UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


_______________




FORM
10-Q


_______________




x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the quarterly period ended June 30, 2008




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





For the transition period from
______to______.




ARTCRAFT
V, INC.


(Exact
name of registrant as specified in Charter




Delaware
            
            26-0744863(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (Commission
      File No.)
            
            (IRS
      Employee Identification No.)





Room
1131, XianKeJiDian Building


BaGuaSi
Road Futian District


Shenzhen
City, China 518029


(Address
of Principal Executive Offices)


_______________




011-86775
23990959


(Issuer
Telephone number)


_______________




(Former
Name or Former Address if Changed Since Last Report)




Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2)has been
subject to such filing requirements for the past 90 days. Yes x  No o




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





Large
Accelerated Filer £                              Accelerated
Filer£                                   Non-Accelerated
Filero                          Smaller
Reporting Companyx





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


Yes x No£




As of
July 29, 2008, the Company had 10,250,000 shares of common stock
outstanding.














ARTCRAFT
V, INC.


FORM
10-Q


June
30, 2008


INDEX




PART
I-- FINANCIAL INFORMATION




Item
      1.
            Financial
      StatementsItem
      2.
            Management’s
      Discussion and Analysis of Financial ConditionItem
      3
            Quantitative
      and Qualitative Disclosures About Market RiskItem
      4T.
            Control
      and Procedures




PART
II-- OTHER INFORMATION




Item
      1
            Legal
      ProceedingsItem
      1A.
            Risk
      FactorsItem
      2.
            Unregistered
      Sales of Equity Securities and Use of ProceedsItem
      3.
            Defaults
      Upon Senior SecuritiesItem
      4.
            Submission
      of Matters to a Vote of Security HoldersItem
      5.
            Other
      InformationItem
      6.
            Exhibits
      and Reports on Form 8-K




SIGNATURE













ITEM
1. FINANCIAL INFORMATION





The
financial statement of the Company are included following the signature page of
this Form 10-Q.





ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.





In this
section, "Management's Discussion and Analysis or Plan of Operation," references
to "we," "us," "our," and "ours" refer to Artcraft V, Inc. and its
subsidiary.





The
following discussion should be read in conjunction with the Consolidated
Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q.
The following discussion contains forward-looking statements. Our actual results
may differ significantly from those projected in the forward-looking
statements.





Critical
Accounting Policies:





Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
generally accepted accounting principles in the United States of America. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amount of assets, liabilities and expenses,
and related disclosure of contingent assets and liabilities. We base our
estimates on historical experience and on other various assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis from making judgments about carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.





Overview:





We
operate our business through our wholly owned subsidiary, Top Interest
International Limited, which operates our "188Info" service. 188Info provides a
number of services including information search engine, online web application
and image designing, digital network service, online market research, online
promotion and advertising services, and query searches for both individuals and
businesses.














188Info
has a strong reputation among Shenzhen residents. Many Shenzhen residents use
188Info to publish and search for information.





188Info
enjoys several competitive advantages including innovative information
categorization, sophisticated product and service categorization. For example,
188Info's categories include career services, real estate, lodging
accommodations, transportation, computer networking, communications electronics,
furniture, gifts and apparel, printing presses, and other businesses.
Information is presented in a variety of ways to enhance
readability.




188Info
has succeeded in becoming one of the major information websites for Chinese in a
relatively short time period. 188Info has achieved its success on the basis of a
modest initial investment.





We are
also completing a website to be utilized in various real estate services such as
relocation, listings of real estate sales or rentals, mortgage information and
other real estate related information or content. We have not spent any money
for research and development.





Plan of
Operation:





We intend
to grow through internal development and strategic alliances. Because of
uncertainties surrounding our growth and limited operating history, we
anticipate incurring losses in the foreseeable future. We have already incurred
significant net losses, with a net loss of $1,781 in 2005 and a net loss of
$92,812 in 2006 and a net
loss of $218,495 in 2007. The difference was due to an increase in
operating expenses, and as we attempt to grow are business, these expenses will
certainly increase. Also, we may incur substantial net losses in the future due
to the relatively high risk associated with our revenue and the high level of
planned operating and capital expenditures, including sales and marketing costs,
personnel hires, and product development. Also, maintaining and further
expanding our brand is critical to our ability to expand our user base and our
revenues. We believe that the importance of brand recognition will increase as
the number of Internet users in China grows. In order to attract and retain
Internet users, advertisers, subscribers, and wireless and e-commerce customers,
we may need to substantially increase our expenditures for creating and
maintaining brand loyalty. If our revenues do not increase proportionately, our
results of operations and liquidity will suffer. For some periods, we may have
net profits; however, we may not sustain profitability over time.




Accordingly,
our ability to achieve our business objectives is contingent upon our success in
raising additional capital until adequate revenues are realized from operations.
During the next twelve months, we expect to take the following steps in
connection with the expansion of our business and the continuance of our
operations:




1)
Initiate substantive construction of our corporate website. We currently have
constructed a comprehensive and well designed site webpage at www.188info.com
which outlines the products and services that we offer and such website includes
additional sub-pages, our phone and email information, navigational tools and a
more detailed description of our products and services. 188 infonet features a
wide range of Web advertisement. Web advertising can reach any part of the world
equally fast, which is an impossible feat for conventional advertisement. Our
multimedia presentation is rich in audio, and video. Our web content is
interactive by nature. Current programs such as Flash, Shockwave provide vivid,
animated interaction.





The next
stage of web expansion will focus on promoting 188 infonet and expand its
influence into people’s daily activities. Including a plan to discuss with
various industries consultants to assist us, as well as companies within the
industry to partner with; further promote of 188Info and develop related
websites to attract a younger demographic and achieve one million hits on a
daily basis; Establish a community information service in Shenzhen by
cooperating with communities, Such as publish yellow pages in
Shenzhen.




Incorporation
of these services could run from $2,500 to $100,000 depending upon the level of
detail in these services and the nature of the partnerships reached. If we reach
partnerships whereby we incorporate other company’s services into our site and
co-brand with partners, programming will be far simpler and thereby cheaper than
if we have to offer users the ability to design their own service
requests.




