UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-K
 
 [X]
                                            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended  December 31,
  2008[  ]
                                            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACTFor
      the transition period from _________ to ________Commission
      file number:333-151960
 
 Arthur Kaplan Cosmetics,
    Inc.(Exact
      name of registrant as specified in its
charter)  Nevada
                                                                      26-0429687(State
      or other jurisdiction of incorporation or organization)
                                                                      (I.R.S.
      Employer Identification No.)56C
      Page Street
                                                                        Gahanna, Ohio
                                                                      43230(Address
      of principal executive offices)
                                                                      (Zip
      Code)Registrant’s
      telephone number:  614-596-1586Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class
                                                                      Name
      of each exchange on which registerednone
                                                                      not applicableSecurities
      registered under Section 12(g) of the Exchange Act:Title
      of each class
                                                                      Name
      of each exchange on which registerednone
                                                                      not
applicable
 
 Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.  Yes [  ] No
[X]
  Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes
[X]       No [
]
  Check whether the Issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes
[X]       No
[   ]
  Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K. Yes
[X]       No
[  ]
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
  Large
accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [  ] Smaller reporting company [X]
  Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange
Act).   Yes [X]   No
[  ]
  State the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the registrant’s
most recently completed second fiscal quarter. Not
available
  Indicate the number
of shares outstanding of each of the registrant’s classes of common stock, as of
the latest practicable date.  15,100,000 shares as of March 26,
2009
 
 Table of Contents
 
 TABLEOF
CONTENTS
 
 PagePART IItem 1.
                                              Business
                                              3Item 1A.
                                              Risk Factors
                                              7Item 1B.
                                              Unresolved Staff Comments
                                              7Item 2.
                                              Properties
                                              7Item 3.
                                              Legal Proceedings
                                              8Item 4.
                                              Submission of Matters to a Vote of Security
      Holders
                                              8PART IIItem 5.
                                              Market for Registrant’s Common Equity and Related Stockholder
      Matters and Issuer Purchases of Equity Securities
                                              8Item 6.
                                              Selected Financial Data
                                              10Item 7.
                                              Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
                                              10Item 7A.
                                              Quantitative and Qualitative Disclosures About Market
      Risk
                                              14Item 8.
                                              Financial Statements and Supplementary Data
                                              14Item 9.
                                              Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure
                                              14Item 9A(T).
                                              Controls and Procedures
                                              14Item 9B.
                                              Other Information
                                              15PART IIIItem 10.
                                              Directors, Executive Officers and Corporate
      Governance
                                              16Item 11.
                                              Executive Compensation
                                              17Item 12.
                                              Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
                                              19Item 13.
                                              Certain Relationships and Related Transactions, and Director
      Independence
                                              20Item 14.
                                              Principal Accountant Fees and Services
                                              20PART IVItem 15.
                                              Exhibits, Financial Statement Schedules
                                              21
  2
 Table of
Contents
  PART I
 Item1.   Business
 
 Recent
Developments
 
 We were
incorporated as “Arthur Kaplan Cosmetics, Inc.” (“AKC”) on June 25, 2007, in the
State of Nevada. Our principal offices are located at 56C Page Street, Gahanna,
OH 43230, and our telephone number is (614) 596-1586.
 
 Our
original plan of operations was to engage in the business of developing,
manufacturing, and selling organic personal care products (our “Products”)
specifically for men. We have currently limited our operations under this
business model to pursue negotiations of a potentially more promising business
opportunity for our company.  We recently have been conducting due
diligence of a private oil and gas company known as Plantation Exploration, Inc.
(“Plantation”), based out of Texas.  We have not entered into any
binding agreements with the company, but we believe a business combination could
come to fruition within the coming weeks.  We have formed a
wholly-owned subsidiary, known as Plantation Acquisition, Inc., a Nevada
corporation, in anticipation of the proposed business combination with
Plantation.  If we decide to proceed with the business combination, we
will likely structure the deal as a reverse merger with Plantation Acquisition
merging with and into Plantation, the private Texas
entity.  Plantation would become our wholly-owned subsidiary at the
end of the transaction.
 
 We are
still conducting due diligence of Plantation, so we are not able to say as of
the date of this Annual Report whether or not we will proceed with the
merger.  In the event that we are able to reach such an agreement, we
will re-focus our operations and follow a plan centering in the oil and gas
industry, specifically Plantation’s line of business. In the meantime, however,
we have limited our operations in men’s personal care products and we have
focused our efforts on determining whether to proceed with
Plantation.  If we are unable to acquire Plantation, for whatever
reason, we intend to pursue our original business plan, as set forth in the
balance of this Annual Report.
 
 Our
Products
 
 We have
developed a customized formula for our line of men’s organic personal care
products to sell in the luxury segment of the personal care product market. An
increasing awareness of and demand for organic and natural skin products, and
for aromatherapy products, has resulted in what we anticipate will be a highly
receptive potential market for our Products.
 
 Our
Products are made from natural ingredients, including food-grade vegetable oils,
and we promote them as 100% USDA Certified Organic through an agreement we have
in place with Sensibility Soaps, Inc, to pack our Products under its
certification. Our Products also include therapeutic aromas, which we believe
will help us sell the Products at a high price point.
 
 Because
our Products contain ingredients grown in the absence of insecticides and other
soil pollutants, they contain minerals, vitamins and nutrients not found in
other products.  Additionally, the uniquely long maceration process to
which these ingredients are subjected yield polyphenols in relatively high
quantity.  Polyphenols are the free radical scavengers that, among other
things, help to protect collagen and elastic fibers and prevent the destruction
of hyaluronic acid in the skin.  The use of these ingredients enhances our
Products’ ability to help fight wrinkles and other visible signs of
aging.
  3
 Table of Contents
 
 We have
developed a customized formula for our Product line that was developed using a
proprietary blend of different organic raw materials, which are consistent
across the entire product line.  The significant ingredients contain the
anti-oxidant properties that many believe help fight free radical damage caused
by sunlight, stress and other environmental factors. Other key ingredients used
in our formulas have been selected for their efficacy in correcting existing
skin damage.
 
 Every
item in our Product line is:
 
 ·
              100%
      USDA Certified Organic
 ·
              Derived
      from plant and marine botanicals
 ·
              Moisturizing,
      non-irritating, softening, cleansing, and
  nourishing
 ·
              Free
      of animal products and manufactured without animal
  testing
 ·
              Free
      of synthetic preservatives, colors, and
  fragrances
 ·
              Free
      of Sodium Laureth (Lauryl) Sulfate (used to lather, but can irritate the
      skin) - we use coconut oil instead
 ·
              Free
      of petro-chemicals, lanolin, or mineral
oil
 ·
              Safe
      for the environment
 
 Following
is a description of our Products, including some of their ingredients and the
intended effect of those ingredients:
 
 ·
              Facial
      Scrub: This
      is a gentle, non-irritating, face and body cleansing foam containing
      certified organic ingredients such as olive, coconut, grapeseed oils and
      chamomile.  The olive oil, vegetable glycerin, and natural
      humectants in the scrub are intended to draw moisture to the skin. A blend
      of essential oils of orange, sandalwood, clary sage, Moroccan rose,
      jasmine absolute, yarrow, tanacetum, ylang ylang, and vetiver is included.
      Grapeseed oil contains vitamins and minerals, which we feel offer
      antioxidant and anti-wrinkle benefits. Purified water is infused with
      certified organic chamomile flowers. Rosemary extract delivers
      antioxidants to the skin. The foam has a silky texture and is promoted as
      delivering natural benefits for the skin and aromatherapy benefits to help
      balance moods and create a sense of
wellbeing.
 
 ·
              Facial
      Moisturizer:  This mild, soap-free facial cleanser was
      developed to exfoliate and smooth skin with coconut oil, aloe vera, and
      vitamin E. Honey is included and naturally inhibits bacteria growth. The
      essential oils of orange and grapefruit cool the skin. Almonds and oatmeal
      exfoliate skin and absorb excess oil. This moisturizer was created to
      soothe and restore tired, faded skin and is for all skin types, including
      sensitive skin.
 
