SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K-SB





(Mark One)





x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended December 31, 2006





o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from ___________ to ___________





Commission File No. 000-32029





CONCEPT DIGITAL, INC.


(Name of small business issuer in its charter)





DELAWARE

22-3698370(State or other jurisdiction of
incorporation or organization)

(IRS Employer Identification No.)
 
 298 Fifth Avenue
New York, NY

10001(Address of principal executive offices)

(Zip Code)


(212) 564-1600


(Registrant’s telephone number, including area code)





Securities registered under Section 12(b) of the Exchange Act:Title of each class registered:
Name of each exchange on which registered:None
NoneSecurities registered under Section 12(g) of the Exchange Act:Common Stock, par value $.001
(Title of class)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes oNo x





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ̈ No  ̈





Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes oNo x





Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B not contained in this form, and no disclosure will be contained, to the best of the 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. o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o




















Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company.  See the definitions of the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.   (Check one):





Large Accelerated Filer  o
Accelerated Filer                  oNon-Accelerated Filer     o
(Do not check if a smaller reporting company)
Smaller reporting company x





Revenues for year ended December 31, 2006: $748





Aggregate market value of the voting common stock held by non-affiliates of the registrant as of December 31, 2006, was: $0





Number of shares of the registrant’s common stock outstanding as of September 22, 2009 is: 39,683,381





Transitional Small Business Disclosure Format:  Yes o    No x

















TABLE OF CONTENTS





PART I

1ITEM 1.
DESCRIPTION OF BUSINESS
1ITEM 2.
DESCRIPTION OF PROPERTY
5ITEM 3.
LEGAL PROCEEDINGS
5ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
5PART II

5ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
5ITEM 6.
SELECTED FINANCIAL DATA
6ITEM 7.
MANAGEMENT’S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
6ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
8ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
F-ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
9ITEM 9A.
CONTROLS AND PROCEDURES
9PART III

9ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
9ITEM 11.
EXECUTIVE COMPENSATION
10ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
11ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
11ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
11PART IV

13ITEM 15.
EXHIBITS,FINANCIAL STATEMENT SCHEDULES.
13SIGNATURES

14

















PART I





ITEM 1. DESCRIPTION OF BUSINESS





As of December 31, 2000, i-AntiqueAuction.com, Inc. (the "Company" or "i-Antique") was a development stage company which was anticipating the completion of a specialized online person- to-person trading website dedicated to bringing together antique sellers and buyers. The website would have resided at WWW.I-ANTIQUEAUCTION.COM, and
will attempt to serve as a centralized auction for buyers and sellers to meet, negotiate sales, and finally consummate transactions directly, thereby bypassing the time and expense of intermediaries. In addition, i-Antique owns the domain names "i-AntiqueAuction.com" and "i-AntiqueAuction.net". Anticipated sales would have been conducted by a traditional rising price auction (the highest bid wins), and will be hosted by the Company. The Company's goal was to create an integrated antique site for individuals on
both sides of the transaction, and thus would offer additional value added services through links to its strategic partners. i-Antique anticipated that it will achieve this goal by growing through acquisitions of companies and businesses in complimentary industries. In addition to the auction, anticipated products offered through strategic partners will include: loan services, insurance, antique appraisal, moving and shipping companies, interior design specialists, content links for researching antiques and collectibles,
and image hosting services for showing an item on line.





Our corporate offices were located at 136 West 32nd Street, New York, NY 10001.  Our corporate offices are currently located at 298 Fifth Avenue, New York, NY 10001.  Our corporate staff consists of one person experienced in the online market. The Company's telephone number is (212) 564-1600.





Concurrently with the share exchange discussed below, the Company changed its business plan to become a development stage company whose goal is to become a leading provider of digital imaging services and changed its name to Concept Digital, Inc.





In September 2001, the Company completed a share exchange with PhotoAmerica, Inc. a New York corporation ("PAI") where the Company would acquire all the issued and outstanding shares of capital stock of PAI in exchange solely for shares of Concept Digital common stock. PAI operates the website photoamerica.com, which enables digital
camera users to upload their photographs via the Internet to our outsourced developing facility for processing.





DIGITAL CAMERAS





Today, consumers can buy a digital camera with mega-pixel resolution, offering all the features of top-of-the-line 35mm cameras, such as zoom lenses and manual controls. Most digital cameras also come equipped with a built in monitor that allows the photographer to review the picture immediately after taking it. The most commonly quoted
benefit of digital cameras is that it allows the photographer to immediately determine if he is satisfied with the image. If not, the image is simply deleted and the picture can be re-shot.  Digital cameras also allow photographers to transfer their images to a computer and digitally manipulate and enhance the photo before printing it. This is a far more desirable alternative than film based cameras, where the photographer can only determine if a picture is to their liking after it has been developed
(industry surveys show that the average consumer typically only likes four out of every 36 pictures printed).





COMPUTERS AND THE INTERNET IN THE PHOTOGRAPHY INDUSTRY





The continuing evolution of the Internet as an entertainment medium coupled with rapid advances in technology has had a significant impact on the traditional chemical film based photo-processing model. Traditionally, photographers finish a complete roll of film, bring the film to their local photo processor, and then return for a second
visit to retrieve the pictures. The photos are evaluated to determine the interest in additional prints, at which point the consumer must place another order and return again to pick up the reprints. Digital photography, the Internet and advances in printing technology are introducing attractive alternatives. Photographs can be stored on a PC or uploaded to the Internet where they can be viewed, edited and reprinted at any time using a color desk top printer or professional processing techniques.





PRODUCTS AND SERVICES





THE WEBSITE





Our website will be the primary tool through which customers will purchase products and services and through which we will conduct marketing initiatives for its Profit Partners. The website is expected to feature related content and advertising targeted to the Company's customer base, and links to other appropriate sites. The following
is an overview of the site's features:





CUSTOMER ACTIVATION





The website has been planned to be straightforward and minimally intrusive; customers will review and fully evaluate all services of the site, short of placing an order, without providing us with any personal information.  Customers will be able to immediately begin to upload images upon entering the site.








