UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-K

(Mark One)



|[√] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ------------------------------------------------------------------------------------





For the fiscal year ended December 31, 2012



OR





|[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------





For the
transition period from ______ to ______



Commission file number: 000-54156



SHADES HOLDINGS, INC.

(Exact name of registrant as specified in its
charter)





| | Florida                                                        |  | 27-1368114                          
| | -------------------------------------------------------------- |  | ------------------------------------
| | (State or other jurisdiction of incorporation or organization) |  | (I.R.S. employer identification no.)
| |                                                                |  |                                     
| | 2875 NE 191 Street, Suite 511                                  |  |                                     
| | Aventura, FL                                                   |  | 33810                               
| | (Address of principal executive offices)                       |  | (Zip code)                          





Registrant’s
telephone number, including area code:(813) 454-0130



Securities registered pursuant to Section 12(b)
of the Act: None

Securities registered pursuant to section
12(g) of the Exchange Act: Common Stock, par value $0.0001 per share





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [√]



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 [ ] No
[√]



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 [] No [x ]



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate website, 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 [x]



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 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. [x ]



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. (Check one):



Large accelerated filer [
] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company
[√]



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



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, as
of the last business day of the registrant’s most recently completed fiscal year, is $412,600, which is based on a price
per share of $.05.



The registrant had 32,500,000 shares of common
stock, par value $0.0001 per share, outstanding as of September 6, 2013.













Shades Holdings, Inc.

Table of Contents



|PART I.    |                                                                                                               | Page No.
|---------- | ------------------------------------------------------------------------------------------------------------- | --------
|           |                                                                                                               |         
|Item 1.    | Business.                                                                                                     | 1       
|           |                                                                                                               |         
|Item 2.    | Properties.                                                                                                   | 2       
|           |                                                                                                               |         
|Item 3.    | Legal Proceedings.                                                                                            | 3       
|           |                                                                                                               |         
|Item 4.    | Mine Safety Disclosure                                                                                        |         
|           |                                                                                                               |         
|PART II.   |                                                                                                               |         
|           |                                                                                                               |         
|Item 5.    | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 3       
|           |                                                                                                               |         
|Item 6.    | Selected Financial Data.                                                                                      | 3       
|           |                                                                                                               |         
|Item 7.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations.                        | 3       
|           |                                                                                                               |         
|           |                                                                                                               |         
|           |                                                                                                               |         
|Item 8.    | Financial Statements and Supplementary Data.                                                                  | 9-19    
|           |                                                                                                               |         
|Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.                         | 20      
|           |                                                                                                               |         
|Item 9A.   | Controls and Procedures.                                                                                      | 20      
|           |                                                                                                               |         
|Item 9B.   | Other Information.                                                                                            | 20-21   
|           |                                                                                                               |         
|PART III.  |                                                                                                               |         
|           |                                                                                                               |         
|Item 10.   | Directors, Executive Officers and Corporate Governance.                                                       | 21      
|           |                                                                                                               |         
|Item 11.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.               | 22      
|           |                                                                                                               |         
|Item 12.   | Executive Compensation.                                                                                       | 22      
|           |                                                                                                               |         
|Item 13.   | Certain Relationships and Related Transactions, and Director Independence.                                    | 23      
|           |                                                                                                               |         
|Item 14.   | Principal Accounting Fees and Services.                                                                       | 23      
|           |                                                                                                               |         
|PART IV.   |                                                                                                               |         
|           |                                                                                                               |         
|Item 15.   | Exhibits, Financial Statement Schedules.                                                                      | 24      
|           |                                                                                                               |         
|SIGNATURES | 25                                                                                                           







DESCRIPTION OF THE COMPANY’S BUSINESS



Explanatory Note



During the period covered by this report, the
registrant, through its operating subsidiary Daily Shades, Inc., operated as an online retailer of discount designer and brand
name sunglasses. Subsequent to the period covered by this report, as disclosed in the Company’s 8-K filed with the SEC on
in June 2013, the Company sold its Daily Shades, Inc. subsidiary, and acquired all of the outstanding capital of Shades of Fragrances,
Inc. (“SOF”). The description of the Company’s business in this report relates to the sunglasses business operated
during the period covered by this report unless otherwise indicated.



General



During the period covered by this report, we
were an online retailer of discount designer and brand name sunglasses and watches. We incorporated under the laws of Florida on
November 23, 2009. We are a development stage company and have recently commenced our business operations.  From our inception
on November 23, 2009 through December 31, 2012, we incurred a cumulative loss of $415,989 and have only generated limited revenues
from our business operations.



We offered and sell
high quality, name brand sunglasses and watches to our customers through our wholly-owned subsidiary, Daily Shades, Inc. 
We offered recognized designer brand sunglasses, such as Armani®, Prada®, Versace®, Ray Ban® and Gucci®, at
discounts of up to 70% of the manufacturer’s suggested retail price.  We also offered recognized designer brand
watches, such as Movado®, Invicta®, Swiss Army®, Fossil® and Tag Heuer®, at discounts of up to 75% of the manufacturer’s
suggested retail price. Sunglasses and watches that were available through our “bargain bins” were  typically offered
at discount prices as well.  Our products were offered and sold through our websites atwww.dailyshades.com and
www.dailychrono.com.



To date, our operations have been limited,
and as of December 31, 2012 we have only earned $7,761 in revenues from the sale of our products.  We have earned $102 in
2012 from the sale of advertising space on our websites.



Our Websites and Our Products



Because online shoppers cannot touch or feel
products, online retailers must find ways to supplant the physical shopping experience with a content-rich, user-friendly interface
that makes it easy for shoppers to find, research and compare products, answer their questions and direct them toward a buying
decision. Shoppers must also feel comfortable enough with the reliability and reputability of an online retailer to make a purchase
online.  Many online retailers’ websites are clogged with needless information and products.  We have designed
websites that we believe are simple and user-friendly with a focus on our “daily deal.”



We also sold advertisement
space on our websites.  To date, our sale of advertising space has generated de minimus revenues. Also, we launched “splash
pages” for the other daily deal domains owned by us, which includedailyflops.com, dailylids.com, dailytote.com and
dailysneaks.com. A “splash page” is a simple one page website that requires minimal development output and expenditures
but that will allow us additional exposure on the internet. Each of these other daily deal domains had an advertisement that can
potentially generate revenue and had a link to our website, dailyshades.com.



Product Delivery



We generally utilized a “drop shipping”
arrangement to deliver the products offered as our “daily deal.”  When we received an order, we transferred the
order and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer. In the
instances where we shipped the products to our customers directly, we utilize the United States Postal Service or UPS®, both
of which use signature confirmation for delivery and arrive in two to three business days generally. These processes allow our
customers to receive our products promptly and also allow us to minimize our overhead costs as we are not required to maintain
inventory of our product.  The inventory we carried was generally limited to single models in limited quantity, old models
and slightly damaged models that we offered through our “bargain bins.”



We offered free shipping within the continental U.S. and offer shipping
to the U.K. on a fixed cost basis.



Marketing



We utilized various channels to market our
products, including click-through based advertising on shopping comparison engines, targeted emails, display and banner advertisements
on high-traffic portals, social networking via major social media sites, affiliate programs such as Shareasale.com, and onsite
promotions on our websites.  We did not conduct any “offline” marketing activities.



Our primary marketing channels to date have
been through the social networking sites Twitter (http://twitter.com/DailyShades) and Facebook.  We believe these social networking
sites allowed us to reach our target customer base.











Suppliers



We generally did not purchase inventory
from our suppliers; rather, we typically negotiated an arrangement with our supplier to acquire the products at a fixed cost,
which did not incur until the item is sold.  However, there are limited instances where we purchased inventory such
as greatly discounted models and carried that inventory from time to time.



Additionally, we were approved by two drop
shipper suppliers, who supplied designer and brand name sunglasses, and by 2 drop shipper suppliers, who supplied designer and
brand name watches. A drop shipper allows the retailer to advertise the drop shipper’s supply of items, products and merchandise,
and the retailer only incurs the cost of the item, product or merchandise when the retailer sells the item, product or merchandise
to a customer. When a customer places an order with the retailer, the retailer transfers the customer order to the drop shipper.
Once the retailer pays the drop shipper for the merchandise ordered by the customer, the drop shipper ships the merchandise directly
to the customer in a non-marked package with the retailer’s return address. Further, a drop shipper does not require a minimum
order or maintenance of a credit line by the retailer.



While we will seek to establish supply channels
with other manufacturers, retail chains, wholesalers and liquidators that have excess inventory of sunglasses and watches, we do
not anticipate entering into any contracts or arrangements with our suppliers that guarantee the availability of merchandise, or
provide for the continuation of particular pricing or other practices, as this is atypical in our industry.  As such, our
suppliers may cease selling us inventory on current terms or entirely, and if the terms are changed, then we may not be able to
establish new supply relationships on similar or better terms.



Technology



Our websites provided product descriptions,
search and ordering functionalities and product reviews. We utilized secure encryption technology to send and receive confidential
financial information during the transaction process.  Online fraud is a constant threat to security and reliability of e-commerce
retailers. We worked with third-party vendors to assist us in monitoring our network security devices and to secure our online
payment systems.



Competition



The e-commerce market is rapidly evolving and
intensely competitive with limited barriers to entry.  The internet’s development into a significant global medium for
communication, content and commerce has led to substantial growth in online shopping.  According to the Forrester Research
report, “U.S. eCommerce Forecast, 2008 to 2013,” published February 2, 2009, the U.S. e-commerce market was $141.3
billion in 2008 and is expected to grow to $229.1 billion in 2013, representing a 10.1% compound annual growth rate. In addition,
the Forrester Research predicts that online retail sales will grow from 5% of total retail sales in 2008 to 8% of total retail
sales by 2013.  We expect that our primary competition will come from internet retailers such as Woot.com, ebay.com and other
“deal of the day” websites.   Many of our potential online and brick-and-mortar competitors have longer operating
histories, larger customer bases, greater brand recognition and significantly greater financial, marketing, technical, management
and other resources than we do.  In addition, our competitors have used and may continue to use aggressive pricing or promotional
strategies, have stronger supplier relationships with more favorable terms and inventory allocation and devote substantially greater
resources to website and system development than we do.



Employees



Lucien G. Lallouz is our Chief Executive Officer
and President.  We have no other employees other than Mr. Lallouz at this time.



As noted above,
in June 2013, we acquiredShades of Fragrances, Inc., which has since been our operating subsidiary. SOF is a Florida corporation
formed May 14, 2013, which owns the federal registered trademark (Registration No. 277316) “Phantom” for perfumes and
fragrances. In connection with this acquisition the Company will become a luxury & lifestyle brand developer, through licensing
agreements with emerging fashion designers and established celebrity brands, including our own proprietary trademarks in the fragrance
and cosmetic industry.We are also engaged in developing our business infrastructure and we are seeking
capital to support the further development of our licensing agreements. As of the date of this report, our activities have been
limited to various organizational matters, limited operations, and the development of our business plan.



DESCRIPTION OF PROPERTIES



Our principal executive offices are located
at 2875 NE 191 Street, Suite 511, Aventura, Florida 33810. The space is provided at a cost of $197 per month for limited
services such as general meeting space and copier use. .  In the future, we will need to obtain warehouse space and office
space if business increases.













LEGAL PROCEEDINGS



None.



MINE SAFETY DISCLOSURES



Not applicable.



MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS



Our common stock is quoted on the OTC Pink market under the symbol
“SHDH”.



Holders



As of December 31, 2012, there were 63 registered
holders or persons otherwise entitled to hold our common stock.



Dividends



We have never paid cash dividends on our capital
stock and do not anticipate paying any cash dividends with respect to those securities in the foreseeable future.  Our
current business plan is to retain any future earnings to finance the expansion and development of our business.  Any
future determination to pay cash dividends will be at the sole discretion of the Board of Directors and will be dependent upon
our financial condition, results of operations, capital requirements and other factors, as our Board of Directors may deem relevant
at that time. Our Board of Directors has the right to authorize the issuance of preferred stock, without further shareholder approval,
the holders of which may have preferences over the holders of the common stock as to the payment of dividends.



Securities Authorized for Issuance Under
Equity Compensation Plans



We have not adopted any equity compensation
plans.



MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Our Management’s Discussion and Analysis
should be read in conjunction with our financial statements included in this report. The following discussion and analysis is intended
to help the reader understand the results of operations, financial condition and cash flows of Shades Holdings, Inc. Our Management’s
Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements
and the accompanying notes to the consolidated financial statements included herein.



Forward-Looking Statements



Certain statements contained in this report
on Form 10-K and other written material and oral statements made from time to time by us do not relate to historical or current
facts. As such, they are referred to as “forward-looking statements,” which are intended to convey our expectations
or predictions regarding the occurrence of possible future events or the existence of trends and factors that may impact our future
plans and operating results. These forward-looking statements are derived, in part, from various assumptions and analyses we have
made in the context of our current business plan and information currently available to us and in light of our experience and perceptions
of historical trends, current conditions and expected future developments and other factors we believe to be appropriate in the
circumstances. You can generally identify forward-looking statements through words and phrases such as “seek,” “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “plan,” “budget,”
“project,” “may be,” “may continue,” “may likely result,” and similar expressions.
When reading any forward-looking statement, you should remain mindful that actual results or developments may vary substantially
from those expected as expressed in or implied by that statement for a number of reasons or factors, such as those relating to:

- whether or not a market for our products and services develop and, if a market develops,
the pace at which it develops;
- our ability to successfully sell our products and services if a market develops;
- our ability to attract the qualified personnel to implement our growth strategies;
- our ability to develop sales and marketing capabilities;
- the accuracy of our estimates and projections;
- our ability to fund our short-term and long-term financing needs;
- changes in our business plan and corporate strategies; and other risks and uncertainties
discussed in greater detail in the sections of this report, including the section captioned “Plan of Operation.”

Each forward-looking statement should be read
in context with, and with an understanding of, the various other disclosures concerning our Company and our business made elsewhere
in this report, as well as other public reports filed with the SEC. You should not place undue reliance on any forward-looking
statement as a prediction of actual results or developments. We are not obligated to update or revise any forward-looking statement
contained in this report to reflect new events or circumstances unless and to the extent required by applicable law.











Background



From our inception on November 23, 2009 through
December 31, 2012, we incurred a cumulative loss of $415,989 and have only generated limited revenues from our business operations.
We previously offered and sold high quality, name brand sunglasses and watches to our customers through our wholly-owned subsidiary,
Daily Shades, Inc. The high quality, name brand sunglasses were offered at discounts of up to 70% of the manufacturer’s suggested
retail price and were offered and sold through our website at www.dailyshades.com, and the high quality, name brand watches were
offered at discounts of up to 75% of the manufacturer’s suggested retail price and were offered and sold through our website
at www.dailychrono.com. We offered a different pair of sunglasses and a different watch each day to our customers through our websites.
We generally offered our sunglasses and watches for a limited period of time and presented the offer as a “daily deal”
on our websites. We are also engaged in developing our business infrastructure and we are seeking capital to support the further
development of our licensing agreements.



During
our development stage, we have and will continue to incur significant expenditures for organizational costs and marketing, arising
both internally and externally. Our organizational costs have made up the majority of our expenses to date. These expenditures
are entirely predicated on the success of our financing efforts discussed in Liquidity and Capital Resources, below. We have had
to pay for most of our organizational costs with cash and currently anticipate that we will be required to pay for our marketing
efforts with cash. However, to the extent that outside parties will entertain share-based payment arrangements, we will likely
pursue negotiations on those lines.We have previously issued shares of our common stock as compensation to certain consultants,
and our legal service provider. We will seek stock-based compensation arrangements in the future.



As previously reported, on September 7, 2012,
the Company entered into a Share Exchange Agreement with Suncoast Real Estate Owned Holdings, Inc., (“Suncoast”), and
the shareholder of Suncoast (the “Suncoast Shareholder”), pursuant to which the Suncoast Shareholder agreed to transfer
all of the issued and outstanding capital stock of Suncoast (the “Suncoast Shares”) to the Company in exchange for
15,500,000 shares of common stock of the Company (the “Suncoast Exchange Shares”). The parties contemplated that such
exchange would result in Suncoast becoming a wholly-owned subsidiary of the Company and the Shareholder acquiring a controlling
interest in the Company (the “Suncoast Exchange Transaction”).



On November 27, 2012, the Company entered into
an agreement with the Suncoast Shareholder, effective as of September 11, 2012 (the “Suncoast Effective Time”), pursuant
to which the parties agreed that the Suncoast Shareholder failed to relinquish control of Suncoast to the Company and that the
Suncoast Exchange Transaction was never effectively consummated. Accordingly, the Suncoast Shareholder returned the Suncoast Exchange
Shares to the Company on November 27, 2012 and the parties agreed that the Suncoast Shares have remained under the ownership of
the Suncoast Shareholder since the Suncoast Effective Time.



New Business



Shades
of Fragrances, Inc. (“SOF”) is a fragrance branding company and a wholly owned subsidiary of the Company which owns
the federal registered trademark (Registration No. 277316) “Phantom” for perfumes and fragrances.



In connection with the acquisition the Company
will become a luxury & lifestyle brand developer, through licensing agreements with emerging fashion designers and established
celebrity brands, including our own proprietary trademarks. SOF applies analytical tools and models, which have been proven successful,
to identify and leverage the brand’s powerful characteristics. Additionally, on July
2, 2013 the Company appointed David H. Schwanz, formerly a Vice President of Sales at Elizabeth Arden, as President of Shades Of
Fragrances, Inc., effective immediately. David’s primary focus will be building a sales team to lead the initiatives of the
company.



Liquidity and Capital Resources



The preparation of financial statements in
accordance with generally accepted accounting principles contemplates that operations will be sustained for a reasonable period.
However, we have incurred operating losses of $160,197 during the year ended December 31, 2012. In addition, we used cash of $82,358
in support of our operating activities. As of December 31, 2012, we had cash on hand of $542 and negative working capital of $153,556.
Since our inception, we have been substantially dependent upon funds raised through the sales of our stock in private placements
to sustain our operating activities. Our operating plan will require substantially all available liquid resources and additional
financing sources, which we may not be able to achieve, to continue our business operations. These conditions raise substantial
doubt about our ability to continue as a going concern for a reasonable period.

Our preferred
method of raising this necessary capital will be to sell shares through stock offerings.Our Registration Statement on Form
S-1 (File No. 333-168139), related to our initial public offering, was declared effective by the SEC on October 25, 2010. Under
the registration statement, the Company sold 95,000 shares of common stock at a price of $0.25 per share resulting in cash proceeds
of $23,750 during the year ended December 31, 2011. On June 3, 2011, the Company closed the offering under the registration statement.
The Company’s focus has been on addressing the regulatory requirements associated with becoming a public company rather than
actively offering its shares. The Company intends to begin actively offering its shares to raise the funds necessary to implement
its business plan.

We currently do not have any financing
commitments (binding or non-binding), and we cannot give you any assurance that we will be able to secure the additional cash or
working capital we may require to continue our operations and fully implement the initial phase of our business plan.

The Company issued shares of common stock valued
at approximately $38,730 as compensation to service providers and vendors. However, further funding is not assured for the Company
to continue as a going concern for a reasonable period, and, ultimately, we need to generate profitable operations to sustain our
business activities. We cannot give any assurances regarding the success of management’s plans. Our consolidated financial
statements do not include adjustments relating to the recoverability of recorded assets or liabilities that might be necessary
should we be unable to continue as a going concern.



4







Cash Flow from Operating Activities– We recorded a net loss of $160,197 and $79,884 during the year ended December 31, 2012 and 2011, respectively.



Our cash used in operating activities includes
cash flow from changes in our operating assets and liabilities of $82,358 for the year ended December 31, 2012 compared to a use
of cash of $39,366 for the year ended December 31, 2011.



Our inventory was $3,053 at December 31, 2012
compared to $3,145 at December 31, 2011.



In October of 2010, we charged non-cash share-based
registration statements costs of $69,486 to paid in capital upon the effective registration of our common stock on October 25,
2010.



Accounts payable and accrued expenses were
$69,266 at December 31, 2012, an increase of $35,707 from $33,559 at December 31, 2011. This use of funds is due to the timing of
payments for services accrued at December 31, 2012.



Cash Flow from Investing Activities– We used $0 and $1,500 cash in our investing activities during the year ended December 31, 2012 and December 31, 2011,
respectively.



We have no commitments for the purchase of property and equipment
or other long-lived assets.



Cash Flow from Financing Activities– On February 1, 2010, we distributed to potential investors a Private Placement Memorandum
offering 250,000 shares of our common stock at a price of $0.25 per share.  The shares were offered by us on a “best
efforts” basis through the efforts of our President.  We have sold 217,000 shares of our common stock resulting in cash
proceeds of $54,250 to the Company. This Private Placement Memorandum offering is now closed. We have been substantially
dependent on these types of financings since inception.



Our Registration Statement on Form S-1 (File
No. 333-168139), related to our initial public offering, was declared effective by the SEC on October 25, 2010. During the year
ended December 31, 2011 the Company sold 95,000 shares of common stock at a price of $0.25 per share resulting in cash proceeds
of $23,750. On June 3, 2011, the Company closed the offering under the registration statement. There can be no assurances that
funding sources to meet our business needs will become available or be on terms that are suitable to our management. The Company’s
focus has been on addressing the regulatory requirements associated with becoming a public company rather than actively offering
its shares. The Company intends to begin actively offering its shares to raise the funds necessary to implement its business plan.



In November 2011 we took out a short
term note from a fund for $6,000. That fund is managed by our former CEO Sean Lyons. Terms of the note were twelve percent per
annum for six month with a default clause of an additional $1,000 added to principal. In March of 2012 we issued an additional
$1,000 short term promissory note to the same fund. In April of 2012 the previous notes along with a new note for $18,000 were
combined into one note totaling $25,000 with a one year term. The notes accrued interest at twelve percent per annum for one year
with a default clause of an additional $3,000 added to principal. The note is secured by inventory and domains owned by the Company.The short term note was paid in full on June 24, 2013 for$28,968.



On September 11, 2012, the Company issued an 8% note in the principal
amount of $32,500 to Asher Enterprises, Inc., an investment fund. The note is convertible into common stock at a discount to the
market price of the Company’s common stock. The note was secured with 565,000 shares of common stock reserved. On June 24,
2013 the note issued to the investment fund was paid in full and the shares were released from reserve.



The Company also issued an 8% promissory note to two related parties
which were stockholders of company in the principal amount of $10,000 each, which are convertible into common stock at a discount
to the market price of the common stock.



