 31, 2008 andcurrently we have no employees. Our officers serve us on a part time basiswithout compensation. If we become fully operational, we foresee the need forapproximately ten manufacturing, three marketing, six sales personnel, and twoclerical personnel with the exact numbers determined by management’s judgmentof our business’ needs.   

 

#               Legal Proceedings

 

We are not party to any legalproceeding and are unaware of any threatened legal proceeding to which we maybecome subject.

                                                                                                                                                                                                 

######                                       Intellectual Property

 

We believe that our proposeddesigns for surfboards are unique and intend to protect our proprietaryproperty rights therein by requiring our future employees to executenon-disclosure agreements.  From time to time we may consider the advisabilityof applying for patent protection with respect to our future designs and othercharacteristics of our products.  No assurance can be given that we will everchoose to apply for a patent, that any patent will be granted, that any patentthat might be granted will provide meaningful protection to us or not be foundto infringe upon the rights granted to others.  As we are not yet operationalwe have no way to predict whether we will ever apply for a patent or whetherour plan to protect our proprietary information will prove effective.

** **
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**Item 1A Risk Factors.**
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** **

In addition toother information in this Annual Report on Form 10-K, the following riskfactors should be carefully considered in evaluating our business because suchfactors may have a significant impact on our business, operating results,liquidity and financial condition. As a result of the risk factors set forthbelow, actual results could differ materially from those projected in anyforward-looking statements. Additional risks and uncertainties not presentlyknown to us, or that we currently consider to be immaterial, may also impactour business, operating results, liquidity and financial condition. If any suchrisks occur, our business, operating results, liquidity and financial conditioncould be materially affected in an adverse manner. Under such circumstances,the trading price of our securities could decline, and you may lose all or partof your investment.

 

**RisksRelated to Our Business**

 

**We are not yet operationaland will require substantial additional funds.** We intend to enter the business of designing,manufacturing and marketing surfboards and related equipment.  We believe thatthese markets present an opportunity for us.  Recent economic conditions havesubstantially reduced the likelihood of our successfully entering our proposedbusiness. 

 

We have not yet hired any personnel, acquired thenecessary equipment or otherwise begun operations. Our activities to date havemostly been organizational and developmental (pre-operational). We believe thatour presently available funds and our financing commitments will be sufficientto meet our anticipated needs for our business plan in the pre-operationalstage for at least the next twelve months. We will need to raise additionalfunds of $625,000 to $2,150,000 to further develop our product and additionalfunds

 

 

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 to truly become operational, implement our business plan, bring ourproduct to market, respond to competitive pressures or acquire complementarybusinesses or technologies. We may also need to raise funds if our availablefunds decrease during our various operational stages. If additional funds areraised through the issuance of equity or convertible debt securities, thepercentage ownership of our stockholders will be reduced and stockholders mayexperience dilution. Moreover, such securities may have rights, preferences andprivileges senior to those of our common stock. There can be no assurance thatadditional financing will be available on terms favorable to us or at all. Ifadequate funds are not available or are not available on acceptable terms, wemay not be able to fund our expansion, take advantage of unanticipatedacquisition opportunities, develop or enhance new product offerings or respondto competitive pressures. We have no commitments to raise the additionalcapital we will need to become operational. Thus we may never becomeoperational and, even if we do, we may not have sufficient funds to grow tomeet demand if we are successful and investors may lose their entireinvestment.

 

**We are subject to the periodic reporting requirementsof the Securities Exchange Act of 1934 that will require us to incur audit feesand legal fees in connection with the preparation of such reports.  Theseadditional costs could reduce or eliminate our ability to earn a profit.**

 

We are required to file periodic  reports with the Securities and Exchange  Commission  pursuant to theSecurities  Exchange Act of 1934 and the  rules and  regulations  promulgatedthereunder.  In order to comply with these requirements, our independentregistered public accounting firm reviews our financial statements on aquarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel has to review and assist in the preparation of suchreports.  The costs charged by these professionals for such services cannot beaccurately predicted at this time because factors such as the number and typeof transactions that we engage in and the complexity of our reports cannot bedetermined at this time and will have a major affect on the   amount of time tobe spent by our auditors and attorneys.  However, incurring of such costs willobviously be an expense to our operations and thus have a negative effect onour ability to meet our overhead requirements and earn a profit. We may beexposed to potential risks resulting from new requirements under Section 404 ofthe Sarbanes-Oxley Act of 2002. If we cannot provide reliable financial reportsor prevent fraud, our business and operating results could be harmed, investorscould lose confidence in our reported financial information, and the tradingprice of our common stock, if a market ever develops, could drop significantly.

** **

Pursuant to Section 404 ofthe Sarbanes-Oxley Act of 2002, as amended by SEC Release 33-8934 on June 26, 2008 we will be required,beginning with our year ending December 31, 2009, to include in our annualreport our assessment of the effectiveness of our internal control overfinancial reporting as of the end of the year ending December 31, 2009.Furthermore, in the following year, our independent registered publicaccounting firm will be required to report separately on whether it believesthat we have maintained, in all material respects, effective internal controlover financial reporting. We have not yet completed any assessment of theeffectiveness of our internal control over financial reporting. We expect toincur additional expenses and diversion of management’s time as a result ofperforming the system and process evaluation, testing and remediation requiredin order to comply with the management certification and auditor attestationrequirements. 

 

**Our officers have noexperience in managing a public company. **Neither of our officers has previous experience in managing a publiccompany, we do not have a sufficient number of employees to segregateresponsibilities and may be unable to afford increasing our staff or engagingoutside consultants or professionals to overcome our lack of employees. Duringthe course of our testing, we may identify other deficiencies that we may notbe able to remediate in time to meet the deadline imposed by the Sarbanes-OxleyAct for compliance with the requirements of Section 404. In addition, if wefail to achieve and maintain the adequacy of our internal controls, as suchstandards are modified, supplemented or amended from time to time, we may notbe able to ensure that we can conclude on an ongoing basis that we haveeffective internal controls over financial reporting in accordance with Section404 of the Sarbanes-Oxley Act. Moreover, effective internal controls,particularly those related to revenue recognition, are necessary for us toproduce reliable financial reports and are important to help prevent financialfraud. If we cannot provide reliable financial reports or prevent fraud, ourbusiness and operating results could be harmed, investors could lose confidencein our reported financial information, and the trading price of our commonstock, if a market ever develops, could drop significantly.

 

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**Our independent auditorshave expressed doubt about our ability to continue as a going concern.** We received a report on our financial statements forthe periods from March 19, 2007 (inception) through December 31, 2007 and forthe year ended December 31, 2008 from our independent registered publicaccounting firm that includes an explanatory paragraph stating that there issubstantial doubt about our ability to continue as a going concern. The reportexpressed doubt about our ability to continue as a going concern because we arenot operational and have limited resources. We can offer no assurance that theactions we plan to take to address these conditions will be successful.Inclusion of a “going concern qualification” in the report of our independentaccountants may have a negative impact on our ability to obtain financing andmay adversely impact our stock price in any market that may develop.

**Our ability tohire additional personnel is important to the continued growth of our business.**Our continued success depends uponour ability to attract and retain a group of motivated design, manufacturingand marketing professionals. Our growth may be limited if we cannot recruit andretain a sufficient number of people.  We cannot guarantee that we will be ableto hire and retain a sufficient number of qualified personnel. 

 

**Mr. Delaney, our president, has made all decisionsconcerning his compensation.**There isno employment contract with Mr. Delaney at this time. Nor are there anyagreements for compensation in the future. Mr. Delaney’s future compensation isnot fixed or based on any percentage calculations. He will make all decisionsdetermining the amount and timing of his compensation. He will continue makingdecisions about the timing and amount of his compensation until we have asufficient number of directors to establish a compensation committee of theboard of directors. Mr. Delaney’s decisions about his compensation may not bein the best interests of other shareholders.

 

**We face substantialcompetition.** Presently the surfingproducts manufacture industry is diverse with no dominant participant.  Smallercompanies either distinguish their product so that they can sell at premiumprices or operate on small margins.  As a result we will face intensecompetition.  A large part of our effort will be directed to being recognizedby retailers and carried in their outlets and catalogs.  We cannot promisewhether our marketing efforts will be successful and as a result we may neverachieve sustainable operating results.