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Specifically, we have planned to accept customer images in virtually any format compatible with digital images, including jpegs (.jpg), bitmaps (.bmp), tiffs (.tif), encapsulated post script (.eps) and more.





GENERAL CONTENT





In addition to serving as the primary interface to customers, our website will provide a community environment, offering visitors advice regarding digital photography, cameras and related products.





ARTICLES





Additionally, it is anticipated that our website will feature articles written to inform digital camera users on a broad variety of topics such as photography techniques, industry trends, accessory introductions, and "Ask the Expert".





BUYING GUIDE





We plan to engage a professional writer to prepare a buying guide that will be updated regularly.  This service can attract potential customers to our planned website and may also induce digital camera manufacturers and retailers to advertise on the website.





CUSTOMER SERVICE





The regularly updated FAQ section of the site will assist customer with issues.  Also, the customer service department will be able to be contacted via email from the website.





WARRANTY REGISTRATION





Although many manufacturers enable customers to do so through their own site, the vast majority of consumer do not register their electronic purchases, either on-line or by mail. We may work with manufacturers to offer incentives, such as a free reprint, to consumers that use the site to register their electronic purchases. This information
can then be shared with the manufacturer for additional marketing purposes.





DIRECTORY OF PROFIT PARTNERS





As a part of our planned Profit Partner program, we plan to feature the names, addresses and phone numbers of all future merchant partners and companies on the website.





ADVERTISING AND RESOURCE LINKS





We plan to sell advertising to a variety of camera and related equipment manufacturers in addition to other e-tailers seeking to target its customer base on our site.





Longer term, we may provide links to resources for our customers to photography magazines.





PROCESSING SYSTEMS





Our primary activity will be the production of images from digital feeds. Customers can upload selected images to our server where they will be stored in a file database, from which they can be retrieved, modified and printed as often as desired. Using state-of-the-art equipment, outsourced technicians will apply the silver-halide
chemical process used to process film-based photographic images.





Digital processing activities will be outsourced to major digital processor facilities.  The photo finishing process will begin with the entry of each order into a customer database, primarily using information provided by the anticipated customer. Each order will receive a bar-coded identification number that will enable
the tracking of the order throughout the production process.  Once the files have been uploaded, each image will be computer analyzed and color-corrected as warranted or instructed, then printed on photographic paper.  Shipping information will then be printed on labels and forwarded to the traffic department to await completion of the order. After a visual quality inspection, the orders will be packaged for delivery. Orders for which recipients will provide e-mail addresses will be digitized
and delivered through the our Internet Service Provider.








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STANDARD REPRODUCTIONS





Using the information gathered during customer registration and order placing, we will provide a selection of printing alternatives.  We plan to offer a variety of print packages including the following:





o Single image prints in a variety of sizes from 4" X 6" to 11" X 14"


o Pre-printed frame templates in hundreds of designer patterns


o Package prints (e.g. 4 copies of the same image on one sheet)


o Multi-image package prints (e.g., up to 10 different images on a single sheet)


o Passport photos


o Photo business cards





Pricing for development will be dependent upon the size and complexity of the process.





ACCESSORIES AND NOVELTIES





We plan to offer an extensive array of accessory products and novelties including frames and photo-personalized gifts ranging from mugs to T-shirts to greeting cards.  Pricing for these items will be in the $2.35 to $29.95 range and will be sold on the website.





ELECTRONIC GREETING CARDS





We plan to develop an extensive library of electronic cards, designer frame templates and email backgrounds that can be applied to a customer's printout. Customers will be able to choose from an array of designs, including birthdays, anniversaries, holidays and other standard occasions. Customers will also be able to create customized
cards with a personalized greeting.





DISTRIBUTION





It is anticipated that completed orders will be shipped to the addresses designated by the customer upon completion of the order. Standard distribution will be United States Postal Service, First Class, however customers will have the option of selecting priority or overnight delivery service for an extra cost.





ON-LINE ADDRESS BOOK





It is anticipated that customers may provide us with multiple addresses for delivery of their photographs or other products. For example, a customer might wish to order multiple copies of a Christmas card to be mailed to list of family and friends. These names and addresses will then be stored in the customer's file for future use.





IMAGE STORAGE AND MANAGEMENT





Current plans will allow us to offer our customers the ability to store and access their images (even those that are not printed) on our server at no charge.





ACCOUNT MANAGEMENT





Customers will be offered a database management tool which will enable them to manage all aspects of the electronic distribution of their library. Using these tools, a customer will be able to enter addresses, calendar reminders, etc. The site will also enable the customer to keep track of pending and completed orders with the Company.





MARKETING AND ROLL OUT STRATEGY





We are in the process of developing a rollout strategy. We anticipate that it will enable us to penetrate the market and overtime, establish a leadership position in the online processing of digital images. This strategy comprises the following steps.





O        INTRODUCE PRODUCTS AND SERVICES TO INDUSTRY PARTICIPANTS





O        ESTABLISH PROFIT PARTNER DEALER NETWORK





O        IMPLEMENT AGGRESSIVE SALES AND MARKETING CAMPAIGNS








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INTRODUCE PRODUCTS AND SERVICES TO INDUSTRY PARTICIPANTS





We expects to utilize a variety of tools to present the website and services to potential Profit Partners, however we believe it will have broadest access to its target audience at industry trade shows. We anticipate signing up vendors for the Profit Partner program at these types of shows. Management believes that trade shows and
other industry events provide it with the ideal environment to feature the product.





ESTABLISH PROFIT PARTNER DEALER NETWORK





Concept Digital plans to create an affiliate program designed to attract vendors from around the country to assist in the marketing of its products and services. We anticipate that these retailers and e-tailers, in exchange for a recurring commission, will hand out or deliver at point of purchase, a ConceptDigital.com free offer coupon
to the digital camera buyer. The retailer's Profit Partner code will be embedded in the coupon. When the consumer sets up an account on the site to redeem the free offer coupon, they will be assigned in the database to the Profit Partner that referred them. From that point on the Profit Partner will receive a preset commission on any purchases that consumer makes. We believe that this highly targeted marketing approach should yield much greater, more cost effective results than an aggressive advertising campaign.





