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 September 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
November 12, 2008, the Company had 10,250,000 shares of common stock
outstanding.













ARTCRAFT
V, INC.


FORM
10-Q


September
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 statements 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.





Plan of
Operation:




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
subsidiary.




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.




We
operated our business through our wholly owned subsidiary, Top Interest
International Limited, which owns a 70% interest in 188info.com, which
operates  "188Info" service in the PRC.




On
September 22, 2008 the Company’s board of directors agreed to sell the Company’s
70% interest in 188info.com in order to protect its shareholders’
interest  as “188info.com” continues to generate operating losses and
negative cash flow.  The Company entered into an agreement with Shenzhen Dingyi Investment
Consulting Company Co., Ltd  on September 22, 2008 to sell them
our 70% interest in 188info.com for $0.15 (RMB1) and the assumption of all
assets and liabilities of 188info.com. The transaction was completed and
approved by the PRC on October 17, 2008.






-1-







Due to
the sale of 188info.com we do not expect to generate any revenues over the next
twelve months. Our principal business objective for the next twelve months will
be to seek, investigate and, if such investigation warrants, engage in a
business combination with a private entity whose business presents an
opportunity for our shareholders.





During
the next twelve months we anticipate incurring costs related to filing of
Exchange Act reports, general administrative costs and costs relating to
consummating an acquisition. We believe we will be able to meet these costs
through  loans by  our stockholders, management or other
outside investors. We have no specific plans, understandings or agreements with
respect to the raising of such funds, and we may seek to raise the required
capital by the issuance of equity or debt securities or by other means. Since we
have no such arrangements or plans currently in effect, our inability to raise
funds for the consummation of an acquisition may have a severe negative impact
on our ability to become a viable company.





In the
future, we will attempt to acquire other assets or business operations that will
maximize shareholder value. No specific assets or businesses have been
definitively identified and there is no certainty that any such assets or
business will be identified or any transactions will be
consummated.





We expect
that we will need to raise funds in order to effectuate our business plan. We
will seek to establish or acquire businesses or assets with funds raised either
via the issuance of shares or debt. There can be no assurance that additional
capital will be available to us. We may seek to raise the required capital by
other means. We may have to issue debt or equity or enter into a strategic
arrangement with a third party. We currently have no agreements, arrangements or
understandings with any person to obtain funds through bank loans, lines of
credit or any other sources. Since we have no such arrangements or plans
currently in effect, our inability to raise funds will have a severe negative
impact on our ability to remain a viable company. In pursuing the foregoing
goals, we may seek to expand or change the composition of the Board or make
changes to our current capital structure, including issuing additional shares or
debt and adopting a stock option plan.




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





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






-2-









Three
      month periods ended September 30,2008
              
              
              2007Revenue,
      net
              
              $
              -
              
              
              $
              -Operating
      Expenses:General
      and administrative expenses
              
              
              18,875
              
              
              
              24,956Loss
      from operations
              
              
              (18,875
              )
              
              
              (24,956
              )Loss
      from continued operations
              
              
              (18,875
              )
              
              
              (24,956
              )Discontinued
      OperationsLoss
      from operations of entity to be disposed
              
              
              (5,395
              )
              
              
              (2,298
              )Impairement
      for Asset held for sale
              
              
              (11,694
              )
              
              
              -Total
      loss from Discontinued Operation
              
              
              (17,089
              )
              
              
              (2,298
              )Loss
      before minority interest
              
              
              (35,964
              )
              
              
              (27,254
              )Minority
      interest
              
              
              -
              
              
              
              689Net
      loss
              
              $
              (35,964
              )
              
              $
              (26,565
              )




Operating
Expenses


General
and administrative expenses for the three month periods ended September 30, 2008
totaled $18,875 compared to $24,956 for the three month periods ended September
30, 2007.  The decrease in operating expense of $6,081 or
approximately 24.4% was due to lower operation fees related to SEC
filings.





Income (Loss) from
Operations


Loss from
operations for the three month periods ended September 30, 2008 totaled $18,875
compared to $24,956 for the three month periods ended September 30,
2007.  The decrease in operating expense of $6,081or approximately
24.4% was due to lower operation fees related to SEC filings as discussed
above.