Further
website expansion in 2008 will be in various phases subject to revenue and
capital availability.





2) We
are currently identifying funding options to raise additional capital for the
company and key geographic markets to target during our first phase of
operations. We intend to seek funding options such as equity or debt financing.
However, currently we have had no preliminary discussions with any group
regarding such financing. As we grow and the overall economic climate improves,
we expect to be in a better position to raise outside capital later. The only
associated costs for such funding may be the due diligence costs or expenses
associated with putting a financing deal together. The costs would be as much as
5%-6% of the funding raised, but any such fees would be taken out of the closing
of the funding transaction. Searching for capital will likely be an ongoing
process even if we raise an initial amount of funds. The only potential expenses
would be if we decide to pay for outside research or if business trips are
required.













3) Hire
and train additional staff, including management, marketing staff, and
administrative personnel; we anticipate hiring at a minimum 10 employees in the
next twelve months. The number of employees hired will be dependent upon a
variety of factors including our progress in implementing our business plan and
available capital. Ultimately, we expect to require approximately $10,000 per
month for payroll. We will need additional capital to meet these expenses and
will scale down accordingly until we are in such a position. The hiring of
employees will be an ongoing process during the company’s
existence.




We intend
to grow through internal development and strategic alliances.  Because
of uncertainties surrounding our growth and strong competition, we anticipate
incurring losses in the foreseeable future. Our ability to achieve our business
objectives is contingent upon its success in raising additional capital until
adequate revenues are realized from operations.





Employees





As of
June 30, 2008, we have 10 full time employees located in China. We intend to
hire and train additional staff, including management, marketing staff, and
administrative personnel. We anticipate hiring a minimum of 10 employees in the
next twelve months. The number of employees hired will depend on a variety of
factors including our progress in implementing our business plan and available
capital. Ultimately, we expect to require approximately $10,000 per month for
payroll. We will need additional capital to meet these expenses and will scale
down accordingly until we are in such a position. The hiring of employees will
be an ongoing process during the Company's existence.





RESULTS
OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED JUNE 30, 2008 AND
2007





The
following table presents certain consolidated statement of operations
information for the three month periods ended June 30, 2008 and 2007. The
discussion following the table is based on these results. Certain columns
may not add due to rounding.





Three
      months ended
              
              
              Three
      months endedJune
      30, 2008
              
              
              June
      30, 2007Revenue,
      net
              
              $
              9,003
              
              
              $
              6,781General
      and administrative expenses
              
              
              22,606
              
              
              
              37,423Loss
      from operations
              
              
              (13,604
              )
              
              
              (30,643
              )Other
      (Income) ExpenseInterest
      income
              
              
              (3
              )
              
              
              -Other
      expense
              
              
              -
              
              
              
              897Income
      tax
              
              
              135
              
              
              
              -Minority
      interest
              
              
              -
              
              
              
              (1,260
              )Total
      Other (Income) Expense
              
              
              132
              
              
              
              (363
              )Net
      loss
              
              
              $
              (13,737
              )
              
              $
              (30,280
              )





Net
Revenue




Net sales
for the three months ended June 30, 2008 totaled $9,003 compared to $6,781 for
the three months ended June 30, 2007, an increase of $2,222 or approximately
33%. In 2008, due to marketing department’s hard working and technical
department’s development, our website was improved with more categories and
information available to our users.





Operating
Expense


General
and administrative expenses for the three month periods ended June 30, 2008
totaled $22,606 or approximately 251% of net revenue compared to $37,423 or
approximately 552% of net revenue for the three month periods ended June 30,
2007.  The decrease in operating expense of $14,817 or approximately
40% was due to lower operation fees related to SEC filing in the U.S. stock
market.





Income
(Loss) from Operations


Loss from
operations for the three month periods ended June 30, 2008 totaled $13,604 or
approximately 151% of net revenue compared to $30,643 or approximately 452% of
net revenue for the three month periods ended June 30, 2007, a decrease of
$17,039 or approximately 56%. The decrease in loss from operations was primarily
due to a decrease in expenses and an increase in revenue as stated
above.




Net
Income (Loss)
 Net loss
for the three month periods ended June 30, 2008 totaled $13,737 compared to
$30,280 for the three month periods ended June 30, 2007, a decrease of $16,543
or approximately 55%. The decrease in net loss was primarily due to the reasons
described above.









RESULTS
OF OPERATIONS FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2008 AND
2007




The
following table presents certain consolidated statement of operations
information for the six month periods ended June 30, 2008 and 2007. The
discussion following the table is based on these results. Certain columns
may not add due to rounding.





Six
      months ended
              
              
              Six
      months endedJune
      30, 2008
              
              
              June
      30, 2007Revenue,
      net
              
              $
              16,392
              
              
              $
              11,564General
      and administrative expenses
              
              
              38,776
              
              
              
              61,107Loss
      from operations
              
              
              (22,384
              )
              
              
              (49,544
              )Other
      (Income) ExpenseInterest
      income
              
              
              (6
              )
              
              
              (1,813
              )Other
      expense
              
              
              -
              
              
              
              897Income
      tax
              
              
              246
              
              
              
              -Minority
      interest
              
              
              -
              
              
              
              (2,300
              )Interest
      expense
              
              
              -
              
              
              
              40Total
      Other (Income) Expense
              
              
              240
              
              
              
              (3,176
              )Net
      loss
              
              
              $
              (22,625
              )
              
              $
              (46,368
              )





Net
Revenue




Net sales
for the six month periods ended June 30, 2008 totaled $16,392 compared to
$11,564 for the six month periods ended June 30, 2007, an increase of $4,828, or
approximately 42%. The increase was due to the increase in the number of new
clients.





Operating
Expense


General
and administrative expenses for the six month periods ended June 30, 2008
totaled $38,776 or approximately 237% of net revenue compared to $61,107 or
approximately 528% of net revenue for the six month periods ended June 30,
2007.  The decrease in operating expense of $22,331 or approximately
37% was due to lower operation fees related to SEC filings in the U.S. stock
markets.