 ·
              Shave
      Cream:  This cream delivers nutrients and moisturizes
      skin. Olive oil acts as a humectant, drawing moisture from the air to the
      skin. Cocoa butter serves to retain and restore skin moisture and
      softness, particularly after environmental exposure. Organic chamomile
      soothes skin, and soy cream helps stimulate circulation. This cream emits
      a pink grapefruit aroma and deeply penetrates without leaving a greasy
      residue.
 
 4
 Table of Contents
 ·
              After Shave
      Tonic:  This aftershave tonic is made to soothe freshly
      shaved skin, reduce irritation and provide moisturizing
      properties.
 
 ·
              Conditioner:  This
      mild hair conditioner detangles, softens hair, and restores manageability
      with combing and anti-static properties. It is formulated to provide body
      and shine, reveal natural highlights of hair and diminish split ends.
      Vitamins and botanical extracts help to nourish and restore natural
      balance to hair. Tea tree oil helps control flaking while Shea butter
      helps restore the sheen and softness of hair. It is designed to be an
      effective supplement to our shampoo, and is readily
      biodegradable.
 
 ·
              Shampoo:  Hijiki
      Seaweed is included to remove residue deposited on hair and provide
      nutrients to the hair and scalp. Coconut and jojoba oils add moisture and
      shine to hair. Soy milk and honey proteins provide additional nutrients
      and softening.  Aloe vera acts as an emollient to promote
      healing to dry or damaged hair. This shampoo is mild, and promotes clean
      hair with shine and manageability.
 
 ·
              Shower
      Gel:  This gentle, exfoliating gel is contains seaweed,
      sea salt and clay to nourish skin by leeching toxins. This mild, soap-free
      body cleanser was developed to exfoliate and smooth skin with coconut oil,
      aloe vera, and vitamin E. Honey naturally inhibits bacteria growth. The
      essential oils of spearmint and eucalyptus provide aromatherapy benefits
      and cool the skin. The lather softens skin without leaving a residue. This
      gel is marketed as providing the benefits of a spa experience at
      home.
 
  ·
              Lip
      Balm:  This balm contains natural ingredients intended to
      provide optimal benefits in lip nourishing and conditioning. Green tea is
      a natural antioxidant, and Shea butter contains vitamins A, E, and
      F.  This balm penetrates deeply to soften and smooth skin.
      Grapeseed extract and vitamin E provide antioxidant and anti-wrinkle
      benefits. Aloe vera further promotes healthy skin. A blend of essential
      oils of orange, sandlewood, clary sage, Moroccan rose, jasmine absolute,
      yarrow, tanacetum, ylang ylang, & vetiver is included to provide
      aromatherapy benefits.
 
 Competition
 
 We
compete with a number of established manufacturers, importers, and distributors
who sell organic, luxury skin care products to men. These companies enjoy brand
recognition which exceeds that of our brand name. We compete with several
manufacturers, importers, and distributors who have significantly greater
financial, distribution, advertising, and marketing resources than we do,
including:
 
 ·
              Burt’s Bees: We
      consider Burt Bee’s to be our closest competitor in terms of Products
      offered.  They offer a natural line of products that reflects
      our product concept and closely resembles our proposed product line. The
      concept and creation of the Burt’s Bees product line, like ours, is an
      extrapolation on the benefits of the antioxidants, polyphenols, and
      organic and natural ingredients. Burt’s Bees has two significant
      advantages over usin the marketplace at this time: (a) they have been on
      the market for over a decade and have grown to be a global brand with
      distribution outlets all over the world; and (b) they serve a larger
      target audience with a lower price point than we
      anticipate.  According to a January 2008 article published in
      E/The Environmental Magazine, Burt's Bees has gone from a small-time
      beeswax candle business to a $250 million-per-year top-grossing
      manufacturer of natural-care products (lip care, hair care, foot care,
      baby care, pregnant mother care).
  5
 Table of Contents
  ·
              Terressentials:  This
      company hand-crafts a wide range of certified organic products: skin care,
      hair care, baby products, and other goods made with certified organic
      herbs and certified organic essential oils.  They only use
      ingredients that the USDA permits in certified organic
      food.  Instead of stearic acid or cetyl alcohol, they use
      certified organic cocoa butter and certified organic shea
      butter.  Instead of ammonium lauryl sulfate or decyl
      polyglucose, they use mild, cold-process castile soap made from certified
      organic olive oil.
  ·
              JASON Natural
      Products, a subsidiary of Hain Celestial Group:  JASON
      Natural Products claims to be “the leading purveyor of pure and natural
      products for skin, body, hair and oral health for the whole family, giving
      consumers effective, environmentally-friendly alternatives to
      mass-produced, synthetic chemical products since 1959.”  Their
      line features over 200 products that they advertise “contain the finest
      food-grade, natural, organic and nutritional ingredients that deliver
      topical benefits to the hair and
skin.”
  ·
              EO:  This
      acronym stands for Essential Oils.  EO promotes that they “blend
      only pure essential oils with other plant-based ingredients to create
      natural personal care products that awaken & delight your
      senses.”
 
 ·
              Dr. Bronner's and Sun
      Dog's Magic:  Certified to National Organic Standards,
      their products are based on pure organic oils, free of petrochemically
      modified ingredients and preservatives.  They offer a variety of
      products, including lotions, body balms and lip
  balms.
 
 We
compete primarily on the basis of quality, brand name recognition, and price. We
believe that our success will depend upon our ability to remain competitive in
our product area. The failure to compete successfully in the future could result
in a material deterioration of customer loyalty and our image and could have a
material adverse effect on our business.
 
 Intellectual
Property
 
 Now that
we have determined the final formulas for our Product line, we intend to file a
patent on each of our unique mixtures. We will apply for patent protection
and/or copyright protection in the United States.
  6
 Table of Contents
 
 We intend
to aggressively assert our rights under trade secret, unfair competition,
trademark, patent, and copyright laws to protect our intellectual property,
including product formulas, proprietary manufacturing processes and
technologies, product research and concepts and recognized trademarks. These
rights are protected through the acquisition of patents and trademark
registrations, the maintenance of trade secrets, the development of trade dress,
and, where appropriate, litigation against those who are, in our opinion,
infringing these rights.
 
 While
there can be no assurance that registered trademarks will protect our
proprietary information, we intend to assert our intellectual property rights
against any infringer. Although any assertion of our rights can result in a
substantial cost to, and diversion of effort by, our company, management
believes that the protection of our intellectual property rights is a key
component of our operating strategy.
 
 Regulatory
Matters
 
 We are
unaware of and do not anticipate having to expend significant resources to
comply with any governmental regulations of the personal care product industry.
We are subject to the laws and regulations of those jurisdictions in which we
plan to sell our product, which are generally applicable to business operations,
such as business licensing requirements, income taxes and payroll taxes. In
general, the development, manufacture, and sale of our Product in the United
States is not subject to special regulatory and/or supervisory
requirements.
 
 Employees
 
 The
Company appointed Arthur Kaplan as our Chief Executive Officer and President.
Our President oversees all responsibilities in the areas of corporate
administration, business development, and research. On July 29, 2008, the board
of directors appointed Yuriy Kolstov to act as our Secretary. We do not have any
other employees at this time.
 
 Research
and Development Expenditures
 
 We have
incurred $0 in research or development expenditures since our
incorporation.
 
 Item1A.   Risk Factors.
 
 A smaller
reporting company is not required to provide the information required by this
Item.
 
 Item1B.   Unresolved Staff Comments
 
 A smaller
reporting company is not required to provide the information required by this
Item.
 
 Item2.   Properties
 
 We
maintain our corporate office at 56C Page Street, Gahanna, Ohio
43230.  We have no materially important physical
properties.
  7
 Table of Contents
 
 Item3.   Legal Proceedings
 
 We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.
 
