UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





[X]
ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
fiscal year ended June 30, 2009





[  
] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
transition period from __________ to _________





LADYBUG
RESOURCE GROUP, INC.


(Exact
name of registrant as specified in its charter)





Nevada
                  333-153306
                  26-1973389(State
      or other jurisdiction of incorporation or organization)
                  (Commission
      file number)
                  (IRS
      Employer Identification
No.)





Molly
      S. Ramage
                Ladybug
      Resource Group, Inc.
                12703
      NE 129th
      Ct. #H102
                Kirkland, WA 98034-3246
                (Address
      of principal executive
offices)





425-821-1829(Issuer's
      telephone number)





SECURITIES
REGISTERED PURSUANT TO SECTION 12(B) OF


THE
EXCHANGE ACT:





None.





SECURITIES
REGISTERED PURSUANT TO SECTION 12(G) OF


THE
EXCHANGE ACT:





None.





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





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).   Yes [ ]  No [ ]





Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. Yes [   ] No [X]





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for
such shorter periods 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-K  contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]





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





Large
      accelerated filer [  ]
            Accelerated
      filer [  ]Non-accelerated
      filer  [  ]
            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].





The
aggregate market value of the issuer's voting and non-voting common equity held
by non-affiliates computed by reference to the closing price of such common
equity on the Over-The-Counter Bulletin Board as of December 31, 2008, the end
of the issuer’s most recently completed second fiscal quarter, was $0, as the
issuer’s common stock had not traded on the Over-The-Counter Bulletin Board as
of that date.





At
September 15, 2009, there were 11,320,000 shares of the Issuer's common stock
outstanding.





TABLE
OF CONTENTS





PART
I





ITEM
      1. BUSINESS
            4ITEM
      1A. RISK FACTORS
            8ITEM
      2. PROPERTIES
            17ITEM
      3. LEGAL PROCEEDINGS
            17ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            17





PART
II





ITEM
      5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
      ISSUER PURCHASES OF EQUITY SECURITIES
            18ITEM
      6. SELECTED FINANCIAL DATA
            19ITEM
      7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS
            19ITEM
      8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
            F-1ITEM
      9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE
            23ITEM
      9A. CONTROLS AND PROCEDURES
            23ITEM
      9B. OTHER INFORMATION
            23





PART
III




ITEM
      10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
            24ITEM
      11. EXECUTIVE COMPENSATION
            26ITEM
      12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
      RELATED STOCKHOLDER MATTERS
            27ITEM
      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
            28ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
            28





PART
IV





ITEM
      15. EXHIBITS
            30SIGNATURES
            31





PART
I





FORWARD-LOOKING
STATEMENTS





ALL
STATEMENTS IN THIS DISCUSSION THAT ARE NOT HISTORICAL ARE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED. STATEMENTS PRECEDED BY, FOLLOWED BY OR THAT OTHERWISE INCLUDE
THE WORDS "BELIEVES", "EXPECTS", "ANTICIPATES", "INTENDS", "PROJECTS",
"ESTIMATES", "PLANS", "MAY INCREASE", "MAY FLUCTUATE" AND SIMILAR EXPRESSIONS OR
FUTURE OR CONDITIONAL VERBS SUCH AS "SHOULD", "WOULD", "MAY" AND "COULD" ARE
GENERALLY FORWARD-LOOKING IN NATURE AND NOT HISTORICAL FACTS. THESE
FORWARD-LOOKING STATEMENTS WERE BASED ON VARIOUS FACTORS AND WERE DERIVED
UTILIZING NUMEROUS IMPORTANT ASSUMPTIONS AND OTHER IMPORTANT FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
STATEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE THE INFORMATION CONCERNING OUR
FUTURE FINANCIAL PERFORMANCE, BUSINESS STRATEGY, PROJECTED PLANS AND OBJECTIVES.
THESE FACTORS INCLUDE, AMONG OTHERS, THE FACTORS SET FORTH BELOW UNDER THE
HEADING "RISK FACTORS." ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS REFLECTED IN
THE FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GUARANTEE FUTURE
RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS. MOST OF THESE FACTORS
ARE DIFFICULT TO PREDICT ACCURATELY AND ARE GENERALLY BEYOND OUR CONTROL. WE ARE
UNDER NO OBLIGATION TO PUBLICLY UPDATE ANY OF THE FORWARD-LOOKING STATEMENTS TO
REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE
OCCURRENCE OF UNANTICIPATED EVENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-K,
UNLESS ANOTHER DATE IS STATED, ARE TO JUNE 30, 2009. AS USED HEREIN, THE
"COMPANY," “LADYBUG,” "WE," "US," "OUR" AND WORDS OF SIMILAR MEANING REFER TO
LADYBUG RESOURCE GROUP, INC.