Income
(Loss) from Operations


Loss from
operations for the six month periods ended June 30, 2008 totaled $22,384 or
approximately 137% of net revenue compared to $49,544 or approximately 428% of
net revenue for the six month periods ended June 30, 2007, a decrease of $27,160
or approximately 55%. The decrease in loss from operations was primarily due to
the decrease in expenses and increase in revenue as stated above.





Net
Income (Loss)


Net loss
for the six month periods ended June 30, 2008 totaled $22,625 compared to
$46,368 for the six month periods ended June 30, 2007, a decrease of $23,743 or
approximately 51%. The decrease in net loss was primarily due to the reasons
described above.





LIQUIDTY
AND CAPITAL RESOURCES




Cash has
historically been generated from operations. Operations and liquidity needs are
funded primarily through cash flows from operations and short-term borrowings.
Cash and cash equivalents were $115,495 at June 30, 2008 and current assets
totaled $115,787 at June 30, 2008. The Company's total current liabilities were
$395,802 at June 30, 2008. Working capital at June 30, 2008 was $(280,015).
During the six month periods ended June 30, 2008, net cash used in operating
activities was $907.














We will
continue to evaluate alternative sources of capital to meet our growth
requirements, including other asset or debt financing, issuing equity securities
and entering into other financing arrangements. There can be no assurance,
however, that any of the contemplated financing arrangements described herein
will be available and, if available, can be obtained on terms favorable to
us.




Our
operations and short term financing does not currently meet our cash
needs.  We believe we will be able to generate revenues from sales and
raise capital through private placement offerings of its equity securities to
provide the necessary cash flow to meet anticipated working capital
requirements.  Our actual working capital needs for the long and short
term will depend upon numerous factors, including our operating results,
competition, and the availability of credit facilities, none of which can be
predicted with certainty.  Our future expansion will depend on
operating results and will be limited by its ability to enter into financings
and raise capital.




Working Capital
Requirements




Historically
operations and short term financing have been sufficient to meet our cash needs.
We believe that we will be able to generate revenues from sales and raise
capital through private placement offerings of its equity securities to provide
the necessary cash flow to meet anticipated working capital requirements.
However, our actual working capital needs for the long and short term will
depend upon numerous factors, including operating results, competition, and the
availability of credit facilities, none of which can be predicted with
certainty. Future expansion will be limited by the availability of financing
products and raising capital.




OFF-BALANCE
SHEET ARRANGEMENTS




We have
never entered into any off-balance sheet financing arrangements and have never
established any special purpose entities. We have not guaranteed any debt or
commitments of other entities or entered into any options on non-financial
assets.





ITEM
3.        QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.





The
Company is subject to certain market risks, including changes in interest rates
and currency exchange rates.  The Company does not undertake any specific
actions to limit those exposures.





Foreign
Currency Exchange Rate Risk





The
Company procures products from domestic sources with operations located
overseas.  As such, its financial results could be indirectly affected by
the weakening of the dollar.  If that were to occur, and if it were
material enough in movement, the financial results of the Company could be
affected, but not immediately because the Company has entered into contracts
with these vendors which establish product pricing levels for up to one year.
 Management believes these contracts provide a sufficient amount of time to
mitigate the risk of changes in exchange rates.





ITEM
4T.       CONTROLS AND
PROCEDURES.





Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Accounting Officer (“CAO”) (the Company’s principal financial and accounting
officer), of the effectiveness of the Company’s disclosure controls and
procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the
end of the period covered by this report. Based upon that evaluation, the
Company’s CEO and CAO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that the Company files or submits under the Exchange
Act, is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to the Company’s management, including the Company’s CEO and
CAO, as appropriate, to allow timely decisions regarding required
disclosure.





Management’s Report on
Internal Controls over Financial Reporting





Internal
control over financial reporting is a process to provide reasonable assurance
regarding the reliability of consolidated financial reporting and the
preparation of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles.  There has been no change in
the Company’s internal control over financial reporting during the quarter
ended June 30, 2008 that has materially affected, or is reasonably likely
to materially affect, the Company’s internal control over financial
reporting.




The
Company’s management, including the Company’s CEO and CAO, does not expect that
the Company’s disclosure controls and procedures or the Company’s internal
controls will prevent all errors and all fraud. 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 the
controls can provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been detected.














Management
conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management concluded that the
company’s internal control over financial reporting was effective as
of June 30, 2008.





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








PART
II - OTHER INFORMATION




Item
1. Legal Proceedings.




Currently
we are not aware of any litigation pending or threatened by or against the
Company.





Item
1A. Risk Factors.





Not
Applicable.


Item
2. Unregistered Sales of Equity Securities and Use of Proceeds




None.




Item
3. Defaults Upon Senior Securities.




None




Item
4. Submission of Matters to a Vote of Security Holders.




None.




Item
5. Other Information.




None




Item
6. Exhibits and Reports of Form 8-K.




(a)           Exhibits




31.1
Certifications pursuant to Section 302 of Sarbanes Oxley Act of
2002




32.1
Certifications pursuant to Section 906 of Sarbanes Oxley Act of
2002




(b)           Reports
of Form 8-K




None.














SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.




ARTCRAFT
      V, INCDate:
      August 1, 2008
            By:
            By:
      /s/
      Li Te XiaoLi
      Te XiaoPresident,
      Chief Executive Officer,Chief
      Financial Officer and Director





ARTCRAFT
V, INC. AND SUBSIDIARIES
 
 CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 June
30, 2008
 
 
 
 
  TABLE
OF CONTENTS
 
 
  Unaudited Condensed
      Consolidated Balance Sheets
              2Unaudited Condensed
      Consolidated Statements of Operations
              3Unaudited Condensed
      Consolidated Statements of Cash Flow
              4Notes to unaudited
      Condensed Consolidated Financial Statements
              5
 
 
 
 ARTCRAFT
      V, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSJUNE
      30, 2008 AND DECEMBER 31, 2007ASSETSJune
      30,
              
              
              December
      31,2008
              
              
              2007(Unaudited)Current
      assetsCash
      and cash equivalents
              
              $
              115,495
              
              
              $
              18,070Other
      receivable from related parties
              
              
              292
              
              
              
              274Other
      receivable
              
              
              -
              
              
              
