SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-K
 
 
 [x]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
EXCHANGE ACT OF 1934
 
 For the
fiscal year ended   December 31,
2009
 
 []
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
EXCHANGE ACT OF 1934
 
 Commission
File No.000-53853
 
 Art Dimensions,
Inc.
 (Exact
Name of Small Business Issuer as specified in its charter)
 
 Colorado
              80-0182193(State
      or Other Jurisdiction
              (IRS
      Employer File Number)of
      Incorporation)
 
 3636
      S. Jason StreetEnglewood, Colorado
              80113(Address
      of Principal Executive Offices)
              (Zip
      Code)
 
 (303)
781-7280
 (Registrant's
telephone number, including area code)
 
 Securities
to be Registered Pursuant to Section 12(b) of the Act: None
 
 Securities
to be Registered Pursuant to Section 12(g) of the Act:
 
 Common Stock, $.0.001 per
share par value
 
 Indicate
by check mark if registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes []   No [X].
  Indicate
by check mark if registrant is not required to file reports pursuant to Section
13 or 15(d) of the Exchange Act.
 Yes
[] No [X].
  Indicate
by check mark whether the registrant (1) has filed all Reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes: [X]    No: [ ]
  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is 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-K.
[X]
  Indicate
by check mark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of “large
accelerated filer,” “accelerated filer,” and “small reporting company” in Rule
12b-2 of the Exchange Act.
  Large
      accelerated filer
      []
              Accelerated
      filer                   []Non-accelerated
      filer   [] (Do not check if a smaller reporting
      company)
              Smaller
      reporting company  [X]
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act):  Yes []   No
[X].
  State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter: the registrant’s securities did not trade in a public venue as of the
last business day of the registrant’s most recently completed second fiscal
quarter. Based upon the registration statement of its common stock, the
aggregate market value of the voting and non-voting common equity held by
non-affiliates approximately $1,200.
  
  
 FORM
10-K
 Art
Dimensions, Inc.
 
 INDEX
 
 PART
      IItem
      1. Business
              3Item
      1A. Risk Factors
              6Item
      2. Property
              12Item
      3. Legal Proceedings
              12Item
      4. Submission of Matters to a Vote of Security
    Holders
              12PART
      IIItem
      5. Market for Registrant’s Common Equity, Related Stockholder Matters and
      Issuer Purchases of Equity Securities
              12Item
      6. Selected Financial Data
              14Item
      7. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
              14Item
      7A. Quantitative and Qualitative Disclosures About Market
      Risk
              19Item
      8. Financial Statements and Supplementary Data
              19Item
      9. Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosures
              32Item
      9A(T). Controls and Procedures
              32Item
      9B. Other Information
              33PART
      IIIItem
      10. Directors, Executive Officers and Corporate
      Governance
              33Item
      11. Executive Compensation
              35Item
      12. Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
              35Item
      13. Certain Relationships and Related Transactions, and Director
      Independence
              36Item
      14. Principal Accountant Fees and Services
              36Item
      15. Exhibits Financial Statement Schedules
              37Financial
      Statements pages
              20
      - 31Signatures
              38
 
  -
2 -
  References
in this document to “us," "we," or "Company" refer to Art Dimensions,
Inc.
 
 Forward-Looking
Statements
 
 The
following discussion contains forward-looking statements regarding us, our
business, prospects and results of operations that are subject to certain risks
and uncertainties posed by many factors and events that could cause our actual
business, prospects and results of operations to differ materially from those
that may be anticipated by such forward-looking statements. Factors that may
affect such forward-looking statements include, without limitation: our ability
to successfully develop new products and services for new markets; the impact of
competition on our revenues, changes in law or regulatory requirements that
adversely affect or preclude clients from using us for certain applications;
delays our introduction of new products or services; and our failure to keep
pace with our competitors.
 
 
 When used
in this discussion, words such as "believes", "anticipates", "expects",
"intends" and similar expressions are intended to identify forward-looking
statements, but are not the exclusive means of identifying forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report. We
undertake no obligation to revise any forward-looking statements in order to
reflect events or circumstances that may subsequently arise. Readers are urged
to carefully review and consider the various disclosures made by us in this
report and other reports filed with the Securities and Exchange Commission that
attempt to advise interested parties of the risks and factors that may affect
our business.
 
 
 PART
I
 
 Item
1. DESCRIPTION OF BUSINESS.
 
 General
 
 We were
incorporated in January 29, 2008. We were formerly a wholly-owned subsidiary of
Art Design, Inc.(“ATDN”).  On August 21, 2009, the directors of ATDN
approved, subject to the effectiveness of a registration with the Securities and
Exchange Commission, a spin-off to ATDN shareholders on a pro rata basis, with
one share each of ART DIMENSIONS, Inc. to be issued for each ten shares issued
and outstanding of common stock owned by such ATDN shareholders as of the Record
Date.  Since ATDN’s business is related to the current activities of
Art Dimensions, the ATDN directors decided it was in the best interest of ATDN
and Art Dimensions and ATDN's shareholders to spin-off Art Dimensions to
minimize any potential of conflict of interest by more clearly focusing each
company on their own, individual business plans. Also,the management of Art Design,
Inc. originally thought that the two companies would operate in a more
closely-related manner. However, management of Art Design, Inc. now believes
that the companies have two unique and distinct business plans and should not be
directly tied together in order to maximize the potential success of both.
ATDN’s business is primarily the sale of products with service and consulting as
ancillary components. On the other hand, Art Dimensions business is to primarily
service and consulting with the sale of products as an ancillary component. To
the extent there may be an overlap of activities, a potential conflict of
interest may exist. However, each company will utilize its best efforts to
minimize any impact. Both companies plan to operate as separate, distinct
entities and neither company foresees any substantial potential for conflicts
after the spin-off.
 
 The
shares of Art Dimensions were spun off to the ATDN in December,
2009.
 
 We began
operations as of our date of incorporation, January 29, 2008.
 -
3 -
   On June 1, 2008, an organization named
Spyglass Investment Partnership (“Spyglass ”) agreed to provide operating
capital in the form of a loan of $250,000 to cover operating expenses. This loan
is evidenced by an unsecured promissory note which is due May 31, 2010.
It should be noted that Spyglass
is under no obligation to lend us funds under the term of the
note.
 
 We issued
have a total of 300,000 warrants to Spyglass , exercisable at a price of $0.001
per share subject to adjustment, for a period of five years from the date of
issuance. These warrants were issued as an additional inducement for Spyglass to
loan us $250,000. The warrants are subject to registration rights.
 
 Our
principal executive offices are located at 3636 S. Jason Street, Englewood,
Colorado 80110. Our telephone number is (303) 781-7820. We have no
website.
 
 Business
 
 We provide art consulting
and marketing services and advises or represent individuals who are in the
business of creating, producing or selling art.  Secondarily, and as
an adjunct to our primary purpose, we also earn revenue from the sale of
art and interior design products. To date, however, all of our revenue
has come solely from the sale of products.  We anticipate that
the sale of products will primarily be to our artist clients but may also
incidentally be to the general public. Our business plan is provide both
services and products to our clients. We provide art consulting, marketing
services, and representation to artists, as well as to sell them or their
clients interior design products.
 We
estimate that we must generate between $10,000 and $20,000 in gross profit in
any fiscal year to be profitable.  These operating costs include
insurance, taxes, utilities, maintenance, contract services and all other costs
of operations.  However, the operating costs and expected revenue
generation are difficult to predict.  We expect to generate revenues
in the next twelve months from operations using referrals from ATDN and
unrelated individuals and entities that associate with or work with individuals
in the business of creating, producing or selling art.
 
 Since
there can be no assurances that revenues will be sufficient to cover operating
costs for the foreseeable future, it may be necessary to raise additional
funds.  Due to our limited operating history, raising additional funds
may be difficult.  In June 2008, an organization named Spyglass agreed
to provide operating capital in the form of a loan of $250,000 to cover
operating expenses. The loan matured on May 31, 2009, and we entered into a
new loan.  This loan is evidenced by an unsecured promissory note
which is due May 31, 2010. It should be noted that Spyglass is under no
obligation to lend us funds under the term of the note. If we are unable to
raise funds to cover any operating deficit after May 31, 2010, our business may
fail.
 
 We plan
to continue to increase our revenues with the addition of additional clients and
projects. We have no definitive agreements in place at this time for the
generation of revenues, however.
 
 The
consulting and marketing services we provide to artists includes, but are not
limited to the following business activities such as: development of a business
plan and/or marketing plan;  website analysis of the artist’s site;
how an artist should present oneself and his/her art;  how to price
art for sale/exhibition;  pricing art for sale; critical essay for an
exhibition catalogue; write/rewrite of an artist statement; provide custom
content for an artist or gallery website and provide seminars and lectures on
business aspects of art.  The business representation services we
provide to artists includes but not limited to: contract review and/or
negotiation and mediation and dispute resolution.  The consulting and
marketing services we provide to non-artists includes the following types of
activities or tasks:  advice on whether to buy or sell a work of art;
advice on how to develop a collection;  consulting on estate or
inheritance issues; expert witness testimony;  assistance with
fundraisers or charity events; seminars and lectures on art business
issues;  critical essay for an exhibition or collection catalogue and
estate planning for art.
 -
4 -
  We are
growing our business in the following manner. We market our services in a number
of different forums. We attend different gatherings where artists and
non-artist congregate such as trade shows, auctions and
exhibitions.  We also market our services via the internet and at
events and activities sponsored by ATDN.  Other sales channels include
print media focused on art or artists or art collectors.  We also
market our services via direct sales campaigns to artists and non-artists
alike.  We also believe that we must provide a high level of service
for our clients. We believe that it is our responsibility to make certain that
our products and services are satisfying for our clients.
 
 Operations
 
 Our plan
is to concentrate our operations in the Denver, Colorado metropolitan area and
online through a website, which we will eventually develop.
 