ITEM
1. BUSINESS





Ladybug
was incorporated in the State of Nevada on November 27, 2007 by Molly S. Ramage.
Our business purpose is to assist in the design of websites and website
components that use specific marketing messages or themes to reach target
audiences. Our initial marketing focus is the websites of the funeral industry
in the Seattle, Washington area; however, we also currently market our service
via email and the internet across the world.





Ladybug
has limited financial resources and has not established a source of equity or
debt financing.





Operations





Ladybug
designs the message or marketing theme included on Internet Websites. We will
accept engagements for the development of entire Websites in which case we will
work with other contractors to code complex portions of the project and design
portions that are not theme or marketing related.





We refer
to our approach as “Smart Design” which is about carefully planning the work
that needs to be done before starting the project. We make sure a customer’s
website is a good fit for its business and customers. We design our websites
based on what it means for the customer. We work to:





·
            Increase
      brand recognition;





·
            Integrate
      the website with a customer’s marketing goals and strategies;
      and





·
            Enhance
      a customer’s credibility through offerings that are timely and
      relevant.


-4-


A
successful website depends on much more than just aesthetics. Delivery of a
successful product to a customer requires careful analysis of what customers
want and need for their business.





We have
developed an approach to accomplish our development efforts.

















The first
stage is the Planning and Discovery Stage. During this stage we get to know
the customer and its business to determine:





·
            The
      customer’s marketing objectives;





·
            The
      customer’s expected Website audience and the expectations of that
      audience;





·
            The
      message to be conveyed to the target audience;
  and





·
            The
      competitive landscape in the customer’s industry and the industry’s best
      practices on the Internet.




Once we
have a thorough understanding of a customer’s place in the market and its
business needs, we make recommendations of how we can best help achieve those
goals. We help a customer to make decisions about the course of the project and
how it will impact their overall marketing scheme.





The
information that we develop during this process will provide us in the Concept
Stage. During this stage we develop concepts for customer review - keeping in
mind usability, best design practices, and ease-of-use.





Designing
the look and feel of a Website is just one part of this stage; other tasks
include:





·
            Determining
      the architecture of the Website by developing a detailed site
      map.





·
            If
      the website includes technical developments, such as a shopping cart, we
      make sure that the design meets all usability
  standards.





When the
look of the Website has been developed and all of the web pages that will need
to be constructed have been identified, we start to build the Website in our
Implementation Stage. During this phase we do the following:





·
            Construct
      the navigational architecture with what we believe to be usability best
      practices;


-5-


·
            Propagate
      all pages with graphics and
content;





·
            Code
      any technical requirements into the site - such as eCommerce functions and
      interactivity; and





·
            Create
      extra features like Flash animations, dynamic menus, and multimedia
      components.





Also,
during this phase, we review all areas of the site to ensure that we have met
our internal standards of making the site extremely simple to use.