 Item4.   Submission of Matters to a Vote of Security
Holders
 
 No
matters were submitted to a vote of the Company's shareholders during the
quarter ended December 31, 2008.
  PART II
 
 Item5.    Market for Registrant’s Common Equity
and Related Stockholder Matters and Issuer Purchases of Equity
Securities
 
 Market
Information
 
 Our
common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is
sponsored by FINRA. The OTCBB is a network of security dealers who buy and sell
stock. The dealers are connected by a computer network that provides information
on current "bids" and "asks", as well as volume information. Our shares are
quoted on the OTCBB under the symbol “AKPN.OB.”
 
 The
following table sets forth the range of high and low bid quotations for our
common stock for each of the periods indicated as reported by the OTCBB. These
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.
 
 Fiscal
      Year Ending December 31, 2008Quarter
      Ended
                  
                  High
      $
                  
                  Low
      $December
      31, 2008
                  
                  0.50
                  
                  0.18September
      30, 2008
                  
                  n/a
                  
                  n/aJune
      30, 2008
                  
                  n/a
                  
                  n/aMarch
      31, 2008
                  
                  n/a
                  
                  n/a
  Fiscal
      Year Ending December 31, 2007Quarter
      Ended
                    
                    High
      $
                    
                    Low
      $December
      31, 2007
                    
                    n/a
                    
                    n/a
 
 Penny
Stock
 
 The SEC
has adopted rules that regulate broker-dealer practices in connection with
transactions in penny stocks. Penny stocks are generally equity securities with
a market price of less than $5.00, other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in such
securities is provided by the exchange or system. The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock, to deliver a
standardized risk disclosure document prepared by the SEC, that: (a) contains a
description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (b) contains a description of the
broker's or dealer's duties to the customer and of the rights and remedies
available to the customer with respect to a violation of such duties or other
requirements of the securities laws; (c) contains a brief, clear, narrative
description of a dealer market, including bid and ask prices for penny stocks
and the significance of the spread between the bid and ask price; (d) contains a
toll-free telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of trading in
penny stocks; and (f) contains such other information and is in such form,
including language, type size and format, as the SEC shall require by rule or
regulation.
  8
 Table of Contents
 
 The
broker-dealer also must provide, prior to effecting any transaction in a penny
stock, the customer with (a) bid and offer quotations for the penny stock; (b)
the compensation of the broker-dealer and its salesperson in the transaction;
(c) the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market for
such stock; and (d) a monthly account statement showing the market value of each
penny stock held in the customer's account.
 
 In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement as to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement.
 
 These
disclosure requirements may have the effect of reducing the trading activity for
our common stock. Therefore, stockholders may have difficulty selling our
securities.
 
 Holders
of Our Common Stock
 
 As of
December 31, 2008, we had 15,100,000 shares of our common stock issued and
outstanding, held by 29 shareholders of record.
 
 Dividends
 
 The
Company has not declared, or paid, any cash dividends since inception and does
not anticipate declaring or paying a cash dividend for the foreseeable
future.
 
 Nevada
law prohibits our board from declaring or paying a dividend where, after giving
effect to such a dividend, (i) we would not be able to pay our debts as they
came due in the ordinary course of our business, or (ii) our total assets would
be less than the sum of our total liabilities plus the amount that would be
needed, if the corporation were to be dissolved at the time of distribution, to
satisfy the rights of any creditors or preferred stockholders.
 
 Recent
Sales of Unregistered Securities
 
 None
 
 Securities
Authorized for Issuance under Equity Compensation Plans
 
 We do not
have any equity compensation plans.
  9
 Table of Contents
 
 Item6.   Selected Financial Data
 
 A smaller
reporting company is not required to provide the information required by this
Item.
 
 Item7.  Management’s Discussion and Analysis of Financial
Condition and Results of Operations
 
 Forward-Looking
Statements
 
 Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements generally are identified by the words “believes,” “project,”
“expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar
expressions. We intend such forward-looking statements to be covered by the
safe-harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and are including this statement for
purposes of complying with those safe-harbor provisions. Forward-looking
statements are based on current expectations and assumptions that are subject to
risks and uncertainties which may cause actual results to differ materially from
the forward-looking statements. Our ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse affect on our operations and future prospects on a
consolidated basis include, but are not limited to: changes in economic
conditions, legislative/regulatory changes, availability of capital, interest
rates, competition, and generally accepted accounting principles. These risks
and uncertainties should also be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements. We
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
Further information concerning our business, including additional factors that
could materially affect our financial results, is included herein and in our
other filings with the SEC.
 
 Plan
of Operation in the Next Twelve Months
 
 Product
Development
 
 We have
completed development of and have a contract with a manufacturer of personal
care products to produce a series of men’s organic personal care products. We
have developed a customized formula for our Products designed for sale in the
luxury segment of the personal care product market. Initially, our products are
expected to be sold exclusively online at
www.ArthurKaplanCosmetics.com.  We expect our products to be available
over the counter in the next twelve months, although a definitive launch date
has yet to be determined. We feel that our final Products will compete
effectively in the marketplace due to their quality, certified organic
ingredients, aromatherapy benefits, and highly effective performance relative to
similar products in the marketplace.
 
 10
 Table of Contents
 
 USDA
Certification
 
 In order
to display the USDA organic seal, foods must be grown, raised, harvested, &
processed without the use of synthetics, irradiation, chemicals, preservatives,
genetically modified organisms, & pesticides according to the USDA National
Organic Standards.  Only products, which are certified at either 100%
organic or 95-100% organic can display the USDA seal.  Both the grower
and processor must be certified & inspected annually by an agency
(certifier) accredited to the USDA.  The USDA seal is the assurance
that products, which claim to be organic, meet these rigorous
standards.
 
 We intend
to become independently certified by submitting an application to the Oregon
Tilth Certified Organic (OTCO). The application for certification doubles as an
Organic System Plan, the foundation of organic certification. Our plan will
include a description of our products/services requested for certification, how
we keep record, pest and disease management practices, and the methods we will
use to prevent contamination. A trained organic inspector, familiar with our
type of operation, will then contact us to schedule an annual inspection visit.
The inspector will examine each component of our operation to verify our plan is
an accurate description of organic standards compliance and will summarize his
or her findings during an exit interview. These inspections are said to
typically last 3–5 hours, depending on the complexity of the
operation.  Once completed, OTCO will conduct a review of our
application and the inspector’s report to evaluate compliance with the organic
standards. Then a summary is presented to the Application Review Committee that
makes the final certification decision. OTCO will then notify us of the
certification decision, which may note items that require clarification or
correction prior to completing certification.  Our proposed
resolutions for any minor points of noncompliance will be promptly reviewed by
OTCO. If these are cleared, the operation is approved for organic
certification.  OTCO will then send us its organic certificate. The
certificate is a legal document identifying the company’s name and address,
category of certification, and the company’s certified organic
products/services. If we are approved, our organic certification will remains in
effect until surrendered, suspended, or revoked and will need to be updated
annually.
 
 Until we
are independently certified, we have an agreement with Sensibility Soaps, Inc.
to pack our products under its USDA certification.
 
 Manufacturing
 
 We have a
contract with a manufacturer of personal care products to produce a series of
men’s organic personal care products.  Initial production has begun,
and we have received a commercial batch of each product, bottle and package for
final approval.  Additionally, we have completed the process of choosing
all the peripheral items involved in the manufacturing and marketing process,
including:
  ·
              Shape
      and size of the product containers
 ·
              Types
      of caps
 ·
              Packaging
 ·
              Logo
      and label designs
 ·
              Unit
      cartons
 
 11
 Table of Contents
 Sales
and Distribution Strategy
 
 Our goal
is for our organic personal care product line for men to become a leading
product line in the personal care product marketplace. In order to achieve our
goal, we intend to increase awareness of our Product with potential customers,
who we anticipate will be department stores as wholesale customers and men as
end users. We intend to do this by engaging in the following:
 
 ·
              Attending national and
      regional personal care product promotional events and conferences.
      There are events and conferences managed by regional and central
      institutions and organizations to promote personal care related products.
      We plan to attend a number of events attended by luxury personal care
      product merchants and representatives in order to further expose our
      product. These events will include trade meetings, promotional events,
      seminars, and conferences, which are heavily attended by luxury personal
      care products wholesalers and representatives, in order to further expose
      our Products.
 