 Marketing
and Promotion
 
 We
generate revenues in the next twelve months from our operations using referrals
from ATDN and unrelated individuals and entities that operate in the art
consulting and artist representation business. We also market through direct
contact with prospective clients.  We also use general solicitation of
clients through various forms of media advertising, including, but not limited
to, print media and the internet. We have no sales representatives who solicit
potential clients. We have not yet fully developed our marketing program and do
not know the specific cost of such a program, although we believe that it will
be expensive.
 
 Competition
 
 We
have a limited operating history and, therefore, will have inherent difficulty
competing in the art consulting, marketing and business representation
business.  Our performance depends, in large part, on our ability to
engage with successful artists to perform consulting and marketing services and
advise or represent individuals whom are in the business of creating, producing
or selling art.  The art consulting business is highly fractured with
respect to price and services offered.  There are a handful of
competitors that represent the very successful artists.  Many of these
firms are well-established, including national, regional and local organizations
possessing substantially greater financial, marketing, personnel and other
resources than we do.  There can be no assurance that we will be able
to respond to various competitive factors affecting the art industry and be able
to attract and advise our clients accordingly.  There is very little
competition for up and coming artists, but the demand for consulting, marketing
and agent representation services is hard to gauge.  We believe that
this market is underserved, but most artists are not used to treating their
vocation as a business and may not believe they need our services.  If
we are unable to develop an economical model to serve this market we will not be
profitable.  We cannot guarantee that we will be able to successfully
compete in the highly competitive high-end or poorly served low-end
markets.  We cannot expect to be a significant factor in the
collectibles field in the foreseeable future.
 
 Effect
of Governmental Regulations: Compliance with Environmental Laws
 
 We do not
believe that we are subject to any material government or industry
regulation.
 
 Property
 
 We currently use the offices of ATDN.
We plan to occupy separate office facilities and obtain office furniture and
equipment after the spin-off. We own no real estate nor have plans to acquire
any real estate.
 Raw Materials
 
 The use of raw materials is not a
material factor in our operations at the present time. We do not expect raw
materials to be a material factor in the future.
 -
5 -
   Backlog
 
 At December 31, 2009, we had no
backlogs.
 
 Employees
 
 We have
two part-time employees.  As we expand, we intend to hire
employees.  However, we have no present plans to do so. We may hire
part-time help as needed from time-to-time for specific projects. We do not pay
salaries to our two officers. However, we reimburse them for any out-of-pocket
expenses they incur on our behalf. In addition, in the future, we may approve
the payment of salaries for our management, but currently, no such plans have
been approved. We do not currently pay for vacation, holidays or provide major
medical coverage. None of our officers or directors is a party to any employment
agreement. However, we may adopt such plans in the future.
 
 Proprietary Information
 
 We do not
currently have any patent or trademark protection. If we determine it is
feasible to file for such trademark protection, we still have no assurance that
doing so will prevent competitors from using the same or similar names, marks,
concepts or appearance.
 
 Government Regulation
 
 We are not subject to any material
government or industry regulation.
 
 Research and Development
 
 We have never spent any amount in
research and development activities.
 
 Environmental Compliance
 
 Since we only act in the capacity of an
intermediary, we do not expect environmental laws to have any material impact on
us.
 
 How to Obtain Our SEC
Filings
 
 We file annual, quarterly, and special
reports, proxy statements, and other information with the Securities Exchange
Commission (SEC). Reports, proxy statements and other information filed with the
SEC can be inspected and copied at the public reference facilities of the SEC at
100 F Street N.E., Washington, DC 20549. Such material may also be accessed
electronically by means of the SEC's website at www.sec.gov.
 
 Our investor relations department can
be contacted at our principal executive office located at our principal office,
3636 S. Jason Street, Englewood, Colorado 80113. Our phone number at our
headquarters is (303) 781-7280.
 
 
 Item
1A. RISK FACTORS.
 
 You
should carefully consider the risks and uncertainties described below and the
other information in this document before deciding to invest in shares of our
common stock.
 
 The
occurrence of any of the following risks could materially and adversely affect
our business, financial condition and operating result. In this case, the
trading price of our common stock could decline and you might lose all or part
of your investment.
 -
6 -
 We were recently
formed as a Colorado business entity, have a limited operating history, and have
never been profitable.  Our limited operating history makes it
difficult for us to evaluate our future business prospects and make decisions
based on those estimates of our future performance. We are inherently a
risky investment. If we make poor budgetary decisions as a result of
unreliable historical data, we could continue to incur losses, which may result
in a decline in our stock price. We cannot guarantee we will ever develop a
substantial number of clients.Even if we
develop a substantial number of clients, there is no assurance that we will
become a profitable company.  As a result, we
may never become profitable, and could go out of business.
 
 We were
formed as a Colorado business entity in January 2008.  At the present
time, we have a limited operating history and have never been
profitable. There can be no guarantee that we will ever be
profitable.  From our inception on January 29, 2008 through December
31, 2009, we generated
$207,543           in
revenue.  We had a net loss of $12,500 for this period.  Our
revenues depend upon the number of clients we can develop and
service.  Our limited operating history makes it difficult to evaluate
our business on the basis of historical operations.  As a consequence,
our past results may not be indicative of future results.  Although
this is true for any business, it is particularly true for us because of our
limited operating history.  Reliance on historical results may hinder
our ability to anticipate and timely adapt to increases or decreases in sales,
revenues or expenses.  For example, if we overestimate our future
sales for a particular period or periods based on our historical growth rate, we
may increase our overhead and other operating expenses to a greater degree than
we would have if we correctly anticipated the lower sales level for that period
and reduced our controllable expenses accordingly.  If we make poor
budgetary decisions as a result of unreliable historical data, we could continue
to incur losses, which may result in a decline in our stock price. We cannot
guarantee we will ever develop a substantial number of clients.  Even
if we develop a substantial number of clients, there is no assurance that we
will become a profitable company.  Because we are a company with a
limited history, the operations in which we engage in, the art consulting,
marketing and agent business, is an extremely risky business. We have no
historical frame of reference to determine whether this proposed business model
will be successful. We may never become profitable, and, as a result, we
could go out of business.
 
 Because
we had incurred operating losses from our inception during our limited operating
history, our accountants have expressed substantial doubts about our ability to
continue as a going concern.
 
 For the period ended December 31, 2009,
our accountants have expressed substantial doubt about our ability to continue
as a going concern as a result of our loss from operations and the requirement
of significant future expenditures in connection with marketing efforts and
general and administrative expenses.  Our ability to achieve and
maintain profitability and positive cash flow is dependent
upon:
 
 •
              our ability to locate clients who will purchase our services;
      and
 
 •
              our ability to generate revenues.
 
 Based
upon current plans, we may incur operating losses in future periods because we
may, from time to time, be incurring expenses but not generating sufficient
revenues.  We expect between $10,000 and  $20,000 in
operating costs over the next twelve months.  We cannot guarantee that
we will be successful in generating sufficient revenues or other funds in the
future to cover these operating costs.  Failure to generate sufficient
revenues will cause us to go out of business.
 -
7 -
  We
have a business plan which is expensive and may not generate increases in our
revenues.
 
 We intend
to grow our business and have a business plan.  In connection with this
plan, we anticipate that we will incur expenses associated with our growth and
expansion.  Our funds may not be adequate to offset all of the
expenses we incur in expanding our business.  We will need to generate
revenues to offset expenses associated with our growth, and we may be
unsuccessful in achieving revenues, despite our attempts to grow our
business.  If our growth strategies do not result in significant
revenues, we may have to abandon our plans for further growth or may even cease
our operations.
 
 Because
we are small and do not have much capital, we must limit our operations to the
Denver, Colorado metropolitan area. A company in our industry with limited
operations has a smaller opportunity to be successful.  If we do not
make a profit, we may have to suspend or cease operations.
 
 Because
we are small and do not have much capital, we must limit our
operations.  We must limit our operations to the Denver, Colorado
metropolitan area as the only geographical area in which we
operate.  Because we may have to limit our operations, we may not
generate sufficient sales to make a profit.  If we do not make a
profit, we may have to suspend or cease operations.
 
 Because
our current officers and directors are involved with other businesses in the
same industry, the manner in which we operate may create the possibility of a
conflict of interest.
 
 Both Mrs.
Gregarek and Mrs. Sheehan are also involved with other businesses in the same
industry. Both are officers and directors of Art Design, Inc. Additionally, Mr.
and Mrs. Sheehan own the Accessory Warehouse, Inc. Mrs. Gregarek is an
independent contractor for interior design work. These other arrangements could
create conflict of interest with respect to our operations. We cannot guarantee
that any potential conflicts can be avoided.
 
 We
are a company with limited operating history which intends to grow its
operations to become profitable as soon as possible. As a result, we must
effectively manage the growth of our operations, or we may outgrow our current
infrastructure.
 
 We have
two part-time employees, Mrs. Gregarek, our President and Kathy Sheehan, our
Secretary-Treasurer.  If we experience rapid growth of our operations,
we could see a backlog of client orders.  We can resolve these
capacity issues by hiring additional personnel and upgrading our
infrastructure.  However, we cannot guarantee that sufficient
additional personnel will be available or that we will find suitable personnel
to aid our growth.  In any case, we will continue pursuing additional
sales growth for our company. Expanding our infrastructure will be expensive,
and will require us to train our workforce, and improve our financial and
managerial controls to keep pace with the growth of our operations.
 