 

**Our success depends to alarge extent upon the continued service of key managerial and technicalemployees and our ability to attract and retain qualified personnel**. Specifically, we are highly dependent on the abilityand experience of our key employees, John Delaney, our president and CEO, andBrien Reidy, our vice president and secretary. The loss of either Mr. Delaneyor Mr. Reidy would present a significant setback for us and could impede theimplementation of our business plan. There is no assurance that we will besuccessful in acquiring and retaining qualified personnel to execute ourcurrent plan of operations.

 

**Our president/CEO and ourvice president/secretary each serves us on a part time basis and conflicts mayarise**. Mr. Delaney and Mr. Reidy eachdevotes only a small portion of his time to our operations. Until we receiveproceeds from our financing efforts, we anticipate that each of Mr. Delaney andMr. Reidy will devote 10% to 20% of his time to our business.  If we receivethe proceeds of a financing, both Mr. Delaney and Mr. Reidy will commenceworking for us on a full time basis.   Since they each also have other outsidecommitments, it is inevitable that conflicts will arise in allocation of theirtime and effort. While they will seek to give us sufficient time to allow us tooperate on a basis that is beneficial to our shareholders, this goal may not beaccomplished and our operating results may be negatively impacted by theunavailability of our key personnel.

 

**The ability of ourpresident to control our business will limit minority shareholders' ability toinfluence corporate affairs**. Ourpresident, John Delaney, owns 985,000 or approximately 95.0% of our 1,037,000issued and outstanding shares. Even if he were to sell all of his shares thatare covered by our current prospectus, he would still own 887,000 shares orapproximately 85.5% of our issued and outstanding shares. Because of his stockownership, our president will be in a position to continue to elect our boardof directors, decide all matters requiring stockholder approval and determineour policies. The interests of our president may differ from the interests ofother shareholders with respect to the issuance of shares, businesstransactions with or sales to other companies, selection of officers anddirectors and other business decisions. The minority shareholders would have noway of overriding decisions made by our president. This level of control mayalso have an adverse impact on the market value of our shares because he mayinstitute or undertake transactions, policies or programs that result inlosses; may not take any steps to increase our visibility in the financialcommunity and/or may sell sufficient numbers of shares to significantlydecrease our price per share.

 

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**Our officers do not haveemployment agreements with us.  **Neitherof our officers has an employment agreement with us.  In the absence of anemployment agreement with a restrictive covenant on the part of the employee,either or both of our officers could leave us at any time or commence workingfor a competitive company.  Furthermore, California law, under which we operate,may cast substantial doubt on the enforceability of any restrictive covenantthat we may obtain from our officers in the future.  Accordingly, the continuedservices of our officers cannot be assured.

 

**If we do not receiveadditional financing we will not become operational.** We require between $625,000 and $2,150,000 in debt orequity financing. Our management believes that it will be able to raise fundsfor us in the future.  However, we have not been successful in these efforts todate and we cannot be certain that we will accomplish these goals or that, evenif we do, that additional funds will be raised. No one has committed to investthe money we need to become operational. If we cannot become operational, wewill eventually be required to abandon our plans and, unless we can find asuitable acquisition or merger partner our shareholders will lose theirinvestment. We have not located any suitable potential merger partner becausewe intend to proceed with our business.

 

**We may be exposed topotential risks resulting from new requirements under Section 404 of theSarbanes-Oxley Act of 2002.** Pursuantto Section 404 of the Sarbanes-Oxley Act of 2002, we will be required,beginning with our fiscal year ending December 31, 2009, to include in ourannual report our assessment of the effectiveness of our internal control overfinancial reporting as of the end of 2009. Furthermore, our independentregistered public accounting firm will be required to attest to whether ourassessment of the effectiveness of our internal control over financialreporting is fairly stated in all material respects and separately report onwhether it believes we have maintained, in all material respects, effectiveinternal control over financial reporting as of December 31, 2010. We have notyet completed our assessment of the effectiveness of our internal control overfinancial reporting. We expect to incur additional expenses and diversion ofmanagement's time as a result of performing the system and process evaluation,testing and remediation required in order to comply with the managementcertification and auditor attestation requirements.

 

**We may not have asufficient number of employees to segregate responsibilities and may be unableto afford increasing our staff or engaging outside consultants or professionalsto overcome our lack of employees.**During the course of our testing, we may identify other deficiencies that wemay not be able to remediate in time to meet the deadline imposed by theSarbanes-Oxley Act for compliance with the requirements of Section 404. Inaddition, if we fail to achieve and maintain the adequacy of our internalcontrols, as such standards are modified, supplemented or amended from time totime, we may not be able to ensure that we can conclude on an ongoing basisthat we have effective internal controls over financial reporting in accordancewith Section 404 of the Sarbanes-Oxley Act. Moreover, effective internalcontrols, particularly those related to revenue recognition, are necessary forus to produce reliable financial reports and are important to help preventfinancial fraud. If we cannot provide reliable financial reports or preventfraud, our business and operating results could be harmed, investors could loseconfidence in our reported financial information, and the trading price of ourcommon stock, if a market ever develops, could drop significantly.

 

**We have not conducteddetailed cost and market studies so we do not know if we can operateprofitably. **We have not conductedany detailed studies which would provide us with our actual costs ofmanufacture for our product and are relying on our president’s estimates forthese costs.  In addition, we have not conducted market studies to determinewhether our line of surfboarding products will fill an actual need or would beaccepted in the market and, if it would be accepted, at what price point. Since we have not fully determined our costs of manufacture or our likely pricepoints for sales we cannot determine if we can profitably manufacture andmarket our proposed products. 

 

 

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**We intend to engage in a large-scale manufacturing andmarketing operation and we may have difficulty managing our growth andexpanding our operations successfully.**

 

If we successfully launch oursurfboard line, we will need to expand our design, manufacturing, sales andmarketing and on-going development capabilities.  We do not intend toout-source these core functions. As our operations expand, we expect that wewill need to manage additional relationships with various partners, suppliers,and other organizations. Our ability to manage our operations and growthrequires us to continue to improve our information technology infrastructure,operational, financial and management controls and reporting systems andprocedures. Such growth could place a strain on our administrative andoperational infrastructure that is presently non-existent. We may not be ableto make improvements to our management information and control systems in anefficient or timely manner and may discover deficiencies in existing systemsand controls.

 

**Environmental and othergovernmental regulations may impact our operations. **Assuming we receive private financing and are able tocommence operations, our operations will be subject to present and future environmentaland other governmental regulations. For example, Toluene Di Isocynate or TDI was previously used in surfboardmanufacture and its use is now prohibited in California and to a lesser degreeby Federal regulations.  See, “Our Proposed Business – Government Regulation”. While we are not aware of any impending regulatory actions which would limitour proposed activities, we can not guarantee that we will not be subject tofuture regulatory actions that prohibit or limit the use of materials due to theirpotentially harmful environmental impacts.  Furthermore, while surfing isgenerally regarded as an activity where the participant assumes the risk of anyattendant hazard, it is entirely possible that regulations could be adoptedwhich are design to ensure the safety of surfing participants and which limitour product design freedom.  Management is not aware of any pending regulationsof this type.

 

**Risks Related to Our Common Stock**
```
 
```

**Currently, there is nopublic market for our securities, and there can be no assurances that anypublic market will ever develop and it is likely to be subject to significantprice fluctuations.**While our stockis included in the Over the Counter Bulletin Board (“OTCBB”) under the symbolHMEX, there has not been any established trading market for our common stockand we are not aware of any actual trades.  We cannot predict the extent towhich investor interest in us will ever lead to the development of an active,liquid trading market. Active trading markets generally result in lower pricevolatility and more efficient execution of buy and sell orders for investors.

 

In addition, our common stockis unlikely to be followed by any market analysts, and there may be fewinstitutions acting as market makers for the common stock. Either of thesefactors could adversely affect the liquidity and trading price of our commonstock. Until our common stock is fully distributed and an orderly marketdevelops in our common stock, if ever, the price at which it trades is likelyto fluctuate significantly. Prices for our common stock will be determined inthe marketplace and may be influenced by many factors, including the depth andliquidity of the market for shares of our common stock, developments affectingour business, including the impact of the factors referred to elsewhere inthese Risk Factors, investor perception, and general economic and marketconditions. No assurances can be given that an orderly or liquid market willever develop for the shares of our common stock.