 ·
              Developing direct marketing
      programs to attract retailers. In addition to attending the
      foregoing conferences and seminars, we intend to market directly to
      wholesalers and major department stores. Our marketing will include
      conducting seminars and the use of online and traditional advertising
      media such as newspapers and trade
publications.
 
 ·
              Promoting to the public
      through internet-based and traditional media advertising. We intend
      to use Internet-based and traditional media to promote our product
      directly to the public to raise public awareness of our
      product.  We have recently developed our online store regarding
      distribution.  We are in the process of defining the launch schedule
      and the promotional events that will surround it.  Initially,
      our products are expected to be sold exclusively online at
      www.ArthurKaplanCosmetics.com. If we are able to establish a steady level
      of sales through our website, we anticipate that other distribution
      avenues will be more readily
available.
 
 Intellectual
Property Protection
 
 We intend
to aggressively assert our rights under trade secret, unfair competition,
trademark and copyright laws to protect our intellectual property, including
product formulas, proprietary manufacturing processes and technologies, product
research and concepts, and recognized trademarks. These rights are protected
through the acquisition of patents and trademark registrations, the maintenance
of trade secrets, the development of trade dress, and, where appropriate,
litigation against those who are, in our opinion, infringing these
rights.
 
 We are
currently consulting with law firms to protect our brand name and product
design. While there can be no assurance that registered trademarks will protect
our proprietary information, we intend to assert our intellectual property
rights against any infringer. Although any assertion of our rights can result in
a substantial cost to, and diversion of effort by, our company, management
believes that the protection of our intellectual property rights is a key
component of our operating strategy.
  12
 Table of Contents
 
 Sales
Personnel
 
 We do not
currently employ any sales personnel. In the short term, we intend to use the
services of our management to sell our Product.
 
 In the
event we hire sales personnel, we do not intend to do so in the next twelve
months unless our revenues are enough to absorb the cost of these
personnel.
 
 Significant
Equipment
 
 We do not
intend to purchase any significant equipment for the next twelve
months.
 
 Results
of Operations for the three and nine months ended September 30,
2008
 
 We did
not earn any revenues from inception on June 25, 2007 through the period ending
December 31, 2008. We are presently in the development stage of our business and
we can provide no assurance that we will produce significant revenues from the
development of our Products or, if revenues are earned, that we will be
profitable.
 
 We
incurred expenses (including operating expenses and interest expense) and net
losses in the amounts of $29,907 and $40,922 for the periods from our inception
on June 25, 2007 through December 31, 2007 and 2008, respectively.  We
incurred expenses and a net loss of $11,015 during the year ended December 31,
2008. Our operating expenses from inception through September 30, 2008 consisted
entirely of general and administrative expenses. We have also incurred interest
expenses, which had contributed to our net losses. Our losses are attributable
to our expenses combined with a lack of any revenues during our current stage of
development. We anticipate our operating expenses will increase as we continue
with our plan of operations and begin the sale of our Products.
 
 Liquidity
and Capital Resources
 
 As of
December 31, 2008, we had current assets, consisting entirely of cash, of $540,
current liabilities of $35,452, and a working capital deficit of $34,912. Our
cash on hand will not allow us to cover our anticipated expenses for the next
twelve months and will not be sufficient to pay any significant unanticipated
expenses. We currently do not have any revenues. We will require additional
financing to sustain our business operations. We currently do not have any
arrangements for financing and we may not be able to obtain financing when
required.
 
 We have
not attained profitable operations and may be dependent upon obtaining financing
to pursue our long-term business plan. For these reasons our auditors stated in
their report that they have substantial doubt we will be able to continue as a
going concern.
  13
 Table of Contents
 
 Our
Operating Activities used $34,970 in cash during the period from Inception
through December 31, 2008 and $6,105 in cash during the year ended December 31,
2008. Our net losses during the periods were the primary components for the
negative cash flow. Financing Activities generated $35,510 in cash during the
period from Inception through December 31, 2008 and $4,500 in cash during the
year ended December 31, 2008. No cash was generated or used by Investing
Activities during either period.
 
 Going
Concern
 
 The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern.  However, the Company has accumulated
deficit of $40,922 as of December 31, 2008.  The Company currently has
limited liquidity, and has not completed its efforts to establish a stabilized
source of revenues sufficient to cover operating costs over an extended period
of time.
 Management
anticipates that the Company will be dependent, for the near future, on
additional investment capital to fund operating expenses The Company intends to
position itself so that it may be able to raise additional funds through the
capital markets. In light of management’s efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
 
 Off
Balance Sheet Arrangements
 
 As of
December 31, 2008, there were no off balance sheet arrangements.
 
 Item7A.   Quantitative and Qualitative Disclosures
About Market Risk
 
 A smaller
reporting company is not required to provide the information required by this
Item.
 
 Item8.   Financial Statements and Supplementary
Data
 
 See the
financial statements annexed to this annual report.
 
 Item9.   Changes In and Disagreements with
Accountants on Accounting and Financial Disclosure
 
 None
 
 Item9A(T).  Controls and Procedures
 
 We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of December 31, 2008.  This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, Mr. Arthur Kaplan.  Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as of December 31, 2008, our disclosure controls and procedures
are effective.  There have been no significant changes in our internal
controls over financial reporting during the quarter ended December 31, 2008
that have materially affected or are reasonably likely to materially affect such
controls.
  14
 Table of Contents
 
 Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
 
 Limitations on the
Effectiveness of Internal Controls
 
 Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level.  Further, the
design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within our company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.
 
 Management’s
Annual Report on Internal Control over Financing Reporting
 
 This
annual report does not include a report of management's assessment regarding
internal control over financial reporting or an attestation report of the
company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.
 
 Changes
in Internal Control over Financial Reporting
 
 During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting.
 
 Item9B.   Other Information
 
 None.
  15
 Table of Contents
  PART III
 
 Item10.  Directors, Executive Officers and Corporate
Governance
 
 The
following information sets forth the names of our current directors and
executive officers, their ages as of December 31, 2008 and their present
positions.
 
 Name
                        Age
                        Position
      Held with the CompanyArthur
      Kaplan
                          56C
      Page Street
                          Gahanna,
      OH 43230
                        22
                        President,
      Treasurer, and DirectorYuriy
      Koltsov
                          56C
      Page Street
                          Gahanna,
      OH 43230
                        26
                        Secretary
 
 Set forth
below is a brief description of the background and business experience of
executive officers and directors.
 
 Arthur
Kaplan.  Arthur Kaplan is our President and Treasurer and sole
director. Mr. Kaplan has been involved in the medical field since 2002, working
doctor's offices, the OSU Medical Center, and eventually conducting research for
the Biological Sciences and Arthur G. James Cancer Hospital & Richard J.
Solove Research Institute until 2007 in the field of microbiology.  Mr.
Kaplan is a student at The Ohio State University double majoring in Molecular
Genetics Pre-Med track & Business Administration.  He has also worked
as an Investor Relations Representative, Marketing Assistant, and Demographic
Scientist since 2006 in a medical environment.  His education and
experience in genetics, biology, and business have been significant factors in
the development and marketing of our Product line.
 
 Yuriy
Koltsov.  Yuriy Koltsov is currently a student at Ohio State
University in Columbus, Ohio studying Molecular Genetics.  From May
2008 to the present, Mr. Kolstov serves as an intern for the City of Columbus
Division of Power in Columbus.  From January 2004 to July 2008, he
worked as Sales & Marketing Manager for Koulian Jewelers in Gahanna
Ohio.  From September 2005 to January 2007, he worked as a Cancer
Genetics Researcher at the Arthur G. James Cancer Hospital & Richard J.
Solove Research Institute in Columbus, Ohio.  He began his career in
2002 working for a medical agency as an Executive Office Assistant, handling all
meetings and required daily documents.
 