 Because
we are a company with limited operating history and revenues and only minimally
capitalized, we have a lack of liquidity and will need additional financing in
the future. Our future success depends, in large part, on the continued
financing of Spyglass.  The loss of this financing would have a
material adverse effect on our business. Additional financing may not be
available when needed, which could delay our development or indefinitely
postpone it.  Our investors could lose some or all of their
investment.
 -
8 -
 
 We are
only minimally capitalized.  Because we are only minimally
capitalized, we expect to experience a lack of liquidity for the foreseeable
future in our operations.  We will adjust our expenses as necessary to
prevent cash flow or liquidity problems.  However, we expect we will
need additional financing of some type, which we do not now possess, to fully
develop our operations.  We expect to rely principally upon our
ability to raise additional financing, the success of which cannot be
guaranteed. Spyglass is currently our only source of financing. It should
be noted that Spyglass is under no obligation to lend us funds under the term of
the note. We have no indication that Spyglass would refuse to lend us funds if
we should ask. Spyglass is owned, in part by Mrs. Gregarek’s husband. It
would be very difficult to find a financing source to replace
Spyglass.   The loss of the Spyglass financing would have a
material adverse effect on our business. At the present time, we have no
definitive plans for financing in place, other than the funds which we have
already obtained.  In the event that we need additional capital, we
will need to identify alternate sources of capital for working capital
purposes.  To the extent that we experience a substantial lack of
liquidity, our development in accordance with our proposed plan may be delayed
or indefinitely postponed, our operations could be impaired, we may never become
profitable, fail as an organization, and our investors could lose some or all of
their investment.
 
 Because
we are a company with limited operating history, we have no experience as a
public company. Our inability to operate as a public company could be the
basis of your losing your entire investment in us.
 
 We have never operated as a public
company.  We have no experience in complying with the various rules
and regulations which are required of a public company.  As a result,
we may not be able to operate successfully as a public company, even if our
operations are successful. We plan to comply with all of the various rules and
regulations which are required of a public company.  However, if we
cannot operate successfully as a public company, your investment may be
materially adversely affected.  Our inability to operate as a public
company could be the basis of your losing your entire investment in
us.
 
 Our
ability to grow our business depends on relationships with others. We have only
a few  established relationships at this time.  We may never
develop sufficient relationships to grow a successful business. Further, if we
were to lose those relationships, we could lose our ability to sell services. If
we lose enough clients, we could go out of business.
 
 Eventually,
all of our revenue and gross profit are expected to come from consulting,
marketing and representing artists in their business
dealings.  However, in the interim, we will also sell products. To
date, however, all of our revenue has come solely from the sale of products.
Nevertheless, our business plan is clearly focused to develop revenue and gross
profit primarily from consulting, marketing and representing artists in their
business dealings. While our relationships will change from time to time,
we must rely upon our clients for our success.  Our performance
depends, in large part, on our ability to engage with successful artists to
perform consulting and marketing services and advise or represent individuals
whom are in the business of creating, producing or selling
art.  Artists are skilled in their vocation, but often lack the
general business knowledge and expertise to obtain and secure
contracts.  Most artists do not understand what they do not know and
therefore how to avoid them or what value an organization like ours
provides.   This means that there can be no assurance that we
will be able to secure clients at fees they can afford or are willing to
pay.  If we can identify and establish relationships with a select
group of clients that see value in and can afford the services we provide we
will be able to establish a reputation and develop and grow our niche market. At
the present time, we do not have a significant number of  clients and
cannot guarantee we will ever develop sufficient numbers of clients to be
profitable. We plan to use the efforts of our management to develop our
clients. If we do develop such clients, we risk that a given client will
switch to utilizing similar services from another provider or decide to perform
the tasks on his or her own. Our ability to generate revenue from the sale
consulting, marketing and agent representation services would
diminish.  If we lose enough clients, we could go out of
business.
 -
9 -
 
 We
are a relatively small company with limited resources compared to some of our
current and potential competitors, which may hinder our ability to compete
effectively. The art consulting industry is highly fractured
competitive.  If we are not well received or successful, we may never
achieve profitability.
 
 The art
consulting business is highly fractured with respect to price and services
offered.  There are a handful of competitors that represent the very
successful artists.  Many of these firms are well-established,
including national, regional and local organizations possessing substantially
greater financial, marketing, personnel and other resources than we
do.  There can be no assurance that we will be able to respond to
various competitive factors affecting the art industry and be able to attract
and advise our clients accordingly.  There is very little competition
for up and coming artists, but the demand for consulting, marketing and agent
representation services is hard to gauge.  We believe that this market
is underserved, but most artists are not familiar with treating their vocation
as a business and may not believe they need our services.  If we are
unable to develop an economical model to serve this market we will not be
profitable.  We cannot guarantee that we will be able to successfully
compete in the highly competitive high-end or poorly served low-end
markets.
 
 We
believe that the key to our success will be successful marketing of our service
and product offering. As a result, we may need to substantially invest in
marketing efforts in order to grow our business, which will be
expensive.
 
 In order
to grow our business, we will need to develop and maintain widespread
recognition and acceptance of our company, our business model and our
services.  We have only recently begun to present our service and
product offering to our potential market as we have identified it in our
business plan.  We plan to rely primarily on word of mouth from
contacts we develop personally through our efforts to promote and market
ourselves. We plan to use the efforts of our management to develop these
contacts.  In order to successfully grow our company, we may need to
significantly increase our financial commitment to creating awareness and
acceptance of our company among potential clients, which would be
expensive.  To date, marketing and advertising expenses have been
negligible.  We have not yet fully developed our marketing program and
do not know the specific cost of such a program, although we believe that it
will be expensive. If we fail to successfully market and promote our business,
we could lose potential clients to our competitors, or our growth efforts may be
ineffective.  If we incur significant expenses promoting and marketing
ourselves, it could delay or completely forestall our
profitability.
 
 We
have no agreement with any broker or dealer to act as a market maker for our
securities.  The lack of a broker or dealer to create or maintain a
market in our stock could adversely impact the price and liquidity of our
securities.
 
 We have
no agreement with any broker or dealer to act as a market maker for our
securities and there is no assurance that we will be successful in obtaining any
market makers. Thus, no broker or dealer will have an incentive to make a market
for our stock. The lack of a market maker for our securities could adversely
influence the market for and price of our securities, as well as your ability to
dispose of, or to obtain accurate information about, and/or quotations as to the
price of, our securities.
 
 We
are an art consulting, marketing and intermediary organization.  Our
business is not diversified, which could result in significant fluctuations in
our operating results. A downturn in that sector may reduce our stock
price, even if our business is successful.
 
 We are an
art consulting, marketing and intermediary organization, and, accordingly,
dependent upon trends in that business sector.  Downturns in that
sector could adversely effect on our business.  A downturn in that
sector may reduce our stock price, even if our business is
successful.
 
 The
share  control position of Rebecca Gregarek, David Gregarek, Kathy and Todd
Sheehan will limit the ability of other shareholders to influence corporate
actions.
 
 After
distribution of our shares to the Art Design shareholders, our largest
shareholders, Rebecca Gregarek, David Gregarek,  Kathy Sheehan and
Todd Sheehan will own and control 1,140,000 shares, after giving effect to the
Spyglass warrants and thereby control approximately 82.5% of our outstanding
shares.  Because these individuals will beneficially control almost
83% of the outstanding shares they will have a significant role in controlling
the election or removal of our directors, the supervision and management of our
business or a change in control of or sale of our company, even if they believed
such changes were in the best interest of our shareholders
generally.
 -
10 -
 
 Our future success depends, in large
part, on the continued service of our President andSecretary-Treasurer.
 
 We depend
almost entirely on the efforts and continued employment of Mrs. Gregarek, our
President and Kathy Sheehan, our Secretary-Treasurer.  Mrs. Gregarek
is our primary executive officer, and we will depend on her for nearly all
aspects of our operations. Mrs. Sheehan is our primary financial officer, and we
will depend on her for nearly all aspects of our financial compliance. We do not
have an employment contract with either Mrs. Gregarek or Mrs. Sheehan, and we
do not carry key person insurance on either’s life.  The loss of
the services of Mrs. Gregarek or Mrs. Sheehan through incapacity or otherwise,
would have a material adverse effect on our business.  It would be
very difficult to find and retain qualified personnel such as Mrs. Gregarek or
Mrs. Sheehan.
 
 Applicable
SEC rules governing the trading of “Penny Stocks” limit the liquidity of our
common stock, which may affect the trading price of our common stock. The over-the-counter market for stock
such as ours is subject to extreme price and volume fluctuations.You may
not able to sell your shares when you want to do so, if at all.
 
 Our common stock is currently not
quoted in any market. If our common stock becomes quoted, we anticipate that it
will trade well below $5.00 per share. As a result, our common stock is
considered a “penny stock” and is subject to SEC rules and regulations that
impose limitations upon the manner in which our shares can be publicly
traded. The Exchange Act and such penny stock rules generally impose
additional sales practice and disclosure requirements on broker-dealers who sell
our securities to persons other than certain accredited investors who are,
generally, institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 jointly with spouse, or in transactions not recommended by the
broker-dealer. These regulations require the delivery, prior to any transaction
involving a penny stock, of a disclosure schedule explaining the penny stock and
the associated risks.  Under these regulations, certain brokers who
recommend such securities to persons other than established clients or certain
accredited investors must make a special written suitability determination for
the purchaser and receive the written purchaser’s agreement to a transaction
prior to purchase.  These regulations have the effect of limiting the
trading activity of our common stock and reducing the liquidity of an investment
in our common stock. The securities of companies such as ours have historically
experienced extreme price and volume fluctuations during certain periods. These
broad market fluctuations and other factors, such as new product developments
and trends in the our industry and in the investment markets generally, as well
as economic conditions and quarterly variations in our operational results, may
have a negative effect on the market price of our common stock. As a result of
any or all of these factors, you may not able to sell your shares when
you want to do so, if at all.
 
 We
have the authority to issue up to 50,000,000 shares of common stock, 1,000,000
shares of preferred stock, and to issue options and warrants to purchase shares
of our common stock without stockholder approval.We
are only planning to issue1,082,060 shares
in this registration statement.
As a result, issuances of our stock could dilute current shareholders and
adversely affect the market price of our common stock, if a public trading
market develops.
 