 

Because of the anticipatedlow price of the securities, many brokerage firms may not be willing to effecttransactions in these securities. 

 

9

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**Our board of directors isauthorized to issue shares of preferred stock, which may have rights andpreferences detrimental to the rights of the holders of our common shares.** We are authorized to issue up to 1,000,000 shares ofpreferred stock, $0.0001 par value. As of the date of this Annual Report onForm 10-K, we have not issued any shares of preferred stock. Our preferred stockmay bear such rights and preferences, including dividend and liquidationpreferences, as the Board of Directors may fix and determine from time to time.Any such preferences may operate to the detriment of the rights of the holdersof the common stock being offered hereby.

 

**Our articles ofincorporation provide for indemnification of officers and directors at ourexpense and limit their liability that may result in a major cost to us andhurt the interests of our shareholders because corporate resources may beexpended for the benefit of officers and/or directors.**Our articles of incorporation and applicable Delawarelaw provide for the indemnification of our directors, officers, employees, andagents, under certain circumstances, against attorney's fees and other expensesincurred by them in any litigation to which they become a party arising fromtheir association with or activities on our behalf. We will also bear theexpenses of such litigation for any of our directors, officers, employees, oragents, upon such person's promise to repay us, therefore if it is ultimatelydetermined that any such person shall not have been entitled toindemnification. This indemnification policy could result in substantialexpenditures by us, which we will be unable to recoup.

 

We have been advised that, inthe opinion of the SEC, indemnification for liabilities arising under federalsecurities laws is against public policy as expressed in the Securities Act of1933 and is, therefore, unenforceable. In the event that a claim forindemnification against these types of liabilities, other than the payment byus of expenses incurred or paid by a director, officer or controlling person inthe successful defense of any action, suit or proceeding, is asserted by adirector, officer or controlling person in connection with the securities beingregistered, we will (unless in the opinion of our counsel, the matter has beensettled by controlling precedent) submit to a court of appropriatejurisdiction, the question whether indemnification by us is against publicpolicy as expressed in the Securities Act and will be governed by the finaladjudication of such issue. The legal process relating to this matter if itwere to occur is likely to be very costly and may result in us receiving negativepublicity, either of which factors is are likely to materially reduce themarket and price for our shares, if such a market ever develops.

 

**Any market that developsin shares of our common stock will be subject to the penny stock restrictionsthat are likely to create a lack of liquidity and make trading difficult orimpossible.** Until our shares ofcommon stock qualify for inclusion in the NASDAQ system, if ever, the tradingof our securities, if any, will be in the over-the-counter market which is commonlyreferred to as the OTCBB as maintained by the FINRA. As a result, an investormay find it difficult to dispose of, or to obtain accurate quotations as to theprice of our securities.

 

SEC Rule 15g-9 (as mostrecently amended and effective on September 12, 2005) establishes thedefinition of a "penny stock," for purposes relevant to us, as anyequity security that has a market price of less than $5.00 per share or with anexercise price of less than $5.00 per share, subject to a limited number of exceptions.It is likely that our shares will be considered to be penny stocks for theimmediately foreseeable future. This classification severely and adverselyaffects the market liquidity for our common stock. For any transactioninvolving a penny stock, unless exempt, the penny stock rules require that abroker or dealer approve a person's account for transactions in penny stocksand the broker or dealer receive from the investor a written agreement to thetransaction setting forth the identity and quantity of the penny stock to bepurchased.

 

In order to approve aperson's account for transactions in penny stocks, the broker or dealer mustobtain financial information and investment experience and objectives of theperson and make a reasonable determination that the transactions in pennystocks are suitable for that person and that person has sufficient knowledgeand experience in financial matters to be capable of evaluating the risks oftransactions in penny stocks.

 

 

10

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The broker or dealer mustalso deliver, prior to any transaction in a penny stock, a disclosure scheduleprepared by the SEC relating to the penny stock market, which, in highlightform, sets forth:

•              the basis on which the broker or dealermade the suitability determination, and

•              that the broker or dealer received asigned, written agreement from the investor prior to the transaction.

Disclosure also has to bemade about the risks of investing in penny stock in both public offerings andin secondary trading and commissions payable to both the broker-dealer and theregistered representative, current quotations for the securities and the rightsand remedies available to an investor in cases of fraud in penny stocktransactions. Finally, monthly statements have to be sent disclosing recentprice information for the penny stock held in the account and information onthe limited market in penny stocks.

 

Because of these regulations,broker-dealers may not wish to engage in the above-referenced necessarypaperwork and disclosures and/or may encounter difficulties in their attempt tosell shares of our common stock, which may affect the ability of sellingshareholders or other holders to sell their shares in the secondary market andhave the effect of reducing the level of trading activity in the secondarymarket. These additional sales practice and disclosure requirements couldimpede the sale of our securities, if and when our securities become publiclytraded. In addition, the liquidity for our securities may decrease, with acorresponding decrease in the price of our securities. Our shares in allprobability will be subject to such penny stock rules for the foreseeablefuture and our shareholders will, in all likelihood, find it difficult to selltheir securities.

 

**We do not intend to paydividends on our common stock.** Wehave not paid any dividends on our common stock to date and there are no plansfor paying dividends on the common stock in the foreseeable future. We intendto retain earnings, if any, to provide funds for the implementation of our businessplan. We do not intend to declare or pay any dividends in the foreseeablefuture. Therefore, there can be no assurance that holders of our common stockwill receive any additional cash, stock or other dividends on their shares ofour common stock until we have funds which the Board of Directors determinescan be allocated to dividends.

 

**If a market develops forour shares, sales of our shares relying upon rule 144 may depress prices inthat market by a material amount.** Allof the outstanding shares of our common stock are "restrictedsecurities" within the meaning of Rule 144 under the Securities Act of1933, as amended. As restricted shares, these shares may be resold onlypursuant to an effective registration statement or under the requirements of Rule144 or other applicable exemptions from registration under the Act and asrequired under applicable state securities laws. Rule 144 provides in essencethat a person who has held restricted securities for a prescribed period may,under certain conditions, sell their shares  As a result of revisions to Rule144 which became effective on or about February 15, 2008, there is no limit onthe amount of restricted securities that may be sold by a non-affiliate (i.e.,a stockholder who has not been an officer, director or control person for atleast 90 consecutive days) after the restricted securities have been held bythe owner for a period of one year. A sale under Rule 144 or under any otherexemption from the Act, if available, or pursuant to registration of shares ofcommon stock of present stockholders, may have a depressive effect upon theprice of the common stock in any market that may develop.   

 

**Any trading market thatmay develop may be restricted by virtue of state securities "BlueSky" laws to the extent they prohibit trading absent compliance withindividual state laws.** Theserestrictions may make it difficult or impossible to sell shares in thosestates. There is no public market for our common stock, and there can be noassurance that any public market will develop in the foreseeable future.Transfer of our common stock may also be restricted under the securities orsecurities regulations laws promulgated by various states and foreignjurisdictions, commonly referred to as "Blue Sky" laws. Absentcompliance with such individual state laws, our common stock may not be tradedin such jurisdictions. Because the securities registered hereunder have notbeen registered for resale under the “Blue Sky” laws of any state, the holdersof such shares and persons who desire to purchase them in any trading marketthat might develop in the future, should be aware that there may be significantstate “Blue Sky” law restrictions upon the ability of investors to sell thesecurities and of purchasers to purchase the securities. These restrictionsprohibit the secondary trading of our common stock. We currently do not intendand may not be able to qualify securities for resale in approximately 17 statesthat do not offer manual exemptions and require shares to be qualified beforethey can be resold by our shareholders.

 

Accordingly, investors shouldconsider the secondary market for our securities to be a limited one. 

** **

** **11

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** **

**Item 1B.          UnresolvedStaff Comments.**

 

None. 

** **

**Item 2. Properties.**

** **

Our present level of operationshas not required us to establish regular executive offices and we use spacewithin the residence of our CEO John Delaney as our office at no cost to us.

 

**Item 3.  Legal Proceedings**.

 

We are not currently party to anylegal proceedings and are not aware of any threatened legal proceedings againstus.

 

**Item 4. Submission of Mattersto a Vote of Security Holders.**

 

No matters were submitted to avote of security holders during the last quarter of the period covered by thisreport. 

 

**Part II.**

** **

**Item 5.**  **Market for Registrant's Common Equity, RelatedStockholder Matters and Issuer Purchases of Equity Securities**.