Profit Partners are expected to come from the following sectors:





INDEPENDENT PHOTOGRAPHY SHOPS





There are more than an estimated 5,000 independent photography shops throughout the country and they continue to lose market share. This sector is increasingly faced with competition from three sources; two national photography chains, Ritz Camera Centers and Wolf Camera; mass merchandisers such as Wal-Mart and K-mart, as well as Internet
vendors. The changing face of the market is forcing specialty shops to cut their margins or risk losing business.





EQUIPMENT MANUFACTURERS





We will seek to establish affiliations with digital camera manufacturers. Our site will not sell any merchandise or services other than its own from the site, however it will provide links to the sites of Profit Partner manufacturers. Profit Partner manufacturers will feature our website by including the logo on packaging, coupon inserts
with their products or through mention in users' manuals or newsletters.





RELATED VENDORS





We will seek to establish relationships with appropriate related vendors such as event photographers and frame manufacturers. Through these relationships, we anticipate vendors will offer the services of our Company as an added value to their customers. For example, wedding guests will be able to view the photographer's proofs in order
to select and order their own set of photographs; frame buyers might get a discounted reproduction with the purchase of multiple frames.





We anticipate that our Profit Partner program will provide participants with significant benefits as discussed below:





COMPETITIVE EDGE





We anticipate that our program will enable Profit Partners to provide their customers with a unique and value-added service which will positively differentiate them from their competitors.





ADDITIONAL INCOME





It is anticipated that Profit Partners will be provided with a recurring commission in exchange for encouraging their customers to visit our website. This program will provide Profit Partners with a stream of income that would otherwise not be generated, and at no cost to them. Vendors will receive a fee on any transactions conducted
by a referral throughout the term of their association with us. We will track all revenues and will forward Profit Partners checks on a quarterly basis.





COMPETITION





While there are few companies that compete directly with us, the Company anticipates competing indirectly with a variety of sources as described below.





PROCESSING OF TRADITIONAL FILM TO DIGITAL IMAGES





Kodak gives consumer the ability to develop non-digital film and receive prints as well as digital images of the photo via e-mail or on disk for viewing on a personal computer. Wal-Mart Stores Inc. and Fuji also offer Internet-based photo centers.








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SPECIALTY RETAIL SHOPS AND MASS MERCHANDISERS





RITZ CAMERA CENTERS is the United States' largest photo-specialty chain with more than 1,000 stores in 47 states and the District of Columbia that provide one-hour photo finishing, digital imaging, and other services.





WOLF CAMERA operates one-hour photo labs at each of its 750-plus stores. Film processing and related services make up a third of Wolf Camera's business. Located in 34 states, its stores sell cameras, camcorders, film and accessories and feature Kodak do-it-yourself enlargement centers where customers make digital-quality reprints from
photos or computer files. Wolf's also offers digital imaging services, including alteration, restoration, and transferring customers' photos to floppy disks.





PICTUREWORKS (formerly Seattle FilmWorks) markets 35mm film, photo processing, photofinishing services and products, and a variety of digital photo services, including "PhotoMail" (digital-photo delivery to the customer via the Internet) and "Pictures On Disk" (digitized photos on a disk or CD). It markets primarily on a mail-order
basis and through about 40 retail stores in Oregon and Washington. Pictureworks has recently added digital imaging technology in order to compete with faster in-store retail processors.





Most mass merchandisers and drug store chains provide customers with developing services. Some offer on-site capabilities, others send the work out to independent processors. However, these services, like Kodak's Picture Maker and Pictureworks require the consumer bring their film to a remote facility for processing before they can
take advantage of the services.





Employees





As of December 31, 2006, the Company did not have any employees.





ITEM 2. DESCRIPTION OF PROPERTY





Our corporate offices were located at 136 West 32nd Street, New York, NY 10001.  The Company presently shares office space in a building located at 298 Fifth Avenue, New York, NY 10001, for an indefinite amount of time at no charge. The Company's telephone number is (212) 564-1600.





ITEM 3. LEGAL PROCEEDINGS





The Company is not presently parties to any litigation, nor to the Company’s knowledge and belief is any litigation threatened or contemplated.





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





None.





PART II





ITEM 5.MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





As of December 31, 2006, there is no public market for our common stock.  As such, the Company’s common stock is not currently available for trading.





Holders





As of December 31, 2006, in accordance with our transfer agent records, there were 133 shareholders of record of the Company’s common stock.





Dividends





The Company does not intend to issue dividends. However, should we decide to issue dividends, any payment of cash dividends in the future will be dependent upon: the amount of funds legally available therefore; the Company's earnings; financial condition; capital requirements; and other factors which the Board of Directors deems relevant.





Recent Sales of Unregistered Securities





During the fiscal year ended December 31, 2006, we did not issue any shares of our common stock.





Stock Options Grants





As of December 31, 2006, we have stock options outstanding on 1,815,000 shares of our common stock.








-5-








ITEM 6.   SELECTED FINANCIAL DATA





Not applicable.





ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS





The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our consolidated financial statements and notes thereto. Concept Digital Inc. is a development – stage company.
Because the Company has generated minimal revenue, it intends to report its plan of operation below.





The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. The Company’s actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.





The Company’s operations have been devoted primarily to developing a business plan and raising capital for future operations and administrative functions.  The Company intends to grow through internal development, strategic alliances, and acquisitions of existing businesses.  Because of uncertainties surrounding
its development, the Company anticipates incurring development stage losses in the foreseeable future.  The ability of the Company to achieve its business objectives is contingent upon its success in raising additional capital until adequate revenues are realized from operations.