 We have
the authority to issue up to 50,000,000 shares of common stock, 1,000,000 shares
of preferred stock, and to issue options and warrants to purchase shares of our
common stock without stockholder approval.  Although no financing is
planned currently, we may need to raise additional capital to fund operating
losses.  If we raise funds by issuing equity securities, our existing
stockholders who receive shares in the spin-off may experience substantial
dilution.  In addition, we could issue large blocks of our common
stock to fend off unwanted tender offers or hostile takeovers without further
stockholder approval.
 
 The
issuance of preferred stock by our board of directors could adversely affect the
rights of the holders of our common stock.  An issuance of preferred
stock could result in a class of outstanding securities that would have
preferences with respect to voting rights and dividends and in liquidation over
the common stock and could, upon conversion or otherwise, have all of the rights
of our common stock.  Our board of directors' authority to issue
preferred stock could discourage potential takeover attempts or could delay or
prevent a change in control through merger, tender offer, proxy contest or
otherwise by making these attempts more difficult or costly to
achieve.
 -
11 -
  Colorado
law and our Articles of Incorporation protect our directors from certain types
of lawsuits, which could make it difficult for us to recover damages from them
in the event of a lawsuit.
 
 Colorado
law provides that our directors will not be liable to our company or to our
stockholders for monetary damages for all but certain types of conduct as
directors.  Our Articles of Incorporation require us to indemnify our
directors and officers against all damages incurred in connection with our
business to the fullest extent provided or allowed by law.  The
exculpation provisions may have the effect of preventing stockholders from
recovering damages against our directors caused by their negligence, poor
judgment or other circumstances.  The indemnification provisions may
require our company to use our assets to defend our directors and officers
against claims, including claims arising out of their negligence, poor judgment,
or other circumstances.
 
 Because
we are a company with limited operating history, we do not expect to pay
dividends on common stock.
 
 We have
not paid any cash dividends with respect to our common stock, and it is unlikely
that we will pay any dividends on our common stock in the foreseeable future.
Earnings, if any, that we may realize will be retained in the business for
further development and expansion.
 
 
 ITEM
2. DESCRIPTION OF PROPERTY.
 
 We currently use the offices of Art
Design, Inc. We plan to occupy separate office facilities and obtain office
furniture and equipment. We own no real estate nor have plans to acquire any
real estate. We currently carry no inventory and have no other
property.
 
 
 ITEM
3. LEGAL PROCEEDINGS.
 
 We are not a party to any material
legal proceedings, nor is our property the subject of any material legal
proceeding.
 
 
 ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
 We held no shareholders meeting in the
fourth quarter of our fiscal year.
 
 
 PART
II
 
 ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
 
 Holders
 
 As of
January 1 2010, we had a total of 1,082,060 shares of our Common Stock
outstanding. The number of holders of record of our common stock at that date
was one hundred. No public market
currently exists for shares of our common stock. We intend to apply to have our
common stock listed for quotation on the Over-the-Counter Bulletin
Board.
 
 Market Information
 
 No public
market currently exists for shares of our common stock. We intend to apply to
have our common stock listed for quotation on the Over-the-Counter Bulletin
Board.
  -
12 -
  Dividend Policy
 
 Holders of common stock are entitled to
receive such dividends as may be declared by our Board of Directors. No
dividends on the common stock were paid by us during the periods reported herein
nor do we anticipate paying dividends in the foreseeable future.
 
 Equity Compensation Plan
Information
 
 We have no outstanding stock options or
other equity compensation plans.
 
 The Securities Enforcement and Penny
Stock Reform Act of 1990
 
 The Securities Enforcement and Penny
Stock Reform Act of 1990 requires additional disclosure and documentation
related to the market for penny stock and for trades in any stock defined as a
penny stock. Unless we can acquire substantial assets and trade at over $5.00
per share on the bid, it is more likely than not that our securities, for some
period of time, would be defined under that Act as a "penny stock." As a result,
those who trade in our securities may be required to provide additional
information related to their fitness to trade our shares. These requirements
present a substantial burden on any person or brokerage firm who plans to trade
our securities and would thereby make it unlikely that any liquid trading market
would ever result in our securities while the provisions of this Act might be
applicable to those securities.
 
 Any broker-dealer engaged by the
purchaser for the purpose of selling his or her shares in us will be subject to
Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than
creating a need to comply with those rules, some broker-dealers will refuse to
attempt to sell penny stock.
 
 The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules, to deliver a standardized risk disclosure document prepared by the
Commission, which:
 
 -
              contains
      a description of the nature and level of risk in the market for penny
      stocks in both public offerings and secondary trading;-
              contains
      a description of the broker's or dealer's duties to the client and of the
      rights and remedies available to the client with respect to a violation to
      such duties or other requirements of the Securities Act of 1934, as
      amended;-
              contains
      a brief, clear, narrative description of a dealer market, including "bid"
      and "ask" prices for penny stocks and the significance of the spread
      between the bid and ask price;-
              contains
      a toll-free telephone number for inquiries on disciplinary
      actions;-
              defines
      significant terms in the disclosure document or in the conduct of trading
      penny stocks; and-
              contains
      such other information and is in such form (including language, type, size
      and format) as the Securities and Exchange Commission shall require by
      rule or regulation;
 
 The broker-dealer also must provide,
prior to effecting any transaction in a penny stock, to the client:
 
 -
              the
      bid and offer quotations for the penny
stock;
 
 -
              the
      compensation of the broker-dealer and its salesperson in the
      transaction;
 
 -
              the
      number of shares to which such bid and ask prices apply, or other
      comparable information relating to the depth and liquidity of the market
      for such stock; and
 
 -
              monthly
      account statements showing the market value of each penny stock held in
      the client's account.
  -
13 -
  
 In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
those rules; the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written acknowledgment of the receipt of a risk disclosure
statement, a written agreement to transactions involving penny stocks, and a
signed and dated copy of a written suitability statement. These disclosure
requirements will have the effect of reducing the trading activity in the
secondary market for our stock because it will be subject to these penny stock
rules. Therefore, stockholders may have difficulty selling their
securities.
 
 Stock Transfer Agent
 
 The stock transfer agent for our
securities is Corporate Stock Transfer of Denver, Colorado.  Their
address is 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209.
Their phone number is (303)282-4800.
 
 
 ITEM
6. SELECTED FINANCIAL DATA
 
 A smaller reporting company is not
required to provide the information in this Item.
 
 
 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Certain statements in this Management’s
Discussion and Analysis of Financial Condition and Results of Operations that
are not historical facts are forward-looking statements such as statements
relating to future operating results, existing and expected competition,
financing and refinancing sources and availability and plans for future
development or expansion activities and capital expenditures. Such
forward-looking statements involve a number of risks and uncertainties that may
significantly affect our liquidity and results in the future and, accordingly,
actual results may differ materially from those expressed in any forward-looking
statements. Such risks and uncertainties include, but are not limited to, those
related to effects of competition, leverage and debt service financing and
refinancing efforts, general economic conditions, and changes in applicable laws
or regulations. The following discussion and analysis should be read in
conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this report.
 
 Results of Operations
 
 We operate an art consulting,
marketing in addition to advising artists in their business dealings.
Secondarily, and as an adjunct to our primary purpose, we also earn revenue
from the sale of art and interior design products. We anticipate that the sale
of products will primarily be to our artist clients but may also incidentally be
to the general public. We earn revenue from the sale of art products and
consulting services, but do not separate sales into different operating
segments. To date, however, all of our revenue has come solely from the sale of
products
 
 From
our inception on January 29, 2008 through December 31, 2009, all of our revenue
was generated from selling products to one client in 2008 and two clients in
2009. Because our primary business model is in the art consulting and marketing
service business and in representing individuals whom are in the business of
creating, producing or selling art, we do not consider this relationship with
this client in 2008 to be material to our future success. We may develop
additional product sales with this client but have no definitive plans at the
present time.
 
 For
the fiscal year ended December 31, 2009, we generated $119,682 in revenue,
compared to $87,861 from inception (January 29, 2008) through December 31,
2008.
 -
14 -
  
 For the
fiscal year ended December 31, 2009, we had cost of goods sold of $119,373,
compared to $84,942 from inception (January 29, 2008) through December 31,
2008. This left us with a gross profit of $309 for the fiscal year ended
December 31, 2009, compared to $2,919 from inception (January 29, 2008) through
December 31, 2008.
 
 Our
operating expenses included general and administrative expenses of $6,220 for
the fiscal year ended December 31, 2009, compared to $9,508 from inception
(January 29, 2008) through December 31, 2008.
 
 We had a
net loss of $5,911 for the fiscal year ended December 31, 2009, compared to
$6,589 from inception (January 29, 2008) through December 31,
2008.
 
 Because
we do not pay salaries, and our major professional fees have been paid for the
year, operating expenses are expected to remain fairly constant.
 
 We expect
to incur operating losses in future periods because we will be incurring
expenses and not generating sufficient revenues. We believe that we will be
required to make significant future expenditures in connection with marketing
efforts along with general administrative expenses. We expect approximately to
range between $10,000 and $20,000 in operating costs through December 31, 2010.
We cannot guarantee that we will be successful in generating sufficient revenues
or other funds in the future to cover these operating costs. Failure to generate
sufficient revenues or additional financing when needed could cause us to go out
of business.
 
 Liquidity and Capital
Resources.
 
 As of December
31, 2009, we had cash or cash equivalents of $1,365. As of December 31, 2008, we
had cash or cash equivalents of $2,127.
 
 Net cash used for operating activities was $762 for the fiscal year ended
December 31, 2009. This compares to net cash provided by operating activities of
$2,127 from inception (January 29, 2008) through December 31,
2008.
 
 Cash flows
provided by or used for investing activities were $-0- for all relevant
periods.
 
 Cash flows
provided by or used for financing activities were $-0- for all relevant
periods.
 
