Table
of Contents
  SECURITIES AND EXCHANGE
COMMISSION
 WASHINGTON, D.C.
20549
  
  ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT OF
1934
 FOR FISCAL YEAR ENDED DECEMBER 31,
2007.
  000-131224Commission File
Number
  SMART
HOLDINGS, INC.
 (Name of
small business issuer in its charter)
 Nevada
              
              20-5956047(State
      or other jurisdiction of incorporation)
              
              (IRS
      Employer Identification No.)
  647
MILL POINT DRIVE
 MILFORD,
MI 48381
 (248)
321-0121
 (Address
and telephone number of principal executive offices)
  Securities
registered under Section 12(b) of the Exchange Act: None.
  Securities
registered under Section 12(g) of the Exchange Act: Common Stock, par value
$0.0001
  Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act, during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes þ No o
  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. þ.
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes x No o
  The
registrant’s revenues for the year ended December 31, 2007 were $0.
  As of
January 17, 2008, the registrant had 9,000,000 shares of common stock, par value
$0.0001 per share, outstanding.
 
  
  SMART
HOLDINGS, INC.
 FORM 10-KSB REPORT
INDEX
  
 Title
              
              Page
      No.Part
IItem 1. Description of
      Business
              
              
              3Item 2. Description of
      Property
              
              
              4Item 3. Legal
      Proceedings
              
              
              4Item 4. Submission of Matters to
      a Vote of Securities Holders
              
              
              4Part
    II.Item 5. Market for Common Equity
      and Related Stockholder Matters
              
              
              5Item 6. Management’s Discussion
      and Analysis of Financial Condition and Results of
      Operations
              
              
              5Item 7. Financial
      Statements
              
              
              7Item 8. Changes in and
      Disagreements with Accountants on Accounting and Financial
      Disclosures
              
              
              16Item 8A. Controls and
      Procedures
              
              
              16Part
    III.Item 9. Directors, Executive
      Officers, Promoters, Control Persons and Corporate Governance; Compliance
      with Section 16(a) of the Exchange Act
              
              
              16Item 10. Executive
      Compensation
              
              
              17Item 11. Security Ownership of
      Certain Beneficial Owners and Management
              
              
              18Item 12. Certain Relationships
      and Related Transactions, and Director
    Independence
              
              
              18Item 13.
      Exhibits
              
              
              18Item 14. Principal Accountant
      Fees and Services
              
              
              19Signatures
              
              
              20Index to
      Exhibits
              
              
              21Exhibit
      31.1Exhibit
      32.1
  Page -2
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of Contents
 PART I
  Forward
Looking Statements.
Certain of the statements included in this annual report on Form 10-KSB,
including those regarding future financial performance or results or that are
not historical facts, are “forward-looking” statements as that term is defined
in Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended. The words “expect,” “plan,”
“believe,” “anticipate,” “project,” “estimate,” and similar expressions are
intended to identify forward-looking statement. Smart Holdings, Inc. (referred
to herein, with its predecessors and subsidiaries, as “Smart Holdings, Inc.”,
“we”, “us”, and “our”) cautions readers that these statements are not guarantees
of future performance or events and such statements involve risks and
uncertainties that may cause actual results and outcomes to differ materially
from those indicated in forward-looking statements. Additional factors that
could cause actual results to differ materially from those indicated in the
forward-looking statements are discussed under the caption “Risk Factors”.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date hereof. We undertake no duty to
update these forward-looking statements. Readers are urged to carefully review
and consider the various disclosures made by us which attempt to advise
interested parties of the additional factors which may affect our business,
including the disclosures made under the caption “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in this
report.
  Item 1. Description of
Business
  Smart
Holdings, Inc. was incorporated in the State of Nevada on December 6, 2005. It
is a consulting company, headquartered in Milford, Michigan, which plans to
offer a variety of strategic business consulting services to public and private
companies. Currently, the main service is providing financial and business
consulting services to its clients. The services offered include due diligence,
mergers and acquisition consulting, and strategic business planning. Smart
Holdings, Inc. works with both private and public companies. Smart Holdings,
Inc.’s long-term focus is on creating lasting relationships with its clients. It
also provides strategic consulting services and business plan development for
start-up companies and has the expertise to work with its clients through the
public offering process, with introductions to underwriters, broke dealers and
market makers, as well as post offering support services such as development of
road show and research materials.
  As
indicated above the company was recently incorporated and is presently in the
development stage wherein it is in the process of setting up operations and
working to obtain clients. It has not yet realized revenue.
  Our
principal executive office is located at 647 Mill Point Dr. Milford, Michigan,
48381, and our telephone number is (248) 321-0121
  Page -3
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of Contents
  Item 2. Description of
Property
  Property
and equipment are recorded at historical cost and include expenditures, which
substantially increase the useful lives of existing property and equipment.
Maintenance and repairs are charged to operations when incurred.
  Depreciation
of property and equipment is computed primarily using the straight-line method
based on estimated useful lives (furniture and fixtures, 6 to 7 years, office
equipment 5 to 7 years, and computers and software, 3 to 5 years). Depreciation
for income tax purposes is computed principally using the straight line method
and estimated useful lives.
 