 

Our common stock trades on theOver the Counter Bulletin Board under the symbol “HMEX”.  The volume andfrequency of both quotations and trades in our stock has been limited.  Thereare presently approximately forty holders of record of our common stock.  Thenumber of holders does not include the shareholders for whom shares are held ina "nominee" or "street" name.  We have not paid any cashdividends and do not anticipate doing so in the foreseeable future.  Futuredividends, if any, will depend upon our results of operations, financial condition,capital needs and such other factors as the Board of Directors deems relevant.

 

**Item 6. Selected Financial Data**.

 

We were organized in July 2007. The following information is derived from our financial statements containedelsewhere herein and should be reviewed in conjunction with those financialstatements, the notes thereto and “Item 7. Management’s Discussion and Analysisof Financial Condition and Results of Operations” included in this annualreport. 

 

12

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***Balance Sheet Data***:

                                               **ASSETS**

                        December 31,             

                                                                                                                            2008                                2007

Current assets:

   Cash                                                                                                        $             919                $         10,479

 

Total assets                                                                                             $            919                 $        10,479

** **

** **

LIABILITIES ANDSTOCKHOLDERS’ DEFICIT

** **

** **

Currentliabilities:

   Accruedexpenses                                                                                $                  22,500         $     13,706

 

   Total CurrentLiabilities                                                                        $                  22,500         $     13,706   

 

Stockholders’deficit:

   Preferredstock; $.0001 par value; authorized - 

  1,000,000 shares; issued - none                                                                                  -                          -

   Common stock;$.0001 par value; authorized - 

  20,000,000 shares; issued and outstanding - 

  1,037,000 and 1,024,000 shares,respectively                                                         104                   102

   Additional paid-incapital                                                                                         36,996               23,998

Deficitaccumulated during the development stage                                              (56,681)           (27,327)

 

TotalStockholders’ Deficit                                                                                    $(21,581)        $   (3,227)

 

Total liabilitiesand stockholders’ deficit**                                                            **$       919          $  10,479** **

 

 

13

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** **

***Statements of Operations Data:***

    
|                                                                           |      | Year Ended December 31, 2008                              |      | The Period from March 19, 2007 (Inception) through December 31, 2007 |      | The Period from March 19, 2007 (Inception) through December 31, 2008 |
|--------------------------------------------------------------------------------|-----------|-----------------------------------------------------------|-----------|----------------------------------------------------------------------|-----------|----------------------------------------------------------------------|
| Operating Expenses:                                                            |      |                                                      |      |                                                                 |      |                                                                 |
| Professional fees                                                              | $         | 12,000                                                    | $         | 20,000                                                               | $         | 32,000                                                               |
| General and administrative  expenses                                           |      |  

19,354                                            |      |  

7,327                                                        |      |  

26,681                                                       |
| Total operating expenses                                                       |      | 31,354                                                    |      | 27,327                                                               |      | 58,681                                                               |
|                                                                           |      |                                                      |      |                                                                 |      |                                                                 |
| Loss before income taxes                                                       |      | (31,354)                                                  |      | (27,327)                                                             |      | (58,681)                                                             |
|                                                                           |      |                                                      |      |                                                                 |      |                                                                 |
| Provision for income taxes                                                     |      | -                                                         |      | -                                                                    |      | -                                                                    |
|                                                                           |      |                                                      |      |                                                                 |      |                                                                 |
| Net loss                                                                       | $         | (31,354)                                                  | $         | (27,327)                                                             | $         | (58,681)                                                             |
|                                                                           |      |                                                      |      |                                                                 |      |                                                                 |
| Net loss per common share -  basic and diluted                                 |  

$ |  

        (0.03) |  

$ |  

(0.03)                                                       |  

$ |  

(0.06)                                                       |
|                                                                           |      |                                                      |      |                                                                 |      |                                                                 |
| Weighted average number of  common shares outstanding – basic and diluted |      |  

 

 

1,034,107                         |      |  

 

 

1,006,503                                    |      |  

 

 

1,021,985                                    |
|                                                                           |      |                                                      |      |                                                                 |      |                                                                 |
| See accompanying notes to the financial statements.                            |

 

 

**Item 7. Management’s Discussionand Analysis of Financial Condition and Results of Operations**.

 

 

**MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

 

Management’s Discussion and Analysis contains statementsthat are forward-looking. These statements are based on current expectationsand assumptions that are subject to risks and uncertainties. Actual resultscould differ materially because of factors discussed in “Factors That MayAffect Future Results and Financial Condition.”

 

**OVERVIEW**

 

We are in a developmental stage. Implementing our plannedbusiness operation is dependant on the effectiveness of this registrationstatement and our ability to raise between $625,000 and $2,150,000 ofadditional capital after all offering expenses paid to a placement agent,attorneys, accountant’s and the like.

 

Our plan is to utilize suchcapital we raise as follows:

 

14

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                                                                                Ifa Net of                                                                             Ifa Net of

                                                                                $625,000is Raised                                                            $2,150,000is Raised

 

Establishing Manufacturing 

Facility/ Offices                                                   $140,000                                                                               $500,000

 

Retail Shop                                                           $ 25,000                                                                               $ 50,000

 

Equipment                                                            $ 75,000                                                                               $150,000

 

Officer Salaries                                                    $150,000                                                                               $350,000

 

Marketing Expense                                             $135,000                                                                               $700,000

 

Working Capital                                                  $100,000                                                                               $400,000

 

 

The foregoing are estimatesonly and funds may be reallocated based upon management’s evaluation of thenexisting conditions.  We believe that we can commence manufacturing withinthree to four months of receiving financing.  We will have to acquire andinstall equipment, hire manufacturing and marketing personnel and establishworking relationships with suppliers.  We believe that when we sell boards tosurf shops that the sales will be on net thirty terms and the time for receiptof payment will require us to maintain significant working capital.  We projectthat our monthly operating budget will be approximately $70,000 to $80,000 permonth comprised of rent of $3,300; salaries of $45,000 to $50,000 and overheadof $21,700 to $26,700    

 

Due to the recent downturn inthe general economy, the likelihood of our achieving the foregoing goals hasbeen substantially reduced and we may be required to seek an acquisition as analternative to developing our business.

 

**IINFLATION**

 

Inflation can be expected tohave an impact on our operating costs. A prolonged period of inflation couldcause a general economic downturn and negatively impact our results. However,the effect of inflation has been minimal over the past three years.

 

**SEASONALITY**

 

We believe that our business will be seasonal in thatsales will tend to decrease during winter months.

** **

**LIQUIDITY AND CAPITAL RESOURCES**

 

As of December 31, 2008, we had$919 cash on hand and current liabilities of $22,500.  Obviously our currentposition is extremely illiquid.  Management is seeking debt or equity financingof which there can be no assurance or alternatively to acquire an operatingbusiness with liquidity. 

 

**Off-Balance Sheet Arrangements**

 

We have no significant off-balancesheet arrangements that have or are reasonably likely to have a current orfuture effect on our financial condition, changes in financial condition,revenues or expenses, results of operations, liquidity, capital expenditures orcapital resources that is material to stockholders.

 

**Employees and Purchase of Plantor Equipment**

          

We are in the process ofdetermining our personnel needs. We intend to hire employees or consultantsover the course of the next twelve months if we are successful in raisingcapital, but do not currently have an estimate of how many employees we willhire or how much it will cost.

 

 15

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** **

**Recent AccountingPronouncements**

 

Reference is made to Note 2 to ourfinancial statements included herein.

 

**Item 8  Financial Statementsand Supplementary Data**.

 

See Financial Statements beginningon Page F-1.

 

**Item 9**  **Changes in and Disagreements With Accountants onAccounting and Financial Disclosure**

 

None.

 

**Item 9A Controls andProcedures.**

 

**Conclusions Regarding the Effectivenessof Disclosure Controls and Procedures**

 

We maintain disclosure controlsand procedures, as defined in Exchange Act Rule 13a-15(e), that are designed toensure that information required to be disclosed by the company in the reportsthat it files or submits under the Securities Exchange Act of 1934, as amended,is recorded, processed, summarized, and reported within the time periodsspecified in the Securities and Exchange Commission’s rules and forms, and thatsuch information is accumulated and communicated to the company’s management,including its chief executive officer and chief financial officer, asappropriate to allow timely decisions regarding required disclosure. Ourmanagement evaluated, with the participation of the Chief Executive Officer andChief Financial Officer, the effectiveness of the design and operation of ourdisclosure controls and procedures as of December 31, 2008. Based on thisevaluation, our principal executive and principal financial officer concludedthat our disclosure controls and procedures were effective as of December 31,2008, the end of the period covered by this annual report.