The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As reflected in the consolidated financial statements, development stage losses from June 15, 1999 (date of inception) through
December 31, 2006 aggregated ($2,115,170) and raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s cash flow requirements during this period have been met by contributions of capital and debt financing, primarily from related parties. The Company anticipates that financing will be required until such time that the Company has been able to develop its own business or find an appropriate merger candidate. Currently, the Company cannot determine when either
will occur and as such the Company will need to obtain financing to cover its costs for the foreseeable future. No assurance can be given that these sources of financing will continue to be available. If the Company is unable to generate profits, or unable to obtain additional funds for its working capital needs, it may have to cease operations.





CRITICAL ACCOUNTING POLICIES





Our accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which require our management to make estimates that affect the amounts of revenues, expenses, assets and liabilities reported. The following are critical accounting policies which are important
to the portrayal of our financial condition and results of operations and which require some of management’s most difficult, subjective and complex judgments. The accounting for these matters involves the making of estimates based on current facts, circumstances and assumptions which could change in a manner that would materially affect management’s future estimates with respect to such matters. Accordingly, future reported financial conditions and results could differ materially from financial conditions
and results reported based on management’s current estimates.





Revenue recognition:





Revenue from processing images is recognized upon delivery of the images.  The Company recognizes revenue from warranties over the term of the warranty.





Income taxes:





The Company utilizes Statement of Financial Standards (“SFAS”) No. 109, “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in financial statements or tax returns. Under this method, deferred
income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period based on enacted tax laws and statutory tax rates applicable to the period in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The accompanying consolidated financial statements have no provision
for deferred assets or liabilities.








-6-








The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition.  The discussion should be read along with our consolidated financial statements and notes thereto.  Concept Digital Inc. is a development
– stage company.  Because the Company has not generated any revenue, it intends to report its plan of operation below.




The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties.  The Company’s actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.




The Company’s operations have been devoted primarily to developing a business plan and raising capital for future operations and administrative functions.  The Company intends to grow through internal development, strategic alliances, and acquisitions of existing businesses.  Because of uncertainties surrounding
its development, the Company anticipates incurring development stage losses in the foreseeable future.  The ability of the Company to achieve its business objectives is contingent upon its success in raising additional capital until adequate revenues are realized from operations.




The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As reflected in the consolidated financial statements, development stage losses from June 15, 1999 (date of inception)
through December 31, 2006 aggregated ($2,115,570), raises substantial doubt about the Company’s ability to continue as a going concern.  The Company’s cash flow requirements during this period have been met by contributions of capital and debt financing, primarily from related parties.  The Company anticipates that financing will be required until such time that the Company has been able to develop its own business or find an appropriate merger candidate.  Currently,
the Company cannot determine when either will occur and as such the Company will need to obtain financing to cover its costs for the foreseeable future.  No assurance can be given that these sources of financing will continue to be available.  If the Company is unable to generate profits, or unable to obtain additional funds for its working capital needs, it may have to cease operations.




YEARS ENDED DECEMBER 31, 2006 AND 2005




Development stage losses during the year ended December 31, 2006 was ($132,390) compared to ($25,078) for the year ended December 31, 2006.




Expenses during the year ended December 31, 2005 the Company incurred various operating expenses consist primarily of management fees ($9,000), transfer agent fees ($1,952) and general office ($1,320).




Expenses during the year ended December 31, 2006 the Company incurred various professional fees such as accounting ($87,419), legal services ($8,605).  Other operating expenses consist primarily of management fees ($14,500) and interest expense ($19,240).






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PERIOD FROM JANUARY 1, 2004 (COMMENCEMENT OF DEVELOPMENT STAGE) THROUGH DECEMBER 31, 2006




Losses from operations since commencement of the development stage have amounted to ($207,162) primarily consisting of accounting ($109,169), legal ($9,335), and management fees ($32,500).




Liquidity and Capital Resources




Despite capital contributions and both related party and third party loan commitments, the Company from time to time experienced, and continues to experience, cash flow shortages that have slowed the Company’s growth.




The Company has primarily financed its activities from issuance of common stock of the Company and from loans from related and third parties.  A significant portion of the funds raised from the loans has been used to cover working capital needs.




For the year ended December 31, 2006 and 2005, we incurred a net loss of ($132,390) and ($25,078), respectively.  Our accumulated deficit since the date of inception is ($2,115,570).  Such accumulated losses have resulted primarily from costs incurred in the purchase and maintenance of our domain name, trade shows and
various professional fees.




The Company’s cash flow requirements during this period have been met by contributions of capital and debt financing.  The Company anticipates that financing will be required until such time that the Company has been able to develop its own business or find an appropriate merger candidate.  Currently, the Company
cannot determine when either will occur and as such the Company will need to obtain financing to cover its costs for the foreseeable future.  No assurance can be given that these sources of financing will continue to be available.  If the Company is unable to generate profits, or unable to obtain additional funds for its working capital needs, it may have to cease operations.





ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





Market risk is the risk of loss from adverse changes in market prices and interest rates. We do not have substantial operations at this time so they are not susceptible to these market risks.  If, however, they begin to generate substantial revenue, their operations will be materially impacted by interest rates and market
prices.








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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.





CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
 
 CONSOLIDATED FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2006 AND FOR THE YEARS
 ENDED DECEMBER 31, 2006 AND 2005
 AND FOR THE PERIOD JANUARY 1, 2004
 (COMMENCEMENT OF DEVELOPMENT STAGE) TO
 DECEMBER 31, 2006
 
 
    
 
 
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (A DEVELOPMENT STAGE COMPANY)
   TABLE OF CONTENTS
 
  Page(s)REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-1CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2006 AND 2005AND FOR THE YEARS ENDEDDECEMBER 31, 2006 AND 2005 AND FOR THE PERIOD JANUARY 1, 2004(COMMENCEMENT OF DEVELOPMENT STAGE) TO DECEMBER 31, 2006Consolidated balance sheet
F-2Consolidated statements of operations
F-3Consolidated statements of stockholders’ deficit
F-4Consolidated statement of cash flows
F-5 - F-6Note to consolidated financial statements
F-7 - F-17
 
 
 
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To the Stockholders and
 Board of Directors
 Concept Digital, Inc and Subsidiary
 