We then
enter the Deployment Stage. Prior to the Website going-live on the Internet,
we:





·
            Test
      the site to make sure it provides the best user experience
      possible;





·
            Obtain
      customer approval that we have met project requirements for usability and
      technical standards, and design
excellence;





·
            Develop
      a launch plan to promote the customer’s Website, including marketing, ads
      and email blasts; and





·
            Submit
      a customer’s Website to the appropriate search
  engines.





We will
also resell Website hosting space for the Websites of customers. In this case,
the Website is hosted on the server of a Website hosting company, but we manage
all changes to the Website.





Marketing





Ladybug
obtains customer leads from the business and personal contacts of Molly S.
Ramage and by word of mouth. Ms. Ramage works with a customer to understand the
nature of the business and the theme that the customer wants to convey. She then
works with Stephen H. Ramage, her husband, to develop the image and written
portion of the theme. In most cases, she codes the HyperText Markup Language
(“HTML”) portions of the package to be placed on the customer Website. In
certain cases, she will engage the assistance of independent subcontractors to
assist her with complex coding requirements.





Ladybug
developed its first product to be marketed to companies in the funeral business.
This product, when installed on a funeral home’s Website, makes it easy to place
obituaries on the Website. No sales to funeral businesses other than an original
participating funeral business have been made at this point.  Ladybug
has gone on to develop other cost-saving features for funeral home web sites and
has decided to delay marketing to funeral homes until an entire suite of
features has been developed and thoroughly tested. The code to support these
additional features is being developed primarily by outsourcing the work to a
third party independent contractor who expects to complete the code during the
third or fourth quarter of 2009. After an anticipated three months of testing,
Ladybug expects to begin marketing this feature to funeral business during the
first quarter of 2010. There is no contract between Ladybug and the independent
contractor.





During
the fiscal year ended June 30, 2009, the Company derived 34% of its revenues
from two (2) companies, VOF (23.95%) and Seattle Cremations (10.45%).The remaining revenue was
derived from twelve (12) separate clients.  VOF is a company involved
in political web sites.  That activity has ceased and it is unlikely
that additional revenue will be generated from VOF in the foreseeable future. We
do not have any agreements or contracts with any of the companies described
above.





Ladybug
bills for engagements after the work has been completed and accepted by the
customer.


-6-


Competition





The Web
applications markets are highly competitive and have low barriers of entry,
which could hinder our ability to successfully market our products and services.
We may not have the resources, expertise or other competitive factors to compete
successfully in the future. Because there are few substantial barriers to entry,
we expect that we will face additional competition from existing competitors and
new market entrants in the future. Some of these competitors are part-time
contractors willing to provide services at low rates to enter the industry or
earn extra money. On the other hand, many of our current and potential
competitors have greater name recognition and more established relationships in
the industry and greater resources. As a result, these competitors may be able
to:





·
            Develop
      and expand their network infrastructures and service offerings more
      rapidly;





·
            Adapt
      to new or emerging technologies and changes in customer requirements more
      quickly; and





·
            Devote
      greater resources to the marketing and sale of their services and adopt
      more aggressive pricing policies than we
can.





Current
and potential competitors in the market include Web hosting service providers,
applications hosting providers, Internet service providers, telecommunications
companies, large information technology firms and computer hardware
suppliers.





Our
ability to compete is based on our ability to meet customers through our other
contacts and to convince those prospective customers that we provide quality
personalized services at very competitive prices. We cannot provide assurances
that our strategy will succeed.





Intellectual
Property





We have
no patents or trademarks.





Employees





As of
September 15, 2009, we had three employees, including Molly S. Ramage, the
Company’s Chief Executive Officer and Director. Ms. Ramage, who is not under
contract. Stephen H. Ramage, Ms. Ramage’s husband, assists in preparing written
themes and Benjamin Ramage, Ms. Ramage’s son, provides business assistance.
Molly Ramage spends approximately 10 hours per week on Company matters and
Stephen Ramage spends approximately 5 hours per week on Company matters.
Benjamin Ramage spends varying amounts of time on Company matters, which time
does not exceed 5 hours per week on average.