              -Loan
      receivable, net
              
              
              -
              
              
              
              26,250Total
      Current Assets
              
              
              115,787
              
              
              
              44,594Property
      & equipment, net
              
              
              15,516
              
              
              
              15,777Intangible
      assets, net
              
              
              5,649
              
              
              
              6,636Total
      assets
              
              $
              136,952
              
              
              $
              67,006LIABILITIES AND
      STOCKHOLDERS' DEFICITCurrent
      liabilitiesAccounts
      payable and accrued expenses
              
              $
              20,721
              
              
              $
              36,142Loan
      payable to related parties
              
              
              363,628
              
              
              
              265,721Deferred
      revenue
              
              
              11,453
              
              
              
              3,313Total
      current liabilities
              
              
              395,802
              
              
              
              305,176Stockholders'
      deficitCommon
      stock, $.001 par value, 100,000,000shares
      authorized, 10,250,000 issued and outstanding
              
              
              10,250
              
              
              
              10,250Additional
      paid in capital
              
              
              109,998
              
              
              
              108,872Subscription
      receivable
              
              
              (50,000
              )
              
              
              (50,000
              )Other
      accumulated comprehensive gain
              
              
              7,491
              
              
              
              6,673Accumulated
      deficit
              
              
              (336,590
              )
              
              
              (313,965
              )Total
      stockholders' deficit
              
              
              (258,851
              )
              
              
              (238,170
              )Total
      liabilities and stockholders' deficit
              
              $
              136,952
              
              
              $
              67,006
  The accompanying
notes are an integral part of these unaudited consolidated financial
statements.
   2
   ARTCRAFT
      V, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOMEFOR
      THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2008 AND
    2007(UNAUDITED)Three
      month periods
                  ended
      June 30,
                
                
                Six
      month periods
                  ended
      June 30,June
      30, 2008
                
                
                June
      30, 2007
                
                
                June
      30, 2008
                
                
                June
      30, 2007Revenue,
      net
                
                $
                9,003
                
                
                $
                6,781
                
                
                $
                16,392
                
                
                $
                11,564Operating
      Expenses:General
      and administrative expenses
                
                
                22,606
                
                
                
                37,423
                
                
                
                38,776
                
                
                
                61,107Loss
      from operation
                
                
                (13,604
                )
                
                
                (30,643
                )
                
                
                (22,384
                )
                
                
                (49,544
                )Other
      (income) expenseInterest
      income
                
                
                (3
                )
                
                
                -
                
                
                
                (6
                )
                
                
                (1,813
                )Other
      expense
                
                
                -
                
                
                
                897
                
                
                
                -
                
                
                
                937Income
      tax
                
                
                135
                
                
                
                -
                
                
                
                246
                
                
                
                -Interest
      expense
                
                
                -
                
                
                
                -
                
                
                
                -Total
      other (income) expense
                
                
                132
                
                
                
                897
                
                
                
                240
                
                
                
                (876
                )Loss
      before minority interest
                
                
                (13,737
                )
                
                
                (31,540
                )
                
                
                (22,625
                )
                
                
                (48,668
                )Minority
      interest
                
                
                -
                
                
                
                1,260
                
                
                
                -
                
                
                
                2,300Net
      loss
                
                
                (13,737
                )
                
                
                (30,280
                )
                
                
                (22,625
                )
                
                
                (46,368
                )Other
      comprehensive incomeForeign
      currency translation
                
                
                288
                
                
                
                1,559
                
                
                
                818
                
                
                
                2,666Comprehensive
      loss
                
                $
                (13,449
                )
                
                $
                (28,721
                )
                
                $
                (21,806
                )
                
                $
                (43,702
                )Net
      loss per share:Basic
      & diluted
                
                $
                (0.001
                )
                
                $
                (0.003
                )
                
                $
                (0.002
                )
                
                $
                (0.004
                )Weighted
      average number of shares outstanding:Basic
      & diluted
                
                
                10,250,000
                
                
                
                10,100,000
                
                
                
                10,250,000
                
                
                
                10,100,000Weighted
      average number of shares for dilutive securities has not been taken since
      the effect of dilutive securities is anti-dilutive
  The accompanying
notes are an integral part of these unaudited consolidated financial
statements.
   3
   ARTCRAFT
      V, INC. AND SUBSIDIARIESFOR
      THE SIX MONTH PERIODS ENDED JUNE 30, 2008 AND 2007(UNAUDITED)2008
                
                
                2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Loss
                
                $
                (22,625
                )
                
                $
                (46,368
                )Adjustments to
      reconcile net loss to net cashused
      in operating activities:Depreciation
      & amortization
                
                
                2,610
                
                
                
                4,354Minority
      interest
                
                
                -
                
                
                
                (2,300
                )Payment
      of rental by an officer
                
                
                1,135
                
                
                
                -Increase/
      (decrease) in current assets:Other
      receivables
                
                
                26,250
                
                
                
                (912
                )Increase/
      (decrease) in current liabilities:Accounts
      payable and accrued expenses
                
                
                (15,984
                )
                
                
                (1,230
                )Deferred
      revenue
                
                
                7,707
                
                
                
                2,030Total
      Adjustments
                
                
                21,717
                
                
                
                1,942Net
      cash used in operating activities
                
                
                (907
                )
                
                
                (44,426
                )CASH
      FLOWS FROM FINANCING ACTIVITIESLoan
      from related party
                
                
                97,907
                
                
                
                93,382Effect
      of exchange rate changes on cash and cash equivalents
                
                
                425
                
                
                
                141Net
      increase in cash and cash equivalents
                
                
                97,425
                
                
                
                49,097Cash
      and cash equivalents, beginning balance
                
                
                18,070
                
                
                
                7,750Cash
      and cash equivalents, ending balance
                
                $
                115,495
                
                
                $
                56,847SUPPLEMENTAL
      DISCLOSURES:Cash
      paid during the year for:Income
      tax payments
                
                $
                -
                
                
                $
                -Interest
      payments
                
                $
                -
                
                
                $
                -
  The
accompanying notes are an integral part of these unaudited consolidated
financial statements.
   4
   ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  Note
1 –  ORGANIZATION
 
 Artcraft
V, Inc. was incorporated under the laws of the State of Delaware on June 7,
2004.  On November 7, 2005, the Company entered into an Exchange
Agreement with Top Interest International Limited (“Top
Interest”).  Top Interest owns 70% equity interest of Shenzhen Xin Kai
Yuan Info Consult Co., Ltd. (“188info.com”) which operates 188info.com, a
professional information searching platform that is engaged in the business of
providing information search engine, online web application and image designing,
digital network service, online market research, online promotion and
advertising services, and query searches for both individuals and
businesses.  Top Interest was incorporated under the laws of the
British Virgin Islands.  188info.com was legally established under the
laws of the People’s Republic of China.  When used in these notes, the
terms “Company”, “we”, “our” or “us” mean Artcraft V, Inc. and its
subsidiaries.
 