Results of Operations



Year Ended December 31, 2012 Compared to
Year Ended December 31, 2011



Revenues–We derive
our revenues from the sale of tangible products, primarily sunglasses and watches. Our consolidated product sales of sunglasses
and watches were $2,556 for the year ended December 31, 2012 compared to $2,509 for the year ended December 31, 2011. Gross profit
margin of 56.37% and 47.27% was achieved during the year ended December 31, 2012 and December 31, 2011, respectively. We expect
our margins to increase over time. Our revenues are limited and will continue to be limited until we can fully implement our business
plan.



Cost of Product Sales –
Our cost of product sales were $1,115 for the year ended December 31, 2012 compared to $1,323 for the year ended December 31, 2011.
Our cost of product sales is a direct result of our sales activity. Costs of products sold reflect our normal costs for products
we sell but include some unexpected emergency shipping costs and product pricing costs.



Selling General and Administrative Expense
– These operating expenses consist of advertising expense, accounting and professional expenses, compensation costs and general
expenses, amortization and administrative expenses. Our analysis of the material components of changes in our operating expenses
are as follows:



Advertising and Promotion –
Advertising and promotion expense was $376 for the year ended December 31, 2012 compared to $552 for the year ended December 31,
2011. Due to limited operating activity, our advertising expense is set at minimum levels however we expect these expenses to increase
as our operating activity increases.



Accounting and Professional Expense
- Accounting and consulting professional expenses were $134,819 for the year ended December 31, 2012 compared to $72,138 for the
year ended December 31, 2011. This increase in accounting and consulting professional expenses is due to a significant increase
in consulting and accounting fees. In 2010 we filed our S1 and additional filings involved with becoming effective created the
additional cost not incurred until 2012. These expenses for the year ended December 31, 2012 include non-cash share-based payment
expense for accounting and information technology services of $39,999. These costs include fees relating to professional consulting
for information technology services and accounting services and external audit related expenses. Our fees for these services will
continue as these services support our operations.













Compensation Costs – Compensation
related costs consist of salaries and payroll taxes. These costs were $12,887 and $6,888 for the year ended December 31, 2012
and December 31, 2011, respectively. Our compensation costs relate to payroll for our Principal Executive Officer. Since June
2011 the payroll has been accrued by our CFO. On July 1, 2012, our Chief Executive Officer, Sean Lyons, forgave all his accrued
compensation totaling $6,500. On September 25, 2012 Sean Lyons received a consulting fee of $16,686.



Amortization - Our amortization
of intangible assets was $1,000 and $1,000 for the year ended December 31, 2012 and December 31, 2011, respectively. The expense
is related to the amortization of our website over its useful life.



Other General and Administrative
– These costs and expenses include general office expenses. Our general and administrative costs were $2,171 for the year
ended December 31, 2012 and $492 for the year ended December 31, 2011. These costs reflect normal operating expenses and other
administrative expenses, including, without limitation, travel and entertainment expenses.



Net Loss – We have reported
net loss of $160,197 during the year ended December 31, 2012 compared to a net loss of $79,884 during the year ended December 31,
2011. The change in the net loss amount results, among other things, from more expenses for accounting and consulting professional
expenses, compensation costs and other general and administrative office expenses. The net loss is a result of the items discussed
in the preceding discussion.



Our costs associated with legal and accounting
fees will continue to remain high because, as a reporting company, we are required to comply with the reporting requirements of
the Securities and Exchange Act of 1934. This involves the preparation and filing of the quarterly and annual reports required
under the Securities and Exchange Act of 1934 as well as the other filing requirements found in that Act. We will also incur additional
expenses associated with the services provided by our transfer agent. In addition, to the work we are presently doing, we will
need to focus our time and energy to complying with the Securities and Exchange Act of 1934. This will detract from our ability
and efforts to expand our business model and future product and service offerings.



We anticipate incurring these additional expenses
related to complying with the Securities and Exchange Act of 1934 and being a public company without receiving a substantial increase
in revenues associated with this undertaking. Therefore, these additional expenses will not be offset by an increase in revenue.
There is currently no public market for our common stock. We will need to compensate for these additional costs associated with
becoming a public company by revenues generated from our products or from the public or private sale of equity securities, the
procurement of advances from our majority shareholder, debt financing or short-term loans, or a combination of the foregoing. As
discussed elsewhere in this report, we currently do not have any financing commitments (binding or non-binding), and we cannot
give you any assurance that we will be able to secure the additional cash or working capital we may require to continue our operations
and meet these costs.



Off-Balance Sheet Arrangements



We do not have any off-balance sheet arrangements.



Going Concern



The independent auditor’ report accompanying
our December 31, 2012 and December 31, 2011 financial statements contains an explanatory paragraph expressing doubt about our
ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a
going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary
course of business.



Critical Accounting Policies



Our discussion and analysis of our financial
condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses
and related disclosures of contingent assets and liabilities. For a description of those estimates, see Note 3, Summary of Significant
Accounting Policies, contained in the explanatory notes to our audited financial statements for the period ended December 31, 2012
and December 31, 2011. On an on-going basis, we evaluate our estimates, including those related to deferred tax assets and valuation
allowance, impairment of long-lived assets and fair value of our financial instruments and equity instruments. We base our estimates
on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that
our estimates, including those for the above-described items, are reasonable.



While all of our accounting policies impact
the consolidated financial statements, certain policies are viewed to be critical. Critical accounting policies are those that
are both most important to the portrayal of our financial condition and results of operations and that require management’s
most subjective or complex judgments and estimates. Management believes the policies that fall within this category are the policies
on revenue recognition, accounts receivable, intangible assets, investments and financial instruments.



Revenue Recognition – Revenue
is recognized when evidence of the arrangement exists, the product is shipped to a customer, the fee for the service is fixed or
determinable and when we have concluded that amounts are collectible from the customers. Estimated amounts for sales returns and
allowances are recorded at the time of sale. Shipping costs billed to customers are included as a component of product sales. The
associated cost of shipping is included as a component of cost of product sales.



Accounts Receivable –Accounts
receivable represent normal trade obligations from customers that are subject to normal trade collection terms, without discounts
or rebates. Notwithstanding these collections, we periodically evaluate the collectability of our accounts receivable and consider
the need to establish an allowance for doubtful accounts based upon our historical collection experience and specifically identifiable
information about our customers.













Inventories –Inventories consist
of retail merchandise that is in its finished form and ready for sale to end-user customers. Inventories are recorded at the lower
of average cost or market. In-bound freight-related costs from our vendors are included as part of the net cost of merchandise
inventories. Other costs associated with acquiring, storing and transporting merchandise inventories are expensed as incurred and
included in cost of goods sold. Our inventories are acquired and carried for retail sale and, accordingly, the carrying value is
susceptible to, among other things, market trends and conditions and overall customer demand.



Impairments – The Company’s
management evaluates its tangible and definite-lived intangible assets for impairment under Accounting Standards Codification 350
(Intangible Assets) and Accounting Standards Codification 360 (Impairment and Disposals). Our evaluation is a two step process.
The first step is to compare our undiscounted cash flows, as projected over the remaining useful lives of the assets, to their
respective carrying values. In the event that the carrying values are not recovered by future undiscounted cash flows, as a second
step, we compare the carrying values to the related fair values and, if lower, record an impairment adjustment. For purposes of
fair value, we generally use replacement costs for tangible fixed assets and discounted cash flows, using risk-adjusted discount
rates, for intangible assets.



Financial Instruments –Our financial
instruments consist of cash and cash equivalents, inventory, accounts payable and accrued expense. We carry cash and cash equivalents,
inventory, accounts payable and accrued expense at historical costs; their respective estimated fair values approximate carrying
values because of the short-term nature of these investments.



Earnings (Loss)
Per Share - The Company uses the guidance set forth under FASB TopicAccounting Standards Codification260 (Earnings Per Share) for calculating the basic and diluted loss per share. Basic loss per share is computed by dividing loss
by the weighted average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share
except that the denominator is increased to include the number of additional common shares that would have been outstanding if
the potential shares had been issued and if the additional shares were dilutive. Common equivalent shares are excluded from the
computation of net loss per share if they would be anti-dilutive. The Company has no potentially dilutive securities for the year
ended December 31, 2012 and December 31, 2011.



Income Taxes - Income taxes are accounted
for using the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected
future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis, using
currently enacted tax rates. The effect on deferred assets and liabilities of a change in tax rates is recognized in income in
the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not
that some portion or all of the deferred tax assets will not be realized.



Share-Based Compensation –We
apply the grant-date fair value method to our share-based payment arrangements with employees under the rules provided in Accounting
Standards Codification718 (Accounting for Share-Based Payments) and Staff Accounting Bulletin
107. Share-based compensation cost for employees is measured at the grant date fair value based on the value of the award and is
recognized over the requisite service period, which is usually the vesting period for employees. For share-based payment transactions
with parties other than employees, we apply Accounting Standards Codification 505-50 (Equity Based Payments to Non-Employees).
These non-employee services are accounted for based on the fair value of the consideration received or the fair value of the equity
instruments issued, whichever is more reliably measurable. The measurement date for valuing share-based payments made to non-employees
is the earlier of the date at which a commitment for performance by the counterparty to earn the equity instruments is reached
or the date at which the counterparty’s performance is complete. Share-based payments to non-employees are recorded
at fair value on the measurement date and reflected in expense over the requisite service period.



Recent Accounting Pronouncements



Intedfinite-livied Intangible Assets

In July 2012, the FASB issued an accounting
standard update intended to simplify how an entity test indefinite-lived intangible assets other than goodwill for impairment by
providing entities with an option to perform a qualitative assessment to determine whether further impairment testing is necessary.
This accounting standard update is effective for Shades Holdings beginning in the first quarter of fiscal 2014 and is not expected
to have an impact on the Company’s consolidated statements.



Reporting of Amounts Reclassified out of
Accumulated Other Comprehensive Income

In February 2013, the FASB issued an accounting
standard update to require reclassification adjustments for other comprehensive income to be present either in the financial statements
or in the notes to the financial statements. This account standard update is effective for Shades Holdings beginning in the first
quarter of fiscal 2014, at which time the Company will include the required disclosures, if required.



Cumulative Translation Adjustment

In March 2013, the FASB issued an accounting
standard update requiring an entity to release into net income the entire amount of a cumulative translation adjustment related
to its investment in a foreign entity when as a parent it either sells a part or all of its investment in a foreign entity or no
longer holds a controlling financial interest in a subsidiary or group of assets within a foreign entity. This accounting standard
update is effective for Shades Holdings beginning in the first quarter of fiscal 2014 and is not expected to have an impact of
the Company’s consolidated financial statements.













Shades
Holdings Inc. and Subsidiary

(A
Development Stage Company)

Table
of Contents To Consolidated Financial Statements







|                                                                                                                                                                                |  | Page  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- | 
|                                                                                                                                                                                |  |       | 
|                                                                                                                                                                                |  |       | 
|Independent Auditors Report December 31, 2012                                                                                                                                   |  | 9     | 
|                                                                                                                                                                                |  |       | 
|Independent Auditors Report December 31, 2011                                                                                                                                   |  | 10    | 
|                                                                                                                                                                                |  |       | 
|Consolidated Balance Sheets
    as of December 31, 2012 and 2011                                                                                                                |  | 11    | 
|                                                                                                                                                                                |  |       | 
|Consolidated Statements of Operations
    for the years ended December 31, 2012 and 2011 and for the period from November 23, 2009 (Date of Inception) to December
    31, 2012 |  | 12    | 
|                                                                                                                                                                                |  |       | 
|Consolidated Statements of
    Stockholders' Deficit for the period from November 23, 2009 (Date of Inception) to December 31, 2012                                             |  | 13    | 
|                                                                                                                                                                                |  |       | 
|Consolidated Statements of
    Cash Flows for the years ended December 31, 2012 and 2011 and for the period from November 23, 2009 (Date of Inception)
    to December 31, 2012 |  | 14    | 
|                                                                                                                                                                                |  |       | 
|Notes to the Consolidated
    Financial Statements                                                                                                                              |  | 15-19 | 













REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM







To the Board of Directors and

Stockholders of Shades Holdings, Inc.