 Over the next
twelve months we do not expect any material capital costs to develop operations.
We do not plan to purchase real estate or large capital items
 
 On June 1, 2008, an organization
named Spyglass Investment Partnership (“Spyglass ”) agreed to provide operating
capital in the form of a loan of $250,000 to cover operating expenses. This loan
is evidenced by an unsecured promissory note which is due May 31, 2010.
This promissory note is under the
same terms and conditions and same amount as the prior promissory note with
Spyglass.It should be
noted that Spyglass is under no obligation to lend us funds under the term of
the note.
 
 We believe
that we have sufficient capital in the short term for our current level of
operations. Further, we believe that we can attract sufficient product sales and
services within our present organizational structure and resources to become
profitable in our operations. We also have the potential of additional capital
from Spyglass. While additional resources would be needed to expand into
additional locations, which we have no plans to do at this time.
 -
15 -
 
 We do not
know how long we will be required to rely upon our loan from Spyglass. We plan
to repay any loan amounts from our operations. It should be noted that we have
not had to draw down on this loan from Spyglass to date.  If we are
unable to develop sufficient revenues or raise funds to cover any operating
deficit after May 31, 2010, our business may fail. We do not anticipate needing
to raise additional capital resources in the next twelve months, other than our
loan from Spyglass. It should be noted that Spyglass is under no obligation to
lend us funds under the term of the note. We have no indication that Spyglass
would refuse to lend us funds if we should ask. However, if such funds were
unavailable when needed, we would have a choice to substitute lenders, use
operations for our funds, or go out of business.
 
 We believe that the combination of
revenues and funds which Spyglass can provide to offset any revenue shortfall
will sustain us at least through May 31, 2010. Based upon our past history of
operations, we estimate that we must generate between $10,000 and $20,000 in
gross profit to be profitable.  We do not know when we will be
able to generate this level of gross profit. Our principal source of liquidity will
be our operations. We expect variation in revenues to account for the difference
between a profit and a loss. Also business activity is closely tied to the U.S.
economy, particularly the economy in Denver, Colorado. Our ability to achieve
and maintain profitability and positive cash flow is dependent upon our ability
to successfully develop our business and our ability to generate
revenues.
 
 In any case, we try to operate with minimal overhead. Our primary activity will
be to seek to develop clients for our products and services and, consequently,
our sales. If we succeed in developing clients for our products and services and
generating sufficient sales, we will become profitable. We cannot guarantee that
this will ever occur. Our plan is to build our company in any manner which will
be successful.
 
 Off-Balance Sheet
Arrangements
 
 We have no off-balance sheet
arrangements with any party.
 
 Critical Accounting
Policies
 
 Our
discussion and analysis of results of operations and financial condition are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
sales and expenses, and related disclosure of contingent assets and liabilities.
We evaluate our estimates on an ongoing basis, including those related to
provisions for uncollectible accounts receivable, inventories, valuation of
intangible assets and contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the 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.
 
 We have
identified the following policies below as critical to our business and results
of operations.
 
 Revenue
is recognized on an accrual basis as earned under contract terms, the product or
service price to the client is fixed or determinable, and collectibility is
reasonably assured. More specifically, revenue is recognized when ordered
products are shipped, and any corresponding consulting and design services have
been rendered. Services performed under contract, which may vary in length, are
recognized on an ongoing basis over the life of the contract as services are
performed. Our consulting service contracts generally allow either party to
terminate the contract upon reasonable notice.
 -
16 -
  General and administrative costs
include those costs allocated to the ongoing expenditures of running our
business including in general such items as office overhead, professional fees
and management compensation.
 
 For
further discussion on the application of these and other accounting policies,
see Note 1 to the accompanying audited financial statements for the period ended
September 30, 2008, included elsewhere in this document. Our reported results
are impacted by the application of the following accounting policies, certain of
which require management to make subjective or complex judgments. These
judgments involve making estimates about the effect of matters that are
inherently uncertain and may significantly impact quarterly or annual results of
operations. For all of these policies, management cautions that future events
rarely develop exactly as expected, and the best estimates routinely require
adjustment. Specific risks associated with these critical accounting policies
are described in the following paragraphs.
 
 Use of Estimates in the Preparation of
Financial Statements
 
 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 revenue and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 We have
had revenue during the period ended September 30, 2009.  Anticipated
future operating revenue will come from art consulting, marketing and agent
representation services provided to individuals whom are in the business of
selling art.  Such revenues will be recorded as the art services are
performed.
 
 Secondarily,
and as an adjunct to our primary purpose, we  also earn revenue from the
sale of art and interior design products. We anticipate that the sale of
products will primarily be to our artist clients but may also incidentally be to
the general public.
 
 Trends
 
 There are
no known trends, events or uncertainties that have had or that are reasonably
expected to have a material impact on the net sales or revenues or income from
our operations.  Our management has not made any commitments, which
will require any material financial resources.
 
 Plan of Operation
 
 Our plan for the next twelve months is
to operate at a profit or at break even, although we have a history of losses.
Our plan is to attract sufficient additional product sales and services within
our present organizational structure and resources to become profitable in our
operations.
 
 Currently, we are conducting business
in only one location in the Denver Metropolitan area. We have no plans to expand
into other locations or areas. The timing of the completion of the milestones
needed to become profitable are not directly dependent on the success of our
public offering. We believe that we can achieve profitability as we are
presently organized with sufficient business.
 
 If we are not successful in our
operations we will be faced with several options:
 
 1.
              Cease
      operations and go out of business;
 
 2.
              Continue
      to seek alternative and acceptable sources of
  capital;
 
 3.
              Bring
      in additional capital that may result in a change of control;
      or
 
 4.
              Identify
      a candidate for acquisition that seeks access to the public marketplace
      and its financing sources.
 -
17 -
  Currently, we
have sufficient capital to implement our business operations or to sustain them
for the next twelve months. If we can become profitable, we could operate at our
present level indefinitely.
 
 To date, we have never had any
discussions with any possible acquisition candidate. However, if we cannot
operate our business in a profitable manner, we may seek other opportunities,
including, but not limited to, one or more acquisitions.
 
 Proposed Milestones to Implement
Business Operations
 
 At the present time, we are operating
from one location in the Denver Metropolitan area. Our plan is to make our
operation profitable by the end of our next fiscal year.
 
 We believe that we can be profitable or
at break even by the end of the current fiscal year, assuming sufficient sales.
Based upon our current plans, we have adjusted our operating expenses so that
cash generated from operations and from working capital financing is expected to
be sufficient for the foreseeable future to fund our operations at our currently
forecasted levels. This has not always been the case, since we have had a
history of losses. To try to operate at a break-even level based upon our
current level of anticipated business activity, we believe, based upon our
operating history from 2007,  that we must generate a gross profit on
our revenue of approximately $50,000 per year. However, if our forecasts are
inaccurate, we will need to raise additional funds. On the other hand, we may
choose to scale back our operations to operate at break-even with a smaller
level of business activity, while adjusting our overhead to meet the revenue
from current operations. In addition, we expect that we will need to raise
additional funds if we decide to pursue more rapid expansion, the development of
new or enhanced services and products, appropriate responses to competitive
pressures, or the acquisition of complementary businesses or technologies, or if
we must respond to unanticipated events that require us to make additional
investments. We cannot assure that additional financing will be available when
needed on favorable terms, or at all.
 
 We expect to incur operating losses in
future periods because we will be incurring expenses and not generating
sufficient revenues. We expect approximately $50,000 in operating costs over the
next twelve months. We cannot guarantee that we will be successful in generating
sufficient revenues or other funds in the future to cover these operating costs.
Failure to generate sufficient revenues or additional financing when needed
could cause us to go out of business
 
 No commitments to provide additional
funds have been made by management or current shareholders. There is no
assurance that additional funds will be made available to us on terms that will
be acceptable, or at all, if and when needed. We expect to continue to generate
and increase sales, but there can be no assurance we will generate sales
sufficient to continue operations or to expand.
 
 We also are planning to rely on the
possibility of referrals from clients and will strive to satisfy our clients. We
believe that referrals will be an effective form of advertising because of the
quality of service that we bring to clients. We believe that satisfied clients
will bring more and repeat clients. In the next 12 months, we do not intend to
spend any funds on research and development and do not intend to purchase any
large equipment.
 
 Recently Issued Accounting
Pronouncements
 
 We do not expect the adoption of any
recently issued accounting pronouncements to have a significant impact on our
net results of operations, financial position, or cash flows.
 
 Seasonality
 
 We do not expect our sales to be
impacted by seasonal demands for our products and services.
  -
18 -
  
 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
 
 A smaller
reporting company is not required to provide the information in this
Item.
 
 
 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
 
 
 
 
 ART
DIMENSIONS, INC.
 
 CONSOLIDATED
FINANCIAL STATEMENTS
 
 with
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 December
31, 2009 and 2008
   -
19 -
 
 ART
DIMENSIONS, INC.
 Consolidated
Financial Statements
 
 
 
 TABLE
OF CONTENTS
 
 
 
 PageREPORT
      OF INDEPENDENT REGISTEREDPUBLIC
      ACCOUNTING FIRM
              21CONSOLIDATED
      FINANCIAL STATEMENTSConsolidated
      balance sheets
              22Consolidated
      statements of operations
              23Consolidated
      statements of stockholders’ equity
              24Consolidated
      statements of cash flows
              25Notes
      to consolidated financial statements
              27
 
 
  -
20 -
  
 RONALD R.
CHADWICK, P.C.
 Certified
Public Accountant
 2851
South Parker Road, Suite 720
 Aurora,
Colorado  80014
 Telephone
(303)306-1967
 Fax
(303)306-1944
 
 
 
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Board of
Directors
 Art
Design, Inc.
 Englewood,
Colorado
 
 I have
audited the accompanying balance sheets of Art Design, Inc. as of December 31,
2008 and 2009, and the related statements of operations, stockholders' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit 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.  I believe that my audit provides a
reasonable basis for my opinion.
 