 Pursuant
to the Stock Purchase and Share Exchange Agreement, the Company purchased all of
the issued and outstanding shares of Top Interest from the shareholders for
issuance of a total of 10,000,000 shares of the Company’s common stock, or
approximately 99% of the total issued and outstanding shares.  This
transaction closed on November 7, 2005 and has been accounted for as a reverse
acquisition.
 
 Note
2 –  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Unaudited Interim Financial
Information
 The
accompanying unaudited consolidated financial statements have been prepared
by Artcraft V, Inc., pursuant to the rules and regulations of the
Securities and Exchange Commission (the “SEC”) Form 10-QSB and Item 310 of
Regulation S-B, and generally accepted accounting principles for interim
financial reporting. The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments) which are, in the
opinion of management, necessary to fairly present the operating results
for the respective periods. Certain information and footnote disclosures
normally present in annual consolidated financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been omitted pursuant to such rules and regulations. These
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and footnotes included in the Company’s Annual
Report on Form 10-KSB. The results of the six months ended June 30, 2008 are not
necessarily indicative of the results to be expected for the full year ending
December 31, 2008.
 
 Basis of
Presentation
 
 The
accompanying consolidated financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of
America.  The Company’s functional currency is the Chinese Renminbi
(CNY); however the accompanying consolidated financial statements have been
translated and presented in United States Dollars.
 
 Principles of
Consolidation
 
 The
consolidated financial statements include the accounts of Artcraft V, Inc. and
its wholly owned subsidiary Top Interest International and majority owned
subsidiary Shenzhen Xin Kai Yuan Info Consult Co., Ltd., collectively referred
to within as the Company.  All material intercompany accounts,
transactions and profits have been eliminated in consolidation.
 
 Exchange Gain
(Loss)
 
 During
the period ended June 30, 2008 and 2007, the transactions of Shenzhen were
denominated in foreign currency and were recorded in CNY at the rates of
exchange in effect when the transactions occur. Exchange gains and losses are
recognized for the different foreign exchange rates applied when the foreign
currency assets and liabilities are settled.
 
 Translation
Adjustment
   5
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  Note 2 –  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  As of
June 30, 2008, the accounts of Shenzhen were maintained, and its financial
statements were expressed in CNY. Such financial statements were translated into
U.S. Dollars (USD) in accordance with Statement of Financial Accounts Standards
(“SFAS”) No. 52, “Foreign Currency Translation,” with the CNY as the functional
currency. According to the Statement, all assets and liabilities were translated
at the current exchange rate, stockholder’s equity are translated at the
historical rates and income statement items are translated at the average
exchange rate for the period. The resulting translation adjustments are reported
under other comprehensive income in accordance with SFAS No. 130, “Reporting
Comprehensive Income” as a component of shareholders’ equity.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
 Risks and
Uncertainties
 
 The
Company is subject to substantial risks from, among other things, intense
competition associated with the industry in general, other risks associated with
financing, liquidity requirements, rapidly changing customer requirements,
limited operating history, foreign currency exchange rates and the volatility of
public markets.
 
 Contingencies
 
 Certain
conditions may exist as of the date the financial statements are issued, which
may result in a loss to the Company but which will only be resolved when one or
more future events occur or fail to occur.  The Company’s management
and legal counsel assess such contingent liabilities, and such assessment
inherently involves an exercise of judgment.  In assessing loss
contingencies related to legal proceedings that are pending against the Company
or unasserted claims that may result in such proceedings, the Company’s legal
counsel evaluates the perceived merits of any legal proceedings or unasserted
claims as well as the perceived merits of the amount of relief sought or
expected to be sought.
 
 If the
assessment of a contingency indicates that it is probable that a material loss
has been incurred and the amount of the liability can be estimated, then the
estimated liability would be accrued in the Company’s financial
statements.  If the assessment indicates that a potential material
loss contingency is not probable but is reasonably possible, or is probable but
cannot be
 
 estimated,
then the nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material would be
disclosed.
 
 Loss
contingencies considered to be remote by management are generally not disclosed
unless they involve guarantees, in which case the guarantee would be
disclosed.
 
 Cash and Cash
Equivalents
 
 Cash and
cash equivalents include cash in hand and cash in time deposits, certificates of
deposit and all highly liquid debt instruments with original maturities of three
months or less.
 
 Property, Plant &
Equipment
 
 Property
and equipment are stated at cost. Expenditures for maintenance and repairs are
charged to earnings as incurred; additions, renewals and betterments are
capitalized. When property and equipment are retired or otherwise disposed of,
the related cost and accumulated depreciation are removed from the respective
accounts, and any gain or loss is included in operations. Depreciation of
property and equipment is provided using the straight-line method for
substantially all assets with estimated lives of:
   6
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  Note 2 –  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Automobile                                                          5
years
 Office
equipment                                                 5
years
 
 As of
June 30, 2008 and December 31,2007, Property, Plant & Equipment consist of
the following:
  2008
              
              
              2007Office
      Equipment
              
              $
              22,129
              
              
              $
              20,794Automobile
              
              
              12,723
              
              
              
              11,95734,852
              
              
              
              32,751Accumulated
      depreciation
              
              
              (19,336
              )
              
              
              (16,974
              )Property,
      Plant & Equipment, net
              
              $
              15,516
              
              
              $
              15,777
  Depreciation
expenses were $1,237 and $3,099 for the six month periods ended June 30, 2008
and 2007, respectively.
 