Recent
Events:





On or
around August 18, 2009, the Board of Directors of and the Majority Shareholders
(defined below) of the Company, approved via a consent to action without meeting
(a) an amendment to the Company’s Bylaws (described in greater detail below);
and (b) the filing of Amended and Restated Articles of Incorporation for the
Company (the “Restated Articles”).  The Company’s “Majority
Shareholders” who provided their consent to the action without a meeting
included Molly S. Ramage, the President and Chairman of the Company, Stephen H.
Ramage, a Vice President and a Director of the Company, Benjamin Ramage, the
Vice President and a Director of the Company, and Patricia Barton, who in
aggregate voted 10,300,000 shares of the Company’s outstanding common stock,
representing approximately 91% of the Company’s outstanding common stock, which
they held as of the date of the minutes, August 18, 2009, to approve the written
consent to action without meeting.




The
Company’s Bylaws (the “Bylaws”) were amended to provide that in the event that
action is taken by written consent to action by the shareholders of the Company,
the prompt notice required to be given to the shareholders of the Company who
did not sign the written consent could be given, in the event the Company is a
reporting company which files periodic and current reports with the Securities
and Exchange Commission, by the filing of a Report on Form 8-K describing the
items approved by the shareholders in the consent to action.


-7-


The
Restated Articles affected an increase in the number of the Company’s authorized
shares of common stock to 300,000,000 shares of common stock, $0.001 par value
per share, and authorized 20,000,000 shares of preferred stock, $0.001 par value
per share (“Preferred Shares”).  Previously the Company had 75,000,000
shares of common stock, $0.001 par value per share and no shares of preferred
stock authorized.





The
Preferred Shares shall be issued from time to time in one or more series, with
such distinctive serial designations as shall be stated and expressed in the
resolution or resolutions providing for the issue of such shares from time to
time adopted by the Board of Directors; and in such resolution or resolutions
providing for the issue of shares of each particular series, the Board of
Directors is expressly authorized to fix the annual rate or rates of dividends
for the particular series; the dividend payment dates for the particular series
and the date from which dividends on all shares of such series issued prior to
the record date for the first dividend payment date shall be cumulative; the
redemption price or prices for the particular series; the voting powers for the
particular series, the rights, if any, of holders of the shares of the
particular series to convert the same into shares of any other series or class
or other securities of the corporation, with any provisions for the subsequent
adjustment of such conversion rights; and to classify or reclassify any unissued
preferred shares by fixing or altering from time to time any of the foregoing
rights, privileges and qualifications.   All the Preferred Shares
of any one series shall be identical with each other in all respects, except
that shares of any one series issued at different times may differ as to the
dates from which dividends thereon shall be cumulative.





The
Restated Articles further clarified the Articles of Incorporation to provide
that no shareholders are entitled to cumulative voting and that the Directors of
the Company have the power to amend the Bylaws of the Company, provided that the
shareholders have the power at any meeting called and held for such purpose, to
amend or repeal any such amendments to the Bylaws affected by the Board of
Directors.





The
effective filing date of the Restated Articles with the Secretary of State of
Nevada was August 31, 2009.





ITEM 1A. RISK
FACTORS.





You
should be aware that there are various risks to an investment in our common
stock. You should carefully consider these risk factors, together with all of
the other information included in this Report, before you decide to invest in
shares of our common stock.





If any of
the following risks develop into actual events, then our business, financial
condition, results of operations and/or prospects could be materially adversely
affected. If that happens, the market price of our common stock, if any, could
decline, and investors may lose all or part of their investment.





Risks
Related to the Business





Ladybug
has a very limited operating history and anticipates generating losses for the
foreseeable future.