 In my
opinion, the financial statements referred to above present fairly, in all
material  respects, the  financial position of Art Design,
Inc. as of December 31, 2008 and 2009, and the  results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 7 to the financial
statements the Company has suffered recurring losses from operations and has
a working capital deficitthat raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 7. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
 Aurora,
      Colorado
                  /s/
      Ronald R. Chadwick, P.C.March
      27, 2010
                  RONALD
      R. CHADWICK, P.C.
  -
21 -
   ART
      DIMENSIONS, INC.(A
      Development Stage Company)BALANCE
      SHEETSDec.
      31, 2008
              
              
              Dec.
      31, 2009ASSETSCurrent
      assetsCash
              
              $
              2,127
              
              
              $
              1,365Total current
      assets
              
              
              2,127
              
              
              
              1,365Total
      Assets
              
              $
              2,127
              
              
              $
              1,365LIABILITIES
      &STOCKHOLDERS'
      EQUITYCurrent
      liabilitiesRelated
      party payables
              
              $
              3,309
              
              
              $
              -Total current
      liabilities
              
              
              3,309
              
              
              
              -Total
      Liabilities
              
              
              3,309
              
              
              
              -Stockholders'
      EquityPreferred
      stock, no par value;1,000,000
      shares authorized;no
      shares issued and outstanding
              
              
              -
              
              
              
              -Common
      stock, no par value;50,000,000
      shares authorized;2,000,000
      (2008) and 1,082,060 (2009)
              
              
              2,000
              
              
              
              2,000shares
      issued and outstandingAdditional
      paid in capital
              
              
              3,407
              
              
              
              11,865Deficit
      accumulated during the dev. stage
              
              
              (6,589
              )
              
              
              (12,500
              )Total
      Stockholders' Equity
              
              
              (1,182
              )
              
              
              1,365Total
      Liabilities and Stockholders' Equity
              
              $
              2,127
              
              
              $
              1,365
  The
accompanying notes are an integral part of the financial
statements.
 
  -
22 -
  
 
 ART
      DIMENSIONS, INC.(A
      Development Stage Company)STATEMENTS
      OF OPERATIONSPeriod
      From
              
              
              
              
              
              Period
      FromJan.
      29, 2008
              
              
              
              
              
              Jan.
      29, 2008(Inception)
              
              
              
              
              
              (Inception)Through
              
              
              Year
      Ended
              
              
              ThroughDec.
      31, 2008
              
              
              Dec.
      31, 2009
              
              
              Dec.
      31, 2009Sales
      - net of returns
              
              $
              87,861
              
              
              $
              119,682
              
              
              $
              207,543Cost
      of goods sold - related party
              
              
              84,942
              
              
              
              119,373
              
              
              
              204,315Gross
      profit
              
              
              2,919
              
              
              
              309
              
              
              
              3,228Operating
      expenses:Compensatory
      equity issuances
              
              
              5,407
              
              
              
              
              
              
              
              5,407General
      and administrative
              
              
              4,101
              
              
              
              6,220
              
              
              
              10,3219,508
              
              
              
              6,220
              
              
              
              15,728Gain
      (loss) from operations
              
              
              (6,589
              )
              
              
              (5,911
              )
              
              
              (12,500
              )Other
      income (expense):-
              
              
              
              -
              
              
              
              -Income
      (loss) beforeprovision
      for income taxes
              
              
              (6,589
              )
              
              
              (5,911
              )
              
              
              (12,500
              )Provision
      for income tax
              
              
              -
              
              
              
              -
              
              
              
              -Net
      income (loss)
              
              $
              (6,589
              )
              
              $
              (5,911
              )
              
              $
              (12,500
              )Net
      income (loss) per share(Basic
      and fully diluted)
              
              $
              (0.00
              )
              
              $
              (0.00
              )Weighted
      average number ofcommon
      shares outstanding
              
              
              2,000,000
              
              
              
              1,961,753
  The
accompanying notes are an integral part of the financial
statements.
 
 
  -
23 -
   ART
      DIMENSIONS, INC.(A
      Development Stage Company)STATEMENTS
      OF STOCKHOLDERS' EQUITYDeficitAccumulatedCommon
      Stock
              
              
              
              
              
              During
      The
              
              
              Stock-Amount
              
              
              Paid
      In
              
              
              Development
              
              
              holders'Shares
              
              
              No
      Par Value
              
              
              Capital
              
              
              Stage
              
              
              EquityBalances
      at Jan. 29, 2008 (Inception)
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Compensatory
      stock issuance -January
      29, 2009 shares issued forformation
      services at service value
              
              
              2,000,000
              
              
              
              2,000
              
              
              
              
              
              
              
              
              
              
              
              2,000Compensatory
      warrant issuances -January
      29, 2009 shares issued forconsulting
      services at service value
              
              
              
              
              
              
              
              
              
              
              3,407
              
              
              
              
              
              
              
              3,407Net
      income (loss) for the period
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (6,589
              )
              
              
              (6,589
              )Balances
      at Dec. 31, 2008
              
              
              2,000,000
              
              
              $
              2,000
              
              
              $
              3,407
              
              
              $
              (6,589
              )
              
              $
              (1,182
              )Redemption
      and redistribution of sharesfrom
      spin off from parent
              
              
              (917,940
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -Debt
      relief from spin off
              
              
              
              
              
              
              
              
              
              
              8,458
              
              
              
              
              
              
              
              8,458Net
      income (loss) for the year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (5,911
              )
              
              
              (5,911
              )Balances
      at Dec. 31, 2009
              
              
              1,082,060
              
              
              $
              2,000
              
              
              $
              11,865
              
              
              $
              (12,500
              )
              
              $
              1,365
  The
accompanying notes are an integral part of the financial
statements.
 
 
  -
24 -
  ART
      DIMENSIONS, INC.(A
      Development Stage Company)STATEMENTS
      OF CASH FLOWSPeriod
      From
              
              
              
              
              
              Period
      FromJan.
      29, 2008
              
              
              
              
              
              Jan.
      29, 2008(Inception)
              
              
              
              
              
              (Inception)Through
              
              
              Year
      Ended
              
              
              ThroughDec.
      31, 2008
              
              
              Dec.
      31, 2009
              
              
              Dec.
      31, 2009Cash
      Flows From Operating Activities:Net
      income (loss)
              
              $
              (6,589
              )
              
              $
              (5,911
              )
              
              $
              (12,500
              )Adjustments
      to reconcile net loss tonet
      cash provided by (used for)operating
      activities:Related
      party payables
              
              
              3,309
              
              
              
              5,149
              
              
              
              8,458Compensatory
      stock issuances
              
              
              2,000
              
              
              
              -
              
              
              
              2,000Compensatory
      warrant issuances
              
              
              3,407
              
              
              
              -
              
              
              
              3,407Net cash provided by (used
      for)operating
      activities
              
              
              2,127
              
              
              
              (762
              )
              
              
              1,365Cash
      Flows From Investing Activities:-
              
              
              
              -
              
              
              
              -Net
      cash provided by (used for)investing
      activities
              
              
              -
              
              
              
              -
              
              
              
              -(Continued
      On Following Page)
 
 The
accompanying notes are an integral part of the financial
statements.
 
 
  -
25 -
  ART
      DIMENSIONS, INC.(A
      Development Stage Company)STATEMENTS
      OF CASH FLOWS(Continued
      From Previous Page)Period
      From
              
              
              
              
              
              Period
      FromJan.
      29, 2008
              
              
              
              
              
              Jan.
      29, 2008(Inception)
              
              
              
              
              
              (Inception)Through
              
              
              Year
      Ended
              
              
              ThroughDec.
      31, 2008
              
              
              Dec.
      31, 2009
              
              
              Dec.
      31, 2009Cash
      Flows From Financing Activities:-
              
              
              
              -
              
              
              
              -Net cash provided by (used
      for)financing
      activities
              
              
              -
              
              
              
              -
              
              
              
              -Net
      Increase (Decrease) In Cash
              
              
              2,127
              
              
              
              (762
              )
              
              
              1,365Cash
      At The Beginning Of The Period
              
              
              -
              
              
              
              2,127
              
              
              
              -Cash
      At The End Of The Period
              
              $
              2,127
              
              
              $
              1,365
              
              
              $
              1,365Schedule Of Non-Cash Investing And Financing
      ActivitiesIn
      2008 the Company issued 2,000,000 common shares to its parent corporation
      for formation stage consulting servicesvalued
      at $2,000, and issued 350,000 common stock purchase warrants for
      consulting services valued at $3,407.In
      2009 the Company recorded a debt relief capital contribution of $8,458
      from its former parent corporation.Supplemental DisclosureCash
      paid for interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Cash
      paid for income taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -
 
 The
accompanying notes are an integral part of the financial
statements.
 
 
  -
26 -
  ART
DIMENSIONS, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 December
31, 2008 and 2009
 
 NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
 
 Art
Dimensions, Inc. (the “Company”), was incorporated in the State of Colorado on
January 29, 2008. The Company is was formed to provide art consulting and
marketing services and advise or represent individuals who are in the business
of creating, producing and selling art. While the Company intends to provide
consulting and marketing services in the future, the Company’s business to date
has consisted solely of selling pieces of art.
 
 Cash and cash
equivalents
 
 The
Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect 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.
 
 Income
tax
 
 The
Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences and operating loss carryforwards
and deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.
 
  -
27 -
  ART
DIMENSIONS, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
 
 Net income (loss) per
share
 
 The net
income (loss) per share is computed by dividing the net income (loss) by the
weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share. The Company’s weighted average shares of 2,000,000 and 1,961,753 as
reported on the Statements of Operations for the period from January 29, 2008
(inception) through December 31, 2008 and for the year do not include 350,000
common shares issuable under warrants outstanding as inclusion of those shares
would be anti-dilutive.
 