 Family
Relationships
 
 There are
no family relationships between or among the directors, executive officers or
persons nominated or chosen by us to become directors or executive
officers.
  16
 Table of Contents
 
 Involvement
in Certain Legal Proceedings
 
 To  the
best of our knowledge, during the past five years, none of the
following  occurred  with  respect  to a
present or former director, executive officer, or  employee: (1) any
bankruptcy petition filed by or against any business  of which such
person was a general partner or executive officer either
at  the  time  of the bankruptcy or within two
years prior to that time; (2) any conviction in a
criminal  proceeding  or  being subject to a
pending criminal
proceeding  (excluding  traffic  violations and
other minor offenses); (3) being subject  to  any order,
judgment or decree, not subsequently reversed, suspended
or  vacated,  of  any  court  of  competent  jurisdiction,  permanently  or
temporarily enjoining, barring, suspending or otherwise limiting his or her
involvement in  any  type of business, securities or banking
activities; and (4) being found
by  a  court  of  competent  jurisdiction  (in  a  civil
action), the SEC or the
Commodities  Futures  Trading  Commission  to  have  violated
a federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
 
 Audit
Committee
 
 All
proceedings of our sole director for the year ended December 31, 2008 were
conducted by resolutions consented to in writing by the sole director and filed
with the minutes of the proceedings of the director.  Our company
currently does not have nominating, compensation or audit committees or
committees performing similar functions nor does our company have a written
nominating, compensation or audit committee charter. There has been no need to
delegate functions to these committees due to the fact that our operations are
at a very early stage to justify the effort and expense of creating and
maintaining these committees.
 
 Code
of Ethics
 
 As of
December 31, 2008, we have not adopted a Code of Ethics for Financial
Executives, which include our principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing
similar functions, as required by sections 406 and 407 of the Sarbanes-Oxley Act
of 2002. Our management believes that the size of our company and current
operations at this time do not require a code of ethics to govern the behavior
of our two officers. We anticipate that we will adopt a code of ethics once we
commence operations.
 
 Item11.  Executive Compensation
 
 Summary
Compensation Table
 
 The table
below summarizes all compensation awarded to, earned by, or paid to both to our
officers and to our directors for all services rendered in all capacities to us
for our fiscal years ended December 31, 2008 and 2007.
  SUMMARY
      COMPENSATION TABLEName
                      and
                      principal
                      position
                    Year
                    Salary($)
                    Bonus
                      ($)
                    Stock
                      Awards
                      ($)
                    Option
                      Awards
                      ($)
                    Non-Equity
                      Incentive
      Plan
                      Compensation
                      ($)
                    Nonqualified
                      Deferred
                      Compensation
                      Earnings
      ($)
                    All
      Other
                      Compensation
                      ($)
                    Total
                      ($)Arthur
      Kaplan, President, Treasurer and Director
                    2008
                      2007
                    0
                      0
                    0
                      0
                    0
                      0
                    0
                      0
                    0
                      0
                    0
                      0
                    0
                      0
                    0
                      0Yuriy
      Koltsov, Secretary
                    2008
                      2007
                    0
                      n/a
                    0
                      n/a
                    0
                      n/a
                    0
                      n/a
                    0
                      n/a
                    0
                      n/a
                    0
                      n/a
                    0
                      n/a
 
 17
 Table of Contents
 
 Narrative
Disclosure to the Summary Compensation Table
 
 Although
we do not currently compensate our officers, we reserve the right to provide
compensation at some time in the future.  Our decision to compensate
officers depends on the availability of our cash resources with respect to the
need for cash to further our business purposes.
 
 Stock
Option Grants
 
 We have
not granted any stock options to the executive officers or directors since our
inception.
 
 Outstanding
Equity Awards at Fiscal Year-End
 
 The table
below summarizes all unexercised options, stock that has not vested, and equity
incentive plan awards for each named executive officer as of December 31,
2008.
  OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOPTION
      AWARDS
                      STOCK
      AWARDSName
                      Number
      of
                        Securities
                        Underlying
                        Unexercised
                        Options
                        (#)
                        Exercisable
                      Number
      of
                        Securities
                        Underlying
                        Unexercised
                        Options
                        (#)
                        Unexercisable
                      Equity
                        Incentive
                        Plan
                        Awards:
                        Number
      of
                        Securities
                        Underlying
                        Unexercised
                        Unearned
                        Options
                        (#)
                      Option
                        Exercise
                        Price
                        ($)
                      Option
                        Expiration
                        Date
                      Number
                        of
                        Shares
                        or
      Units
                        of
                        Stock
      That
                        Have
                        Not
                        Vested
                        (#)
                      Market
                        Value
                        of
                        Shares
                        or
                        Units
                        of
                        Stock
                        That
                        Have
                        Not
                        Vested
                        ($)
                      Equity
                        Incentive
                        Plan
                        Awards:
                        Number
                        of
                        Unearned
                        Shares,
                        Units
      or
                        Other
                        Rights
                        That
      Have
                        Not
                        Vested
                        (#)
                      Equity
                        Incentive
                        Plan
                        Awards:
                        Market
      or
                        Payout
                        Value
      of
                        Unearned
                        Shares,
                        Units
      or
                        Other
                        Rights
                        That
                        Have
      Not
                        Vested
                        (#)Arthur
      Kaplan, President and Treasurer
                      -
                      -
                      -
                      -
                      -
                      -
                      -
                      -
                      -Yuriy
      Koltsov, Secretary
                      -
                      -
                      -
                      -
                      -
                      -
                      -
                      -
                      -
  18
 Table of
Contents
 
 Compensation
of Directors
 
 The table
below summarizes all compensation of our directors as of December 31,
2008.
 
 DIRECTOR
      COMPENSATIONName
                    Fees
      Earned or
                      Paid
      in
                      Cash
                      ($)
                    Stock
      Awards
                      ($)
                    Option
      Awards
                      ($)
                    Non-Equity
                      Incentive
                      Plan
                      Compensation
                      ($)
                    Non-Qualified
                      Deferred
                      Compensation
                      Earnings
                      ($)
                    All
                      Other
                      Compensation
                      ($)
                    Total
                      ($)Arthur
      Kaplan
                    -
                    -
                    -
                    -
                    -
                    -
                    -
 
 Narrative
Disclosure to the Director Compensation Table
 
 We do not
pay any compensation to our directors at this time. However, we reserve the
right to compensate our directors in the future with cash, stock, options, or
some combination of the above.
 
 Stock
Option Plans
 
 We did
not have a stock option plan in place as of December 31, 2008.
 
 Item12.  Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder
Matters
 
 The
following table sets forth certain information known to us with respect to the
beneficial ownership of our Common Stock as of December 31, 2008, by (1) all
persons who are beneficial owners of 5% or more of our voting securities, (2)
each director, (3) each executive officer, and (4) all directors and executive
officers as a group. The information regarding beneficial ownership of our
common stock has been presented in accordance with the rules of the Securities
and Exchange Commission. Under these rules, a person may be deemed to
beneficially own any shares of capital stock as to which such person, directly
or indirectly, has or shares voting power or investment power, and to
beneficially own any shares of our capital stock as to which such person has the
right to acquire voting or investment power within 60 days through the exercise
of any stock option or other right. The percentage of beneficial ownership as to
any person as of a particular date is calculated by dividing (a) (i) the number
of shares beneficially owned by such person plus (ii) the number of shares as to
which such person has the right to acquire voting or investment power within 60
days by (b) the total number of shares outstanding as of such date, plus any
shares that such person has the right to acquire from us within 60 days.
Including those shares in the tables does not, however, constitute an admission
that the named stockholder is a direct or indirect beneficial owner of those
shares. Unless otherwise indicated, each person or entity named in the table has
sole voting power and investment power (or shares that power with that person’s
spouse) with respect to all shares of capital stock listed as owned by that
person or entity.
  19
 Table of Contents
 
 Except as
otherwise indicated, all Shares are owned directly and the percentage shown is
based on 15,100,000 Shares of Common Stock issued and outstanding as of December
31, 2008. Addresses for all of the individuals listed in the table below are c/o
56C Page Street, Gahanna, Ohio 43230
 
 Name
      and Address of Beneficial Owners of Common Stock1
                                      Title
      of Class
                                      Amount
      and Nature of Beneficial
      Ownership
                                      %
      of Common Stock2Arthur
      Kaplan
                                      Common
      Stock
                                      10,100,000
                                      66.89%Yuriy
      Kostslav
                                      Common
      Stock
                                      0
                                      0%DIRECTORS
      AND OFFICERS – TOTAL
                                      Common
      Stock
                                      10,100,000
                                      66.89%5%
      SHAREHOLDERSNONE
                                      Common
      Stock
 
 Item13.   Certain Relationships and Related
Transactions, and Director Independence
 
 Except as
provided below, none of our directors or executive officers, nor any proposed
nominee for election as a director, nor any person who beneficially owns,
directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate
family (including spouse, parents, children, siblings, and in-laws) of any of
the foregoing persons has any material interest, direct or indirect, in any
transaction over the last two years or in any presently proposed transaction
which, in either case, has or will materially affect us.
 