 Intangible
Assets
 
 Intangible
assets consist of software for information search engine and online web
application. The Company evaluates intangible assets for impairment, at least on
an annual basis and whenever events or changes in circumstances indicate that
the carrying value may not be recoverable from its estimated future cash flows.
Recoverability of intangible assets, other long-lived assets and, goodwill is
measured by comparing their net book value to the related projected undiscounted
cash flows from these assets, considering a number of factors including past
operating results, budgets, economic projections, market trends and product
development cycles.
 
 If the
net book value of the asset exceeds the related undiscounted cash flows, the
asset is considered impaired, and a second test is performed to measure the
amount of impairment loss.  As of June 30, 2008, there is no
impairment of intangible assets.
 
 As of
June 30, 2008 and December 31,2007, intangible Assets consist of the
following:
  2008
              
              
              2007Software
              
              $
              14,123
              
              
              $
              13,271$
              14,123
              
              
              $
              13,271Accumulated
      Amortization
              
              
              (8,474
              )
              
              
              (6,635
              )5,649
              
              
              
              6,636
  Amortization
expenses were $1,373 and $1,255 for the six month periods ended June 30, 2008
and 2007, respectively.
 
 Amortization
expenses for the next 3 years are as follows:
  Years
      endingJune
      30, 2009
                
                $
                2,746June
      30, 2010
                
                
                2,746June
      30, 2011
                
                
                157Total
                
                
                5,649
   7
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  Note 2 –  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Long-Lived
Assets
  Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards
No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS
144”), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,”
and the accounting and reporting provisions of APB Opinion No. 30, “Reporting
the Results of Operations for a Disposal of a Segment of a Business.” The
Company periodically evaluates the carrying value of long-lived assets to be
held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets’ carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
fair market value of the long-lived assets. Loss on long-lived assets to be
disposed of is determined in a similar manner, except that fair market values
are reduced for the cost of disposal. Based on its review, the Company believes
that, as of June 30, 2008 there were no significant impairments of its
long-lived assets.
  Fair Value of Financial
Instruments
  Statement
of financial accounting standard No. 107, Disclosures about fair value of
financial instruments, requires that the Company disclose estimated fair values
of financial instruments.
  The
carrying amounts reported in the statements of financial position for current
assets and current liabilities qualifying as financial instruments are a
reasonable estimate of fair value.
  Revenue
Recognition
 
 The
Company’s revenue recognition policies are in compliance with Staff accounting
bulletin (SAB) 104. Revenue from marketing services through World Wide Web is
recognized when services are rendered. Payments received before all of the
relevant criteria for revenue recognition are satisfied are recorded as deferred
revenue. As of June 30, 2008 and December 31,2007, deferred revenue was $11,453
and $3,313 respectively.
  Stock-Based
Compensation
  In
October 1995, the FASB issued SFAS No. 123, “Accounting for Stock-Based
Compensation”. SFAS No. 123 prescribes accounting and reporting standards for
all stock-based compensation plans, including employee stock options, restricted
stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123
requires compensation expense to be recorded (i) using the new fair value method
or (ii) using the existing accounting rules prescribed by Accounting Principles
Board Opinion No. 25, “Accounting for stock issued to employees” (APB 25) and
related interpretations with proforma disclosure of what net income and earnings
per share would have been had the Company adopted the new fair value method. The
Company uses the intrinsic value method prescribed by APB 25 and has opted for
the disclosure provisions of SFAS No.123. During the six month periods ended
June 30, 2008, the company did not grant or issue any option or
warrant.
  Advertising
 
 Advertising
expenses consist primarily of costs of promotion for corporate image and product
marketing and costs of direct advertising. The Company expenses all advertising
costs as incurred. The company did not incur any advertising expense during the
six month ended June 30, 2008 and 2007.
  Income
Taxes
  The
Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred income taxes are recognized for the tax
consequences in future years of differences between the tax bases of assets and
liabilities and their financial reporting amounts at each period end based on
enacted tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.
   8
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  Note
2 -   SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Basic and Diluted Earnings
(Loss) Per Share
  Earnings
(loss) per share is calculated in accordance with the Statement of financial
accounting standards No. 128 (SFAS No. 128), “Earnings per share”. SFAS No. 128
superseded Accounting Principles Board Opinion No.15 (APB 15). Net income (loss)
per share for all periods presented has been restated to reflect the adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of common shares outstanding. Diluted net loss per share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised. Dilution is computed by
  applying
the treasury stock method. Under this method, options and warrants are assumed
to be exercised at the beginning of the period (or at the time of issuance, if
later), and as if funds obtained thereby were used to purchase common stock at
the average market price during the period. Basic and diluted loss per share
were $0.002 and $0.004 for the six month ended June 30, 2008 and 2007
respectively.
  Statement of Cash
Flows
  In
accordance with SFAS No. 95, “Statement of Cash Flows,” cash flows from the
Company’s operations is based upon the local currencies. As a result, amounts
related to assets and liabilities reported on the statement of cash flows will
not necessarily agree with changes in the corresponding balances on the balance
sheet.
  Concentration of Credit
Risk
  Financial
instruments that potentially subject the Company to concentrations of credit
risk are cash, accounts receivable and other receivables arising from its normal
business activities. The Company places its cash in what it believes to be
credit-worthy financial institutions. The Company has a diversified customer
base. The Company controls credit risk related to accounts receivable through
credit approvals, credit limits and monitoring procedures. The Company routinely
assesses the financial strength of its customers and, based upon factors
surrounding the credit risk, establishes an allowance, if required, for
uncollectible accounts and, as a consequence, believes that its accounts
receivable credit risk exposure beyond such allowance is limited.
  Segment
Reporting
 
 Statement
of Financial Accounting Standards No. 131 (“SFAS 131”), “Disclosure about
Segments of an Enterprise and Related Information” requires use of the
“management approach” model for segment reporting. The management approach model
is based on the way a company’s management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company. SFAS
131 has no effect on the Company’s consolidated financial statements as the
Company consists of one reportable business segment. All revenue is from
customers in People’s Republic of China. All of the Company’s assets are located
in People’s Republic of China.
 