Net Income
(Loss)


Net loss
for the three month periods ended September 30, 2008 totaled $35,964 compared to
$26,565 for the three month periods ended September 30, 2007, an increase of
$9,399 or approximately 35.4%. The increase in net loss was primarily due to the
impairment for asset held for sale.




RESULTS
OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2008 AND
2007


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






-3-







Nine
      month periods ended September 30,2008
              
              
              2007Revenue,
      net
              
              $
              -
              
              
              $
              -Operating
      Expenses:General
      and administrative expenses
              
              
              39,665
              
              
              
              65,958Loss
      from continued operations
              
              
              (39,665
              )
              
              
              (65,958
              )Loss
      from operations
              
              
              (39,665
              )
              
              
              (65,958
              )Discontinued
      OperationLoss
      from operations of entity to be disposed
              
              
              (7,230
              )
              
              
              (9,963
              )Impairement
      for Asset held for sale
              
              
              (11,694
              )
              
              
              -Total
      loss from Discontinued Operation
              
              
              (18,924
              )
              
              
              (9,963
              )Loss
      before minority interest
              
              
              (58,589
              )
              
              
              (75,921
              )Minority
      interest
              
              
              -
              
              
              
              2,989Net
      loss
              
              $
              (58,589
              )
              
              $
              (72,933
              )




Operating
Expense


General
and administrative expenses for the nine month periods ended September 30, 2008
totaled $39,665 compared to $65,958 for the nine month periods ended September
30, 2007.  The decrease in operating expense of $26,293 or
approximately 40% was due to a decrease in our costs related to compliance
with  SEC filing requirements.





Income (Loss) from
Operations


Loss from
operations for the nine month periods ended September 30, 2008 totaled $39,665
compared to $65,958 for the nine month periods ended September 30,
2007.  The decrease in operating expense of $26,293 or approximately
40% was due to a decrease in our costs related to compliance with  SEC
filing requirements.





Net Income
(Loss)


Net loss
for the nine month periods ended September 30, 2008 totaled $58,589 compared to
$72,933 for the nine month periods ended September 30, 2007, a decrease of
$14,344 or approximately 19.7%. 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 $5,356 at September 30, 2008 and current assets
totaled $5,356 at September 30, 2008. The Company's total current liabilities
were $296,128 at September 30, 2008. Working capital at September30, 2008 was
$(290,772). During the nine month periods ended September 30, 2008, net cash
used in operating activities was $29,415.






-4-







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. 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.
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.




Not
required for smaller reporting companies.





ITEM
4T.       CONTROLS AND
PROCEDURES.





(a) Evaluation
of Disclosure Controls and Procedures.





An
evaluation was carried out under the supervision and with the participation of
the Company's management, including the Chief Executive Officer ("CEO") and
Chief Financial Officer ("CFO") (in this case the same person), of the
effectiveness of the Company's disclosure controls and procedures as of
September 30, 2008. Based on that evaluation, the CEO/CFO has concluded that the
Company's disclosure controls and procedures are effective to provide reasonable
assurance that: (i) information required to be disclosed by the Company in
reports that it files or submits under the Securities Exchange Act of 1934 is
accumulated and communicated to the Company's management, including the CEO/CFO,
as appropriate to allow timely decisions regarding required disclosure by the
Company; and (ii) information required to be disclosed by the Company in reports
that it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms.





(b)     
Changes in Internal Controls.





During
the quarter ended September 30, 2008, there were no changes in the Company's
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, its internal control over financial
reporting.








-5-





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.




On
September 22, 2008, we entered into an Agreement on Transfer of Shenzhen Xin Kai
Yuan Info Consult Co., Ltd, our indirect subsidiary, to Shenzhen Dingyi
Investment Consulting Company Co., Ltd. (the “Agreement”).  Pursuant
to the terms of the Agreement, we agreed to transfer all the shares of Xin Kai
Yuan Info Consult Co., Ltd. to Shenzhen Dingyi.  As consideration for
the shares of Xin Kai Yuan Info Consult Co., Ltd., Shenzhen Dingyi agreed to
assume all the liabilities of Top Interest International Limited (“Top
Interest”), our wholly owned subsidiary, and its subsidiaries in respect of
ownership of equity interest of Shenzhen Xin Kai Yuan Info Consult Co.,
Ltd.