 We
received a loan from our officer and director in the amount of $25,000 in the
form of a convertible demand promissory note.  The note bears interest
at 10% per annum and is convertible into shares of our common stock at an
exercise price of $0.01 per share.
 
 As of the
date of this annual report, our common stock is traded on the OTC Bulletin Board
(the “Bulletin Board”).  The Bulletin Board does not impose on us
standards relating to director independence or the makeup of committees with
independent directors, or provide definitions of independence.
 
 Item14.   Principal Accounting Fees and
Services
 
 Below is
the table of Audit Fees (amounts in US$) billed by our auditor in connection
with the audit of the Company’s annual financial statements for the years
ended:
 
 Financial
      Statements for the Year Ended December 31
                      Audit
      Services
                      Audit
      Related Fees
                      Tax
      Fees
                      Other
      Fees2008
                      $3,000
                      $0
                      $0
                      $02007
                      $3,000
                      $0
                      $0
                      $0
 
 20
 Table of Contents
  PART IV
 
 Item15.   Exhibits, Financial Statements
Schedules
 
 Index to
Financial Statements Required by Article 8 of Regulation S-X:
 
 Audited
      Financial Statements:F-1
                            Report of Independent Registered Public Accounting
      FirmF-2
                            Consolidated Balance Sheets as of December 31,
      2008  and 2007;F-3
                            Statements of Operations for the year ended December 31, 2008,
      and the periods from inception to December 31, 2007, and from inception to
      December 31, 2008;F-4
                            Statement of Stockholders’ Equity for period from inception to
      December 31, 2008;F-5
                            Statements of Cash Flows for the year ended December 31, 2008,
      and the periods from inception to December 31, 2007, and from inception to
      December 31, 2008;F-6
                            Notes to Financial
Statements
  Exhibit
      Number
                              Description3.1
                              Articles
      of Incorporation, as amended (1)3.2
                              Bylaws,
      as amended (1)23.1
                              Consent of Moore & Associates, Chartered,
      Independent Registered Public Accounting Firm31.1
                              Certification of Chief Executive Officer pursuant to
      Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200231.2
                              Certification of Chief Financial Officer pursuant to
      Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200232.1
                              Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of
  2002
 
 1
              Incorporated
      by reference to the Registration Statement on Form S-1 filed on June 26,
      2008.
 
 21
 Table of Contents
  SIGNATURES
 
 In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 Arthur
Kaplan Cosmetics, Inc.
 
 By:
              /s/
      Arthur KaplanArthur
      Kaplan
                President,
      Treasurer, and DirectorMarch 27,
      2009
 
 In accordance with Section 13 or 15(d)
of the Exchange Act, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates
indicated:
 
 By:
              /s/
      Arthur KaplanArthur
      Kaplan
                President,
      Treasurer, and DirectorMarch 27,
      2009
  By:
              /s/
      Yuriy KostovYuriy
      Kostsov, SecretaryMarch 27,
      2009


22
 Table of Contents


MOORE& ASSOCIATES, CHARTERED


ACCOUNTANTS AND
ADVISORS


PCAOB REGISTERED








REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM





To
the Board of Directors


Arthur
Kaplan Cosmetics, Inc.


(A
Development Stage Company)





We have
audited the accompanying balance sheets of Arthur Kaplan Cosmetics, Inc. (A
Development Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations, stockholders’ equity and cash flows for the year ended
December 31, 2008, and from inception on June 25, 2007 through December 31,
2007, and from inception on June 25, 2007 through December 31, 2008. These
financial statements are the responsibility of the Company’s
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.





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





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Arthur Kaplan Cosmetics, Inc. (A
Development Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations, stockholders’ equity and cash flows for the year ended
December 31, 2008, and from inception on June 25, 2007 through December 31,
2007, and from inception on June 25, 2007 through December 31, 2008, in
conformity with accounting principles generally accepted in the United States of
America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 3 to the
financial statements, the Company has accumulated deficit of $40,922 as of
December 31, 2008, which raises substantial doubt about its ability to continue
as a going concern.  Management’s plans concerning these matters are
also described in Note 3.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.





/s/
Moore & Associates, Chartered





Moore
& Associates Chartered


Las
Vegas, Nevada


March 20,
2009





6490 West Desert Inn Rd, Las
Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501


F-1
 Table of Contents
 ARTHURKAPLAN COSMETICS, INC.
 (A
Development Stage Company) Balance
Sheets


ASSETSDecember
      31,
                                                                                                2008
                                                                                            
                                                                                            December
      31,
                                                                                                2007CURRENT
      ASSETSCash
                                                                                            $
                                                                                            540
                                                                                            
                                                                                            $
                                                                                            2,145Total
      Current Assets
                                                                                            
                                                                                            540
                                                                                            
                                                                                            
                                                                                            2,145TOTAL
      ASSETS
                                                                                            $
                                                                                            540
                                                                                            
                                                                                            $
                                                                                            2,145LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable
                                                                                            $
                                                                                            2,258
                                                                                            
                                                                                            $
                                                                                            -Related
      party payables
                                                                                            
                                                                                            29,500
                                                                                            
                                                                                            
                                                                                            25,000Accrued
      interest payable
                                                                                            
                                                                                            3,694
                                                                                            
                                                                                            
                                                                                            1,042Total
      Current Liabilities
                                                                                            
                                                                                            35,452
                                                                                            
                                                                                            
                                                                                            26,042STOCKHOLDERS'
      EQUITY (DEFICIT)Common
      stock, 100,000,000 shares authorized at par value of $0.001,
                                                                                              15,100,000 shares
      issued and outstanding
                                                                                            
                                                                                            15,100
                                                                                            
                                                                                            
                                                                                            15,100Additional
      paid-in capital (deficit)
                                                                                            
                                                                                            (9,090)
                                                                                            
                                                                                            
                                                                                            (9,090)Deficit
      accumulated during the development stage
                                                                                            
                                                                                            (40,922)
                                                                                            
                                                                                            
                                                                                            (29,907)Total
      Stockholders' Equity (Deficit)
                                                                                            
                                                                                            (34,912)
                                                                                            
                                                                                            
                                                                                            (23,897)TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                                                                            $
                                                                                            540
                                                                                            
                                                                                            $
                                                                                            2,145


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


F-2
 Table of Contents
 ARTHURKAPLAN COMETICS, INC.
 (A
Development Stage Company)
 Statements
of Operations
 For
      the Year Ended
                                                                                      December 31, 2008
                                                                                
                                                                                
                                                                                From
      Inception
                                                                                          on June 25,
                                                                                          2007 Through
                                                                                          December 31,
      2007
                                                                                
                                                                                From
      Inception
                                                                                          on June 25,
                                                                                          2007 Through
                                                                                          December 31,
      2008REVENUES
                                                                                $
                                                                                -
                                                                                
                                                                                
                                                                                $
                                                                                -
                                                                                
                                                                                $
                                                                                -COST
      OF SALES
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                -GROSS
      MARGIN
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                -OPERATING
      EXPENSESGeneral
      and administrative
                                                                                