 Item 3. Legal
Proceedings
  As of
December 31, 2007, Smart Holdings Inc. did not have any outstanding legal issues
outside of the ordinary course of business.
 
 Item 4. Submission of Matters to a
Vote of Securities Holders
  There
were no submissions of matters to a vote of shareholders in the three months
ending December 31, 2007.
  Page -4
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of Contents
  PART II
  Item 5. Market for Common Equity and
Related Stockholder Matters.
  On
February 21, 2007, 2006, Smart Holdings, Inc. filed an SB-2 registration
statement with the SEC. The Company registered an additional 1 million
(1,000,000) shares to be sold for an aggregate of $1 million ($1,000,000). The
registration has been approved by the SEC and no shares were sold prior to
December 31, 2007. The Company is currently attempting to complete the
offering.
  Item 6. Management’s Discussion and
Analysis of Financial Condition and Results of Operations
  Cautionary Statement
Regarding Forward-looking Information
  This
report and other reports, as well as other written and oral statements made or
released by us, may contain forward-looking statements. Forward-looking
statements are statements that describe, or that are based on, our current
expectations, estimates, projections and beliefs. Forward-looking statements are
based on assumptions made by us, and on information currently available to us.
Forward-looking statements describe our expectations today of what we believe is
most likely to occur or may be reasonably achievable in the future, but such
statements do not predict or assure any future occurrence and may turn out to be
wrong. You can identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. The words “believe,”
“anticipate,” “intend,” “expect,” “estimate,” “project”, “predict”, “hope”,
“should”, and “may”, other words and expressions that have similar meanings, and
variations of such words and expressions, among others, usually are intended to
help identify forward-looking statements. Forward-looking statements are subject
to both known and unknown risks and uncertainties and can be affected by
inaccurate assumptions we might make. Risks, uncertainties and inaccurate
assumptions could cause actual results to differ materially from historical
results or those currently anticipated. Consequently, no forward-looking
statement can be guaranteed. The potential risks and uncertainties that could
affect forward looking statements include, but are not limited to the ability to
raise needed financing, increased competition, extent of the market demand for
and supply of goods and services of the types provided by the Company,
governmental regulation, performance of information systems, and the ability of
the Company to hire, train and retain qualified employees. In addition, other
risks, uncertainties, assumptions, and factors that could affect the Company’s
results and prospects have been and may further be described in the Company’s
prior and future filings with the Securities and Exchange Commission and other
written and oral statements made or released by the Company.
  We
caution you not to place undue reliance on any forward-looking statements, which
speak only as of the date of this document. The information contained in this
report is current only as of its date, and we assume no obligation to update any
forward-looking statements.
  The
financial information set forth in the following discussion should be read in
conjunction with, and qualified in its entirety by, the Company’s audited
financial statements and notes included herein. The results described below are
not necessarily indicative of the results to be expected in any future period.
Certain statements in this discussion and analysis, including statements
regarding our strategy, financial performance and revenue sources, are
forward-looking information based on current expectations and entail various
risks and uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements. Readers are referred to
our Audited Financials included on Form SB-2 for the fiscal year ended December
31, 2006.
  Page -5
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of Contents
  Results of
Operations
  Our net
loss for twelve months ended December 31, 2007 was $18,502, compared to -0- for
the twelve months ended December 31, 2006. A discussion of our results of
operations is as follows:
  Revenues
for twelve months ended December 31, 2007 and 2006 were $0. No revenues have
been generated since inception.
  Our cost
of services for the twelve months ended December 31, 2007 and 2006 was $0. As we
have had no revenue to date, there is no cost of services.
  Smart
Holdings expects to improve operating results as the Company begins to move
forward with marketing and obtaining a customer base for its
services.
  Operating
expenses were $18,502 for the twelve months ended December 31, 2007, compared to
-0- for the twelve months ended December 31, 2006.
  This
increase is attributable to various administrative and professional
fees.
  No
provision for income taxes have been reflected or recorded on these financial
statements. We incurred a net loss of $18,502 for the twelve months ended
December 31, 2007 as a result of the matters discussed above. Losses to date may
be used to offset future taxable income, assuming the Company becomes
profitable.
  Liquidity and Capital
Resources
  As
reflected in the accompanying financial statements, the Company has a working
capital and stockholders’ equity of $0 and ($3,502), respectively, as of
December 31, 2007. The Company has incurred losses and has been dependent upon
the financial support of stockholders, management and other related
parties.
  Management
is seeking additional financial resources, which the Company believes will
support operations until profitability can be achieved. These financial
resources include financing from both related and non-related third parties, as
discussed in the accompanying footnotes to the financial statements. There can
be no assurance that management will be successful in these efforts. The
financial statements do not reflect any adjustments that may arise as a result
of this uncertainty.
  We expect
our operating expenses to continue to increase as we attempt to build our brand
and expand our customer base. We hope our expenses will be funded from
operations and short-term loans from officers, shareholders or others; however,
our operations may not provide such funds and we may not be able obtain
short-term loans from officers, shareholders or others. Our officers and
shareholders are under no obligation to provide additional loans to the
company.
  Page -6
  Table
of Contents
 