 Recent accounting
pronouncements
 
 In
September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The management is currently
evaluating the effect of this pronouncement on financial
statements.
 
 In
September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87,
88, 106, and
   9
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  Note 2
-   SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  132(R)’
This Statement improves financial reporting by requiring an employer to
recognize the over funded or under funded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or liability
in its statement of financial position and to recognize changes in that funded
status in the year in which the changes occur through comprehensive income of a
business entity or changes in unrestricted net assets of a not-for-profit
organization. This Statement also improves financial reporting by requiring an
employer to measure the funded status of a plan as of the date of its year-end
statement of financial position, with limited exceptions. An employer with
publicly traded equity securities is required to initially recognize the funded
status of a defined benefit postretirement plan and to provide the required
disclosures as of the end of the fiscal year ending after December 15, 2006. An
employer without publicly traded equity securities is required to recognize the
funded status of a defined benefit postretirement plan and to provide the
required disclosures as of the end of the fiscal year ending after June 15,
2007. However, an employer without publicly traded equity securities is required
to disclose the following information in the notes to financial statements for a
fiscal year ending after December 15, 2006, but before June 16, 2007, unless it
has applied the recognition provisions of this Statement in preparing those
financial statements:
  a.  A
brief description of the provisions of this Statement
  b.  The
date that adoption is required
  c.  The
date the employer plans to adopt the recognition provisions of this Statement,
if earlier.
  The
requirement to measure plan assets and benefit obligations as of the date of the
employer’s fiscal year-end statement of financial position is effective for
fiscal years ending after December 15, 2008. The management is currently
evaluating the effect of this pronouncement on financial
statements.
  In
February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal
years beginning after November 15, 2007. Early adoption is permitted subject to
specific requirements outlined in the new Statement. Therefore, calendar-year
companies may be able to adopt FAS 159 for their first quarter 2007 financial
statements.
 
 The new
Statement allows entities to choose, at specified election dates, to measure
eligible financial assets and liabilities at fair value that are not otherwise
required to be measured at fair value. If a company elects the fair value option
for an eligible item, changes in that item's fair value in subsequent reporting
periods must be recognized in current earnings. FAS 159 also establishes
presentation and disclosure requirements designed to draw comparison between
entities that elect different measurement attributes for similar assets and
liabilities.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to establish
accounting and reporting standards for the noncontrolling (minority) interest in
a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. SFAS No. 160 is effective for the Company’s fiscal year
beginning October 1, 2009. Management is currently evaluating the effect of this
pronouncement on financial statements.
 
 In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This
Statement replaces SFAS No. 141, Business Combinations. This Statement retains
the
  fundamental
requirements in Statement 141 that the acquisition method of accounting (which
Statement 141 called the purchase method) be used for all business combinations
and for an acquirer to be identified for each business combination. This
Statement also establishes principles and requirements for how the acquirer: a)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase and c) determines what information
to disclose to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. SFAS No. 141(R) will apply
prospectively to business combinations for which the acquisition date is on or
after Company’s fiscal year beginning October 1, 2009. While the Company has not
yet evaluated this statement for the impact, if any, that SFAS No. 141(R) will
have on its consolidated financial statements, the Company will be required to
expense costs related to any acquisitions after September 30, 2009.
   10
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 Note
3 –   ACCOUNTS PAYABLE AND ACCRUED
EXPENSES
 
 As of
June 30, 2008, account payable and accrued expenses were $20,721, including
$12,677 accrued professional expenses and $7,735 accrued payroll and welfare
expenses.
 
 As of
December 31, 2007, account payable and accrued expenses were $36,142, including
$26,344 accrued professional expenses and $9,798 accrued payroll and welfare
expenses.
 
 Note
4 –   LOAN
PAYBLE TO RELATED PARTIES
 
 As of
June 30, 2008, total loan payable to related parties were $363,628, including a
non interest-bearing, unsecured and due on demand note payable to an officer
of a subsidiary amouting $84,000 and a non interest-bearing, unsecured and
due on demand note payable to a shareholder of the Company in the amount of
$279,628.
 
 As of
December 31, 2007, total loan payable to related parties were $265,721,
including a non interest-bearing, unsecured and due on demand note payable to an
officer of a subsidiary amounting $84,000 and a non interest-bearing,
unsecured and due on demand note payable to a shareholder of the Company in the
amount of $181,721.
 
 Note
5 –  COMMON
STOCK
 
 On May
17, 2005, the Company agreed to issue 150,000 shares of common stock to
individuals forsubscriptions receivable
of $60,000 ($0.40 per share). The shares were issued during the month of
August 2007. However, the physical certificates were not issued as the
company was still waiting for the SB-2 filing to become
effective.  The Company plans to issue the certificates in next few
months.
  Note
6 –  ADDITIONAL PAID-IN
CAPITAL
 
 The
      Company utilizes office space arranged by an officer of the Company, free
      of charge. The fair maket rent value amounting $1,126 and $6,322 have been
      taken as a contribution to the capital from the officer and credited to
      the additional paid in capital as of June 30, 2008 and December 31, 2007
      respectively.
 
 Note
7 –   INCOME
TAXES
 
 The
Company is registered in the State of Delaware and has operations in primarily
two tax jurisdictions - the PRC and the United States. For certain operations in
the US and PRC, the Company has incurred net accumulated operating losses for
income tax purposes The Company believes that it is more likely than not that
these net accumulated operating losses will not be utilized in the future.
Therefore, the Company has provided full valuation allowance for the deferred
tax assets arising from the losses at these locations as of June 30, 2008 and
2007, and the Company has recorded income tax provisions for the periods as
follows:
 
 The provision for income taxes from continuing operations on
income consists of the following for the six month periods ended June 30, 2008
and 2007:
 11
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 6/30/2008
                  
                  
                  6/30/2007US
      Current Tax Expense (Benefit)Federal
                  
                  $
                  -
                  
                  
                  $
                  -State
                  
                  
                  -
                  
                  
                  
                  -PRC
      Current Income Expense (Benefit)
                  