On
October 17, 2008, we received approval from the Chinese government regarding the
Agreement on Transfer of Shenzhen Xin Kai Yuan Info Consult Co., Ltd, our
indirect subsidiary, to Shenzhen Dingyi Investment Consulting Company Co.,
Ltd.  dated September 22, 2008  (the “Agreement”).  A
copy of the Agreement is referred to and incorporated herein by reference to the
Form 8-K filed with the SEC on September 26, 2008.




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




On
September 26, 2008, we filed a Form 8-k for the Agreement we entered into for
the transfer of all our shares of our subsidiary, Xin Kai Yuan Info Consult Co.,
Ltd.  The 8-k is referred to and incorporated herein by
reference.





On
October 22, 2008, we filed a Form 8-k because we obtained PRC government
approval for the transfer of the shares of our affiliate.  The 8-k is
referred to and incorporated herein by reference.







-6-






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:
      November 13, 2008
            By:
            By:
      /s/
      Li Te XiaoLi
      Te XiaoPresident,
      Chief Executive Officer,Chief
      Financial Officer and Director







-7-









ARTCRAFT
V, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)





September
30, 2008 and December 31, 2007















TABLE
OF CONTENTS




Condensed
      Consolidated Balance Sheets as of  September 30, 2008(unaudited)
      and December 31, 2007
            2Unaudited
      Condensed Consolidated Statements of Operations
            3Unaudited
      Condensed Consolidated Statements of Cash Flow
            4Notes
      to Condensed Consolidated Financial Statements
            5






-1-




ARTCRAFT
      V, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSASSETSSeptember
      30,
              
              
              December
      31,2008
              
              
              2007Current
      Assets
              
              (Unaudited)Cash
      and cash equivalents
              
              $
              5,356
              
              
              $
              14,707Other
      receivable, net
              
              
              -
              
              
              
              26,250Total
      Current Assets
              
              
              5,356
              
              
              
              40,957Property
      & equipment, net
              
              
              -
              
              
              
              -Intangible
      assets, net
              
              
              -
              
              
              
              -Net
      assets in the entity held for sale
              
              
              15,568
              
              
              
              26,049$
              20,923
              
              
              $
              67,006LIABILITIES AND
      STOCKHOLDERS' DEFICITCurrent
      LiabilitiesAccounts payable and accrued expenses
              
              $
              12,500
              
              
              $
              26,344Loan
      payable to related parties
              
              
              283,628
              
              
              
              265,721Deferred
      revenue
              
              
              -
              
              
              
              -Net liabilities in the entity held for disposition
              
              
              -
              
              
              
              -Total
      Current Liabilities
              
              
              296,128
              
              
              
              292,065Minority
      Interest
              
              
              -
              
              
              
              -Net
      liabilities in the entity held for sale
              
              
              15,568
              
              
              
              13,111Stockholders'
      DeficitCommon stock, $.001 par value, 100,000,000shares authorized, 10,250,000 issued and outstanding
              
              
              10,250
              
              
              
              10,250Additional
      paid in capital
              
              
              115,159
              
              
              
              108,872Subscription
      receivable
              
              
              (50,000
              )
              
              
              (50,000
              )Other accumulated comprehensive gain
              
              
              6,371
              
              
              
              6,673Accumulated
      deficit
              
              
              (372,554
              )
              
              
              (313,965
              )Total
      Stockholders' Deficit
              
              
              (290,773
              )
              
              
              (238,170
              )$
              20,923
              
              
              $
              67,006






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







-2-






ARTCRAFT
      V, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONSFOR
      THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2008 AND
      2007(UNAUDITED)Three
      month periods ended September 30,
              
              
              Nine
      month periods ended September 30,2008
              
              
              2007
              
              
              2008
              
              
              2007Revenue,
      net
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Cost
      of salesGross
      profit
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Operating
      Expenses:General
      and administrative expenses
              
              
              18,875
              
              
              
              24,956
              
              
              
              39,665
              
              
              
              65,958Loss
      from operations
              
              
              (18,875
              )
              
              
              (24,956
              )
              
              
              (39,665
              )
              
              
              (65,958
              )Loss
      from continued operations
              
              
              (18,875
              )
              
              
              (24,956
              )
              