We have audited the accompanying balance sheet
of Shades Holdings, Inc. (the “Company”) as of December 31, 2012, and the related statements of operations, stockholders’
deficit, and cash flows for the year ended December 31, 2012. The Company’s management is responsible for these financial
statements. Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Shades Holdings, Inc. as of December 31, 2012, and
the results of its operations and its cash flows for the year ended December 31, 2012 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 2 of the accompanying financial
statements, the Company has incurred significant recurring losses from operations and is dependent upon the ability to raise sufficient
capital for continuation of its operations. These factors raise substantial doubt about the Company's ability to continue as a
going concern. Management’s plans in regards to these matters are also discussed in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.



/s/ Thomas Howell Ferguson P.A.



Tampa, Florida

October 24, 2013















REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM







To the Board of Directors and

Stockholders of Shades Holdings, Inc.



We have audited the accompanying balance sheet
of Shades Holdings, Inc. (the “Company”) as of December 31, 2011, and the related statements of income, stockholders’
deficit, and cash flows for the year ended December 31, 2011. The Company’s management is responsible for these financial
statements. Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Shades Holdings, Inc. as of December 31, 2011, and
the results of its operations and its cash flows for the year ended December 31, 2011 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 2 of the accompanying financial
statements, the Company has incurred significant recurring losses from operations and is dependent upon the ability to raise sufficient
capital for continuation of its operations. These factors raise substantial doubt about the Company's ability to continue as a
going concern.



/s/ Meeks International, LLC



Tampa, Florida

April 12, 2012










Shades
Holdings, Inc. and Subsidiary

(A
Development Stage Company)

Consolidated
Balance Sheets

---



|ASSETS                                                              |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|------------------------------------------------------------------- |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
|                                                                    |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|                                                                    |  |   | December
                                                                                                                          31,
                                                                                                                          2012 |   |  |   | December
                                                                                                                          31,
                                                                                                                          2011 |  
|Current
    assets:                                                 |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|Cash
    and cash equivalents                                       |  | $ | 542                                                                                                                                                                                                                                                                   |   |  | $ | 1,015                                                                                                                                                                                                                                                                 |  
|Inventory                                                           |  |   | 3,053                                                                                                                                                                                                                                                                 |   |  |   | 3,145                                                                                                                                                                                                                                                                 |  
|Total
    current assets                                            |  |   | 3,595                                                                                                                                                                                                                                                                 |   |  |   | 4,160                                                                                                                                                                                                                                                                 |  
|Websites-net                                                        |  |   | 1,500                                                                                                                                                                                                                                                                 |   |  |   | 2,500                                                                                                                                                                                                                                                                 |  
|Total
    assets                                                    |  | $ | 5,095                                                                                                                                                                                                                                                                 |   |  | $ | 6,660                                                                                                                                                                                                                                                                 |  
|                                                                    |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|LIABILITIES
    AND STOCKHOLDERS' (DEFICIT)                         |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|                                                                    |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|Current
    liabilities:                                            |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|Accounts
    payable                                                |  | $ | 68,310                                                                                                                                                                                                                                                                |   |  | $ | 29,656                                                                                                                                                                                                                                                                |  
|Accrued
    expenses                                                |  |   | 956                                                                                                                                                                                                                                                                   |   |  |   | 3,903                                                                                                                                                                                                                                                                 |  
|Notes
    payable - related party                                   |  |   | 27,447                                                                                                                                                                                                                                                                |   |  |   | 6,000                                                                                                                                                                                                                                                                 |  
|Note
    payable                                                    |  |   | 60,439                                                                                                                                                                                                                                                                |   |  |   | —                                                                                                                                                                                                                                                                     |  
|Total
    current liabilities                                       |  |   | 157,151                                                                                                                                                                                                                                                               |   |  |   | 39,559                                                                                                                                                                                                                                                                |  
|                                                                    |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|Stockholders'
    equity:                                           |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|Preferred
    stock, $0.01 par value;                               |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|10,000,000
    shares authorized, none issued or outstanding        |  |   | —                                                                                                                                                                                                                                                                     |   |  |   | —                                                                                                                                                                                                                                                                     |  
|                                                                    |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|Common
    stock, $0.0001 par value:                                |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|100,000,000
    shares authorized; 27,852,000 and 23,777,000 shares |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|issued
    and outstanding, respectively                            |  |   | 2,785                                                                                                                                                                                                                                                                 |   |  |   | 2,377                                                                                                                                                                                                                                                                 |  
|                                                                    |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|Additional
    paid in capital                                      |  |   | 261,148                                                                                                                                                                                                                                                               |   |  |   | 220,516                                                                                                                                                                                                                                                               |  
|Deficit
    accumulated during development stage                    |  |   | (415,989                                                                                                                                                                                                                                                              | ) |  |   | (255,792                                                                                                                                                                                                                                                              | )
|Total
    stockholders'  (deficit)                                  |  |   | (152,056                                                                                                                                                                                                                                                              | ) |  |   | (32,899                                                                                                                                                                                                                                                               | )
|                                                                    |  |   |                                                                                                                                                                                                                                                                       |   |  |   |                                                                                                                                                                                                                                                                       |  
|Total
    liabilities and stockholders'  (deficit)                  |  | $ | 5,095                                                                                                                                                                                                                                                                 |   |  | $ | 6,660                                                                                                                                                                                                                                                                 |  





See
Notes to Consolidated Financial Statements











Shades
Holdings Inc. and Subsidiary

(A
Development Stage Company)

Consolidated
Statements of Operations

---





|                                          |  | For the Year Ended December 31, 2012 |            | For the Year Ended December 31, 2011 |  | For the Period From November 23, 2009 (Date of Inception) to December 31, 2012
|----------------------------------------- |  | ------------------------------------ | ---------- | ------------------------------------ |  | ------------------------------------------------------------------------------
|                                          |  |                                      |            |                                      |  |                                                                               
|Revenue                                   |  | $                                    | 2,556      |                                      |  | $                                                                             
|Cost of goods sold                        |  |                                      | 1,115      |                                      |  |                                                                               
|Gross profit                              |  |                                      | 1,441      |                                      |  |                                                                               
|Selling general and administrative        |  |                                      |            |                                      |  |                                                                               
|Accounting and professional expense       |  |                                      | 134,819    |                                      |  |                                                                               
|Compensation expense                      |  |                                      | 12,887     |                                      |  |                                                                               
|Other general and administrative          |  |                                      | 2,171      |                                      |  |                                                                               
|Advertising                               |  |                                      | 376        |                                      |  |                                                                               
|Amortization                              |  |                                      | 1,000      |                                      |  |                                                                               
|Total selling, general and administrative |  |                                      | 151,253    |                                      |  |                                                                               
|Operating loss                            |  |                                      | (149,812   | )                                    |  |                                                                               
|                                          |  |                                      |            |                                      |  |                                                                               
|Other income (expense)                    |  |                                      |            |                                      |  |                                                                               
|Interest expense                          |  |                                      | (10,386    | )                                    |  |                                                                               
|                                          |  |                                      |            |                                      |  |                                                                               
|Net loss                                  |  | $                                    | (160,197   | )                                    |  | $                                                                             
|Basic and diluted loss per share          |  | $                                    | 0.00       |                                      |  | $                                                                             
|                                          |  |                                      |            |                                      |  |                                                                               
|Weighted average shares outstanding       |  |                                      |            |                                      |  |                                                                               
|basic and diluted                         |  |                                      | 27,788,301 |                                      |  |                                                                               





See
Notes to Consolidated Financial Statements



12











Shades
Holdings Inc. and Subsidiary

(A
Development Stage Company)

Consolidated
Statements of Stockholders’ (Deficit)

---



|                                                                                           |  |                 |   |        |  |              |   |        |  |                     |             |                   |  | Deficit               |        |      
|------------------------------------------------------------------------------------------ |  | --------------- | - | ------ |  | ------------ | - | ------ |  | ------------------- | ----------- | ----------------- |  | --------------------- | ------ | -----
|                                                                                           |  | Preferred Stock |   |        |  | Common Stock |   |        |  | Additional          |             | Common            |  | Accumulated During    |        |      
|                                                                                           |  | Shares          |   | Amount |  | Shares       |   | Amount |  | Paid
    in Capital |             | Stock
    Payable |  | Development
    Stage |        | Total
|                                                                                           |  |                 |   |        |  |              |   |        |  |                     |             |                   |  |                       |        |      
|Balance, Nov 23, 2009 (Inception):                                                         |  |                 |   |        |  |              |   |        |  |                     |             |                   |  |                       |        |      
|Issuance of common
    stock to  founder  and president valued at $0.0001 per share        |  |                 | — |        |  | $            | — |        |  |                     | 20,000,000  |                   |  | $                     | 2,000  |      
|Issuance shares of common stock
    for services for $0.25 per share                       |  |                 | — |        |  |              | — |        |  |                     | 310,000     |                   |  |                       | 31     |      
|Issuance shares of common stock
    for cash at $0.01 per share, net                       |  |                 | — |        |  |              | — |        |  |                     | 3,000,000   |                   |  |                       | 300    |      
|Net loss for  December
    31, 2009                                                        |  |                 | — |        |  |              | — |        |  |                     | —           |                   |  |                       | —      |      
|                                                                                           |  |                 |   |        |  |              |   |        |  |                     |             |                   |  |                       |        |      
|Balance at December 31, 2009                                                               |  |                 | — |        |  |              | — |        |  |                     | 23,310,000  |                   |  |                       | 2,331  |      
|Issuance shares  of common
    stock for cash at $0.25 per share through private placement |  |                 | — |        |  |              | — |        |  |                     | 217,000     |                   |  |                       | 22     |      
|Common stock payable for services
    for $0.25 per share                                  |  |                 | — |        |  |              | — |        |  |                     | —           |                   |  |                       | —      |      
|Net loss for December 31, 2010                                                             |  |                 | — |        |  |              | — |        |  |                     | —           |                   |  |                       | —      |      
|Balance at December 31, 2010                                                               |  |                 | — |        |  |              | — |        |  |                     | 23,527,000  |                   |  |                       | 2,353  |      
|Issuance of common stock for services
    for $0.25 per share                              |  |                 | — |        |  |              | — |        |  |                     | 155,000     |                   |  |                       | 15     |      
|Issuance shares  of common
    stock for cash at $0.25 per share through S1                |  |                 | — |        |  |              | — |        |  |                     | 95,000      |                   |  |                       | 9      |      
|Common stock payable for services
    for $0.25 per share                                  |  |                 | — |        |  |              | — |        |  |                     | —           |                   |  |                       | —      |      
|Forgiveness of Common Stock Payable
    for service                                        |  |                 | — |        |  |              | — |        |  |                     | —           |                   |  |                       | —      |      
|Net loss for December 31, 2011                                                             |  |                 | — |        |  |              | — |        |  |                     | —           |                   |  |                       | —      |      
|Balance at December 31, 2011                                                               |  |                 | — |        |  | $            | — |        |  |                     | 23,777,000  |                   |  | $                     | 2,377  |      
|Common stock returned to treasury
    by President                                         |  |                 | — |        |  |              | — |        |  |                     | (19,600,000 | )                 |  |                       | (1,960 | )    
|Common stock reissued from treasury
    to President                                       |  |                 | — |        |  |              | — |        |  |                     | 19,600,000  |                   |  |                       | 1,960  |      
|Issuance of common stock for services
    for $0..01 per share                             |  |                 | — |        |  |              | — |        |  |                     | 4,000,000   |                   |  |                       | 400    |      
|Issuance of common stock for stock
    purchase agreement                                  |  |                 |   |        |  |              |   |        |  |                     | 75,000      |                   |  |                       | 8      |      
|Issuance of common stock for share
    exchange agreement to SREO                          |  |                 |   |        |  |              |   |        |  |                     | 15,500,000  |                   |  |                       | 1,550  |      
|Shares returned from cancellation
    of SREO transaction                                  |  |                 |   |        |  |              |   |        |  |                     | (15,500,000 | )                 |  |                       | (1,550 | )    
|Net loss for December 31, 2012                                                             |  |                 | — |        |  |              | — |        |  |                     | —           |                   |  |                       | —      |      
|Balance at December 31, 2012                                                               |  |                 | — |        |  | $            | — |        |  |                     | 27,852,000  |                   |  | $                     | 2,785  |      