 Inventories
 
 Inventories,
consisting of finished art pieces and art design work in process, are stated at
the lower of cost or market (first-in, first-out method). Costs capitalized to
inventory include the purchase price of materials, transportation costs, labor
and design costs, and any other expenditures incurred in bringing art pieces to
the point of sale and putting them in saleable condition. Costs of good sold
include inventory costs for those items sold during the period.
 
 General and administrative
costs
 
 General
and administrative costs include those costs allocated to the ongoing
expenditures of running the Company’s business including in general such items
as office overhead, professional fees and management compensation.
 
 Revenue
recognition
 
 Revenue
is recognized on an accrual basis as earned under contract terms, the product or
service price to the client is fixed or determinable, and collectibility is
reasonably assured. More specifically, revenue is recognized when ordered
products are shipped, and any corresponding consulting and design services have
been rendered. Services performed under contract, which may vary in length, are
recognized on an ongoing basis over the life of the contract as services are
performed. Billings are presented to clients for time spent as opposed to being
fixed price, with billing rates and product prices agreed upon in advance of
work performance or product shipment. Any partial up-front payments received
under contract are recorded as a deposit liability until such time as services
required under the contract are performed. The Company’s consulting service
contracts generally allow either party to terminate the contract upon reasonable
notice.
 
 
  -
28 -
  
 ART
DIMENSIONS, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
 
 Property and
equipment
 
 Property
and equipment are recorded at cost and depreciated under the straight line
method over each item's estimated useful life.
 
 Financial
Instruments
 
 The
carrying value of the Company’s financial instruments, as reported in the
accompanying balance sheet, approximates fair value.
 
 Accounting
year
 
 The
Company employs a fiscal accounting year ending December 31.
 
 Stock based
compensation
 
 The
Company accounts for employee and non-employee stock awards under ASC 718,
whereby equity instruments issued to employees for services are recorded based
on the fair value of the instrument issued and those issued to non-employees are
recorded based on the fair value of the consideration received or the fair value
of the equity instrument, whichever is more reliably measurable.
 
 Products and services,
geographic areas and major customers
 
 The
Company earns revenue from the sale of art products and consulting services, but
does not separate sales into different operating segments. All sales are
domestic and to external customers. All Company sales for the period from
January 29, 2008 through December 31, 2008 and for the year 2009 of $87,861 and
$119,682 were to one customer in 2008 and two customers in 2009.
   NOTE
2. INCOME TAXES
 
 Deferred
income taxes arise from the temporary differences between financial statement
and income tax recognition of net operating losses. These loss carryovers are
limited under the Internal Revenue Code should a significant change in ownership
occur. The Company accounts for income taxes pursuant to ASC 740. At December
31, 2008 and 2009 the Company had approximately $3,200 and $6,000 in unused
federal net operating loss carryforwards, which begin to expire principally in
the year 2028. A deferred tax asset of approximately $630 and $1,900 resulting
from the loss carryforward has been offset by a 100% valuation allowance. The
change in the valuation allowance in 2008 and 2009 was approximately $630 and
$1,270.
  -
29 -
  
 ART
DIMENSIONS, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
3. NOTE AGREEMENT
 
 The
Company has entered into a note agreement with an outside party under which it
may borrow up to $250,000 at 15% per annum to fund Company operations. The
stated due date on any funds borrowed under the agreement is May 31, 2009, which
may be extended until May 31, 2010 upon payment of a 1.5% fee. The note
agreement calls for quarterly interest payments, with a rate of 24% per annum
accrued on late amounts. At December 31, 2008 and 2009 no amounts had been
borrowed by the Company under this agreement, nor is the lending party under any
binding obligation to lend to the Company.
 
 
 NOTE
4. STOCK COMPENSATION
 
 In
January 2008 the Company issued its parent corporation 2,000,000 common shares
valued at $2,000 for formation stage consulting services.
 
 Stock options and
warrants
 
 At
December 31, 2008 and 2009 the Company had stock options and warrants
outstanding as described below.
 
 Non-employee
stock options and warrants
 
 The
Company accounts for non-employee stock options and warrants under ASC 718,
whereby option and warrant costs are recorded based on the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable. Unless otherwise provided for, the
Company covers option and warrant exercises by issuing new shares.
 
 The
Company had no outstanding options or warrants at January 29, 2008. During the
period from January 29, 2008 (inception) through December 31, 2008 the Company
issued 350,000 common stock purchase warrants for $3,407 in services, allowing
the holder to purchase one share of common stock per warrant at an exercise
price of $.001, exercisable through May 13, 2013. The fair value of these
warrant grants were estimated on the date of grant using the Black-Scholes
option pricing model with the following assumptions: risk free interest rate of
3.52, dividend yield of 0%, expected life of 5 years, volatility of 142%.
Volatility was calculated using the historical, annualized standard deviation
method employing stock prices of a limited activity public entity. As there was
and is currently no trading market for the Company’s stock, it was impractical
for the Company to calculate volatility using its own share price, therefore the
Company used the stock price of a publicly traded company with limited activity
to approximate anticipated volatility of its own shares. The trading prices of a
limited activity public company was chosen to best estimate the Company’s own
stock price volatility as the Company currently conducts only limited operations
and there can be no guarantee of
 
  -
30 -
  
 ART
DIMENSIONS, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
4. STOCK COMPENSATION (Continued):
 
 expanded
operations in the future. No warrants were exercised, expired or were cancelled
during the period nor during the year ended December 31, 2009, leaving a
December 31, 2008 and 2009 balance of 350,000 non-employee stock warrants
outstanding.
 
 Employee
stock options
 
 The
Company accounts for employee stock options under ASC 718. Unless otherwise
provided for, the Company covers option exercises by issuing new shares. There
were no employee stock options issued or outstanding at December 31, 2008 and
September 30, 2009.
 
 
 NOTE
5. SPIN OFF TRANSACTION
 
 Effective
in December 2009 the Company was spun off from its parent corporation Art
Design, Inc. (the “Parent”). The Parent returned to the Company the 2,000,000
common shares in the Company held by the Parent, and the Company then
distributed to each Art Design, Inc. shareholder one common share of Art
Dimensions, Inc. for each ten shares of Art Design, Inc. held by the
shareholder. This resulted in a distribution of 1,082,060 Art Dimensions, Inc.
common shares, after which Art Dimensions, Inc. was no longer a subsidiary of
Art Design, Inc. The net change in the outstanding common shares of Art
Dimensions, Inc. after the return and redistribution of shares was a decrease of
917,940 common shares. The Company recorded paid in capital from debt relief of
$8,458 from amounts due to the Parent which the Parent forgave upon spin
off.
 
 
 NOTE
6.  GOING CONCERN
 
 The
Company has suffered a loss from operations and in all likelihood will be
required to make significant future expenditures in connection with marketing
efforts along with general administrative expenses. These conditions raise
substantial doubt about the Company’s ability to continue as a going
concern.
 
 The
Company may raise additional capital through the sale of its equity securities,
through an offering of debt securities, or through borrowings from financial
institutions. By doing so, the Company hopes through marketing efforts to
generate revenues from sales of its art consulting and marketing services.
Management believes that actions presently being taken to obtain additional
funding provide the opportunity for the Company to continue as a going
concern.
 
  
  -
31 -
  ITEM
9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
 
 We did not have any disagreements on
accounting and financial disclosures with our present accounting firm during the
reporting period.
 
 
 ITEM
9A(T). CONTROLS AND PROCEDURES.
 
 Conclusion Regarding the Effectiveness
of Disclosure Controls and Procedures
 
 Under the supervision and with the
participation of our management, including our principal executive officer and
principal financial officer, we conducted an evaluation of our disclosure
controls and procedures, as such term is defined under the Securities Exchange
Act of 1934, as amended (the Exchange Act).  Accordingly, our
principal executive officer and principal financial officer concluded that our
disclosure controls and procedures were effective as of December 31,
2009.
 
 Management’s Annual Report on Internal
Control Over Financial Reporting.
 
 Management is responsible for
establishing and maintaining adequate internal control over financial reporting
(ICFR).
 
 Our internal control over financial
reporting are designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of consolidated financial statements
for external purposes in accordance with U. S. generally accepted accounting
principles.
 
 Our management conducted an evaluation
of the effectiveness of our internal control over financial reporting based on
the framework in Internal
Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.  Based on our evaluation,
management has concluded, as of December 31, 2009, we did maintain effective
control over the financial reporting process.
 
 Inherent Limitations Over Internal
Controls
 
 Internal control over financial
reporting cannot provide absolute assurance of achieving financial reporting
objectives because of its inherent limitations, including the possibility of
human error and circumvention by collusion or overriding of controls.
Accordingly, even an effective internal control system may not prevent or detect
material misstatements on a timely basis. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.
 
 Attestation Report of the Registered
Public Accounting Firm.
 
 This annual report does not include an
attestation report of our independent registered public accounting firm
regarding internal control over financial reporting. Management's report was not
subject to attestation by our independent registered public accounting firm
pursuant to temporary rules of the SEC that permit us to provide only
management's report in this annual report.
 
 Changes in Internal Control Over
Financial Reporting.
 
 We have made no change in our internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
 
  -
32 -
  ITEM
9B. OTHER INFORMATION.
 
 Nothing to report.
 