 

**Management’s Report on InternalControl Over Financial Reporting**

 

This Annual Report on Form 10-Kdoes not include a report of management’s assessment regarding internal controlover financial reporting or an attestation report of the Company’s independentregistered public accounting firm due to a transition period established byrules of the Securities and Exchange Commission for newly public companies.

 

**Changes in Internal Controlover Financial Reporting**

 

There has been no change in ourinternal control over financial reporting that occurred during our year endedDecember 31, 2008, that has materially affected, or is reasonably likely tomaterially affect, our internal control over financial reporting.

 

 **Item 9B—Other Information**

 

We do not have any informationthat was required to be reported on Form 8-K during the fourth quarter that wasnot reported. 

 

16

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**Part III**

 

**Item10  Executive Officers and Corporate Governance**

** **

**Directorsand Executive Officers.**

** **

 

Ourdirectors and officers are as follows:

 

Name                                     Age                                         Position(s)

 

John Delaney                     24                                             President,Chief Executive Officer and a Director

 

BrienReidy                        58                                              VicePresident and Secretary

 

Term and Family Relationships

 

Our director currently has a term whichwill end at our next annual meeting of the stockholders or until a successor iselected and qualifies, subject to their prior death, resignation or removal.Officers serve at the discretion of the Board of Directors. We only have twoofficers and one director.

 

No officer, director, orpersons nominated for these positions, and no promoter or significant employeeof our corporation has been involved in legal proceedings that would bematerial to an evaluation of our management.

 

Business Experience

 

John Delaneywas electeda director, and president and CEO upon our formation in 2007.  He has been involved in the sport ofsurfing for 10 years. Over those 10 years he has purchased approximately 100surfboards, of various sizes and materials. While he was attending theUniversity of California, Santa Barbara (“UCSB”) he competed on their surf teamand held a part time job at J7 surfboards, a local manufacturer from Septemberof 2005 to June of 2007. Mr. Delaney worked on various manufacturing tasks atJ7, including sanding and shaping boards and retail sales. He received a B.A.Degree in Economics from UCSB in 2007 with an emphasis in EnvironmentalEconomics.  

 

Brien Reidywas electedour Vice President and Secretary in August 2008.  He has operated an independentbusiness consultant  for more than the past five years, concentrating in thearea of real estate finance  In June 2004 Mr. Reidy filed for personalbankruptcy in the United States bankruptcy Court for the Eastern District ofLong Island (Case No 8-05-83274-sb) and was discharged under Chapter 7 on March14, 2006.  The Board has considered Mr. Reidy’s bankruptcy filing anddetermined that it has no bearing on his efforts on behalf of the Company.

 

Wehave determined that due to our early stage of development and our small size,the present adoption of a code of ethics is not appropriate.  If we grow wewill adopt a suitable code of ethics.

 

Exceptas set forth above, no officer or director has been involved in any materiallegal proceeding.

 

Theseare no family relationships among our officers and directors except that Mr.Reidy is Mr. Delaney’s uncle.

 

 

 

17

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Item11.  Executive Compensation

 

**SUMMARYCOMPENSATION TABLE**

 

Thefollowing table sets forth the cash and non-cash annual remuneration of each ofthe three highest paid persons who are officers and directors officers anddirectors as a group during our last fiscal year:

 

 
| Name of  individual or identity of group

  | Capacities  in which remuneration was received

  | Salary

  | Bonus

  | Stock Awards

  | All Other Compensation

  | Aggregate remuneration

  |
|--------------------------------------------------|--------------------------------------------------------|----------------|---------------|----------------------|--------------------------------|--------------------------------|
| John Delaney                                | CEO

                                             | $0

      | $0

     | $0

            | $0

                      | $0

                      |
| Brien Reidy                                      | CFO                                                    | $0             | $0            | $0                   | $0                             | $0                             |

 

 

 

The Company has not paid and has no present plan togive any compensation other than cash. The Company does not have any StockOption Plan or other equity compensation plans.

 

 

**No compensation to Directors.**

 

No director has receivedany cash or other compensation for serving as a director and we do not plan topay any cash or other compensation to any person for serving as a director.

 

**Item 12 SECURITY OWNERSHIP OF MANAGEMENT ANDCERTAIN SECURITY HOLDERS**

 

The information in thefollowing table sets forth the beneficial ownership of our shares of common stockas of the date of this Annual Report on Form 10-K, by: (i) each of the threehighest paid persons who are our officers and directors (or in the alternative,each officer and director); (ii) all officers and directors as a group; (iii)each shareholder who beneficially owns more than 10% of any class of oursecurities, including those shares subject to outstanding options.

 

 

18

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Nameand address              Amount owned before the offering    Amount owned afterthe offering    Percent of class after the                                               

ofowner                                                                                                                                                                                offering

 

JohnDelaney                                      985,000                                                  887,000                                                  85.5%

 

BrienReidy                                                     0                                                           0                                                    0%

 

Allofficers and directors                    985,000                                                 887,000                                                 85.5%

as a group (2person)**         **

 

**Item 13.  Certain Relationships andRelated Transaction, and Director Independence.**

 

The Company was incorporated onMarch 19, 2007 at which time 985,000 shares of common stock were issuedto the Company’s founder and 15,000 shares of common stock were issued to theCompany’s legal counsel. No value was given to theshares issued by the newly formed corporation.  Therefore, the shares wererecorded to reflect the $.0001 par value and paid in capital was recorded as anegative amount ($100). In other words, no net value was assigned to theseshares. 

 

 

**Item 14.  Principal AccountingFees and Services.**

 

*Audit Fees*

* *

The aggregate fees billed for professional services rendered byour principal accountant for the audit of our annual financial statements for the year ended December 31, 2008and for the period from March 19,2007 (Inception) through December 31, 2007 were $9,500 and $10,000, respectively.

*Audit-Related Fees*

During the fiscal year endedDecember 31, 2008 and for theperiod from March 19, 2007 (Inception)through December 31, 2007, our principal accountant did not render assuranceand related services reasonably related to the performance of the audit orreview of financial statements. 

*Tax Fees*

Theaggregate fees billed for professional services rendered by our principalaccountant for the tax compliance for the year ended December 31, 2008 and for the period from March 19, 2007 (Inception) through December 31, 2007 were $0 and $0, respectively.

*All Other Fees*

During the for the year ended December 31, 2008 and for the period from March 19, 2007 (Inception) through December 31, 2007, there were no fees billed for products and servicesprovided by the principal accountant other than those set forth above. 

*Audit Committee Approval*

We currently do nothave an audit committee.  However, our board of directors has pre-approved theservices described above.

 

19

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**Part IV**

 

**Item 15. Exhibits, FinancialStatement Schedules.**

 

(A) Financial Statements

                See index toFinancial Statements on Page F-1

 

(B) Exhibits.

 

**Exhibit Number                                                                                                                    ExhibitDescription**

 

3.1                           Certificate ofIncorporation - Incorporated by reference to like numbered exhibit to theCompany’s Registration Statement on Form S –1 File Number 333-151148

3.2                           Bylaws - Incorporatedby reference to like numbered exhibit to the Company’s Registration Statementon Form S –1 File Number 333-151148 

23.1                         Consent of Li &Company, PC

31.1                         Certificationof CEO pursuant toSection 302 of the Sarbanes-Oxley Act 

31.2                         Certificationof CFO pursuant toSection 302 of the Sarbanes-Oxley Act

32.1                         Certificationof CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002

32.2                         Certificationof CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002

 

 

 

(C) Financial Statement Schedules- None

 

20

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** **

** **

**SIGNATURES**

 

Pursuantto the requirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned threunto duly authorized.

 

HAMPTONSEXTREME, INC.

 

 

By:   /s/John Delaney, CEO       

                JohnDelaney, CEO

                (PrincipalExecutive Officer)

 

March 23,2009

By:   /s/Brien Reidy, VP and CFO

                BrienReidy, VP and CFO

                (PrincipalFinancial and Accounting Officer)

 

March 23,2009

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed below by the following persons on behalf of the registrant and inthe capacities and on the dates indicated.