Ladybug
was formed in November 2007. Therefore, we have insufficient operating history
upon which an evaluation of our future performance and prospects can be made.
Ladybug’s future prospects must be considered in light of the risks, expenses,
delays, problems and difficulties frequently encountered in the establishment of
a new business. An investor in our common stock must consider the risks and
difficulties frequently encountered by early stage companies operating in new
and competitive markets such as ours. These risks include:





·
            competition
      from entities that are much more established and have greater financial
      and technical resources than do we;





·
            the
      need to develop corporate
infrastructure;


-8-


·
            the
      ability to access and obtain capital when required;
  and





·
            the
      dependence upon key personnel.




Ladybug
cannot be certain that its business strategy will be successful or that it will
ever have profitable business activities or generate sustainable revenues.
Furthermore, Ladybug believes that it is probable that it will incur operating
losses and negative cash flow for the foreseeable future.





Ladybug has limited financial
resources, and its independent registered auditors’ report includes an
explanatory paragraph stating that there is substantial doubt about its ability
to continue as a going concern.





Ladybug
has very limited financial resources and had negative working capital of $65,867
and an accumulated deficit of $114,121 at June 30, 2009. Our independent
registered auditors included an explanatory paragraph in their opinion on
Ladybug’s financial statements as of June 30, 2009 that states that this lack of
resources causes substantial doubt about our ability to continue as a going
concern. No assurances can be given that we will generate sufficient revenue or
obtain necessary financing to continue as a going concern.




Ladybug
is and will continue to be completely dependent on the services of its
President, Molly S. Ramage, and its Vice President, Stephen H. Ramage, the loss
of whose services would likely cause its business operations to
cease.





Ladybug’s
current business strategy is completely dependent upon the knowledge, reputation
and business contacts of Molly S. Ramage, its President, and Stephen H. Ramage,
its Vice President. Ms. Ramage spends approximately 10 hours per week on Company
matters and Stephen Ramage spends approximately 5 hours per week on Company
matters. Ms. Ramage reduced her hours during the latter part of 2008 because of
health related issues. She cannot predict the timing or likelihood of recovering
sufficiently to be able to resume her normal work schedule.  In the event
she is unable to perform work on a full-time basis, the Company will be forced
to expend additional resources on outside consultants which will increase the
Company’s expenses.





If we
were to lose the services of either one or both for any reason, it is unlikely
that we would be able to continue conducting our business plan even if financing
is obtained.





Our
President, Molly S. Ramage, is principally responsible for the execution of our
business. She is under no contractual obligation to remain employed by us. If
she should choose to leave us for any reason before we have hired qualified
additional personnel, our operations are likely to fail. Even if we are able to
find additional personnel, it is uncertain whether we could find someone who
could develop our business along the lines with our business plan. We will fail
without Ms. Ramage or an appropriate replacement(s).





We
depend on a very limited number of customers.





During
the fiscal year ended June 30, 2009, the Company derived 34% of its revenues
from two (2) companies, VOF (23.95%) and Seattle Cremations (10.45%). The
work done for VOF related to politically oriented websites and is not expected
to result in recurring engagements. We do not have long-term agreements with any
customer and cannot predict the likelihood of getting additional engagements
from them.


-9-


We
operate in a highly competitive industry with low barriers to entry, and we may
be unable to compete successfully against existing or new
competitors.





The Web
applications markets are highly competitive and have low barriers of entry,
which could hinder our ability to successfully market our products and services.
We may not have the resources, expertise or other competitive factors to compete
successfully in the future. Because there are few substantial barriers to entry,
we expect that we will face additional competition from existing competitors and
new market entrants in the future. Some of these competitors are part-time
contractors willing to provide services at low rates to enter the industry or
earn extra money. On the other hand, many of our current and potential
competitors have greater name recognition and more established relationships in
the industry and greater resources. As a result, these competitors may be able
to:





·
            Develop
      and expand their network infrastructures and service offerings more
      rapidly;





·
            Adapt
      to new or emerging technologies and changes in customer requirements more
      quickly; and





·
            Devote
      greater resources to the marketing and sale of their services and adopt
      more aggressive pricing policies than we
can.