  Item 7. Financial
Statements
 PageReport of Independent Registered
      Public Accounting Firm
              
              
              F-1Balance Sheet at December 31,
      2006
              
              
              F-2Statement of Income Years Ended
      December 31, 2006 and 2005
              
              
              F-3Statement of
      Stockholders’Equity Years Ended December 31, 2006 and
      2005
              
              
              F-4Statement of Cash Flows Years
      Ended December 31, 2006 and 2005
              
              
              F-5Notes to financial
      Statements
              
              
              F-6
  Page -7
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of Contents
 
  Report of Independent Registered
Public Accounting Firm
  The Board
of Directors of
  Smart
Holdings, Inc.
  Milford,
Michigan
  We have
audited the accompanying balance sheet of Smart Holdings, Inc. (a development
stage company) as of December 31, 2007 and 2006, and the related statements of
operation, stockholders’ equity and cash flows for each of the years in the
two-year period ended December 31, 2007. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Smart Holdings, Inc. as of December
31, 2007 and 2006, and the results of their operations and their cash flows for
each of the years in the two-year period ended December 31, 2007 in conformity
with accounting principles generally accepted in the United States of
America.
  /s/
Robert L. White & Associates, Inc.
 Robert L.
White & Associates, Inc.
 Cincinnati,
Ohio
 January
18, 2007
  Page F-1
 Table
of Contents
  SMART HOLDINGS, INC.
 BALANCE SHEET
 December 31, 2007 AND
2006
 2007
              
              
              2006ASSETSCurrent
      Assets:Cash
              
              $
              —
              
              
              $
              5,000Accounts
      receivable
              
              
              —
              
              
              
              —Other
      current assets
              
              
              —
              
              
              
              10,000Total
      current assets
              
              
              —
              
              
              
              15,000Fixed
      assets, net
              
              
              —
              
              
              
              —Total
      Assets
              
              $
              —
              
              
              $
              15,000LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)Current
      Liabilities:Accounts
      payable
              
              
              3,502
              
              
              
              —Total
      current liabilities
              
              
              3,502
              
              
              
              —Stockholders’
      Deficit:Common
      stock, $.0001 par value, 100,000,000 shares authorized, issued and
      outstanding: December 31, 2007 - 9,000,000 shares; December 31, 2006 -
      9,000,000 shares.
              