 

Name           Signature                                          Date                               Capacities

 

 

John Delaney       /s/ John Delaney            March 23,2009            Sole Director and CEO 

----

**HAMPTONS EXTREME,INC.**

** **

**(A DEVELOPMENTSTAGE COMPANY)**

** **

**December 31, 2008**

 

**INDEXTO FINANCIAL STATEMENTS**

| Contents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Page(s)     |
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| Report  of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | F-2         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |        |
| Balance  Sheets at December 31, 2008 and 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | F-3         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |        |
| Statement  of Operations for the Year Ended December 31, 2008, the Period from                                                                                                                                                                                                             | F-4         |
| March  19, 2007 (inception) through December 31, 2007 and the Period from March 19,  2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |        |
| (Inception)  through December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |        |
| Statement  of Stockholders’ Deficit for the Period from March 19, 2007  (Inception)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | F-5         |
| through  December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |        |
| Statement  of Cash Flows for the Year Ended December 31, 2008, the Period from March 19,  2007                                                                                                                                           | F-6         |
| (Inception)  through December 31, 2007 and the Period from March 19, 2007 (Inception)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |        |
| through  December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |        |
| Notes  to the Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | F-7 to F-10 |

----

 

**REPORT OFINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

 

 

To the Board of Directors andStockholders

Hamptons Extreme, Inc.

(A development stage company)

Oak View, California

 

We have audited the accompanying balance sheet of HamptonsExtreme, Inc. (a development stage company) (the “Company”) as of December 31,2008 and 2007 and the related statement of operations, stockholders’ deficitand cash flows for the year ended December 31, 2008, the periodfrom March 19, 2007 (inception) through December 31, 2007 and the period fromMarch 19, 2007                                                            (inception)through December 31, 2008. These financial statements are theresponsibility of the Company’s management.  Our responsibility is to expressan opinion on these financial statements based on our audit.

 

We conducted our audits in accordance with the standards ofthe Public Company Accounting Oversight Board (United States).  Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement.  TheCompany is not required to have, nor were we engaged to perform, an audit ofits internal control over financial reporting. Our audits includedconsideration of internal control over financial reporting as a basis fordesigning audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the Company'sinternal control over financial reporting.  Accordingly, we express no suchopinion. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements.  An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statementpresentation.  We believe that our audits provide a reasonable basis for ouropinion.

 

In our opinion, the financial statements referred to abovepresent fairly, in all material respects, the financial position of the Companyas of December 31, 2008 and 2007 and the results of its operations and its cashflows for the year ended December 31, 2008, the period from March 19, 2007(inception) through December 31, 2007 and the period from March 19,2007                                                            (Inception)through December 31, 2008 in conformity with accounting principles generallyaccepted in the United States of America.

 

Theaccompanying financial statements have been prepared assuming that the Companywill continue as a going concern. As discussed in Note 3 to the financialstatements, the Company had a negative working capital and a deficit accumulatedduring the development stage at December 31, 2008 and had a net loss and cashused in operations for the year ended December 31, 2008, the period from March19, 2007 (inception) through December 31, 2007 and for the period from March19, 2007 (inception) through December 31, 2008, with no revenues during theperiod. These factors raise substantial doubt about the Company’s ability tocontinue as a going concern. Management’s plans in regards to these matters arealso described in Note 3. The financial statements do not include anyadjustments that might result from the outcome of this uncertainty.

 

 

*/s/Li& Company, PC*

Li & Company, PC

 

 

Skillman, New Jersey

March 13, 2009

F-2

----

 

**HAMPTONSEXTREME, INC.**

(A Development StageCompany)

 

Balance Sheets

 

|                                                                                                                                 |      | December 31, 2008 |   |      | December 31, 2007 |  |
|--------------------------------------------------------------------------------------------------------------------------------------|-----------|-------------------|--------|-----------|-------------------|--|
| Current Assets:                                                                                                                      |      |              |   |      |              |  |
| Cash                                                                                                                                 | $         | 919               |   | $         | 10,479            |  |
| Total current assets                                                                                                                 |      | 919               |   |      | 10,479            |  |
|                                                                                                                                 |      |              |   |      |              |  |
| TOTAL ASSETS                                                                                                                         | $         | 919               |   | $         | 10,479            |  |
|                                                                                                                                 |      |              |   |      |              |  |
| Current Liabilities                                                                                                                  |      |              |   |      |              |  |
| Accrued expenses                                                                                                                     | $         | 22,500            |   | $         | 13,706            |  |
|                                                                                                                                 |      |              |   |      | -                 |  |
| Total current liabilities                                                                                                            |      | 22,500            |   |      | 13,706            |  |
|                                                                                                                                 |      |              |   |      |              |  |
| Stockholders' Deficit:                                                                                                               |      |              |   |      |              |  |
| Preferred stock: $0.0001 par value; 1,000,000 shares  authorized; none issued or outstanding                                         |      | -                 |   |      | -                 |  |
|                                                                                                                                      |
| Common stock: $0.0001 par value; 20,000,000 shares  authorized; 1,037,000 and 1,024,000 shares issued and outstanding,  respectively |      | 104               |   |      | 102               |  |
|                                                                                                                                      |
|                                                                                                                                      |
| Additional paid-in capital                                                                                                           |      | 36,996            |   |      | 23,998            |  |
| Deficit accumulated during development stage                                                                                         |      |  

(58,681)  |   |      |  

(27,327)  |  |
| Total stockholders’ deficit                                                                                                     |      | (21,581)          |   |      | (3,227)           |  |
|                                                                                                                                 |      |              |   |      |              |  |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                     |  

$ | 919               |   |  

$ | 10,479            |  |
|                                                                                                                                 |      |              |   |      |              |  |
| See accompanying  notes to the financial statements.                                                                                 |           |

F-3

----

 

 

**HAMPTONS EXTREME,INC.**

 (A Development StageCompany)

** **

Statement ofOperations

 

|                                                                           |      | Year Ended December  31, 2008                                                                 |      | The Period from  March 19, 2007 (Inception) through December 31, 2007 |      | The Period from  March 19, 2007 (Inception) through December 31, 2008 |
|--------------------------------------------------------------------------------|-----------|-----------------------------------------------------------------------------------------------|-----------|-----------------------------------------------------------------------|-----------|-----------------------------------------------------------------------|
| Operating Expenses:                                                            |      |                                                                                          |      |                                                                  |      |                                                                  |
| Professional fees                                                              | $         | 12,000                                                                                        | $         | 20,000                                                                | $         | 32,000                                                                |
| General and administrative expenses                                            |      |  

19,354                                                                                |      |  

7,327                                                         |      |  

26,681                                                        |
| Total operating expenses                                                       |      | 31,354                                                                                        |      | 27,327                                                                |      | 58,681                                                                |
|                                                                           |      |                                                                                          |      |                                                                  |      |                                                                  |
| Loss before income taxes                                                       |      | (31,354)                                                                                      |      | (27,327)                                                              |      | (58,681)                                                              |
|                                                                           |      |                                                                                          |      |                                                                  |      |                                                                  |
| Provision for income taxes                                                     |      | -                                                                                             |      | -                                                                     |      | -                                                                     |
|                                                                           |      |                                                                                          |      |                                                                  |      |                                                                  |
| Net loss                                                                       | $         | (31,354)                                                                                      | $         | (27,327)                                                              | $         | (58,681)                                                              |
|                                                                           |      |                                                                                          |      |                                                                  |      |                                                                  |
| Net loss per common share - basic and diluted                                  |  

$ |  

              (0.03) |  

$ |  

(0.03)                                                        |  

$ |  

(0.06)                                                        |
|                                                                           |      |                                                                                          |      |                                                                  |      |                                                                  |
| Weighted average number of common shares outstanding –  basic and diluted |      |  

 

1,034,107                                                                     |      |  

 

1,006,503                                             |      |  

 

1,021,985                                             |
|                                                                           |      |                                                                                          |      |                                                                  |      |                                                                  |
| See accompanying  notes to the financial statements.                           |

 

 

F-4

----

**HAMPTONS EXTREME,INC.**

 (A Development StageCompany)

 

Statement ofStockholders’ Deficit

 

|  

 