              
              (39,665
              )
              
              
              (65,958
              )Discontinued
      OperationLoss
      from operations of entity to be disposed
              
              
              (5,395
              )
              
              
              (2,298
              )
              
              
              (7,230
              )
              
              
              (9,963
              )Impairement
      for Asset held for sale
              
              
              (11,694
              )
              
              
              -
              
              
              
              (11,694
              )
              
              
              -Total
      loss from Discontinued Operation
              
              
              (17,089
              )
              
              
              (2,298
              )
              
              
              (18,924
              )
              
              
              (9,963
              )Loss
      before minority interest
              
              
              (35,964
              )
              
              
              (27,254
              )
              
              
              (58,589
              )
              
              
              (75,921
              )Minority
      interest
              
              
              -
              
              
              
              689
              
              
              
              -
              
              
              
              2,989Net
      loss
              
              
              (35,964
              )
              
              
              (26,565
              )
              
              
              (58,589
              )
              
              
              (72,933
              )Other
      comprehensive income (loss)Foreign
      currency translation
              
              
              (1,120
              )
              
              
              1,914
              
              
              
              (302
              )
              
              
              4,580Comprehensive
      loss
              
              $
              (37,084
              )
              
              $
              (24,652
              )
              
              $
              (58,891
              )
              
              $
              (68,353
              )Net
      loss per share:Basic
      & diluted
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.01
              )
              
              $
              (0.01
              )Weighted
      average number of shares outstanding:Basic
      & diluted
              
              
              10,250,000
              
              
              
              10,164,286
              
              
              
              10,250,000
              
              
              
              10,121,507Weighted
      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 SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWSFOR
      THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2008 AND 2007(UNAUDITED)2008
              
              
              2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Loss
              
              $
              (58,589
              )
              
              $
              (72,933
              )Adjustments to reconcile net loss to net cashused in operating activities:Minority
      interest
              
              
              -
              
              
              
              (2,989
              )Payment of rental by an officer
              
              
              6,287
              
              
              
              -Changes in current assets:Other receivables
              
              
              26,250
              
              
              
              -Other receivables from entity held for sale
              
              
              -
              
              
              
              -Changes in current liabilities:Accounts payable and accrued expenses
              
              
              (13,844
              )
              
              
              20,476Total
      Adjustments
              
              
              18,693
              
              
              
              17,487Net
      cash used in operating activities from continuing
    operations
              
              
              (39,896
              )
              
              
              (55,446
              )Net cash provided by operations of entity held for sale
              
              
              10,481
              
              
              
              5,835Net cash used in operating activities
              
              
              (29,415
              )
              
              
              (49,611
              )CASH
      FLOWS FROM FINANCING ACTIVITIESCash received from subscription
              
              
              -
              
              
              
              60,000Loan from related party
              
              
              17,907
              
              
              
              40,766Net cash provided by financing activities from continuing
      operations
              
              
              17,907
              
              
              
              100,766Net cash provided by financing activities from entity held for
      sale
              
              
              2,457
              
              
              
              -Net
      cash provided by financing activities
              
              
              20,364
              
              
              
              100,766Effect of exchange rate changes on cash and cash
    equivalents
              
              
              (300
              )
              
              
              4,579Net
      increase (decrease) in cash and cash equivalents
              
              
              (9,351
              )
              
              
              55,735Cash
      and cash equivalents, beginning balance
              
              
              14,707
              
              
              
              19Cash
      and cash equivalents, ending balance
              
              $
              5,356
              
              
              $
              55,754$
              0
              
              
              
              (0
              )SUPPLEMENTAL
      DISCLOSURES:Cash paid during the year for:Income
      tax
              
              $
              249
              
              
              $
              -Interest
      expense
              
              $
              -
              
              
              $
              -Non-cash transactions in investing and financing
    activities:Shares
      to be issued
              
              $
              -
              
              
              $
              60,000




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






-4-






ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




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.




On
September 22, 2008 the Company’s board of directors decided to sell the
Company’s 70% interest in its  subsidiary Shenzhen Xin Kai Yuan Info
Consult Co., Ltd. (“188info.com”). The operations of “188info.com” have been
presented as the “operations of the entity to be disposed”, in the accompanying
consolidated financial statements.