Current
and potential competitors in the market include Web hosting service providers,
applications hosting providers, Internet service providers, telecommunications
companies, large information technology firms and computer hardware
suppliers.





Our
success depends on our ability to maintain our professional reputation and name.
If we are unable to do so, our business would be significantly and negatively
impacted.





We depend
on our overall reputation and name recognition to secure new engagements. We
expect to obtain and are likely to continue obtaining many of our new
engagements from existing clients or from referrals by those clients. A client
who is dissatisfied with our work can adversely affect our ability to secure new
engagements. If any factor hurts our reputation, including poor performance, we
may experience difficulties in competing successfully for new engagements.
Failure to maintain our professional reputation and brand name could seriously
harm our business, financial condition and results of operations.





We
currently are likely to complete a limited number of engagements in a year. Our
revenues and operating results will fluctuate significantly from quarter to
quarter, which may cause our stock price, if one exists, to
decline.





Our current limited sources
of resources permit us to perform a limited number of engagements in any one
financial reporting period. Performance of a small number of engagements in any
one financial reporting quarter compared with the number of engagements
performed in other surrounding periods will have a significant percentage impact
on that quarter compared to the other quarters. As a result of these and other
factors, we believe that period-to-period comparisons of our operating results
will not be meaningful in the short term and that you should not rely upon our
performance in a particular period as an indication of our performance in any
future period.





We
are subject to the periodic reporting requirements of the Securities Exchange
Act of 1934, as amended, and will incur audit fees and legal fees in connection
with the preparation of such reports. These additional costs could reduce or
eliminate our ability to earn a profit.




We are
required to file periodic reports with the Securities and Exchange Commission
(the “SEC”) pursuant to the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder. In order to comply with these
requirements, our independent registered public accounting firm has to review
our financial statements on a quarterly basis and audit our financial statements
on an annual basis. Moreover, our legal counsel has to review and assist in the
preparation of such reports. The costs charged by these professionals for such
services cannot be accurately predicted because factors such as the number and
type of transactions that we engage in and the complexity of our reports cannot
be determined at this time and will have a major affect on the amount of time to
be spent by our auditors and attorneys. However, the incurrence of such costs
will obviously be an expense to our operations and thus have a negative effect
on our ability to meet our overhead requirements and earn a profit. We may be
exposed to potential risks resulting from new requirements under
Section 404 of the Sarbanes-Oxley Act of 2002. If we cannot provide
reliable financial reports or prevent fraud, our business and operating results
could be harmed, investors could lose confidence in our reported financial
information, and the trading price of our common stock, if a market ever
develops, could drop significantly.


-10-


Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required,
beginning with our fiscal year ending June 30, 2010, to include in our annual
report our assessment of the effectiveness of our internal control over
financial reporting as of the end of the fiscal year ended June 30, 2010.
Furthermore, in the following fiscal year, our independent registered public
accounting firm will be required to report separately on whether it believes
that we have maintained, in all material respects, effective internal control
over financial reporting. We have not yet completed our assessment of the
effectiveness of our internal control over financial reporting. We expect to
incur additional expenses and diversion of management’s time as a result of
performing the system and process evaluation, testing and remediation required
in order to comply with the management certification and auditor attestation
requirements.





We
currently have only three employees. We may be unable to afford the cost of
increasing our staff or engaging outside consultants or professionals to
overcome our lack of employees. During the course of our testing, we may
identify other deficiencies that we may not be able to remediate in time to meet
the deadline imposed by the Sarbanes-Oxley Act for compliance with the
requirements of Section 404. In addition, if we fail to achieve and maintain
adequate internal controls, as such standards are modified, supplemented or
amended from time to time, we may not be able to ensure that we can conclude on
an ongoing basis that we have effective internal controls over financial
reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover,
effective internal controls, particularly those related to revenue recognition,
are necessary for us to produce reliable financial reports and are important to
help prevent financial fraud. If we cannot provide reliable financial reports or
prevent fraud, our business and operating results could be harmed, investors
could lose confidence in our reported financial information, and the trading
price of our common stock, if a market ever develops, could drop
significantly.