 
 PART
III
 
 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
 
 The following tables set forth
information regarding the Company’s current executive officers and directors as
of December 31, 2009:
 
 Name:
              Age
              Position:Rebecca
      Gregarek
              52
              President
      and DirectorKathy
      Sheehan
              44
              Secretary-Treasurer
      and Director
 
 Rebecca Gregarek was appointed the President
and a Director of our Company on January 29, 2008.  She has been
involved in the interior design business in various capacities since 1975. She
has been a Director of ATDN since May, 2007.  From 2005 to the
present, she has also been an Interior Design Consultant with By Design Group,
Englewood, Colorado. From 2001-2005, she was associated with Home Builders
Flooring, LLC- HBF Designs, Denver, Colorado.  This group worked at
the Shea Design Center in Highlands Ranch, Colorado to develop custom window
Coverings and after-market sales for new home buyers.  She oversaw a
sales team in training and developing marketing and advertising
strategies.  Her group won the JD Powers Award for client satisfaction
for 2001, 2002 and 2003.  Ms. Gregarek does not hold an academic
degree but attended Arapahoe Community College, with courses in Interior
Design.  She is a Certified Window Fashion Designer and a member of
American Society of Interior Designers.  She will devote approximately
20 hours per month to carry out her responsibilities for us and approximately 10
hours per month to carry out her duties as a member of the ATDN Board of
Directors.
 
 Kathy Sheehan has been the Secretary-Treasurer,
Chief Financial Officer and a Director of our company since inception January
29, 2008. She has been the President Chief Executive Officer, Treasurer, Chief
Financial Officer and a Director of ATDN. since inception in January,
2002. She has also been the Chief Financial Officer, director and principal
owner of Accessory Warehouse, Inc., a private company in the wholesale art
framing manufacturing and home furnishing warehouse business, located in Denver,
Colorado, from 1992 to the present. She attended Front Range Community College
from 1980 to 1983. She has completed the Dale Carnegie Leadership Course. She
will devote a minimum of 10 hours per month to our operations and
approximately 40 hours per month to carry out her duties as an officer and
director of ATDN.
 
 Neither
can be considered to be an independent director. We do not presently have the
resources to hire one or more independent directors but plan to do so as soon as
we are able.
 
 Committees
of the Board of Directors
 
 Currently,
we do not have any committees of the Board of Directors.
 
 Director
and Executive Compensation
 
 No
compensation has been paid and no stock options granted to any officer or
director in the last three fiscal years.
 
  -
33 -
  Employment
Agreements
 
 We have
no written employment agreements with our executive officer.
 
 Equity
Incentive Plan
 
 We have
not adopted an equity incentive plan, and no stock options or similar
instruments have been granted to any of our officers or directors.
 
 Indemnification
and Limitation on Liability of Directors
 
 Our
Articles of Incorporation limit the liability of our directors to the fullest
extent permitted by Colorado law. Specifically, our directors will not be
personally liable to our company or any of its shareholders for monetary damages
for breach of fiduciary duty as directors, except liability for (i) any breach
of the director's duty of loyalty to the corporation or its shareholders; (ii)
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) voting for or assenting to a distribution in
violation of Colorado Revised Statutes Section 7-106-401 or the articles of
incorporation if it is established that the director did not perform his duties
in compliance with Colorado Revised Statutes Section 7-108-401, provided that
the personal liability of a director in this circumstance shall be limited to
the amount of distribution which exceeds what could have been distributed
without violation of Colorado Revised Statutes Section 7-106-401 or the articles
of incorporation; or (iv) any transaction from which the director directly or
indirectly derives an improper personal benefit. Nothing contained in the
provisions will be construed to deprive any director of his right to all
defenses ordinarily available to the director nor will anything herein be
construed to deprive any director of any right he may have for contribution from
any other director or other person.
 
 At
present, there is no pending litigation or proceeding involving any of our
directors, officers, employees or agents where indemnification will be required
or permitted. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
 
 Compliance with Section 16(a) of the
Securities Exchange Act of 1934
 
 Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires the Company’s directors and executive
officers, and persons who own more than 10% of a registered class of the
Company’s outstanding equity securities to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than 10% shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file. We have nothing to
report in this regard.
 
 Director and Executive
Compensation
 
 No compensation has been paid and no
stock options granted to any of our officers or directors in the last three
fiscal years.
 
 Code of Ethics
 
 Our board of directors has not adopted
a code of ethics but we plan to do so.
 
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  Item
11. EXECUTIVE COMPENSATION.
 
 No compensation has been paid and no
stock options granted to any of our officers or directors since our
incorporation in January, 2008.
 
 
 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
 
 The
following table sets forth, as of December 31, 2009, information regarding the
ownership of our common stock by:
 
 *
              persons
      who own more than 5% of our common
stock;
 
 *
              each
      of our directors and each of our executive officers;
  and
 
 *
              all
      directors and executive officers as a
group.
 
 We had 1,082.060 shares issued and
outstanding as of December 31, 2009. The following table reflects our stock
ownership as of that date.
 
 Name
      and Address of
                Beneficial
      Owner
              No.
      of
                Common
      Shares
              Percentage
      of
                OwnershipTodd and Kathy
      Sheehan (1)
              515,000
              37.3%3636
      S. Jason StreetEnglewood,
      CO 80110Rebecca Gregarek (2)
              625,000
              45.2%3636
      S. Jason StreetEnglewood,
      CO 80110All
      Officers and Directors as a Group
              1,140,000
              82.5%(two persons)(3)
 ___________________
 
 (1)Kathy and Todd Sheehan are husband and
wife. Kathy Sheehan owns 255,000 shares of record.  Todd Sheehan owns
245,000 shares of record The minor children of Mr. and Mrs. Sheehan own a total
of 15,000 shares of record.
 
 (2)Rebecca Gregarek owns 320,000 shares of
record. Her husband, David, owns 10,000 shares of record. Her minor child owns
5,000 shares of record.  Her adult child owns 5,000 shares of record,
for which she disclaims beneficial ownership. Her husband, David, is a part
owner of Spyglass, which has loaned funds to us and which has a warrant to
purchase 300,000 shares of our common stock, which is included in this
table.
 
 (3) Shares held by all officers
and directors as a group are also being beneficially held by other
individuals.
 
 
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35 -
  ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
 
 On June 1, 2008, an organization named
Spyglass Investment Partnership (“Spyglass ”) agreed to provide operating
capital in the form of a loan of $250,000 to cover operating expenses. The
husband of Mrs. Gregarek, our President, David Gregarek, is an owner of
Spyglass. The loan matured on May 31, 2009, and we entered into a new
loan. This loan is evidenced by an unsecured promissory note which is due
May 31, 2010.  The transaction was reviewed and approved by our
director, Mrs. Sheehan, who has no interest in Spyglass. At December 31, 2009 no amounts had
been borrowed by us under this agreement, nor is the lending party under any
binding obligation to lend to us.
 
 We issued
have a total of 300,000 warrants to Spyglass, exercisable at a price of $0.001
per share subject to adjustment, for a period of five years from the date of
issuance. These warrants were issued as an additional inducement for Spyglass to
loan us $250,000.  The warrants are subject to registration rights.
The husband of Mrs. Gregarek, our President, David Gregarek, is an owner of
Spyglass. We have not received anything else of value from Mr. Gregarek,
directly or indirectly, and have no plans to receive anything else.
 
 Rebecca
Gregarek, our President, and , David Gregarek, her spouse, and an owner of
Spyglass will own approximately 45.2% of our issued and outstanding shares of
common stock, after giving effect to the exercise of the 300,000 warrants held
by Spyglass. Todd Sheehan and Kathy Sheehan, owns and controls 515,000 shares of
stock thereby controlling approximately 37.3% of our issued and outstanding
shares of common stock. As a group, these individuals own approximately 82.5% of
our issued and outstanding shares of common stock.
 
 We use
the offices of ATDN. No expense provision for this use has been provided since
it has been determined that it is immaterial.
 
 
 ITEM
14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
 Our independent auditor, Ronald R.
Chadwick, P.C., Certified Public Accountants, billed an aggregate of $6,000 for
the year ended December 31, 2009 and for professional services rendered for the
audit of the Company's annual financial statements and review of the financial
statements included in its quarterly reports. The firm billed an aggregate of
$7,950 for the year ended December 31, 2008 and for professional services
rendered for the audit of the Company's annual financial statements and review
of the financial statements included in its quarterly reports.
 
 We do not have an audit committee and
as a result our entire board of directors performs the duties of an audit
committee. Our board of directors evaluates the scope and cost of the engagement
of an auditor before the auditor renders audit and non-audit
services.
 
 
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36 -
  ITEM
15. EXHIBITS FINANCIAL STATEMENT SCHEDULES.
 
 The
following financial information is filed as part of this report:
 
 
 (a)
              (1)
      FINANCIAL STATEMENTS(2)
      SCHEDULES(3)
      EXHIBITS. The following exhibits required by Item 601 to be filed herewith
      are incorporated by reference to previously filed
    documents:
 
 ExhibitNumber
              Description3.1*
              Articles
      of Incorporation3.2*
              Bylaws4.1*
              Warrant
      dated June 1, 2008 for Spyglass Investment Partnership4.2*
              Warrant
      dated June 1, 2008 for David Wagner & Associates,
  P.C.5.1
              Opinion
      re: Legality10.1*
              Promissory
      note dated June 1, 2008 with Spyglass Investment
    Partnership10.2*
              Promissory
      note dated June 1, 2009 with Spyglass Investment
    Partnership31.1
              Certification
      of CEO pursuant to Sec. 30232.1
              Certification
      of CEO pursuant to Sec. 90631.2
              Certification
      of CFO pursuant to Sec. 30232.2
              Certification
      of CEO pursuant to Sec. 906
 
 
 *
Previously filed
 
 (b)
              Reports
      on Form 8-K. No reports were filed under cover of Form 8-K for the fourth
      fiscal year ended December 31.
2009.
 
 
 
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37 -
  SIGNATURES
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
 
 
 Date:  March 31,
      2010
              
              Art
      Dimensions, Inc.By:
              /s/
      Rebecca
      GregarekRebecca
      Gregarek
                President
      and Chief Executive Officer
 
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934 this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
 
 
 By:
              /s/ 
      Kathy SheehanKathy
      SheehanDirector,
      Treasurer, Principal Accounting Officer, and Chief Financial
      OfficerDate:  March
      31, 2010
              By:
              /s/ 
      Rebecca GregarekRebecca
      GregarekDirector
 
 
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