See
Notes to Consolidated Financial Statements











Shades
Holdings, Inc. and Subsidiary

(A
Development Stage Company)

Consolidated
Statements of Cash Flows

---



|                                                        |  |                    |          |                    |  | For The Period From
|------------------------------------------------------- |  | ------------------ | -------- | ------------------ |  | -------------------
|                                                        |  |                    |          |                    |  | November 23, 2009  
|                                                        |  | For The Year Ended |          | For The Year Ended |  | ( Inception) To    
|                                                        |  | December 31, 2012  |          | December 31, 2011  |  | December 31, 2012  
|                                                        |  |                    |          |                    |  |                    
|Cash flows from operating activities:                   |  |                    |          |                    |  |                    
|                                                        |  |                    |          |                    |  |                    
|Net loss                                                |  | $                  | (160,197 | )                  |  | $                  
|Adjustments to reconcile net (loss) to net cash         |  |                    |          |                    |  |                    
|used in operating activities:                           |  |                    |          |                    |  |                    
|Stock based compensation                                |  |                    | 41,040   |                    |  |                    
|Amortization of website                                 |  |                    | 1,000    |                    |  |                    
|Changes in operating assets and liabilities:            |  |                    |          |                    |  |                    
|Prepaid expenses                                        |  |                    | —        |                    |  |                    
|Inventories                                             |  |                    | 92       |                    |  |                    
|Accounts payable                                        |  |                    | 38,654   |                    |  |                    
|Accrued expenses                                        |  |                    | (2,947   | )                  |  |                    
|Net cash (used) in operating activities                 |  |                    | (82,358  | )                  |  |                    
|                                                        |  |                    |          |                    |  |                    
|Cash flows from investing activities:                   |  |                    |          |                    |  |                    
|                                                        |  |                    |          |                    |  |                    
|Acquisition of intangible assets                        |  |                    | —        |                    |  |                    
|Net cash (used) in investing activities                 |  |                    | —        |                    |  |                    
|                                                        |  |                    |          |                    |  |                    
|Cash flows from financing activities:                   |  |                    |          |                    |  |                    
|Proceeds from issuance of common stock                  |  |                    | —        |                    |  |                    
|Payments for stock issuance costs                       |  |                    | —        |                    |  |                    
|Proceeds from issuance of note payable                  |  |                    | 60,438   |                    |  |                    
|Proceeds from issuance of note payable to related party |  |                    | 21,447   |                    |  |                    
|Net cash provided by financing activities               |  |                    | 81,885   |                    |  |                    
|                                                        |  |                    |          |                    |  |                    
|Net increase (decrease)  in cash and cash equivalents   |  |                    | (473     | )                  |  |                    
|Cash and cash equivalents at beginning of year          |  |                    | 1,015    |                    |  |                    
|                                                        |  |                    |          |                    |  |                    
|Cash and cash equivalents at end of year                |  | $                  | 542      |                    |  | $                  
|                                                        |  |                    |          |                    |  |                    
|Supplemental disclosures:                               |  |                    |          |                    |  |                    
|Cash paid for interest                                  |  | $                  | —        |                    |  | $                  
|Cash paid for taxes                                     |  | $                  | —        |                    |  | $                  





See
Notes to Consolidated Financial Statements



14







Shades
Holdings Inc.

(A
Development Stage Company)

Notes
To Consolidated Financial Statements





NOTE
1. BASIS OF PRESENTATION AND NATURE OF OPERATIONS



The
Company – Shades Holdings Inc. (the “Company”) was organized in Florida on November 23, 2009. The Company is
in the development stage.



Nature
of Business - We are an internet sales Company which, through our wholly owned subsidiary, Daily Shades, Inc., sells name brand
sunglasses at up to 70% off manufactured suggested retail prices at our website www.dailyshades.com and Daily Chrono a DBA which
sells brand name watches up to 75% off manufactured suggested retail price at our website www.dailychrono.com. Our business strategy
is focused on a “daily deal” that is a niche in the internet market place.



The
Summary of Significant Accounting Policies (Note 3) is presented to assist in understanding the financial statements. The financial
statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity.
These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently
applied in the preparation of the financial statements.



References
to accounting principles generally accepted in the Unites States of America are to those standards promulgated and described in
the Accounting Standards Codification (“ASC”) of the Financial Accounting Standards Board.



NOTE
2. GOING CONCERN



The
preparation of financial statements in accordance with accounting principles generally accepted in the United States contemplates
that operations will be sustained for a reasonable period. However, we have incurred operating losses of $160,197 and $ 79,884
for the years ended December 31, 2012 and 2011, respectively. Additionally our cumulative losses were $415,989 through December
31, 2012. Our revenues are minimal. In addition, during the years ended December 31, 2012 and 2011 we used cash of $82,358 and
$39,366 respectively, in our operating activities. Since our inception, we have been substantially dependent upon funds raised
through the sale of common stock. We will need to obtain additional financing to implement our business plan. We may not be successful
unless we can successfully market our products and generate revenue sufficient to continue our operations. These conditions raise
substantial doubt about our ability to continue as a going concern.



Our
ability to continue as a going concern is dependent upon our ability to raise sufficient capital to implement our business plan
and to generate profits sufficient to become financially viable. Since inception through December 31, 2012 we raised $110,000
from the sale of common stock. We cannot give any assurances regarding the success of our current operations or our ability to
raise adequate capital to finance our operations. Our consolidated financial statements do not include adjustments relating to
the recoverability of recorded assets or liabilities that might be necessary should we be unable to continue as a going concern.



NOTE
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Use
of Estimates—The Company prepares the financial statements in accordance with generally accepted accounting principles of
the United States of America and, accordingly, 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 revenues and expenses during
the reporting period. Actual results could differ from those estimates.



Principles
of Consolidation – Our consolidated financial statements include the accounts of Shades Holding Inc. and its wholly owned
subsidiary, Daily Shades Inc. All significant intercompany accounts, profits and transactions have been eliminated in consolidation.



Impairment
of Long-Lived Assets -Our management evaluates its tangible
and definite-lived intangible assets for impairment under ASC 350 Intangible Assets and ASC 360 Impairments and Disposals.



Our
evaluation related to tangible and intangible long-lived assets provides a two step process. The first step is to compare our
undiscounted cash flows, as projected over the remaining useful lives of the assets, to their respective carrying values. In the
event that the carrying values are not recovered by future undiscounted cash flows, as a second step, we compare the carrying
values to the related fair values and, if lower, record an impairment adjustment. For purposes of fair value, we generally use
replacement costs for tangible fixed assets and discounted cash flows, using risk-adjusted discount rates, for intangible assets.



Cash
and Cash Equivalents—Cash equivalents are comprised of all highly liquid investments with an original maturity of three
months or less when purchased.



Revenue
Recognition– Revenue is recognized when evidence of
the arrangement exists, the product is shipped to a customer, the fee for the service is fixed or determinable and when we have
concluded that amounts are collectible from the customers. Estimated amounts for sales returns and allowances are recorded at
the time of sale. Shipping costs billed to customers are included as a component of product sales. The associated cost of shipping
is included as a component of cost of product sales.



Inventories
– Inventories consist of retail merchandise that is in its finished form and ready for sale to end-user customers. Inventories
are recorded at the lower of average cost or market. In-bound freight-related costs from our vendors are included as part of the
net cost of merchandise inventories. Other costs associated with acquiring, storing and transporting merchandise inventories are
expensed as incurred and included in cost of goods sold. Our inventories are acquired and carried for retail sale and, accordingly,
the carrying value is susceptible to, among other things, market trends and conditions and overall customer demand.













Intangible
assets – The Websites are recorded at cost and have a finite life. The Websites are amortized over the estimated periods
of benefit of three years.





Earnings
(Loss) Per Share - The Company uses the guidance set forth under ASC 260, “Earnings Per Share” for calculating the
basic and diluted loss per share. Basic loss per share is computed by dividing loss by the weighted average number of common shares
outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional
shares were dilutive. Common equivalent shares are excluded from the computation of net loss per share if they would be anti-dilutive.
The Company has no potentially dilutive securities at December 31, 2010 and December 31, 2011.



Fair
Value of Financial Instruments:  Our financial instruments
consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities. We believe that the carrying
amounts of the financial instruments approximate their respective current fair values due to their relatively short maturities.

Pursuant
to the requirements of the Fair Value Measurements and Disclosures Topic of the FASB Codification, the Company’s financial
assets and liabilities measured at fair value on a recurring basis are classified and disclosed in one of the following three
categories:



Level
1: Financial instruments with unadjusted quoted prices listed on active market exchanges.

Level
2: Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over the counter traded financial
instruments. The prices for the financial instruments are determined using prices for recently traded financial instruments with
similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are
observable at commonly quoted intervals.

Level
3: Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little,
if any, market activity for the financial instrument. The prices are determined using significant unobservable inputs or valuation
techniques.



All
cash and cash equivalents are considered Level 1 measurements for all periods presented. We do not have any financial instruments
classified as Level 2 or Level 3 and there were no movements between these categories.

The
Company carries cash and cash equivalents, inventory, and accounts payable and accrued expense at historical cost which approximates
the fair value because of the short-term nature of these instruments.



Income
Taxes - Income taxes are accounted for using the liability method of accounting. Under this method, deferred tax assets and liabilities
are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities
and their respective tax basis, using currently enacted tax rates. The effect on deferred assets and liabilities of a change in
tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance
when it is more likely than not that some portion or all of the deferred tax assets will not be realized.



Share-Based
Compensation – We apply the grant-date fair value method to our share-based payment arrangements with employees under the
rules provided in ASC 718 Accounting for Share-Based Payments and Staff Accounting Bulletin 107. Share-based compensation cost
for employees is measured at the grant date fair value based on the value of the award and is recognized over the requisite service
period, which is usually the vesting period for employees.