 
 We have audited the accompanying consolidated balance sheet of Concept Digital, Inc. and Subsidiary (a development stage company) as of December 31, 2006 and 2005 and the related consolidated statements of operations, change in stockholders’ deficit and cash flows for the years ended December 31, 2006 and 2005 and for the period January
1, 2004 (commencement of development stage) to December 31, 2006. 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 audits in accordance with the 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 the audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statement referred to above present fairly, in all material respects, the consolidated financial position of Concept Digital, Inc. and Subsidiary as of December 31, 2006 and 2005, and the consolidated results of their operations and their consolidated cash flows for the years ended December 31, 2006 and 2005
and for the period January 1, 2004 (commencement of development stage) to December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company is a development stage company.  The realization of a major portion of its assets is dependent upon its ability to meet its future
financing requirements, and the success of future operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning these matters are also described in note 1. The consolidated financial statements do not include any adjustments that might result from this uncertainty.
 
 
 Seligson and Giannattasio, LLP
 White Plains, NY
 August 28, 2009
 
 
 F-1
 
 
 CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (A Development Stage Company)
 
 Consolidated Balance Sheet
 
 December 31,


December 31,2006


2005ASSETSCURRENT ASSETS:Cash

$
2,661


$
1,683Accounts receivable – relate party


0



10,000Prepaid expenses


44,525



2,349Total current assets


47,186



14,032TOTAL ASSETS

$
47,186


$
14,032LIABILITIES AND STOCKHOLDERS’ DEFICITCURRENT LIABILITIES:Accounts payable and accrued expenses

$
177,542


$
153,531Notes payable – related party


493,086



241,653Due to related party


100



110,000Total current liabilities


670,728



505,184STOCKHOLDERS’ DEFICIT:Common stock, par value $.0001 per shares;50,000,000 shares authorized; 39,683,381shares issued and outstanding


3,968



3,968Additional paid-in capital


1,488,060



1,488,060Deficit accumulated during the development stage


(2,115,570
)


(1,983,180
)Total stockholders’ deficit


(623,542
)


(491,152
)TOTAL LIABILITIES ANDSTOCKHOLDERS’ DEFICIT

$
47,186


$
14,032
   The accompanying notes are an integral part of these consolidated financial statements.
 F-2
 
 CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (A Development Stage Company)
 
 Consolidated Statements of Operations
 
 For the PeriodJanuary 1, 2004Years Ended


(commencement of development stage) toDecember 31,


December 31,2006


2005


2006Development stage revenues

$
748


$
2,443


$
5,917Cost of services


15



320



1,504733



2,123



4,413Development stage expensesAccounting


87,419



0



109,169Legal


8,605



0



9,355Management fee


14,500



9,000



32,500Office


1,725



1,320



7,344Transfer agent fee


1,179



1,952



4,781TOTAL DEVELOPMENT STAGE EXPENSES


113,428



12,272



163,149Loss from operations


(112,695
)


(10,149
)


(158,736
)Corporate taxes


(455
)


(455
)


(1,491
)Interest expense


(19,240
)


(14,474
)


(46,935
)NET LOSS

$
(132,390
)

$
(25,078
)

$
(207,162
)NET LOSS PER COMMON SHAREBasic and diluted

$
(0.003
)

$
(0.001
)Weighted-average number of commonshares outstanding


39,683,381



39,683,381
   The accompanying notes are an integral part of these consolidated financial statements.
 F-3
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (A Development Stage Company)
 
 Consolidated Statements of Stockholder’s Deficit
 
 AdditionalCommon Stock


Paid-in


AccumulatedShares


Amount


Capital


Deficit


TotalBalance, January 1, 2004


39,683,381


$
3,968


$
1,488,060


$
(1,908,408
)


(416,380
)Net loss














(49,694
)


(49,694
)Balance, December 31, 2004


39,683,381



3,968



1,488,060



(1,958,102
)


(466,074
)Net loss














(25,078
)


(25,078
)Balance, December 31, 2005


39,683,381



3,968



1,488,060



(1,983,180
)


(491,152
)Net loss














(132,390
)


(132,390
)Balance, December 31, 2006


39,683,381


$
3,968


$
1,488,060


$
(2,115,570
)

$
(623,542
)
   The accompanying notes are an integral part of these consolidated financial statements.
 F-4
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (A Development Stage Company)
 
 Consolidated Statements of Cash Flows
 For the PeriodJanuary 1, 2004Years Ended


(commencement of development stage)December 31,


to December 31,2006


2005


2006OPERATING ACTIVITIES:Net loss

$
(132,390
)

$
(25,078
)

$
(207,162
)Adjustments to reconcile net loss to net cashUsed in operating activities:Changes in assets and liabilities:Decrease  in accountsreceivable – related parties


10,000



0



14,028Decrease (increase) in prepaid expenses


(42,176
)


100



(41,976
)Increase in accounts payable


24,111



15,729



75,243(Decrease) increase  in accountspayable - related parties


(38,567
)


9,797



(18,000
)Net cash flows from operating activities


(179,022
)


548



(177,867
)FINANCING ACTIVITIES:Payments on loans payable – related party


(110,000
)


0



(110,000
)Proceeds from notes payable – related party


290,000



0



290,000Net cash flows from financing activities


180,000



0



180,000Increase in cash


978



548



2,133Cash at beginning of period


1,683



1,135



528Cash at end of period

$
2,661


$
1,683


$
2,661Supplemental cash flow information:Interest paid

$
0


$
0


$
0Income taxes paid

$
0


$
0


$
126
   The accompanying notes are an integral part of these consolidated financial statements.
 F-5
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (a development stage enterprise)
 
 Notes to Consolidated Financial Statements
 
 
 NOTE 1 - DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN MATTERS
 
 The Company’s activities have been primarily focused on developing a business plan, and raising capital for future operations and administrative functions.  The ability of the Company to achieve its business objectives is contingent upon its success in raising additional capital until adequate revenues are realized from
operations.
 