                                                                                8,363
                                                                                
                                                                                
                                                                                
                                                                                23,897
                                                                                
                                                                                
                                                                                32,260Total
      Operating Expenses
                                                                                
                                                                                8,363
                                                                                
                                                                                
                                                                                
                                                                                23,897
                                                                                
                                                                                
                                                                                32,260INCOME
      (LOSS) FROM OPERATIONS
                                                                                
                                                                                (8,363)
                                                                                
                                                                                
                                                                                
                                                                                (23,897)
                                                                                
                                                                                
                                                                                (32,260)OTHER
      EXPENSESInterest
      expense
                                                                                
                                                                                (2,652)
                                                                                
                                                                                
                                                                                
                                                                                (6,010)
                                                                                
                                                                                
                                                                                (8,662)Total
      Other Expenses
                                                                                
                                                                                (2,652)
                                                                                
                                                                                
                                                                                
                                                                                (6,010)
                                                                                
                                                                                
                                                                                (8,662)LOSS
      BEFORE INCOME TAXES
                                                                                
                                                                                (11,015)
                                                                                
                                                                                
                                                                                
                                                                                (29,907)
                                                                                
                                                                                
                                                                                (40,922)PROVISION
      FOR INCOME TAXES
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                -NET
      LOSS
                                                                                $
                                                                                (11,015)
                                                                                
                                                                                
                                                                                $
                                                                                (29,907)
                                                                                
                                                                                $
                                                                                (40,922)BASIC
      LOSS PER SHARE
                                                                                $
                                                                                (0.00)
                                                                                
                                                                                
                                                                                $
                                                                                (0.00)WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING
                                                                                
                                                                                15,100,000
                                                                                
                                                                                
                                                                                
                                                                                15,100,000
  The
accompanying notes are an integral part of these financial
statements.
 F-3
 Table of Contents
 ARTHURKAPLAN COSMETICS, INC.
 (A
Development Stage Company)
 Statements
of Stockholders' Equity (Deficit)
 Common
      Stock
                                                                          
                                                                          Additional
                                                                              Paid-in
                                                                          
                                                                          Deficit
                                                                                  Accumulated During the
                                                                                  DevelopmentShares
                                                                          
                                                                          Amount
                                                                          
                                                                          Capital
                                                                          
                                                                          Stage
                                                                          
                                                                          TotalBalance,
      inception, June 25, 2007
                                                                          
                                                                          -
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          $
                                                                          -Common
      stock issued for cash at $0.01 per share
                                                                          
                                                                          10,100,000
                                                                          
                                                                          
                                                                          10,100
                                                                          
                                                                          
                                                                          (9,090)
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          1,010Common
      stock issued for cash at $0.01 per share
                                                                          
                                                                          5,000,000
                                                                          
                                                                          
                                                                          5,000
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          5,000Net
      loss for the period ended December 31, 2007
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          (29,907)
                                                                          
                                                                          
                                                                          (29,907)Balance,
      December 31, 2007
                                                                          
                                                                          15,100,000
                                                                          
                                                                          
                                                                          15,100
                                                                          
                                                                          
                                                                          (9,090)
                                                                          
                                                                          
                                                                          (29,907)
                                                                          
                                                                          
                                                                          (23,897)Net
      loss for the year ended December 31, 2008
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          (11,015)
                                                                          
                                                                          
                                                                          (11,015)Balance,
      December 31, 2008
                                                                          
                                                                          15,100,000
                                                                          
                                                                          $
                                                                          15,100
                                                                          
                                                                          $
                                                                          (9,090)
                                                                          
                                                                          $
                                                                          (40,922)
                                                                          
                                                                          $
                                                                          (34,912)
  The
accompanying notes are an integral part of these financial
statements.
 F-4
 Table of Contents
 ARTHURKAPLAN COSMETICS, INC.
 (A
Development Stage Company)
 Statements
of Cash Flows
 For
      the Year Ended
                                                                                    December 31,
    2008
                                                                              
                                                                              From
      Inception
                                                                                        on June 25,
                                                                                        2007 Through
                                                                                        December 31,
      2007
                                                                              
                                                                              From
      Inception
                                                                                        on June 25,
                                                                                        2007 Through
                                                                                        December 31,
      2008OPERATING
      ACTIVITIESNet
      loss
                                                                              $
                                                                              (11,015)
                                                                              
                                                                              $
                                                                              (29,907)
                                                                              
                                                                              $
                                                                              (40,922)Adjustments
      to reconcile net loss to net cash used by operating
      activities:Depreciation
      expense
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              -Changes
      to operating assets and liabilities:Changes
      in accounts payable
                                                                              
                                                                              2,258
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              2,258Changes
      in accrued interest payable
                                                                              
                                                                              2,652
                                                                              
                                                                              
                                                                              1,042
                                                                              
                                                                              
                                                                              3,694Net
      Cash Used in Operating Activities
                                                                              
                                                                              (6,105)
                                                                              
                                                                              
                                                                              (28,865)
                                                                              
                                                                              
                                                                              (34,970)INVESTING
      ACTIVITIESPurchase
      of property and equipment
                                                                              
                                                                              -Net
      Cash Used in Investing Activities
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              -FINANCING
      ACTIVITIESProceeds
      from related party payables
                                                                              
                                                                              4,500
                                                                              
                                                                              
                                                                              25,000
                                                                              
                                                                              
                                                                              29,500Proceeds
      from common stock issued
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              6,010
                                                                              
                                                                              
                                                                              6,010Net
      Cash Provided by Financing Activities
                                                                              
                                                                              4,500
                                                                              
                                                                              
                                                                              31,010
                                                                              
                                                                              
                                                                              35,510NET
      DECREASE IN CASH
                                                                              
                                                                              (1,605)
                                                                              
                                                                              
                                                                              2,145
                                                                              
                                                                              
                                                                              540CASH
      AT BEGINNING OF PERIOD
                                                                              
                                                                              2,145
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              -CASH
      AT END OF PERIOD
                                                                              $
                                                                              540
                                                                              
                                                                              $
                                                                              2,145
                                                                              
                                                                              $
                                                                              540SUPPLEMENTAL
      DISCLOSURES OF CASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
                                                                              $
                                                                              -
                                                                              
                                                                              $
                                                                              -
                                                                              
                                                                              $
                                                                              -Income
      Taxes
                                                                              $
                                                                              -
                                                                              
                                                                              $
                                                                              -
                                                                              
                                                                              $
                                                                              -
 The
accompanying notes are an integral part of these financial
statements.
 F-5
 Table of
Contents


ARTHURKAPLAN COSMETICS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 December
31, 2008 and 2007


1.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
 
 Nature of
Business
 Arthur
Kaplan Cosmetics, Inc. (the Company) was incorporated in the State of Nevada on
June 25, 2007. The Company was incorporated to engage in the business of the
development, production, and distribution of cosmetic products.
 
 Use of
Estimates
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
 
 Basic (Loss) per Common
Share
 Basic
(loss) per share is calculated by dividing the Company’s net loss applicable to
common shareholders by the weighted average number of common shares during the
period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number
of shares outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted for any
potentially dilutive debt or equity. There are no such common stock equivalents
outstanding as of December 31, 2008 and 2007.
 
 For
      the YearEnded
                                      December
      31,2008
                                    
                                    From
      Inception on June 25,
                                      2007
      Through
                                      December
      31,2007Loss
      (numerator)
                                    $
                                    (11,015)
                                    
                                    $
                                    (29,907)Shares
      (denominator)
                                    
                                    15,100,000
                                    
                                    
                                    15,100,000Per
      share amount
                                    $
                                    (0.00)
                                    
                                    $
                                    (0.00)
 
 Dividends
 The
Company has not adopted any policy regarding payment of dividends. No dividends
have been paid during any of the periods shown.
 
 Advertising
Costs
 The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company had not incurred any advertising expense as of December 31,
2008.
 