Molly
S. Ramage, our Chief Executive Officer, and Benjamin Ramage, our Chief Financial
Officer, have no meaningful accounting or financial reporting education or
experience and, accordingly, our ability to meet Exchange Act reporting
requirements on a timely basis will be dependent to a significant degree upon
others.





Molly S.
Ramage, our Chief Executive Officer and chief accounting officer, and Benjamin
Ramage, our Chief Financial Officer, have no meaningful financial reporting
education or experience. They are heavily dependent on advisors and consultants.
As such, there is risk about our ability to comply with all financial reporting
requirements accurately and on a timely basis.





Our
internal controls may be inadequate, which could cause our financial reporting
to be unreliable and lead to misinformation being disseminated to the
public.





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. As defined in the Securities Exchange Act of
1934, as amended, Rule 13a-15(f), internal control over financial reporting is a
process designed by, or under the supervision of, the principal executive and
principal financial officer and effected by the board of directors, management
and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that: (i) pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the Company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and/or directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's assets that could have a
material effect on the financial statements. Our internal controls may be
inadequate or ineffective, which could cause our financial reporting to be
unreliable and lead to misinformation being disseminated to the public.
Investors relying upon this misinformation may make an uninformed investment
decision.


-11-


Having
only three Directors limits our ability to establish effective independent
corporate governance procedures and increases the control of our
President/Director.





We have
only three Directors, Molly Ramage, Stephen Ramage and Benjamin Ramage, who are
also executive officers. Further, Molly Ramage and Stephen Ramage are married to
each other, and Benjamin Ramage is their son. Accordingly, we cannot establish
Board committees comprised of independent members to oversee functions like
compensation or audit issues. In addition, a tie vote of Board members is
decided in favor of the Chairman, Molly Ramage, which gives her significant
control over all corporate issues.





Until we
have a larger Board of Directors that would include some independent members, if
ever, there will be limited oversight of our President’s decisions and
activities and little ability for minority shareholders to challenge or reverse
those activities and decisions, even if they are not in the best interests of
minority shareholders.





Risks
Related to Our Common Stock





Shareholders
may be diluted significantly through our efforts to obtain financing and satisfy
obligations through the issuance of additional shares of our common
stock.





We have
no committed source of financing. Wherever possible, our Board of Directors will
attempt to use non-cash consideration to satisfy obligations. In many instances,
we believe that the non-cash consideration will consist of restricted shares of
our common stock. Our Board of Directors has authority, without action or vote
of the shareholders, to issue all or part of the authorized but unissued common
shares. We have authorized 300,000,000 shares of common stock, and as of
September 15, 2009, 288,680,000 shares remain unissued. In addition, if a
trading market develops for our common stock, we may attempt to raise capital by
selling shares of our common stock, possibly at a discount to market. These
actions will result in dilution of the ownership interests of existing
shareholders, may further dilute common stock book value, and that dilution may
be material. Such issuances may also serve to enhance existing management’s
ability to maintain control of Ladybugbecause
the shares may be issued to parties or entities committed to supporting existing
management.





Nevada
law and our Articles of Incorporation authorize us to issue shares of stock,
which shares may cause substantial dilution to our existing
shareholders.