              
              9,000
              
              
              
              9,000Paid-in
      capital
              
              
              23,500
              
              
              
              23,500Accumulated
      deficit
              
              
              (36,002
              )
              
              
              (17,500
              )Total
      stockholders’ equity (deficit)
              
              
              (3,502
              )
              
              
              15,000Total
      Liabilities and Stockholders’ Deficit
              
              $
              0
              
              
              $
              15,000
  See
accompanying notes to these financial statements.
  Page F-2
 Table
of Contents
  SMART HOLDINGS, INC.
 STATEMENTS OF
OPERATION FOR THE THREE AND TWELVE MONTHS ENDED
DECEMBER 31,
 2007 AND 2006
 Three
      Months Ended
              
              
              Twelve
      Months EndedDecember
      30,
              
              
              December
      30,(unauditied)2007
              
              
              2006
              
              
              2007
              
              
              2006Revenue
              
              $
              —
              
              
              $
              —
              
              
              $
              —
              
              
              $
              —Cost
      of revenue
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Gross
      profit
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Operating
      expenses
              
              
              3,502-
              
              
              
              —
              
              
              
              18,502
              
              
              
              —Operating
      income
              
              
              —
              
              
              
              —
              
              
              
              (18,502
              )
              
              
              —Other
      income (expense)
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Net
      income (loss)
              
              
              (3,502
              )-
              
              $
              —
              
              
              $
              (18,502
              )
              
              
              —Basic
      and diluted loss per share
              
              $
              (0.00
              )
              
              $
              0.00
              
              
              $
              (0.00
              )
              
              $
              (0.00
              )Weighted
      average number of common shares outstanding
              
              
              9,000,000
              
              
              
              9,000,000
              
              
              
              9,000,000
              
              
              
              9,000,000
  See
accompanying notes to these financial statements.
  Page F-3
 Table
of Contents
  Smart Holdings, Inc.
 Statement
of Changes in Stockholders’ Equity
 For the Years Ended December 31, 2007
and 2006
 Common
      Stock
              
              
              Paid-in
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Deficit
              
              
              TotalBalance,
      December 31, 2006
              
              
              9,000,000-
              
              
              $
              9,000-
              
              
              $
              23,500-
              
              
              $
              17,500-
              
              
              $
              15,000-Net
      loss
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              18,502-
              
              
              
              18,502-Balance,
      December 31, 2007
              
              
              9,000,000-
              
              
              $
              9,000-
              
              
              $
              23,500-
              
              
              $
              36,002-
              
              
              $
              (3,502)-
  See
accompanying notes
  Page F-4
 Table
of Contents
  SMART HOLDINGS, INC.
 STATEMENTS OF CASH
FLOWS
 FOR THE YEARS ENDED DECEMBER 31, 2007
AND 2006
 2007
              
              
              2006Cash
      Flows From Operating ActivitiesNet
      loss
              
              $
              (18,502
              )
              
              $
              -0-Adjustments
      to reconcile net loss to net cash flows from operating
      activities:Depreciation
              
              
              -0-
              
              
              
              -0-Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              -0-
              
              
              
              -0-Other
      current assets
              
              
              10,000
              
              
              
              -0-Accounts
      payable
              
              
              3,502
              
              
              
              -0-Accrued
      liabilities
              
              
              -0-
              
              
              
              -0-Total
      adjustments
              
              
              13,502
              
              
              
              -0-Net
      cash flows from operating activities
              
              
              -5,000
              
              
              
              -0-Cash
      Flows From Investing ActivitiesPurchases
      of property and equipment
              
              
              -0-
              
              
              
              -0-Net
      cash flows from investing activities
              
              
              -0-
              
              
              
              -0-Cash
      Flows From Financing ActivitiesProceeds
      from sale of common stock
              
              
              -0-
              
              
              
              -0-Net
      cash provided by financing activities
              
              
              -0-
              
              
              
              -0-Net
      Change in Cash
              
              $
              (5,000
              )
              