                  
                  246
                  
                  
                  
                  -Total
      Provision for Income tax
                  
                  $
                  246
                  
                  
                  $
                  -Tax
      expense (credit) at staturory rate - federal
                  
                  
                  34
                  %
                  
                  
                  34
                  %State
      tax expense net of federal tax
                  
                  
                  6
                  %
                  
                  
                  6
                  %Changes
      in valuation allowance
                  
                  
                  -40
                  %
                  
                  
                  -40
                  %Foreign
      income tax - PRC
                  
                  
                  15
                  %
                  
                  
                  15
                  %Exempt
      from income tax due to net loss
                  
                  
                  0
                  %
                  
                  
                  -15
                  %Tax
      expense at actual rate
                  
                  
                  15
                  %
                  
                  
                  0
                  %
 
 United States of
America
  As of
June 30, 2008, the Company in the United States had approximately $107,792 in
net operating loss carry forwards available to offset future taxable income.
Federal net operating losses can generally be carried forward 20 years. The
deferred tax assets for the United States entities at June 30, 2008 consists
mainly of net operating loss carry forwards and were fully reserved as the
management believes it is more likely than not that these assets will not be
realized in the future.
 
 The
following table sets forth the significant components of the net deferred tax
assets for operation in the US as of June 30, 2008 and December 31,
2007.
  June
      30, 2008
                
                
                December
      31, 2007Net
      operation loss carry forward
                
                $
                107,792
                
                
                $
                87,002Total
      deferred tax assets
                
                
                64,869
                
                
                
                57,800Less:
      valuation allowance
                
                
                (64,869
                )
                
                
                (57,800
                )Net
      deferred tax assets
                
                $
                -
                
                
                $
                -
  People’s Republic of China
(PRC)
 
 Pursuant
to the PRC Income Tax Laws, the Company's subsidiary is generally subject to
Enterprise Income Taxes ("EIT") at a statutory rate of 33%, which comprises 30%
national income tax and 3% local income tax. The subsidiary is qualified as a
new technology enterprises and under PRC Income Tax Laws, it subject to a
preferential tax rate of 15%.
   12
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 Beginning
January 1, 2008, the new Enterprise Income Tax ("EIT") law will replace the
existing laws for Domestic Enterprises ("DES") and Foreign Invested Enterprises
("FIEs"). The new standard EIT rate of 25% will replace the 33% rate currently
applicable to both DES and FIEs. The Company’s applicable EIT rate under new EIT
law is differ from the amounts computed by applying the EIT primarily. The local
government has implemented a special tax rate based on income rather than net
income for the enterprises reported operation loss continuously for more than
two years.  Pursuant to the special tax rate, the Company’s subsidiary
is first subject to a tax rate of 6% on their income and then multiply that by
the standard tax rate of 25% or simply 1.5% of income. Income tax expenses for
the six month periods ended June 30, 2008 and 2007 were $246 and $0
respectively.
 
 
 June
      30, 2008
                
                
                June
      30, 2007Loss
      from China
                
                $
                (1,589
                )
                
                $
                (7,665
                )Income
      tax expense for operation in the PRC
                
                $
                246
                
                
                $
                -Tax
      expense at actual rate
                
                
                15
                %
                
                
                -
 
 
 Note
8 –  STATUTORY
RESERVE
 
 In
accordance with the laws and regulations of the PRC, after the payment of the
PRC income taxes shall be allocated to the statutory surplus reserves and
statutory public welfare fund for staff and workers.  The proportion
of allocation for reserve is 5 to 10 percent of the profit after tax until the
accumulated amount of allocation for statutory reserve reaches 50 percent of the
registered capital.  Statutory surplus reserves are to be utilized to
offset prior years’ losses, or to increase its share capital. Statutory public
welfare fund is no longer requested for the companies invested by foreign
countries in 2006.
 
 General
reserve fund and statutory surplus fund are restricted for set off against
losses, expansion of production and operation or increase in register capital of
the respective company. Statutory public welfare fund is restricted to the
capital expenditures for the collective welfare of employees. These reserves are
not transferable to the Company in the form of cash dividends, loans or
advances. These reserves are therefore not available for distribution except in
liquidation. As of June 30, 2008, the Company had no reserves to these
non-distributable reserve funds since it had no income from
operations.
 
 Note
9 –  OTHER
COMPREHENSIVE INCOME (LOSS)
 
 Balances
of related after-tax components comprising accumulated other comprehensive
income (loss), included in Stockholders’ Deficit, at June 30, 2008 are as
follows:
 
 Foreign
      Currency Translation AdjustmentBalance
      at December 31, 2007
              
              $
              6,673Change
      for 2008
              
              
              818Balance
      at June 30, 2008
              
              $
              7,491
 
 Note
10 – CURRENT
VULNERABILITY DUE TO RISK FACTORS
 
 The
Company’s operations are carried out in the PRC. Accordingly, the Company’s
business, financial condition and results of operations may be influenced by the
political, economic and legal environments in the PRC, by the general state of
the PRC’s economy. The Company’s business may be influenced by changes in
governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion and remittance abroad, and rates and methods of
taxation, among other things.
   13
 ARTCRAFT
V, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 Note
11– GOING
CONCERN
 
 The
accompanying consolidated financial statements have been prepared in conformity
with generally accepted accounting principles which contemplate continuation of
the company as a going concern.  However, the Company has an
accumulated deficit of $336,590 and $313,965 as of June 30, 2008 and December
31, 2007 including losses of $218,495 and $92,812 for the years ended December
31, 2007 and 2006. The Company’s current liabilities exceed its current assets
by $280,015 and $260,582 as of June 30, 2008 and December 31, 2007. In view of
the matters described above, recoverability of a major portion of the recorded
asset amounts shown in the accompanying consolidated balance sheet is dependent
upon continued operations of the company, which in turn is dependent upon the
Company’s ability to raise additional capital, obtain financing and succeed in
its future operations, The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.
 
 Management
has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern.  Management devoted
considerable effort from inception through the six month ended June 30, 2008,
towards obtaining additional equity and management of accrued expenses and
accounts payable.
 
 Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for the Company to
continue as a going concern.