 The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As reflected in the consolidated financial statements, development stage losses from June 15, 1999 (date of inception)
through December 31, 2006 aggregated ($2,115,570).  The Company’s cash flow requirements during this period have been met by contributions of capital and debt financing primarily from related parties.  The Company anticipates that financing will be required until such time that the Company has been able to develop its own business or find an appropriate merger candidate.  Currently, the Company can not determine when either will occur and as such the Company will need to obtain
financing to cover its costs for the foreseeable future.  No assurance can be given that these sources of financing will continue to be available.  If the Company is unable to generate profits, or unable to obtain additional funds for its working capital needs, it may have to cease operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.
 
 The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the company be unable to continue as a going concern.
 
 NOTE 2 - ORGANIZATION
 
 Concept Digital, Inc. (the “Company”) was incorporated on June 15, 1999, under the laws of the State of Delaware.  Through its wholly owned subsidiary, Photo America, Inc. (“PAI”) is a development stage enterprise engaged in the marketing and issuing warranties primarily for digital cameras.  Previously,
PAI was developing an Internet facility for processing digital images.
   F-6
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (a development stage enterprise)
 
 Notes to Consolidated Financial Statements
 
 NOTE 2 – ORGANIZATION (continued)
 
 On September 26, 2001, Photo America, Inc. merged with Concept Digital, Inc. (“CDI”) a publicly traded development stage enterprise that had 3,032,978 shares of common stock outstanding prior to the merger.  Pursuant to the merger agreement, the Company acquired all of the outstanding common stock of Photo America,
Inc. in exchange for 36,650,403 shares of CDI common stock.  The merger was accounted for as a recapitalization by Photo America, Inc.  The equity accounts of PAI were restated to give effect to the CDI shares issued by the PAI shareholders.  No goodwill was recorded in connection with the transaction.  The results of CDI were included in operations commencing September 26, 2001.
 
 On November 30, 2006, Photo America Inc. ceased operation and all remaining assets were abandoned except for trademark which was sold to a related company.
 
 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of Presentation:
 
 The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary in order to prepare the financial statements have been included. Results for the interim periods are
not necessarily indicative of the results that may be expected for the year.
 
 Principles of Consolidation:
 
 The consolidated financial statements include the accounts of Concept Digital, Inc. and its subsidiary Photo America, Inc.  All significant intercompany balances and transactions have been eliminated in consolidation.
 
 Use of Estimates:
 
 The presentation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and
reporting period.  Accordingly, actual results could differ from those estimates.
 
 F-7
 
 CONCEPT DIGITAL, INC. AND SUBSIDIARY
(a development stage enterprise)

Notes to Consolidated Financial Statements
 
  
 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Cash and Cash Equipment:
 
 For purposes of reporting cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
 
 Carrying Value:
 
 The Company reviews the carrying values of its long-lives and identifiable intangible assets for possible impairment. Whenever events or changes in circumstances indicates that the carrying amount of assets may not be recoverable, the Company will reduce the carrying value of the assets and charge operations in the period the impairment
occurs.
  Trade names:
 
 Purchased trade names are recorded at cost less accumulated amortization and are included in other assets.  Trade names are being amortized over 2 years from the initial date of use.  The trademark was sold on October 18, 2006 to a related company.
 
 Revenue recognition:
 
 Revenue from processing images is recognized upon delivery of the images.  The Company recognizes revenue from warranties over the term of the warranty subsequent to the expiration of the manufacturer’s warranty, which is generally one year.
 
 Advertising:
 
 The Company’s policy for reporting advertising expenditures is to expense them as they are incurred.  For the years ended December 31, 2006 and 2005, the Company did not incur any advertising expenditures.
 
  F-8
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (a development stage enterprise)
 
 Notes to Consolidated Financial Statements
 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Income taxes
 
 The Company utilizes Statement of Financial Standards (“SFAS”) No. 109, “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in financial statements or tax returns.  Under this method,
deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period based on enacted tax laws and statutory tax rates applicable to the period in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  The accompanying consolidated financial
statements have no provision for deferred assets or liabilities.
 
 Net Loss Per Share:
 
 The Company has adopted SFAS No. 128 “Earnings Per Share”, Basic loss per share is computed by dividing the loss available to common shareholders by the weighted-average number of common shares outstanding.  Diluted loss per share is computed in a manner similar to the basic loss per share, except that the weighted-average
number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of warrants, options, convertible debt and other such convertible instruments.  Diluted earnings per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.  Since the Company has incurred net losses, common stock equivalents are excluded from the calculation
of diluted shares as their effect would be anti-dilutive.  Potentially dilutive shares excluded from this calculation totaled 3,400,000 shares.
 
 Fair Value of Financial Instruments:
 
 SFAS No. 107 “Disclosure about Fair Value of Financial Instruments” requires the disclosure of the fair value of financial instruments.  The Company’s management, using available market information and other valuation methods, has determined the estimated fair value amounts.  However, considerable judgment
is required to interpret market data in developing estimates of fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange.
  F-9
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (a development stage enterprise)
 
 Notes to Consolidated Financial Statements
  
 NOTE 4 - RELATED PARTY TRANSACTIONS
 
 During 2003, the Company sold digital camera warranties to a company controlled by the Company’s majority stockholder.   At December 31, 2005, accounts receivable – related party represents amounts due from the sale of warranties to these companies.
 
 Effective January 1, 2002, Photo America, Inc. signed an agreement with Willoughby’s, a related party through common ownership, to pay $750 per month due in quarterly installments of $2,250 in exchange for bookkeeping, secretarial and managerial services.  The agreement terminated on June 30, 2006.
 
 On October 18, 2006, Photo Americas trademark was sold to Douek Holding for $1.00, a related party.
  NOTE 5 – LOANS PAYABLE
 
 The loan payable to Atlas Equity Group, Inc., an entity related to the Company through common ownership, totaling $16,953 bears interest at 6% per annum. The note matured in May 2002 and is convertible to 730,468 shares of common stock at the discretion of the Company. As of May 7, 2002, the loan was in default. The payee has allowed the
loan to continue as a demand loan accruing interest at 6% per annum. At December 31, 2006 the entire balance was outstanding.
 