              
              -0-Cash,
      Beginning of the Period
              
              $
              5,000
              
              
              $
              5,000Cash,
      End of the Period
              
              $
              -0-
              
              
              $
              5,000
  See
accompanying notes to these financial statements.
  Page F-5
 Table
of Contents
  SMART HOLDINGS, INC.
 NOTES TO FINANCIAL
STATEMENTS
  Note A — Nature of Operations and
Basis of Presentation
  Nature of
Operations
  Smart
Holdings, Inc. was incorporated in the State of Nevada on December 6, 2005. It
is a consulting company, headquartered in Milford, Michigan, which plans to
offer a variety of strategic business consulting services to public and private
companies. Currently, the main service is providing financial and business
consulting services to its clients. The services offered include due diligence,
mergers and acquisition consulting, and strategic business planning. Smart
Holdings, Inc. works with both private and public companies. Smart Holdings,
Inc.’s long-term focus is on creating lasting relationships with its clients. It
also provides strategic consulting services and business plan development for
start-up companies and has the expertise to work with its clients through the
public offering process, with introductions to underwriters, broke dealers and
market makers, as well as post offering support services such as development of
road show and research materials.
  As
indicated above the company was recently incorporated and is presently in the
development stage wherein it is in the process of setting up operations and
working to obtain clients. It has not yet realized revenue.
  Basis of
Presentation
  Use of
Estimates
  The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities 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.
  Revenue
Recognition
  Consulting
service revenue and the related labor costs and payroll are recorded in the
period in which services are performed.
  Accounts
Receivable
  Smart
Holdings Inc trade accounts receivable result from the sale of its services, and
consist of private and public companies. Value Consulting uses the allowance
method to account for uncollectible accounts. Bad debt expense for the twelve
months ended December 31, 2007 was $0.
  Concentration of Credit
Risk
  Financial
instruments, which potentially expose Smart Holdings to concentrations of credit
risk consist principally of trade accounts receivable and restricted securities
that are paid as part of consulting fees.
  Smart
Holdings’ trade accounts receivable result from the sale of its services to
customers, and customers consist of public and private companies. In order to
minimize the risk of loss from these companies, credit limits, ongoing credit
evaluation of its customers, and account monitoring procedures are utilized.
Collateral is not generally required. Management analyzes historical bad debt,
customer concentrations, customer credit-worthiness, current economic trends,
and changes in customer payment tendencies, when evaluating the allowance for
doubtful accounts. As of December 31, 2007, Smart Holdings Inc. had no customers
who accounted for 10% or more of gross accounts receivable or 10% or more of the
net sales.
  The
Company is obligated to pay the salaries, wages, related benefit costs, and
expenses of consultants. Accordingly, the Company’s ability to collect amounts
due from customers could be affected by economic fluctuations in its markets or
these industries.
  Financial
Instruments
  Smart
Holdings estimates that the fair value of all financial instruments at December
31, 2007 do not differ materially from the aggregate carrying value of its
financial instruments recorded in the accompanying balance sheets.
  Page F-6
 Table
of Contents
  SMART
HOLDINGS, INC.
 NOTES TO FINANCIAL
STATEMENTS
  Note A — Nature of Operations and
Basis of Presentation (Continued)
  Property and
Equipment
  Property
and equipment are recorded at historical cost and include expenditures, which
substantially increase the useful lives of existing property and equipment.
Maintenance and repairs are charged to operations when incurred.
  Depreciation
of property and equipment is computed primarily using the straight-line method
based on estimated useful lives (furniture and fixtures, 6 to 7 years, office
equipment 5 to 7 years, and computers and software, 3 to 5 years). Depreciation
for income tax purposes is computed principally using the straight line method
and estimated useful lives.
  Advertising
Cost
  Advertising
costs, except for costs associated with direct-response advertising, are charged
to operations when incurred. The costs of direct-response advertising are
capitalized and amortized over the period during which future benefits are
expected to be received. Smart Holdings Inc. did not have direct-response
advertising costs during the twelve months ended December 31, 2007.
  Stock-based Employee
Compensation
  The
company adopted SFAS 123 (R) to account for its stock-based compensation
beginning January 1, 2006. Previously, the company elected to account for its
stock-based compensation plans under Accounting Principles Board Opinion No. 25.
Accounting for Stock Issued to Employees (“APB 25”). Financial Accounting
Standards Interpretation No. 44, Accounting for Certain Transactions Involving
Stock Compensation (“FIN 44”), and Statement of Financial Accounting Standards
No. 148. Accounting for Stock-Based Compensation-Transition and Disclosure (SFAS
148”). The Company did not grant any stock options during 2007 or 2006 which