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 nine month period ended September 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.






-5-




ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Note
2 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Principles of
Consolidation




The
consolidated financial statements include the accounts of Artcraft V, Inc. and
its wholly owned subsidiaries, collectively referred to within as the Company.
All material intercompany accounts, transactions and profits have been
eliminated in consolidation.




Exchange Gain
(Loss)




During
the nine month periods ended September 30, 2008 and 2007, the transactions of
188info.com 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




As of
September 30, 2008, the accounts of 188info.com 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 Note






-6-






ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Note
2 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




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.




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.




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 September 30, 2008 there were no significant impairments of its
long-lived assets.




Fair Value of Financial
Instruments






-7-






ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Note
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




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 September 30, 2008 and December 31,2007, deferred revenue was $0
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 nine month periods ended
September 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
nine month periods ended September 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.




Basic and Diluted Earnings
(Loss) Per Share






-8-






ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Note
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




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 $0.01 and $0.01 for the nine
months ended September 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 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




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
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




Note
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




On March
19, 2008, the FASB issued FASB Statement No. 161, Disclosures about Derivative
Instruments and Hedging Activities. The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. "Use and complexity of derivative instruments and hedging activities
have increased significantly over the past several years. This has led to
concerns among investors that the existing disclosure requirements in FASB
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities,
do not provide enough information about how these instruments and activities
affect the entity’s financial position and performance," explained Kevin
Stoklosa, project manager. "By requiring additional information about how and
why derivative instruments are being used, the new standard gives investors
better information upon which to base their decisions." The new standard also
improves transparency about the location and amounts of derivative instruments
in an entity’s financial statements; how derivative instruments and related
hedged items are accounted for under Statement 133; and how derivative
instruments and related hedged items affect its
financial position, financial performance, and cash flows. FASB Statement No.
161 achieves these improvements by requiring disclosure of the fair values of
derivative instruments and their gains and losses in a tabular format. It also
provides more information about an entity’s liquidity by requiring disclosure of
derivative features that are credit risk-related. Finally, it requires
cross-referencing within footnotes to enable financial statement users to locate
important information about derivative instruments. Management is currently
evaluating the effect of this pronouncement on financial
statements.




In May 0f
2008, FSAB issued SFASB No.162, The Hierarchy of Generally Accepted Accounting
Principles. The pronouncement mandates the GAAP hierarchy reside in the
accounting literature as opposed to the audit literature. This has the practical
impact of elevating FASB Statements of Financial Accounting Concepts in the GAAP
hierarchy. This pronouncement will become effective 60 days following SEC
approval. The company does not believe this pronouncement will impact its
financial statements.




In May of
2008, FASB issued SFASB No. 163, Accounting for Financial Guarantee Insurance
Contracts-an interpretation of FASB Statement No. 60. The scope of the statement
is limited to financial guarantee insurance (and reinsurance) contracts. The
pronouncement is effective for fiscal years beginning after December 31, 2008.
The company does not believe this pronouncement will impact its financial
statements.




Reclassifications




Certain
amounts in the 2007 financial statements have been reclassified to conform to
the 2008 presentation. These reclassifications had no effect on previously
reported results of operations or retained earnings.






-11-






ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Note
3 – ACCOUNTS PAYABLE
AND ACCRUED EXPENSES




As of
September 30, 2008, account payable and accrued expenses were $12,500, including
accrued  legal, audit, and accounting expenses .




As of
December 31, 2007, account payable and accrued expenses were $26,344, including
accrued  legal, audit, and accounting expenses .




Note
4 – LOAN PAYBLE TO
RELATED PARTIES




As of
September 30, 2008, total loan payable to related parties were $283,628,
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 $199,628.




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 for subscriptions receivable of $60,000 ($0.40 per share). The
shares were issued and cash received on the month of August 2007.




Note
6 – ADDITIONAL PAID-IN
CAPITAL




The
Company utilizes office space arranged by an officer of the Company in
188info.com, free of charge. The fair market rent value amounting $6,287 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 September 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 September 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 nine month periods ended September30,
2008 and 2007:






-12-






ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




9/30/2008
              
              
              9/30/2007US
      Current Tax Expense (Benefit)Federal
              
              $
              -
              
              
              $
              -State
              
              
              -
              
              
              
              -PRC
      Current Income Expense (Benefit)
              
              
              393
              
              
              
              -Total
      Provision for Income tax
              
              $
              393
              
              
              $
              -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
              
              
              (9
              %)
              
              
              (15
              %)Tax
      expense at actual rate
              
              
              6
              %
              
              
              0
              %




United States of
America




As of
September 30, 2008, the Company in the United States had approximately $ 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 September 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 September 30, 2008 and December 31,
2007.