                                                                     | Common Shares | Amount                                                                                                 | Additional Paid-in  Capital                                                               | Deficit Accumulated  During the Development Stage                                                                | Total Stockholder's  Deficit                                             |
|-------------------------------------------------------------------------------------------|---------------|--------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|
|                                                                                      |          |                                                                                                   |                                                                                      |                                                                                                             |                                                                     |
|                                                                                      |          |                                                                                                   |                                                                                      |                                                                                                             |                                                                     |
| Balance, March 19, 2007 (inception)                                                       | 1,000,000     |    $     100                                                                  | $                 - | $                    - | $          100    |
|                                                                                      |          |                                                                                                   |                                                                                      |                                                                                                             |                                                                     |
| Sale of common stock from September 10, 2007 through  December 7, 2007 at $1.00 per share | 24,000        | 2                                                                                                      | 23,998                                                                                    |                                                                                                             | 24,000                                                                   |
|                                                                                      |          |                                                                                                   |                                                                                      |                                                                                                             |                                                                     |
| Net loss                                                                                  |          |                                                                                                   |                                                                                      | (27,327)                                                                                                         | (27,327)                                                                 |
|                                                                                      |          |                                                                                                   |                                                                                      |                                                                                                             |                                                                     |
| Balance, December 31, 2007                                                                | 1,024,000     |           102                                                  |         23,998                                              | (27,327)                                                                                                         |    (3,227)                                                     |
|                                                                                      |          |                                                                                                   |                                                                                      |                                                                                                             |                                                                     |
| Sale of common stock from January 4, 2008 through November  26, 2008 at $1.00 per share   | 13,000        | 2                                                                                                      | 12,998                                                                                    |                                                                                                             | 13,000                                                                   |
|                                                                                      |          |                                                                                                   |                                                                                      |                                                                                                             |                                                                     |
| Net loss                                                                                  |          |                                                                                                   |                                                                                      | (31,354)                                                                                                         | (31,354)                                                                 |
|                                                                                      |          |                                                                                                   |                                                                                      |                                                                                                             |                                                                     |
| Balance, December 31, 2008                                                                | 1,037,000     | $          104         | $    36,996                             | $   (58,681)                                                                                           | $   (21,581)                                         |

 

 

Seeaccompanying notes to the financial statements.

 

 

 

 

 

 

F-5

----

 

 

 

 

 

**HAMPTONS EXTREME,INC.**

 (A Development StageCompany)

 

Statement of CashFlows

 

|                                                                         |   | Year Ended December  31, 2008 |   | The Period from  March 19, 2007 (Inception) Through December 31, 2007 |   | The Period from  March 19, 2007 (Inception) Through December 31, 2008 |
|------------------------------------------------------------------------------|--------|-------------------------------|--------|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------|
| CASH FLOWS FROM OPERATING ACTIVITIES:                                        |   |                          |   |                                                                  |   |                                                                  |
| Net loss                                                                     | $      | (31,354)                      | $      | (27,327)                                                              | $      | (58,681)                                                              |
| Adjustments to reconcile net loss to net cash used in  operating activities: |   |                          |   |                                                                  |   |                                                                  |
|                                                                         |   |                          |   |                                                                  |   |                                                                  |
| Changes in operating assets and liabilities:                                 |   |                          |   |                                                                  |   |                                                                  |
|                                                                         |   |                          |   |                                                                  |   |                                                                  |
| Increase in accrued expenses                                                 |   | 8,794                         |   | 13,706                                                                |   | 22,500                                                                |
| Net Cash Used in Operating Activities                                        |   | (22,560)                      |   | (13,621)                                                              |   | (36,181)                                                              |
|                                                                         |   |                          |   |                                                                  |   |                                                                  |
| CASH FLOWS FROM FINANCING ACTIVITIES                                         |   |                          |   |                                                                  |   |                                                                  |
| Sale of common stock                                                         |   | 13,000                        |   | 24,100                                                                |   | 37,100                                                                |
| Net Cash Provided by Financing Activities                                    |   | 13,000                        |   | 24,100                                                                |   | 37,100                                                                |
|                                                                         |   |                          |   |                                                                  |   |                                                                  |
| NET INCREASE (DECREASE) IN CASH                                              |   | (9,560)                       |   | 10,479                                                                |   | 919                                                                   |
|                                                                         |   |                          |   |                                                                  |   |                                                                  |
| CASH AT BEGINNING OF PERIOD                                                  |   | 10,479                        |   | -                                                                     |   | -                                                                     |
| CASH AT END OF PERIOD                                                        | $      | 919                           | $      | 10,479                                                                | $      | 919                                                                   |
| See accompanying  notes to the financial statements.                         |

 

F-6

----

 

**HAMPTONSEXTREME, INC.**

** (A DEVELOPMENTSTAGE COMPANY)**

Notes to theFinancial Statements

December 31, 2008

 

**NOTE 1 -ORGANIZATION AND OPERATIONS**

 

Hamptons Extreme, Inc. (a developmentstage company) (“Hamptons” or the “Company”) was incorporated on March 19, 2007under the laws of the State of Delaware. Asubstantial portion of Hamptons’ activities has involved developing a businessplan and establishing contacts and visibility in the marketplace and theCompany has not generated any revenue to date. Hamptons plans to producea new vacuum composite molded surfboard, which is less toxic, more durable, andoffers a greater level of performance than other boards.

 

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES**

 

*Development stage company*

 

The Company is adevelopment stage company as defined by Statement of Financial Accounting StandardsNo. 7*“Accounting and Reporting by Development Stage Enterprises”*(“SFASNo. 7”). The Company is still devoting substantially all of its efforts on establishingthe business and its planned principal operations have not commenced. Alllosses accumulated since inception have been considered as part of theCompany's development stage activities.

 

*Use of estimates*

 

                The preparation of financial statements inconformity with generally accepted accounting principles requires management tomake estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period.  Actual results could differ from those estimates.

 

                Due to the limitedlevel of operations, the Company has not had to make material assumptions orestimates other than the assumption that the Company is a going concern.

 

*Cash equivalents*

 

                The Company considersall highly liquid investments with a maturity of three months or less whenpurchased to be cash equivalents.

 

*Fair value of financial instruments*

 

The fair value of afinancial instrument is the amount at which the instrument could be exchangedin a current transaction between willing parties.  The carrying amounts offinancial assets and liabilities, such as cashand accruedexpenses, approximate their fair valuesbecause of the short maturity of these instruments and market rates ofinterest.

 

*Revenue recognition*

 

The Company followsthe guidance of the Securities and Exchange Commission’s Staff AccountingBulletin (“SAB”) No. 101 *“Revenue Recognition”* (“SAB No. 101”), asamended by SAB No. 104 (“SAB No. 104”) for revenue recognition. The Companyrecords revenue when persuasive evidence of an arrangement exists, productdelivery has occurred and the title and risk of losstransfer to the buyer, the sales price to the customer is fixed ordeterminable, and collectability is reasonably assured. 

 

The Company will derive its revenue fromsales contracts with customers with revenues being generated upon the shipmentof goods. Persuasive evidence of an arrangement is demonstrated via invoice,product delivery is evidenced by warehouse shipping log as well as a signedbill of lading from the trucking or rail company and titletransfers upon shipment, based on either free on board (“FOB”) factory ordestination terms; the sales price to the customer is fixed uponacceptance of the purchase order and there is no separate sales rebate,discount, or volume incentive. 

 

F-7

----

 

*Income taxes*

 

The Company accounts for income taxes under Statementof Financial Accounting Standards No. 109 *“Accounting for Income Taxes”*(“SFAS No. 109”). Deferred income tax assets and liabilities are determinedbased upon differences between the financial reporting and tax bases of assetsand liabilities and are measured using the enacted tax rates and laws that willbe in effect when the differences are expected to reverse. Deferred tax assetsare reduced by a valuation allowance to the extent management concludes it is morelikely than not that the assets will not be realized. Deferred tax assets andliabilities are measured using enacted tax rates expected to apply to taxableincome in the years in which those temporary differences are expected to berecovered or settled. The effect on deferred tax assets and liabilities of achange in tax rates is recognized in the statements of operations in the periodthat includes the enactment date.