would require a calculation as prescribed by SFAS 123 (R).
  There are
no differences between historical and pro-forma stock based compensation
value.
  Income
Taxes
  Smart
Holdings records its federal and state income tax liability in accordance with
Statement of Financial Accounting Standards Statement No. 109 “Accounting for
Income Taxes”. Deferred taxes are provided for differences between the basis of
assets and liabilities for financial statements and income tax purposes, using
current tax rates. Deferred tax assets represent the expected benefits from net
operating losses carried forward and general business credits that are available
to offset future income taxes.
  Loss Per
Share
  Net loss
per share is computed based upon the weighted average number of outstanding
shares of the Company’s common stock for each period presented.
  Recent Accounting
Pronouncements
  In April
2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative
Instruments and Hedging Activities”. The statement amends and clarifies
accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts, and hedging activities. This
statement is designed to improve financial reporting such that contracts with
comparable characteristics are accounted for similarly. The statement is
generally effective for contracts entered into or modified after June 30, 2003.
The Company currently has no such financial instruments outstanding or under
consideration and does not expect the adoption of this standard to effect the
Company’s financial position or results of operations.
  In May
2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity".This statement establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. This statement
is effective for financial instruments entered into or modified after May 31,
2003, and is otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. The Company currently has no such financial
instruments outstanding or under consideration and therefore adoption of this
standard currently has no financial reporting implications.
  Page F-7
 Table
of Contents
  SMART
HOLDINGS, INC.
 NOTES TO FINANCIAL
STATEMENTS
  Note A — Nature of Operations and
Basis of Presentation (Continued)
  In
December 2003, the FASB issued FASB Interpretation No. 46, “Amended
Consolidation of Variable Interest Entities” (“FIN No. 46”). This interpretation
clarifies rules relating to consolidation where entities are controlled by means
other than a majority voting interest and instances in which equity investors do
not bear the residual economic risks. This interpretation is effective
immediately for variable interest entities created after January 31, 2003 and,
for interim periods beginning after December 15, 2003, for interests acquired
prior to February 1, 2003. The Company does not currently have relationships
with entities meeting the criteria set forth in FIN No. 46 and is not required
to include any such entities in its financial statements pursuant to the
provisions of FIN No. 46.
  Effective
as of December 31, 2004, the Company adopted the revised interpretation of
Financial Accounting Standards Board (FASB) Interpretation No. 46 (FIN 46),
“Consolidation of Variable Interest Entities,” (FIN 46-R). FIN 46-R requires
that certain variable interest entities be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The Company does not have any
investments in entities it believes are variable interest entities for which the
Company is the primary beneficiary.
  In
December 2004, FASB issued SFAS No. 123 (revised 2004) “Stock Based Payment”
(SFAS No. 123R), a revision to Statement No. 123. Accounting for Stock-Based
Compensation which supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees. The revised SFAS 123 eliminates the alternative to use Opinion 25“s
intrinsic value method of accounting and, instead, requires entities to
recognize the cost of employee services received in exchange for awards of
equity instruments based on the grant-date fair value of those awards.
Furthermore, public entities are required to measure liabilities incurred to
employees in share-based payment transactions at fair value as well as estimate
the number of instruments for which the requisite service is expected to be
rendered. Any incremental compensation cost for a modification of the terms or
conditions of an award is measured by comparing the fair values before and after
the modification. The company has determined that SFAS No. 123R has no effect on
it’s financial statements.
  Note B — Income
Taxes
  For
income tax purposes Smart Holdings had $18,502 of net operating losses in the
twelve months ended December 31, 2007, which can be used to offset future
federal and state taxable income. No income tax benefit has been recorded in the
accompanying financial statements since the recoverability of such assets is not
reasonably assured through known future revenue sources.
  Note C — Cash Flow Supplemental
Information
  Cash paid
for interest during the twelve months ended December 31, 2007 amounted to
$0.
  Note D — Stockholders’
Equity
  Issuance of Common
Stock
  No stock
was issued for the twelve months ended December 31, 2007.
  Common Stock
Warrants
  As of
December 31, 2007 there were no stock warrants issued or
outstanding.
  Note E — Commitments and
Contingencies
  Operating
Leases
  Smart
Holdings currently has no lease obligations.
  Litigation
  As of
December 31, 2007, Smart Holdings did not have any outstanding legal issues
outside of the ordinary course of business.
  Note F — Subsequent
Events
  There are
no subsequent events.
  Page F-8
 Table
of Contents
 