 The loan payable to Cool Mobile LLC, an entity related to the Company through common ownership, totaling $290,000 bears interest at 7% per annum.  The note is due 90 days after demand by the holder.  At December 31, 2006, the entire balance was outstanding.
 
 The remaining loan payable to an entity related through common ownership totaling $186,133 is a result of the transfer of cash collected on unearned warranty fees, which were assigned to the related party which is fulfilling the warranty obligations.
  F-10
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (a development stage enterprise)
 
 Notes to Consolidated Financial Statements
  
 NOTE 6 – INCOME TAXES
 
 No provisions for income taxes have been made because the Company has sustained cumulative losses since the commencement of operations on June 15, 1999.  At December 31, 2006, the Company had a net operating loss carryforward (“NOL”) of approximately ($509,000) available to reduce future taxable income and expense
through 2026.
 
 In accordance with SFAS No. 109 the Company has computed the components of deferred income taxes as follows:
 
 December 31,
2006Deferred tax assets

$
203,744Valuation allowance


(203,744
)Deferred tax assets, net

$
-
 
 At December 31, 2006 and 2005, a full valuation allowance has been provided as realization of the deferred tax benefit is not likely.
 
 The effective tax rate varies from the U.S. Federal statutory tax rates for the period ended December 31, 2006 and 2005 principally due to the following:
  U.S. statutory rate


34.00
%State and local taxes


8.00Valuation allowance


(42.00
)00.00
%
 
 
 
 F-11
  CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (a development stage enterprise)
 
 Notes to Consolidated Financial Statements
 
 
 NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 
 Accounts payable and accrued expenses consisted of the following:
 
 December 31,
2006


December 31,
2005Accounts payable

$
54,379


$
9,210Accrued professional fees


105,616



100,000Accrued income taxes


300



1,449Accrued interest


17,247



42,872Total accounts payable and accrued expenses

$
177,542


$
153,531
  NOTE 8 – STOCK OPTIONS AND WARRANTS
 
 Stock Options
 
 During the year ended December 31, 1999, the board of directors authorized the issuance of employee stock options to purchase 1,200,000 shares of common stock.  The options, which vested immediately, have an exercise price of $0.10 per share.
 
 In January 2000, the Company’s board of directors authorized an employee stock option plan under which 1,200,000 shares of common stock were reserved for issuance upon exercise of either incentive or non-incentive stock options, which may be granted from time to time by the Board of Directors to employees.  The Board of
Directors determines the option price (not to be less than estimated fair value for incentive options) vesting period and expiration date (note to exceed 10 years) at the date of grant.
 
 
 F-12
 
 CONCEPT DIGITAL, INC. AND SUBSIDIARY
(a development stage enterprise)

Notes to Consolidated Financial Statements
  
 NOTE 8 – STOCK OPTIONS AND WARRANTS (continued)
 
 Stock Options (continued)
 
 The following summarizes stock option transactions
 
 2006


2005Shares


Weighted
Average
Exercise
Price


Shares


Weighted
Average
Exercise
PriceOutstanding options at the beginning of year


1,815,000


$
0.11



1,880,000


$
0.11Options expired


0







(65,000
)


0.12Outstanding options at end of year


1,815,000


$
0.11



1,815,000


$
0.11
 
 The following table summarizes information about the plan’s options outstanding at December 31, 2006:
 
 Options Outstanding
Options ExercisableRange of
Exercise
Prices
Number
Outstanding
Weighted
Average
Remaining
Contractual
Life
(In Years)
Weighted
Average
Exercise
Price
Number
Exercisable
Weighted
Average
Exercise
Price$0.10-$0.12
1,815,000
3.4
$0.11
1,815,000
$0.11
 
 On January 1, 2002, the Company’s Board of Directors held a meeting and voted to terminate the stock option plan effective January 1, 2002.
   F-13
 CONCEPT DIGITAL, INC. AND SUBSIDIARY
 (a development stage enterprise)
 
 Notes to Consolidated Financial Statements
   NOTE 8 – STOCK OPTIONS AND WARRANTS (continued)
 
 Warrant and Non-Employee Options
 
 In connection with a private placement in 2000, the Company granted warrants to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.10 per share expiring in 2010.
 
 In 2000, the Company issued warrants to purchase 750,000 shares with an exercise price of $.10 per share expiring in 2010 to a consultant and granted, to various consultants, options under the stock option plan to purchase 135,000 shares of common stock with an exercise price of $.12 per share and expiring from 2005 to 2010.  These
warrants and options were valued using the Black-Scholes options pricing model with the following assumptions: dividend yield 0%, volatility 0%, expected life ranging from 5 to 10 years, risk free interest rates ranging from 5.8% to 6.3% and expensed over the vesting period.
 
 In 2001, the Company issued options to purchase 600,000 shares with an exercise price of $.10 per share expiring in 2011 to a consultant and a director.  These options were valued using the Black-Scholes option pricing model with the following assumptions: dividend yield 0%, volatility 0% (since the options were granted prior
to the reverse acquisition of CDI), expected life 10 years, risk free interest rates ranging from 4.7% to 5.35% and expensed over the vesting period.


F-14








ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





None





ITEM 9A. CONTROLS AND PROCEDURES





Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as
amended (Exchange Act), as of December 31, 2006. Based on this evaluation, our principal executive officer and principal financial officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules based on the material weakness described below:





MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING





Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.  The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and
Board of Directors regarding the preparation and fair presentation of published financial statements in accordance with United State’s generally accepted accounting principles (US GAAP), including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with US GAAP and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.





Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Management’s assessment included an evaluation of the design of our
internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting.  Based on this assessment, Management concluded the Company maintained effective internal control over financial reporting as of December 31, 2006.





Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.





This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission
that permit the Company to provide only management’s report in this Annual Report.