 Cash and Cash
Equivalents
 For
purposes of the Statement of Cash Flows, the Company considers all highly liquid
instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.
 
 F-6
 Table of Contents
 ARTHUR
KAPLAN COSMETICS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 December
31, 2008 and 2007
 
 1.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Income
Taxes
 The
Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse. The Company’s predecessor
operated as entity exempt from Federal and State income taxes.
 
 SFAS No.
109 requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized.
 
 The
provision for income taxes differs from the amounts which would be provided by
applying the statutory federal income tax rate of 39% to the net loss before
provision for income taxes for the following reasons:
  December
      31,
                            2008
                          
                          December
      31,
                            2007Income
      tax expense at statutory rate
                          $
                          (4,296)
                          
                          $
                          (11,663)Valuation
      allowance
                          
                          4,296
                          
                          
                          11,663Income
      tax expense per books
                          $
                          -
                          
                          $
                          -
 
 Net
deferred tax assets consist of the following components as of:
 
 December
      31,
                              2008
                            
                            December
      31,
                              2007NOL
      carryover
                            $
                            15,959)
                            
                            $
                            11,663Valuation
      allowance
                            
                            (15,959)
                            
                            
                            (11,663)Net
      deferred tax asset
                            $
                            -
                            
                            $
                            -
 
 Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carry forwards of $40,922 for federal income tax reporting purposes are
subject to annual limitations. When a change in ownership occurs, net operating
loss carry forwards may be limited as to use in future years.
 
 Impairment of Long-Lived
Assets
 The
Company continually monitors events and changes in circumstances that could
indicate carrying amounts of long-lived assets may not be recoverable. When such
events or changes in circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value of
such assets will be recovered through undiscounted expected future cash flows.
If the total of the future cash flows is less than the carrying amount of those
assets, the Company recognizes an impairment loss based on the excess of the
carrying amount over the fair value of the assets.
  F-7
 Table of Contents
 ARTHUR
KAPLAN COSMETICS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 December
31, 2008 and 2007
 1.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Assets to
be disposed of are reported at the lower of the carrying amount or the fair
value less costs to sell.
 
 Accounting
Basis
 The basis
is accounting principles generally accepted in the United States of
America.  The Company has adopted a December 31 fiscal year
end.
 
 Stock-based
compensation.
 As of
December 31, 2008, the Company has not issued any share-based payments to its
employees.
 
 The
Company adopted SFAS No. 123-R effective January 1, 2006 using the
modified prospective method. Under this transition method, stock compensation
expense includes compensation expense for all stock-based compensation awards
granted on or after January 1, 2006, based on the grant-date fair
value estimated in accordance with the provisions of SFAS
No. 123-R.
 
 Recent Accounting
Pronouncements
 In
June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required
to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our consolidated financial positionand results of
operations if adopted.
 
 In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial
Guarantee Insurance Contracts-and interpretation of FASB Statement No.
60”.SFAS
No. 163 clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement of  premium
revenue and claims liabilities. This statement also requires expanded
disclosures about financial guarantee insurance contracts. SFAS No. 163 is
effective for fiscal years beginning on or after December 15, 2008, and interim
periods within those years. SFAS No. 163 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
 
 In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally
Accepted Accounting Principles”.SFAS No. 162 sets forth
the level of authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two categories, the
more authoritative category will prevail. SFAS No. 162 will become effective 60
days after the SEC approves the PCAOB’s amendments to AU Section 411 of the
AICPA Professional Standards.
  F-8
 Table of Contents
 ARTHUR
KAPLAN COSMETICS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 December
31, 2008 and 2007
 1.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 SFAS No.
162 has no effect on the Company’s financial position, statements of operations,
or cash flows at this time.
 
 In March
2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative
Instruments and Hedging Activities—an amendment of FASB Statement No.
133.This standard requires companies to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. The Company has not yet adopted the
provisions of SFAS No. 161, but does not expect it to have a material impact on
its financial position, results of operations or cash flows.
 
 In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based
Payment.  In particular, the staff indicated in SAB 107 that it
will accept a company's election to use the simplified method, regardless of
whether the company has sufficient information to make more refined estimates of
expected term. At the time SAB 107 was issued, the staff believed that more
detailed external information about employee exercise behavior (e.g., employee
exercise patterns by industry and/or other categories of companies) would, over
time, become readily available to companies. Therefore, the staff stated in SAB
107 that it would not expect a company to use the simplified method for share
option grants after December 31, 2007. The staff understands that such detailed
information about employee exercise behavior may not be widely available by
December 31, 2007. Accordingly, the staff will continue to accept, under certain
circumstances, the use of the simplified method beyond December 31, 2007. The
Company currently uses the simplified method for “plain vanilla” share options
and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is
not believed that this will have an impact on the Company’s financial position,
results of operations or cash flows.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No.
51.  This statement amends ARB 51 to establish accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in
a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. Before this
statement was issued, limited guidance existed for reporting noncontrolling
interests. As a result, considerable diversity in practice existed. So-called
minority interests were reported in the consolidated statement of financial
position as liabilities or in the mezzanine section between liabilities and
equity. This statement improves comparability by eliminating that diversity.
This statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009,
for entities with calendar year-ends).
  F-9
 Table of Contents
 ARTHUR
KAPLAN COSMETICS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 December
31, 2008 and 2007
 
 1.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Earlier
adoption is prohibited. The effective date of this statement is the same as that
of the related Statement 141 (revised 2007). The Company will adopt this
Statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s financial position, results of operations or cash
flows.
 
 In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations.’This
Statement replaces FASB Statement No. 141, Business Combinations, but
retains the fundamental requirements in Statement 141.  This
Statement establishes principles and requirements for how the acquirer: (a)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; (b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and (c) determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. This statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. An entity may not apply it before that date. The
effective date of this statement is the same as that of the related FASB
Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements.  The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s financial position, results of operations or cash
flows.
 
 In
February 2007, the FASB, issued SFAS No. 159,The Fair Value Option for Financial
Assets and Liabilities—Including an Amendment of FASB Statement No.
115.  This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments
in Debt and Equity Securities applies to all entities with available for
sale or trading securities. Some requirements apply differently to entities that
do not report net income. SFAS No. 159 is effective as of the beginning of an
entities first fiscal year that begins after November 15, 2007. Early adoption
is permitted as of the beginning of the previous fiscal year provided that the
entity makes that choice in the first 120 days of that fiscal year and also
elects to apply the provisions of SFAS No. 157 Fair Value
Measurements.  The Company adopted SFAS No. 159 beginning March
1, 2008. The adoption of this pronouncement did not have an impact on the
Company’s financial position, results of operations or cash flows.
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements  This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice.
  F-10
 Table of Contents
 ARTHUR
KAPLAN COSMETICS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 December
31, 2008 and 2007
  1.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 This
statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. Earlier application is encouraged, provided that the reporting entity has
not yet issued financial statements for that fiscal year, including financial
statements for an interim period within that fiscal year. The Company adopted
this statement March 1, 2008. The adoption of this pronouncement did not have an
impact on the Company’s financial position, results of operations or cash
flows.
 
 Revenue
Recognition
 The
Company recognizes revenue when products are fully delivered or services have
been provided and collection is reasonably assured.
 
 2.           COMMON
STOCK
 During
the fiscal year ended December 31, 2007, the Company issued 15,100,000 shares of
its common stock for cash at $0.001 per share.
 
 On May
29, 2008, the Company’s common stock was forward split on a 10 shares for 1
share basis. The accompanying financial statements reflect the forward stock
split on a retroactive basis.
 
 3.           GOING
CONCERN
 The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern.  However, the Company has accumulated
deficit of $40,922 as of December 31, 2008.  The Company currently has
limited liquidity, and has not completed its efforts to establish a stabilized
source of revenues sufficient to cover operating costs over an extended period
of time.
 
 Management
anticipates that the Company will be dependent, for the near future, on
additional investment capital to fund operating expenses The Company intends to
position itself so that it may be able to raise additional funds through the
capital markets. In light of management’s efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
  F-11