Equity-Based
Payments to Non-employees - For share-based payment transactions with parties other than employees, we apply ASC 505-50 Equity
Based Payments to Non-Employees. These non-employee services are accounted for based on the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for valuing
share-based payments made to non-employees is the earlier of the date at which a commitment for performance by the counterparty
to earn the equity instruments is reached or the date at which the counterparty’s performance is complete. Share-based
payments to non-employees are recorded at fair value on the measurement date and reflected in expense over the requisite service
period.



Recent
accounting pronouncements -In May 2011, the FASB issued
an update that amends the guidance provided in ASC Topic 820, Fair Value Measurement, by clarifying
some existing concepts, eliminating wording differences between GAAP and International Financial Reporting Standards (“IFRS”),
and in some limited cases, changing some principles to achieve convergence between GAAP and IFRS. The update results in a consistent
definition of fair value, establishes common requirements for the measurement of and disclosure about fair value between GAAP
and IFRS, and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3)
inputs. This update becomes effective in the second quarter of fiscal 2012. The adoption of this update did not have a material
impact on our consolidated financial statements.













NOTE
4. INTANGIBLE ASSETS



The
Company’s intangible assets are as follows:



|                         |  | December 31, 2012 |        | December 31, 2011
|------------------------ |  | ----------------- | ------ | -----------------
|                         |  |                   |        |                  
|Website development      |  | $                 | 4,500  |                  
|Accumulated amortization |  |                   | (3,000 | )                
|Website, net             |  | $                 | 1,500  |                  





Amortization
expense for the year ended December 31, 2012 amount to $1,000.



NOTE
5. NOTE PAYABLE



On
September 11, 2012, the Company issued an 8% note in the principal amount of $32,500 to Asher Enterprises, Inc., an investment
fund. The note is convertible into common stock at a discount to the market price of the Company’s common stock. The note
was secured with 565,000 shares of common stock reserved. On June 24, 2013 the note issued to the investment fund was paid in
full and the shares were released from reserve.



NOTE
6. ADVERTISING

The
Company expenses advertising costs as they are incurred. Advertising expenses for the years ended December 31, 2012 and 2011,
were $376 and $552, respectively.

NOTE
7. ACQUISITIONS

On
September 7, 2012 the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Suncoast Real
Estate Owned Holdings, Inc., a Florida corporation (“Suncoast”), and the shareholder of Suncoast (the “Suncoast
Shareholder”). Upon the satisfaction of all of the closing conditions set forth in the Share Exchange Agreement and the
closing of the transactions contemplated under the Exchange Agreement (the “Exchange”), the Suncoast Shareholder transferred
all of the issued and outstanding capital stock of Suncoast to the Company in exchange for 15,500,000 shares of common stock of
the Company. Such exchange resulted in Suncoast becoming a wholly-owned subsidiary of the Company and gave the Suncoast Shareholder
a controlling interest in the Company.



Immediately
following the closing of the Share Exchange Agreement in the Suncoast transaction and pursuant to a Stock Purchase Agreement with
Suncoast (the “SPA”), all of the outstanding capital stock of Daily Shades, Inc., our wholly owned subsidiary, was
transferred to Sean Lyons in exchange for the return and cancellation of 19,600,000 shares of the Company’s common stock
held by Mr. Lyons (the “Split Off”). Upon the unwinding of the Suncoast transaction the 19,600,000 shares were returned
to Sean Lyons as Daily Shades remained a wholly owned subsidiary of Shades Holdings Inc. On June 19, 2013 a stock purchase agreement
was executed with Sean Lyons purchasing 100% interest in Daily Shades Inc. a subsidiary of Shades Holdings Inc. in consideration
of 19,600,000 shares of common stock in Shades Holdings Inc. which is referenced in Subsequent Events footnote. Additional consideration
that was to be received by Sean Lyons was a cash payment in the amount of $16,700.



On
November 27, 2012, the Company entered into an agreement with the Suncoast Shareholder, effective as of September 11, 2012 (the
“Suncoast Effective Time”), pursuant to which the parties agreed that the Suncoast Shareholder failed to relinquish
control of Suncoast to the Company and that the Suncoast Exchange Agreement Transaction was never effectively consummated. Accordingly,
the Suncoast Shareholder returned the Suncoast Exchange Agreement Shares to the Company and the parties agreed that the Suncoast
Shares have remained under the ownership of the Suncoast Shareholder since the Suncoast Effective Time.



Upon
the unwinding of the Suncoast transaction the 19,600,000 shares were returned to Sean Lyons and as Daily Shades remained a wholly
owned subsidiary of Shades Holdings Inc. On June 19, 2013 a stock purchase agreement was executed with Sean Lyons purchasing 100%
interest in Daily Shades Inc. a subsidiary of Shades Holdings Inc. in consideration of 19,600,000 shares of common stock in Shades
Holdings Inc. which is referenced in Subsequent Events footnote.



NOTE
8. EQUITY TRANSACTIONS



We
have 10,000,000 authorized shares or preferred stock with a par value of $0.01 per share none of which is issued and outstanding.



We
also have 100,000,000 authorized shares of common stock with a par value of $0.0001. Holders of voting shares are entitled to
one vote for each share that they own at any shareholders' meeting. Each share of common stock entitles the holder to one vote,
either in person or by proxy, at meetings of shareholders.



On
the date of inception we issued 20,000,000 shares to our president and director at par value for proceeds of $2,000 We also sold
3,000,000 shares of our common stock at $0.01 per share to accredited investors and received $26,643 in net proceeds after stock
issuance costs of $3,357.



On
February 1, 2010, we distributed to potential investors a Private Placement Memorandum (“PPM”) offering 250,000 shares
of our common stock at a price of $0.25 per share.  The shares were offered by us on a “best efforts” basis through
the efforts of our President.  Although there is no minimum purchase requirement, each investor is permitted to purchase
a maximum of 25,000 shares subject to our right to permit an investor to purchase more than the maximum individual subscription.
We have sold 217,000 shares of our common stock resulting in cash proceeds of $54,250 to the Company. This PPM offering is now
closed.



On
June 3, 2011 the Company closed itsRegistered Direct Offering
(“RDO”) and the Registered Resale Offering (“RRO”) on Form S1. The Company sold 95,000 shares of our common
stock at a price of $0.25 per share. The Company sold 95,000 shares of common stock through RDO resulting in cash proceeds of
$23,750. No shares of RRO were sold.













Common
Stock Issued for Services to Non-employees



On
November 23, 2009, the Company issued and the additional 270310,000 shares were issued to vendors in exchange for future services,
including legal services, accounting services, information technology services and search engine optimization services at a price
of $.25 per share. See below for a description of each agreement.



The
Company entered into a one year consulting agreement with Ryan Ford for web consultation on our website dailyshades.com. In consideration
for services performed the Company compensated Mr. Ford with 10,000 shares of common stock.



We
entered into an agreement with Total CFO, LLC under which Total CFO, LLC agreed to provide us with tax preparation services and
general book keeping services for a 12 month term.  The agreement can be terminated by either party upon 30 days notice.  In
exchange for the services rendered under the agreement, we issued Total CFO, LLC 50,000 shares of our restricted common stock.  These
services were valued at $12,500 based on a price of $0.25 per share.



The
Company entered into a one year consulting agreement with Ron Rule for IT services on our website dailyshades.com. In consideration
for services performed the Company compensated Mr. Rule with 10,000 shares of common stock.



We
issued 200,000 shares of our common stock as compensation for legal services.



On
December 17, 2009 the Company entered into a one year consulting agreement with the Tyler Ryan Group, (TRG) to provide services
on content and social media content. In consideration for the services preformed, the Company compensated TRG at $500 a month
and issued 40,000 shares of our common. Their services were extended at a monthly fee of $500. The agreement with TRG was not
renewed beyond September 30, 2011.

The
total number of shares issued for services in the fourth quarter of 2009 were 310,000 shares and were valued at $77,500.

The
fair value of these shares was based upon the fair value of the services performed.

NOTE
9. EQUITY –BASED PAYMENTS TO NON-EMPLOYEES



The
Company entered into a consulting agreement on September 11, 2012 with each of Vince Vellardita, Apogee Financial Investments,
Inc. and Total CFO LLC (the “Consultants”), pursuant to which the Consultants agreed to provide certain consulting
services to the Company for a period of twelve months. In consideration for their services, the Company issued to Vince Vellardita
and his designees 1,333,333 shares of the Company’s common stock, to Apogee Financial Investments, Inc. 666,667, and Total
CFO LLC, 666,666 shares of the Company’s common stock.



The
Company issued 1,333,334 shares of common stock on September 11, 2012 to a law firm pursuant to the terms of a retainer agreement
in consideration for legal services to be rendered to the Company.



On
September 9, 2012, the Company entered into a consulting agreement with RedChip Companies, Inc. (“Redchip”), pursuant
to which RedChip was to provide certain services to the Company for a period of twelve months. The Company issued Redchip 75,000
shares of common stock. This agreement was later mutually terminated by both parties.



On
September 7, 2012, the Company entered into a Share Exchange Agreement with Suncoast Real Estate Owned Holdings, Inc., (“Suncoast”),
and the shareholder of Suncoast (the “Suncoast Shareholder”), pursuant to which the Suncoast Shareholder agreed to
transfer all of the issued and outstanding capital stock of Suncoast (the “Suncoast Shares”) to the Company in exchange
for 15,500,000 shares of common stock of the Company (the “Suncoast Exchange Shares”). The parties contemplated that
such exchange would result in Suncoast becoming a wholly-owned subsidiary of the Company and the Shareholder acquiring a controlling
interest in the Company (the “Suncoast Exchange Transaction”).

On
September 6, 2012 Ryan Ford and Jesus Diaz both resigned as Directors of Shades Holdings Inc. Mr. Diaz also resigned as CFO at
this time.

On
November 14, 2012 the Suncoast Exchange Transaction was unwound and the 15,500,000 shares of stock were returned to the Company.

NOTE
10. INCOME TAXES



The
components of the provision for income taxes are as follows:



The
income tax provision consists of the following:

|                               |  |   | December
                                                                                                           31, 2012 |  |  |   | December
                                                                                                           31, 2011
|------------------------------ |  | - | ---------------------------------------------------------------------------------------------------------------------------- |  |  | - | ----------------------------------------------------------------------------------------------------------------------------
|                               |  |   |                                                                                                                              |  |  |   |                                                                                                                             
|Current
    taxes              |  | $ | —                                                                                                                            |  |  | $ | —                                                                                                                           
|Deferred
    taxes             |  | $ | —                                                                                                                            |  |  | $ | —                                                                                                                           
|Provision
    for income taxes |  | $ | —                                                                                                                            |  |  | $ | —                                                                                                                           





The
items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes
are as follows:





|                                         |  |  | December 31, 2012 |   |  |  | December
                                                                            31, 2011 |  
|---------------------------------------- |  |  | ----------------- | - |  |  | --------------------------------------------------------------------------------------------- | -
|Income tax at federal
    statutory rate |  |  | 34.00             | % |  |  | 34.00                                                                                         | %
|State tax, net of federal effect         |  |  | 3.63              | % |  |  | 3.63                                                                                          | %
|Valuation
    allowance                  |  |  | <37.63%>          |   |  |  | <37.63%>                                                                                      |  
|Effective
    rate                       |  |  | 0.00              | % |  |  | 0.00                                                                                          | %





Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred income taxes
are as follows:















|                                             |  | December 31, 2013 |          | December 31, 2011
|-------------------------------------------- |  | ----------------- | -------- | -----------------
|                                             |  |                   |          |                  
|Net operating loss carry forwards            |  |                   | 144,684  |                  
|Valuation allowance                          |  |                   | (144,684 | )                
|Deferred taxes                               |  | $                 | —        |                  
|                                             |  |                   |          |                  
|                                             |  |                   |          |                  
|Deficit accumulated during development stage |  |                   | (415,989 | )                
|                                             |  |                   |          |                  
|Valuation Allowance                          |  |                   | 37.63    | %                





We
had net operating losses from November 23, 2009 (inception) through the year ended December 31, 2012. We have provided no current
income tax expense or benefit due to the losses incurred. Our net operating losses from inception amount to $415,989, which is
available for carry forward. The net operating losses are carried forward for up to twenty years and available to offset future
taxable income, if any. The Company has provided a valuation allowance for the deferred tax benefit resulting from the net operating
loss carryover. The valuation allowance is being applied because of the limited operating history of the company and inability
to predict taxable income going forward. In addressing the potential impact of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable income.