 

*Net loss per common share*

 

                Net loss per common share is computed pursuantto Statement of Financial Accounting Standards No. 128 *“Earnings Per Share”*(“SFAS No. 128”).  Basic net loss per share iscomputed by dividing net loss by the weighted average number of shares ofcommon stock outstanding during the period. Diluted net loss per share iscomputed by dividing net loss by the weighted average number of shares ofcommon stock and potentially outstanding shares of common stock during eachperiod. There were no potentially dilutive shares outstanding as of December31, 2008.

 

*Recently issued accounting pronouncements *

 

In June 2003, the Securities and Exchange Commission(“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002(“Section 404”), as amended by SEC Release No. 33-8934 on June 26, 2008.Commencing with its annual report for the fiscal year ending December 31, 2009,the Company will be required to include a report of management on its internalcontrol over financial reporting. The internal control report must include astatement

 
| • | of management’s responsibility for establishing and  maintaining adequate internal control over its financial reporting; |
|--------|-------------------------------------------------------------------------------------------------------------------------------|

 
| • | of management’s assessment of the effectiveness of its  internal control over financial reporting as of year end; and |
|--------|----------------------------------------------------------------------------------------------------------------------------|

 
| • | of the framework used by management to evaluate the  effectiveness of the Company’s internal control over financial reporting. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|

 

Furthermore, inthe following fiscal year, it is required to file the auditor’s attestationreport separately on the Company’s internal control over financial reporting onwhether it believes that the Company has maintained, in all material respects,effective internal control over financial reporting.

 

 

In December 2007,the FASB issued FASB Statement No. 141(Revised 2007)*“Business Combinations”* (“SFAS No. 141(R)”), whichrequires the Company to record fair value estimates of contingent considerationand certain other potential liabilities during the original purchase priceallocation, expense acquisition costs as incurred and does not permit certainrestructuring activities previously allowed under Emerging Issues Task ForceIssue No. 95-3 to be recorded as a component of purchaseaccounting.  SFAS No. 141(R) applies prospectively to businesscombinations for which the acquisition date is on or after the beginning of thefirst annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements,which shall be applied retrospectively for all periods presented. The Companyhas not determined the effect that the adoption of SFAS No. 141(R) will have onthe financial results of the Company.

 

In December 2007,the FASB issued FASB Statement No. 160*“Non-controllingInterests in Consolidated Financial Statements - an amendment of ARB No. 51”*(“SFAS No. 160”), which causes non-controlling interests in subsidiaries to beincluded in the equity section of the balance sheet.  SFAS No. 160applies prospectively to business combinations for which the acquisition dateis on or after the beginning of the first annual reporting period beginning onor after December 15, 2008, except for thepresentation and disclosure requirements, which shall be appliedretrospectively for all periods presented.  The Company has not determined theeffect that the adoption of SFAS No. 160 will have on the financial results ofthe Company.

 

In March 2008, the FASB issued FASB StatementNo. 161*“Disclosures about Derivative Instruments and Hedging Activities anamendment of FASB Statement No. 133”* (“SFAS No. 161”), which changes thedisclosure requirements for derivative instruments and hedgingactivities.  Pursuant to SFAS No.161, Entities are required toprovide enhanced disclosures about (a) how and why an entity uses derivativeinstruments, (b) how derivative instruments and related hedged items areaccounted for under Statement 133 and its related interpretations, and (c) howderivative instruments and related hedged items affect an entity’s financialposition, financial performance, and cash flows.  SFAS No. 161 iseffective for financial statements issued for fiscal years and interim periodsbeginning after November 15, 2008 with early application encouraged. SFAS No.161 encourages but does not require disclosures for earlier periods presentedfor comparative purposes at initial adoption.  In years after initialadoption, this Statement requires comparative disclosures only for periodssubsequent to initial adoption.  The Company does not expect theadoption of SFAS No. 161 to have a material impact on the financial results ofthe Company.

 

F-8

----

 

Management does not believe that any other recentlyissued, but not yet effective accounting pronouncements, if adopted, would havea material effect on the accompanying financial statements.

 

**NOTE3 – DEVELOPMENT STAGE ACTIVITIES AND GOING CONCERN**

 

The Company is currently in thedevelopment stage. The Company intendsto produce a new vacuum composite molded surfboard, which is less toxic, moredurable, and offers a greater level of performance than other boards; however, theCompany has not yet acquired the customers or begun operations.  Its activitiesas of December 31, 2008 have been organizational and developmental(pre-operational).

 

As reflected in the accompanying financial statements, theCompany had a negative working capital of $21,581 and a deficit accumulated duringthe development stage of $58,681 at December 31, 2008 and had a net loss andcash used in operations of $58,681 and $36,181 for the period from March 19,2007 (inception) through December 31, 2008, respectively, and earned no revenues since inception.

 

While the Company is attempting to commence operations andproduce revenues, the Company’s cash position may not be significant enough tosupport the Company’s daily operations. Management intends to raise additionalfunds by way of a public or private offering.  Management believes that theactions presently being taken to further implement its business plan andgenerate revenues provide the opportunity for the Company to continue as agoing concern. While the Company believes in the viability of its strategy toincrease revenues and in its ability to raise additional funds, there can be noassurances to that effect. The ability of the Company to continue as a goingconcern is dependent upon the Company’s ability to further implement itsbusiness plan and generate revenues. The financial statements do not includeany adjustments that might be necessary if the Company is unable to continue asa going concern. 

 

**NOTE4 – STOCKHOLDERS’ EQUITY**

 

*                Sale of common stock*

 

The Company was incorporated on March 19, 2007. Upon the formation, the Company sold 985,000 shares of itscommon stock to its founder and 15,000 shares of its common stock at the parvalue price of $0.001 per share. 

 

For the period from September10, 2007 through December 31, 2007, the Company sold 24,000shares of itscommon stock in a private placement at $1.00 per share to 24 individuals for $24,000. 

 

For the periodfrom January 4, 2008 through November 26, 2008, the Company sold 13,000 sharesof its common stock in a private placement at $1.00 per share to 15 individualsfor $13,000.

 

 

**NOTE 4 – INCOME TAXES –**

 

At December 31,2008, the Company had net operating loss (“NOL”) carry–forwards for Federalincome tax purposes of $58,681 that may be offset against future taxable incomethrough 2028. No tax benefit has been reported with respect to these netoperating loss carry-forwards in the accompanying financial statements becausethe Company believes that the realization of the Company’s net deferred taxassets of approximately $8,802 was not considered more likely than not and accordingly,the potential tax benefits of the net operating loss carry-forwards are fullyoffset by a valuation allowance of $56,681.

 

Deferred tax assets consistprimarily of the tax effect of NOL carry-forwards. The Company has provided afull valuation allowance on the deferred tax assets because of the uncertaintyregarding its realizability.  The valuation allowance increasedapproximately $4,703 and $4,099 for the years ended December 31, 2008 and for theperiod from March 19, 2007 (inception) through December 31, 2007, respectively.

 

F-9

----

 

Components of deferred tax assetsat December 31, 2008 and 2007 are as follows:

 

|                                                |   |              |   |   |              |   |   |   |
|-----------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|--------|
|                                                |   | December 31, 2008 |   |   | December 31, 2007 |   |
| Net deferred tax assets – Non-current:         |   |              |   |   |              |   |   |   |
|                                                |   |              |   |   |              |   |   |   |
| Expected income tax benefit from NOL carry-forwards |   | $                 | 8,802  |   |              |   | 4,099  |   |
| Less valuation allowance                            |   |              | (8,802 | )      |              |   | (4,099 | )      |
|                                                |   |              |   |   |              |   |
| Deferred tax assets, net of valuation  allowance    |   | $                 | -      |   |              | $      | -      |   |

 

*Income taxes in the statements of operations*

 

A reconciliation of the federal statutory income tax rate andthe effective income tax rate as a percentage of income before income taxes isas follows:

 

|                                                                |   |                                  |   |
|---------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                |   | For the Year Ended

December 31, 2008 |   |   | For the Period from March 19, 2007  (inception) through December 31, 2007 |   |
|                                                                |   |                                  |   |   |   |   |   |   |
| Federal statutory income tax rate                                   |   |                                  | 15.0   | % |   |   | 15.0 | % |
| Change in valuation allowance on net operating loss  carry-forwards |   |                                  | (15.0  | )% |   |   | (15.0 | )% |
| Effective income tax rate                                           |   |                                  | 0.0    | % |   |   | 0.0 | % |

 

 

F-10