PART III





ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT





The directors and officers of the Company and its subsidiaries, as of May 26, 2009, are set forth below. The directors hold office for their respective term and until their successors are duly elected and qualified. Vacancies in the existing Board are filled by a majority vote of the remaining directors. The officers serve at the will
of the Board of Directors.





NAME
AGE
WITH COMPANY SINCE
DIRECTOR/POSITIONJoseph Douek
41
2001
Chairman, Chief Executive Officer and Chief Financial OfficerRichard Darrow
61
2001
Director








-9-








JOSEPH DOUEK, 41.CHAIRMAN OF THE BOARD OF DIRECTORS, CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER





Mr. Joseph Douek was born, raised and currently resides in Brooklyn, NY.  He is the Chief Executive Officer and owner of Willoughby’s since 1994.  Established in 1898, Willoughby’s is NYC’s oldest photographic retailer.  Mr. Douek’s responsibilities include overseeing the day to
day activities of Willoughby’s and its long term strategic planning.





In December 2001, Mr. Douek was appointed by The Honorable Mayor Rudolph Giuliani as Brooklyn’s representative to the NYC Economic Development Corporation Board of Directors.  Since 2001 Mr. Douek has continued to serve as an EDC Board Member and has been reappointed by NYC Mayor, The Honorable Michael Bloomberg.





In addition to serving as an appointed official in the capacity of a NYC Economic Development Corporation Board Member, in February 2002 Mr. Douek was appointed by The Honorable Mayor Mike Bloomberg to serve as the Brooklyn representative to the NYC Industrial Development Agency Board of Directors Mr. Douek continues to serve as an
IDA Board Member and has initiated efforts to promote economic development in Brooklyn and all the five Boroughs of NYC.





RICHARD DARROW, 61. DIRECTOR.





All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee
thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors.  We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors' fees and reimburse Directors for expenses related to their activities.





None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.





CERTAIN LEGAL PROCEEDINGS





No director, nominee for director, or executive officer of the Company has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.





Compliance with Section 16(a) of the Exchange Act





Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and persons who own more than 10 percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (SEC). Officers, directors, and greater
than 10 percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.





To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company, all reports under Section 16(a) required to be filed by its officers and directors and greater than ten percent beneficial owners were not filed as of the date of this filing.





Code of Ethics





We have not adopted a Code of Ethics.





ITEM 11.   EXECUTIVE COMPENSATION





Compensation of Executive Officers





The following information relates to compensation received by the Chief Executive Officer of the Company in fiscal years ended December 31, 2006 and December 31, 2006 for the executive officers who were serving as of fiscal years ended December 31, 2006 and December 31, 2006, whose salary and bonus during fiscal years ended December
31, 2006 and December 31, 2006 exceeded $100,000. In 2004, no officer received compensation in excess of $100,000.








-10-





Summary Compensation Table





NAME AND PRINCIPAL POSITION
YEAR

SALARY
($)


BONUS
($)


RESTRICTED
STOCK AWARD
($)


TOTAL
($)Joseph Douek,
Chief Executive Officer
2005


0



0



0



0Joseph Douek,
Chief Executive Officer
2004


0



0



0



0





Employment Agreements





No officer or director has been granted an employment contract or been provided a future benefit to be received upon separation from service with the Company.





ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





The following table sets forth as of December 31, 2006 information with respect to the beneficial ownership of the Company's Common Stock by (i) each person known by the Company to own beneficially 5% or more of such stock, (ii) each Director of the Company who owns any Common Stock, and (iii) all Directors and Officers as a group,
together with their percentage of beneficial holdings of the outstanding shares.





Security Ownership of Beneficial Owners (1):





TITLE OF CLASS
NAME & ADDRESS
AMOUNT
PERCENT (2)Common Stock
Joseph Douek
Chief Executive Officer
18,616,120
46.91%Common Stock
Richard Darrow
Director
100,000
0.25%All directors and executive officers as a group (2 persons)
19,616,120
47.163%





(1)      The persons named in this table have sole voting and investment power with respect to all shares of common stock reflected as beneficially owned by each.





(2)      For purposes of this table only, this percentage is based on 39,683,381 shares outstanding as of December 31, 2006.





ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTION, AND DIRECTOR INDEPENDENCE





During 2003, the Company sold digital camera warranties to a company controlled by the Company’s majority stockholder.  As of December 31, 2006, accounts receivable – related party represents amounts due from the sale of warranties to these companies.





ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES





Audit Fees





For the Company’s fiscal years ended December 31, 2006 and 2005, we were billed approximately $25,000 and $20,000 for professional services rendered for the audit and review of our financial statements.





Audit Related Fees





There were no fees for audit related services for the years ended December 31, 2006 and 2005.






-11-





Tax Fees





For the Company’s fiscal years ended December 31, 2006 and 2005, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.





All Other Fees





The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended December 31, 2006 and 2005.





Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us or our subsidiaries to render any auditing or permitted non-audit related service, the engagement be:





-approved by our audit committee; or





-entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular  service,  the  audit committee is informed of each service, and such policies and procedures do not include delegation of the audit
committee's responsibilities to management.





We do not have an audit committee.  Our entire board of directors pre-approves all services provided by our independent auditors. The pre-approval process has just been implemented in response to the new rules. Therefore, our board of directors does  not have  records of  what percentage of the
above fees were pre-approved.  However, all of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.





-12-






PART IV





ITEM 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES.





a) Documents filed as part of this Annual Report





1. Consolidated Financial Statements





2. Financial Statement Schedules





3. Exhibits





31.1
Certification of President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board of Directors Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 31.2
Certification of President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board of Directors Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002











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SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.





CONCEPT DIGITAL, INC.Dated:
September 22, 2009
By: /s/ Joseph DouekChief Executive Officer,
Principal Financial Officer,
Principal Accounting Officer





Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.







Dated:
September 22, 2009
By: /s/ Joseph DouekChief Executive Officer,
Principal Financial Officer,
Principal Accounting Officer and Director





Dated:
September 22, 2009
By:/s/ Richard DarrowDirector














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