NOTE
11. Compensation Agreements



Employment
Compensation —We have not entered into an employment
agreement or non-competition agreement with our President. On July 1, 2012, our Chief Executive Officer, Sean Lyons, forgave all
his accrued compensation to date totaling $6,500.





NOTE
12. RELATED PARTIES



In
November 2011 we issued a short term promissory note to Debt Opportunity Fund LLLP for $6,000 which is managed by Sean Lyons.
In March of 2012 we issued an additional $1,000 short term promissory note to the same fund. In April of 2012 the previous notes
along with a new note for $18,000 were combined into one note totaling $25,000 with a one year term. The notes accrued interest
at twelve percent for one year with a default clause of an additional $3,000 added to principal. The note is secured by inventory
and domains owned by the Company. On June 24, 2013 the note was paid in full for$28,968.



The
Company issued an 8% promissory note to two related parties which were stockholders of company in the principal amount of $10,000
each, which are convertible into common stock at a discount to the market price of the common stock.



We
utilize space leased by a non-affiliated entity of our President.

.

NOTE
13.    Subsequent events



On
June 18, 2013, the Company entered into and closed a securities purchase agreement with an accredited investor pursuant to which
the Company issued to the accredited investor a promissory note in the principal amount of $200,000 (the “Note”),
and five-year warrants to purchase an aggregate of 1,100,000 shares of common stock with an exercise price of $0.01. Repayment
of the Note is due June 18, 2014 and bears an interest at the rate of 8% per year, which is payable upon maturity of the note.

On
June 19, 2013, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Shades of Fragrances,
Inc. (“SOF”) and Omniscent Corp. (“OMNI”), the sole shareholder of SOF. Pursuant to the Share Exchange
Agreement, which closed on June 21, 2013, the Company issued 24,000,000 shares of common stock to OMNI, resulting in a change
in control of the Company, in exchange for 1,000,000 shares of common stock of SOF, representing 100% of the issued and outstanding
capital stock of SOF, and SOF thus became a wholly-owned subsidiary of the Company.

SOF
is a Florida corporation formed on May 14, 2013, which now owns the federal registered trademark (Registration No. 277316) “Phantom”
for perfumes and fragrances.

On
June 19, 2013, in connection with the Exchange Agreement, Sean Lyons resigned as officer of the Company and Lucien Lallouz (the
President and owner of SOF) was appointed Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Secretary,
Treasurer and President of the Company.

On
June 19, 2013, in connection with the Exchange Agreement, the Company issued a convertible promissory note (the “Convertible
Note”), in the principal amount of $100,000, to various parties. The Convertible Note is convertible into shares of the
Company’s common stock at a variable conversion price equal to 80% of the closing price of the common stock for the trading
day preceding the conversion date. Repayment of the Convertible Note is due in monthly installments, each in the amount of 10%
of the principal amount, commencing June 19, 2014.

On
June 19, 2013 a stock purchase agreement was executed with Sean Lyons purchasing 100% interest in Daily Shades Inc. a subsidiary
of Shades Holdings Inc. in consideration of 19,600,000 shares of common stock in Shades Holdings Inc.

On
June 20, 2013 1,200,000 shares of Shades Holdings Inc. common stock were returned to treasury by three nonaffiliated shareholders.

On
July 8, 2013 Mr. Lucien Lallouz was elected to the Company's Board of Directors.

On
July 12, 2013 the Company issued 100,000 shares of the Company's common stock for services previously rendered to a law firm.

On
July 12, 2013, the Company entered into Consulting Agreements with each of Sean Lyons, R D Diamond Consulting Group, Inc. and
CTP Advisors (the “Consultants”) pursuant to which the Consultants will provide consulting services to the Company,
as described in their respective agreements, for a period of one year. In consideration for their services, Mr. Lyons received 614,666 shares
of the Company's common stock and R D Diamond and CTP Advisors both received 366,667 shares of the Company's common stock for
services rendered.





On
June 24, 2013, the Company paid $40,000 to Asher Enterprises, Inc. in full satisfaction of the convertible note issued on September
11, 2012 that was issued in the original amount of $32,500.













CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



We have had no changes in or disagreements with our accountants.



Controls
and Procedures



Evaluation of Disclosure Controls and Procedures



An evaluation was conducted, with the participation
of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), as of December 31, 2012. This evaluation was to ensure that information required to be disclosed by
us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities Exchange Commission’s rules and forms.  In addition, the evaluation’s
goal was to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act
is accumulated and communicated to our management, including our Principal Executive and Principal Financial Officers, as appropriate,
to allow timely decisions regarding required disclosure. Based on that evaluation, our Principal Executive Officer and Principal
Financial Officer have concluded that, as of December 31, 2012, our disclosure controls and procedures were not effective due to
the material weaknesses in our internal controls described below.



In light of the material weaknesses described
below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance
with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly
present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

Management’s Report on Internal Control Over Financial
Reporting



Our management is responsible for establishing
and maintaining adequate internal controls over financial reporting. Under the supervision and with the participation of our management,
including our chief executive officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting
using framework similar to criteria referenced in the initial steps of the Internal Control – Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).



Based on this evaluation management concluded that, as of December 31,
2012, our internal control over financial reporting is  ineffective in providing reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted
accounting principles, as a result of the material weaknesses described below.



A material weakness is a control deficiency
(within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5) or combination of control
deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements
will not be prevented or detected. Management has identified the following four material weaknesses which have caused management
to conclude that, as of December 31, 2012, our disclosure controls and procedures were not effective:



Deficiencies pertaining to a lack of human
resources within our finance and accounting functions:We currently only have one employee. The lack of appropriately skilled
personnel and less effective monitoring activities could result in material misstatements to financial statements not being detected
in a timely manner.



Deficiencies pertaining to the lack of controls
or ineffectively designed controls:Our control design analysis and process walk-throughs disclosed a number of instances where
review approvals were undocumented, where established policies and procedures were not defined and controls were not in place.



Deficiencies related to information technology
control design and operating effectiveness weaknesses:This material weakness resulted from the absence of key formalized information
technology policies and procedures and could result in (1) unauthorized system access, (2) application changes being implemented
without adequate reliability testing, (3) inconsistent investigation of system errors and the absence of timely or properly considered
remedial actions, and (4) over reliance on spreadsheet applications without quality control assurances. These factors could lead
to material errors and misstatements to financial statements occurring without timely detection.



Deficiencies related to failures in operating
effectiveness of the internal control over financial reporting:Our procedures relating to operating effectiveness, including
monitoring activities, of financial reporting internal controls continue to be ineffective. When an assessment was done to confirm
the effectiveness of the internal control over financial reporting, controls were not operating effectively. We need to remediate
our material weakness in internal control.





Deficiencies related to failures in operating
effectiveness of the internal control over financial reporting:Our procedures relating to operating effectiveness, including
monitoring activities, of financial reporting internal controls continue to be ineffective. When an assessment was done to confirm
the effectiveness of the internal control over financial reporting, controls were not operating effectively. We need to remediate
our material weakness in internal control.



In addition



* We have noted
that there may be an insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing
internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented
or detected on a timely basis.



* We do not have
an audit committee or an independent audit committee financial expert. While not being legally obligated to have an audit committee
or independent audit committee financial expert, it is the managements view that to have audit committee, comprised of independent
board members, and an independent audit committee financial expert is an important entity-level control over the Company's financial
statements. Currently, the Board does not have sufficient independent directors to form such an audit committee. Also, the Board
of Directors does not have an independent director with sufficient financial expertise to serve as an independent financial expert.













This annual report does not include an attestation
report of our registered public accounting firm regarding internal control over financial reporting. Management’s report
is not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only
management’s report in this annual report.



Remediation Efforts to Address Material
Weaknesses in Internal Control Over Financial Reporting



As a result of the findings from the investigation
and a company-led accounting review, management intends to take practical, cost-effective steps in implementing internal controls,
when the financial operation of the company allows, including the following remedial measures:



*Interviewing
and potentially hiring outside consultants that are experts in designing internal controls over financial reporting based on criteria
established in Internal Control-Integrated Framework issued by COSO.



*Board to review
and make recommendations to shareholders concerning the composition of the Board of Directors, with particular focus on issues
of independence. The Board of Directors to consider nominating an audit committee and audit committee financial expert, which may
or may not consist of independent members.



A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. 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 the Company have been detected. Because of the
inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.





There have not been any changes in the Company’s
internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act,
during the three months ended December 31, 2012 that have materially affected, or are reasonably likely to materially affect, its
internal control over financial reporting.



DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS



Lucien Lallouz, 68, has served as President,
Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Secretary and Treasurer of the Company since June 2013
and as director since July 2013. Mr. Lallouz has over 35 years of experience in the celebrity and fashion designers licensing and
luxury consumer product development. Throughout his career, in the late 1980’s Lucien Lallouz created the first ever celebrity
fragrances, for Julio Iglesias, followed by the longest running Broadway theatrical musical, The Phantom of the Opera and a special
50th anniversary fragrance for Ted Turner’s Gone with the Wind MGM classic movie. Since 2002, to date, Mr. Lallouz has been
the President and owner of Omniscent Corp., also d/b/a GLMAC and has acted as business consultant to Gigantic, the Katy Perry fragrance
licensee. From 2004 to 2006, Mr. Lallouz was co-founder and non-executive Chairman of Omnireliant Holdings, Inc, a publicly traded
company, in partnership with Rick and Kathy Hilton for the Kathy Hilton Skin Care and Fragrance, targeting electronic media such
as HSN/QVC. From 2002 to 2007, Mr. Lallouz was also a business development consultant to Parlux Fragrances, Inc. Mr. Lallouz’s
keen perception for identifying “Winners” has led him to identify, facilitate acquisitions and the successful development
of the GUESS?, Paris Hilton, Maria Sharapova, Jessica Simpson and Baby Gund fragrance licenses for Parlux Inc. Mr. Lallouz also
facilitated the $63 Million Perry Ellis Fragrance sale for Parlux, Perry Ellis in 2006. Mr. Lallouz was a pioneer of the e-commerce
boom in the late 90’s, when he co-developed the successful launch of perfumania.com’s e-commerce website and also served
as Senior Vice President of Business Development for ECOM Ventures, the then parent Company of Perfumania’s 300 Retail Stores.