  Item 8. Changes in and Disagreements
with Accountants on Accounting and Financial Disclosures
  None.
  Item 8A. Controls and
Procedures
  Evaluation of Disclosure Controls and
Procedures
  As of the
end of the year covered by this report, we carried out an evaluation under the
supervision and with the participation of our management, including our Chief
Executive Officer and Principal Accounting and Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Based upon this evaluation, as of December 31, 2007, the Chief Executive Officer
and Principal Accounting and Financial Officer concluded that our disclosure
controls and procedures were effective to ensure that information required to be
disclosed by us in reports that we file or submit under the Exchange Act, are
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 our management, including the Chief Executive Officer and
Principal Accounting and Financial Officer, as appropriate to allow timely
decisions regarding required disclosure.
  Changes in Internal Controls over
Financial Reporting
  There
have been no changes made in our internal control over financial reporting that
materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting, during the period covered by this
report.
  
  PART III
  
  Item 9 Directors, Executive Officers,
Promoters, Control Persons and Corporate Governance; Compliance with Section
16(a) of the Exchange Act
  Additional
information required by this Item 9 concerning directors and executive officers
of the Company appears under the heading “Executive Officers of the Registrant”
in this report.
  Presently,
Smart Holdings Inc., has a total of one officers and director. The following
table identifies, as of January 18, 2008, each executive officer and director of
the Company.
 Name
              
              Age
              
              PositionMark
      Seifer
              
              57
              
              Chief
      Executive Officer, Chief Financial Office, Chairman, and
      Director
  Directors
serve until the next annual meeting and until their successors are elected and
qualified. Officers are appointed to serve for one year until the meeting of the
Board of Directors following the annual meeting of stockholders and until their
successors have been elected and qualified.
  Mark Seifer: Mr. Seifer joined Smart
Holdings Inc.at it’s inception.
  Page - 16
  Table
of Contents
  
  Item 10. Executive
Compensation
  Executive
Compensation
  The
following Summary Compensation Table sets forth certain information regarding
the compensation of our officers as of December 31, 2006.
  Summary Compensation
Table
 Annual
      Compensation
              
              
              Long
      Term Compensation Awards
              
              
              All
      Other
              
              
              CompensationYear
              
              
              Salary
              
              
              Bonus
              
              
              Securities
      Underlying Options
              
              
              Compensation
              
              
              TotalMark
      Seifer, CEO
              
              
              2006
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —2007
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
  Option Grants
During Last Fiscal Year
  No
options, warrants or similar rights to purchase our Common Stock have been
granted to any officers or directors.
  Employment
Agreements
  There are
no employment agreements to date.
  Compensation of
Directors
  Our
directors receive no compensation as members of our board. Our directors are
reimbursed for travel and out-of-pocket expenses in connection with attendance
at board meetings. The following table summarizes compensation that our
directors earned during 2007 and 2006 for services as members of our Board of
Directors.
 FeesEarnedor
      Paid
              
              
              Options
              
              
              All
      OtherYear
              
              
              in
      Cash
              
              
              Awarded
              
              
              Compensation
              
              
              TotalMark
      Seifer
              
              
              2006
              
              
              $
              —
              
              
              $
              —
              
              
              $
              —
              
              
              $
              —2007
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
  Page - 17
 Table
of Contents
  Item 11. Security Ownership of
Certain Beneficial Owners and Management
  As of
January 18, 2008, there were 9,000,000 shares of common stock, par value $.0001
outstanding. The following table sets forth certain information regarding the
beneficial ownership of our common stock as of April 13, 2007:
  •
              
              all
      directors•
              
              each
      person who is known by us to be the beneficial owner of more than five
      percent (5%) of the outstanding common stock•
              
              each
      executive officer named in the Summary Compensation
  Table•
              
              all
      directors and executive officers as a
group
  The
number of shares beneficially owned by each director or executive officer is
determined under rules of the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under the SEC rules,
beneficial ownership includes any shares as to which the individual has the sole
or shared voting power or investment power. In addition, beneficial ownership
includes any shares that the individual has the right to acquire within 60 days.
Unless otherwise indicated, each person listed below has sole investment and
voting power (or shares such powers with his or her spouse). In certain
instances, the number of shares listed includes (in addition to shares owned
directly), shares held by the spouse or children of the person, or by a trust or
estate of which the person is a trustee or an executor or in which the person
may have a beneficial interest.
 Amount
      ofName
      and Address of Beneficial
              