September
      30, 2008
              
              
              December
      31, 2007Net
      operation loss carry forward
              
              $
              126,667
              
              
              $
              87,002Total
      deferred tax assets
              
              
              71,286
              
              
              
              57,800Less:
      valuation allowance
              
              
              (71,286
              )
              
              
              (57,800
              )Net
      deferred tax assets
              
              $
              -
              
              
              $
              -







-13-








ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




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%.




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 nine month periods ended September 30, 2008 and 2007 were $ 393 and $0
respectively.




September
      30, 2008
              
              
              September
      30, 2007Loss
      from China before income tax
              
              $
              (6,838
              )
              
              $
              (7,665
              )Income
      tax expense for operation in the PRC
              
              $
              393
              
              
              $
              -Tax
      expense at actual rate
              
              
              6
              %
              
              
              -




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 September 30, 2008, the Company had no reserves to these
non-distributable reserve funds since it had no income from
operations.






-14-







ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Note
9 – OTHER
COMPREHENSIVE INCOME (LOSS)




Balances
of related after-tax components comprising accumulated other comprehensive
income (loss), included in Stockholders’ Deficit, at September 30, 2008 are as
follows:




Foreign
      Currency Translation AdjustmentBalance
      at December 31, 2007
            
            $
            6,673Change
      for 2008
            
            
            (302
            )Balance
      at September 30, 2008
            
            $
            6,371




Note 10 –  ASSETS/LIABILITIES HELD FOR
SALE




On
September 22, 2008, Top Interest entered into an Agreement on transfer of
188info.com to Shenzhen Dingyi Investment Consulting Company Co., Ltd. Pursuant
to the Agreement, Top Interest agreed to transfer all the shares of 188info.com
to Shenzhen Dingyi for $0.15 (RMB1.00) and the buyer agreed to assume all the
assets and liabilities of 188info.com. The transaction did not consummate as of
September 30, 2008 and all the assets and liabilities of the 188info.com was
booked as assets/liabilities held for sale as of September 30,
2008.




The
components of income (loss) from operations related to operations held for sale
for the nine month period ended September  30, 2008 are shown below.






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ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS






Nine
      month period endedSeptember
      30, 2008Sales,
      net
              
              $
              26,275Cost
      of sales
              
              
              -Gross
      profit
              
              
              26,275-General
      and administrative expenses
              
              
              33,124Income
      from operations
              
              
              (6,849
              )Interest
      income
              
              
              11Income
      before income tax
              
              
              (6,838
              )Income
      tax
              
              
              (393
              )Net
      loss from discontinued operations
              
              $
              (7,230
              )




Assets
and liabilities for the entity held for sale as of September 30, 2008 are as
follows:




As
      of September 30. 2008AssetsCash
      and cash equivalents
              
              $
              8,026Receivable
      from related party
              
              
              293Total
      current assets
              
              
              8,319Property
      & equipment
              
              
              13,986Intangible
              
              
              4,957Total
      assets held for sale
              
              
              27,262LiabilitiesAccounts
      payable and accrued expense
              
              
              8,070Deffered
      revenue
              
              
              7,498Total
      liabilities held for sale
              
              
              15,568Net
      assets held for sale
              
              
              11,694Consideration
      for disposal
              
              
              0Impairment
      of assets held for sale
              
              $
              11,694




As of
September 30, 2008, the Company impaired assets held for sale in the amount of
$11,694.






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ARTCRAFT
V, INC. AND SUBSIDIARIES




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Note
11  – 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.




Note
12  – 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 $372,554 and $313,965 as of September 30, 2008 and
December 31, 2007 including losses of $58,589 and $92,812 for the periods ended
September 30, 2008 and December 31, 2007. The Company’s current liabilities
exceed its current assets by $290,772 and $251,108 as of September 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 nine month ended September 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.






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