Involvement in Legal Proceedings



To the best of our knowledge, during the past
ten years, none of our directors or executive officers were involved in any of the following: (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 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.



Committees of the Board of Directors



At present, we do not have an audit committee,
compensation committee, nominating committee, an executive committee of our Board of Directors, stock plan committee or any other
committees.  This is primarily due to our size and our status as a development stage company.  Lucien Lallouz
will perform certain functions of an audit committee, such as recommending a firm of independent certified public accountants to
audit the annual financial statements; reviewing the independent auditor’s independence, the financial statements and their
audit report; and reviewing management’s administration of the system of internal accounting controls.



Section 16(a) Beneficial Ownership Reporting Compliance



Section 16(a) of the Securities Exchange Act
of 1934 requires our executive officers and directors and persons who own more than 10% of our common stock to file with the Securities
and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning
their ownership of our common stock and other equity securities, on Forms 3, 4 and 5, respectively. Executive officers, directors
and persons who own more than 10% of our common stock are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file.



Based solely on our review of the copies of
such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended
December 31, 2012, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners
were complied with.



Code of Ethics



The board of directors has adopted a Code of Ethics applicable
to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions, which is designed to promote honest and ethical conduct; full, fair, accurate, timely and
understandable disclosure; and compliance with applicable laws, rules and regulations.  A copy of the Code of Ethics
will be provided to any person without charge upon written request to the Company at its executive offices, 2875 NE 191 Street,
Suite 511 Aventura, FL 33810.



21









BENEFICIAL OWNERSHIP OF THE COMPANY



The following table sets forth information
with respect to the securities holdings of our executive officers, directors and all persons which we have reason to believe may
be deemed the beneficial owners of more than 5% of our outstanding common stock.  Also set forth in the table is the
beneficial ownership of all shares of our outstanding common stock of all proposed officers and directors as a group.



Beneficial ownership of shares is determined
under Rule 13d-3(d)(1) of the Exchange Act and generally includes any shares over which a person exercises sole or shared voting
or investment power and the number of shares that can be acquired within sixty (60) days upon exercise of an option or conversion
of warrants and debentures.  Common stock subject to these convertible securities are deemed to be outstanding for the
purpose of computing the ownership percentage of the person holding such convertible security but are not deemed to be outstanding
for the purpose of computing the ownership percentage of any other person.





|Title of Class                                         |  | Name and Address of Beneficial
        Owner(1) |  | Amount and Nature of
        Beneficial Owner |            |     | Percentage of
        Class(2) | 
|------------------------------------------------------ |  | ----------------------------------------------- |  | --------------------------------------------- | ---------- | --- | ------------------------------ | 
|Common Stock                                           |  | Lucien Lallouz                                  |  |                                               | 24,000,000 | (3) |                                | 
|Executive Officers and Directors as a Group (1 person) |  |                                                 |  |                                               | 24,000,000 |     |                                | 
|                                                       |  |                                                 |  |                                               |            |     |                                | 
|                                                       |  |                                                 |  |                                               |            |     |                                | 





(1) Unless otherwise indicated,
the address of each shareholder is2875 NE 191 Street, Suite 511 Aventura, FL 33810.



(2) Applicable percentage of ownership is based
on 43,352,000 shares of Shades Holdings, Inc. common stock being issued and outstanding as of September 6, 2013.



EXECUTIVE COMPENSATION



Compensation of Our Executive Officers



The following table contains compensation information
for our executive officers for the fiscal years ended December 31, 2009, 2010 2011, and 2012.  No other officer received
compensation greater than $100,000 for the fiscal years ended December 31, 2009, 2010, 2011, and 2012. All of the information included
in this table reflects compensation earned by the individuals for services rendered to our Company and all references in the following
tables to stock awards relate to awards of stock granted by us.



SUMMARY COMPENSATION TABLE





|                   |  |            |         |       |                  |        | Non-Equity         | Nonqualified     |              |              
|------------------ |  | ---------- | ------- | ----- | ---------------- | ------ | ------------------ | ---------------- | ------------ | -------------
|Name and           |  |            |         |       |                  |        | Incentive
    Plan | Deferred         | All Other    |              
|Principal          |  |            |         |       |                  | Option | Compensation       | Compensation     | Compensation |              
|Position           |  | Year       | Salary  | Bonus | Stock
    Awards | Awards | ($)                | Earnings
    ($) | ($)          | Total
    ($)
|Sean
    M. Lyons, |  | 2009(1)    | -       | -     | -                | -      | -                  | -                | -            | -            
|Principal          |  | 2010(1)    | $6,000  |       |                  |        |                    |                  |              | $6,000       
|Executive Officer  |  | 2011(1)(2) | $6,000  |       |                  |        |                    |                  |              | $6,000       
|                   |  | 2012(1)(2) | $16,686 |       |                  |        |                    |                  |              | $16,686      
|Jesus Diaz,        |  | 2009(3)    | -       | -     | -                | -      | -                  | -                | -            | -            
|Principal          |  | 2010(3)    |         |       | $12,500          |        |                    |                  |              | $12,500      
|Financial Officer  |  | 2011(3)    |         |       |                  |        |                    |                  |              |              
|                   |  | 2012(3)    |         |       |                  |        |                    |                  |              |              





|(1) | Sean M. Lyons was appointed to serve as our President on November 23, 2009.  All amounts reflected in this table are from the date of Mr. Lyons’ appointment to the end of the fiscal year on December 31, 2012.  Commencing January 1, 2010, Mr. Lyons is compensated $500 per month for his services.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2)
        
        
        (3) | Sean M. Lyons compensation was accrued from
        July of 2011 to June of 2012 and then forgiven on September 9, 2012. On September 25, 2012 he received a consultants fee of $16,686
        
        
        Jesus Diaz was appointed
        to serve as our Chief Financial Officer in July 2010.  As such, Mr. Diaz did not receive any compensation from the Company
        in 2009.  Commencing in 2010, Mr. Diaz will receive 50,000 shares of common stock each year for his service as our Chief
        Financial Officer.  The stock award shall vest quarterly (i.e., 12,500 per quarter) and will be awarded to Mr. Diaz at
        the end of our fiscal year.  For 2010, Mr. Diaz received 50,000 shares of our common stock even though his employment
        commenced in July 2010. The shares have been valued at $0.25 per share, or $12,500. For 2011,the Board of Directors and
        Mr. Diaz have decided to forgive all stock compensation due to Mr. Diaz for 2011 for his service as our Chief Financial Officer.
|--------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Outstanding Equity Awards



There were no outstanding equity awards as
of December 31, 2012.





Compensation of Directors



No director of the Company received any
compensation for services as director for the year ended December 31, 2012.



Retirement Benefits



Currently, we do not provide any company sponsored
retirement benefits to any employee, including named executive officers.



Employment Agreements



We are not party to any employment agreements with our officers.



Change of Control



There is currently no arrangement which may
result in a change of control of the Company.













CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE



Except as set forth below, there were no transactions
since the beginning of our last completed fiscal year, and there are no proposed transactions, that involve an amount that exceeds
the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, to
which we were or are to become a party in which any director, executive officer, beneficial owner of more than five (5%) percent
of our common stock, or members of their immediate families had, or is to have, a direct or indirect material interest.



In November 2011 we issued a short term promissory
note to a fund for $6,000 which is managed by Sean Lyons. In March of 2012 we issued an additional $1,000 short term promissory
note to the same fund. In April of 2012 the previous notes along with a new note for $18,000 were combined into one note totaling
$25,000 with a one year term. The notes accrued interest at twelve percent per annum for one year with a default clause of an additional
$3,000 added to principal. The note is secured by inventory and domains owned by the Company. On June 24, 2013 the note
was paid in full for $28,968.



On June 19, 2013, the Company entered into
a stock purchase agreement with Sean Lyons, pursuant to which, on June 21, 2013, the Company sold to Mr. Lyons all of the issued
and outstanding capital stock of Daily Shades, Inc. in exchange for the transfer by Mr. Lyons of 19,600,000 shares of the Company’s
common stock.



Director Independence



Our sole director is not independent as defined
under the Nasdaq Marketplace Rules.



PRINCIPAL
ACCOUNTING FEES AND SERVICES



Audit Fees



Audit fees paid to the Company by Thomas Howel
Ferguson P.A. (formerly Meeks International, LLC) for its audit of the Company’s financial statements included in this Form
10-K, and for its review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q for 2012 and
2011 totaled $10,200 and $23,000, respectively.



Audit-Related



There were no audit-related fees billed to
the Company by Thomas Howel Ferguson P.A. for the years ended December 31, 2012 and 2011.



Tax Fees



Tax fees billed to the Company by Thomas Howel
Ferguson P.A. for its tax returns for the years ended December 31, 2012 and 2011 were $0 and
$0, respectively.



Other



No other fees were billed to the Company by
Thomas Howel Ferguson P.A. for all other non-audit or tax services rendered to the Company for the years ended December 31, 2012
and 2011.



Audit Committee Pre-Approval Policies



As of this filing date, the Company does not
have an audit committee.  Therefore, it has not adopted a procedure under which all fees charged by Thomas Howel Ferguson
P.A. must be pre-approved by the Board of Directors, subject to certain permitted statutory de minimus exceptions.









EXHIBITS,
FINANCIAL STATEMENT SCHEDULES



|Exhibit No. | Description                                                                                                                                                              
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1**       | Articles of Incorporation of Shades Holdings, Inc.                                                                                                                       
|3.2**       | Bylaws of Shades Holdings, Inc.                                                                                                                                          
|10.1*       | Agreement, dated November 27, 2012, between the Company and Creative Investments 2012 LLC                                                                                
|10.2*       | Securities Purchase Agreement, dated June 18, 2013, between the Company and the Purchaser named therein.                                                                 
|10.3*       | Amended and Restated Promissory Note, dated June 28, 2013.                                                                                                               
|10.4*       | Warrant, dated June 18, 2013                                                                                                                                             
|10.5*       | Warrant, dated June 28, 2013                                                                                                                                             
|10.6*       | Share Exchange Agreement, dated June 19, 2013, between the Company, Shades of Fragrances, Inc. and Mr. Lucien Lallouz                                                    
|10.7*       | Convertible Promissory Note, dated June 19, 2013                                                                                                                         
|10.8*       | Stock Purchase Agreement, dated June 19, 2013, between the Company and Sean Lyons                                                                                        
|14.1***     | Code of Ethics.                                                                                                                                                          
|21.1****    | List of Subsidiaries.                                                                                                                                                    
|31.1****    | Certification of Principal Executive and Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|32.1****    | Certification of Principal Executive and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     
|            |                                                                                                                                                                          
|            |                                                                                                                                                                          
|            |                                                                                                                                                                          



* Filed as exhibit to 8-K filed on July 1,
2013 and incorporated herein by reference.

** Previously filed with Registration Statement
on Form S-1 filed with the Securities and Exchange Commission on July 16, 2010.



*** Previously filed as an exhibit on Form
10-K filed with the Securities and Exchange Commission on April 15, 2011.



**** Filed herewith.













SIGNATURE



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.





SHADES HOLDINGS, INC.







|Date: November
    8, 2013 | Shades Holdings, Inc.
|-------------------------- | ---------------------
|                           | By                   
|                           |                      











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





|Date: November
    8, 2013 | Shades Holdings, Inc.
|-------------------------- | ---------------------
|                           | By                   
|                           |                      







25