              BeneficialTitle
      of Class
              Owner
              
              Ownership
              
              
              Percent
      of ClassCommon
      Stock
              Mark
      Seifer
                Smart
      Holdings Inc.
                647
      Mill Pointe Drive
                Milford,
      MI 48381
              
              
              7,000,000
              
              
              
              77.8
              %
  Stock Option and Incentive
Plans There are no stock option or incentive plans.
  Item 12. Certain Relationships and
Related Transactions, and Director Independence
  None
 
  Item 13. Exhibits
 No.
              
              Description3.1
              
              Articles
      of Incorporation (1)3.2
              
              Bylaws
      of the Company (2)4.1
              
              Specimen
      Stock Certificate (3)31.1
              
              Certification of Chief Executive Officer pursuant to Rule
      13a-14(a)32.1
              
              Certification pursuant to 18 U.S.C. Section
      1350
  (1)
              
              incorporated
      by reference to Exhibit 3.1 of the Current report on Form SB-2/A, as filed
      with the SEC on February 21, 2007.(2)
              
              incorporated
      by reference to Exhibit 3.2 of the Current report on Form SB-2/A, as filed
      with the SEC on February 21, 2007.(3)
              
              incorporated
      by reference to Exhibit 4.1 of the Current report on Form SB-2/A, as filed
      with the SEC on February 21, 2007.
  Page - 18
 Table
of Contents
 
 Item 14. Principal Accountant Fees
and Services
  The
following are the fees billed us by our auditors, Robert L. White and
Associates, Inc., for services rendered thereby during 2006 and
2007:
 2007
              
              
              2006Audit
      Fees
              
              $
              1,500
              
              
              $
              3,000-Audited
      Related Fees
              
              
              —
              
              
              
              —Tax
      Fees
              
              
              —
              
              
              
              —Total
      Fees
              
              $
              1,500
              
              
              
              —
  Audit Feesconsist of the
aggregate fees billed for professional services rendered for the audit of our
annual financial statements and the reviews of the financial statements included
in our Forms 10-QSB and for any other services that were normally provided in
connection with our statutory and regulatory filings or
engagements.
  Audit Related Feesconsist of
the aggregate fees billed for professional services rendered for assurance and
related services that were reasonably related to the performance of the audit or
review of our financial statements and were not otherwise included in Audit
Fees.
  Tax Feesconsist of the
aggregate fees billed for professional services rendered for tax compliance, tax
advice and tax planning. Included in such Tax Fees were fees for preparation of
our tax returns and consultancy and advice on other tax planning
matters.
  Page - 19
 Table
of Contents
 
 SIGNATURES
  In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized. Smart Holdings, Inc., a Nevada
Corporation
 Dated
      March 21, 2008
              By:
              Mark
    SeiferMark
      Seifer, Chief Executive Officer, ChiefFinancial
      Officer, and Directors
  In
accordance with the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities
and on the dates indicated.
 Signature
              
              Title
              
              Date/s/ Mark
      Seifer
              
              
              
              March
      21, 2008Mark
      Seifer
              
              Chief
      Executive Officer, ChiefFinancial
      Officer, and Director
  Page - 20
 Table
of Contents
  
  Exhibit
Index
 No.
              
              Description3.1
              
              Articles
      of Incorporation (1)3.2
              
              Bylaws
      of the Company (2)4.1
              
              Specimen
      Stock Certificate (3)31.1
              
              Certification of Chief Executive Officer pursuant to Rule
      13a-14(a)32.1
              
              Certification pursuant to 18 U.S.C. Section
      1350
 (1)
              
              incorporated
      by reference to Exhibit 3.1 of the Current report on Form SB-2/A, as filed
      with the SEC on February 21, 2007.(2)
              
              incorporated
      by reference to Exhibit 3.2 of the Current report on Form SB-2/A, as filed
      with the SEC on February 21, 2007.(3)
              
              incorporated
      by reference to Exhibit 4.1 of the Current report on Form SB-2/A, as filed
      with the SEC on February 21, 2007.
  Page - 21
  2