We have
authorized capital stock consisting of 300,000,000 shares of common stock,
$0.001 par value per share and 20,000,000 shares of preferred stock, $0.001 par
value per share (“Preferred Stock”). As of the date of this Prospectus, we have
11,320,000 shares of common stock issued and outstanding and no shares of
Preferred Stock issued and outstanding. As a result, our Board of Directors
has the ability to issue a large number of additional shares of common stock
without shareholder approval, which if issued could cause substantial dilution
to our then shareholders. Additionally, shares of Preferred Stock may be issued
by our Board of Directors without shareholder approval with voting powers, and
such preferences and relative, participating, optional or other special rights
and powers as determined by our Board of Directors, which may be greater than
the shares of common stock currently outstanding. As a result, shares of
Preferred Stock may be issued by our Board of Directors which cause the holders
to have super majority voting power over our shares, provide the holders of the
Preferred Stock the right to convert the shares of Preferred Stock they hold
into shares of our common stock, which may cause substantial dilution to our
then common stock shareholders and/or have other rights and preferences greater
than those of our common stock shareholders. Investors should keep in mind that
the Board of Directors has the authority to issue additional shares of common
stock and Preferred Stock, which could cause substantial dilution to our
existing shareholders. Additionally, the dilutive effect of any Preferred
Stock, which we may issue may be exacerbated given the fact that such Preferred
Stock may have super majority voting rights and/or other rights or preferences
which could provide the preferred shareholders with voting control over us
subsequent to this offering and/or give those holders the power to prevent or
cause a change in control.  As a result, the issuance of shares of
common stock and/or Preferred Stock may cause the value of our securities to
decrease and/or become worthless.


-12-


Our Articles of Incorporation
provide for indemnification of officers and Directors at our expense and limit
their liability. These provisions may result in a major cost to us and hurt the
interests of our shareholders because corporate resources may be expended for
the benefit of officers and/or Directors.





Our
Articles of Incorporation and applicable Nevada law provide for the
indemnification of our Directors, officers, employees, and agents, under certain
circumstances, against attorney's fees and other expenses incurred by them in
any litigation to which they become a party arising from their association with
or activities on our behalf. We will also bear the expenses of such litigation
for any of our Directors, officers, employees, or agents, upon such person's
written promise to repay us even if it is ultimately determined that any such
person shall not have been entitled to indemnification. This indemnification
policy could result in substantial expenditures by us that we may be unable to
recoup.





We have
been advised that, in the opinion of the SEC, indemnification for liabilities
arising under federal securities laws is against public policy as expressed in
the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the
event that a claim for indemnification for liabilities arising under federal
securities laws, other than the payment by us of expenses incurred or paid by a
Director, officer or controlling person in the successful defense of any action,
suit or proceeding, is asserted by a Director, officer or controlling person in
connection with the securities being registered, we will (unless in the opinion
of our counsel, the matter has been settled by controlling precedent) submit to
a court of appropriate jurisdiction, the question whether indemnification by us
is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue. The legal process relating to this
matter if it were to occur is likely to be very costly and may result in us
receiving negative publicity, eitherof which factors is
likely to materially reduce the market and price for our shares, if such a
market ever develops.





Currently,
there is no established public market for our securities, and there can be no
assurances that any established public market will ever develop or that our
common stock will be quoted for trading, and even if quoted, it is likely to be
subject to significant price fluctuations.





There has
not been any established trading market for our common stock. The Financial
Industry Regulatory Authority ("FINRA") has assigned us a trading symbol
(“LBRG”) which enables a market maker to quote the shares of our common stock on
the OTCBB maintained by FINRA.  There can be no assurances as to
whether:





1.
            any
      market for our shares will ever
develop;





2.
            the
      prices at which our common stock will trade;
or





3.
            the
      extent to which investor interest in us will lead to the development of an
      active, liquid trading market.  Active trading markets generally
      result in lower price volatility and more efficient execution of buy and
      sell orders for investors.





In
addition, in the event a market develops, our common stock is unlikely to be
followed by any market analysts, and there may be few institutions acting as
market makers for our common stock. Either of these factors could adversely
affect the liquidity and trading price of our common stock. Until an orderly
market develops in our common stock, if ever, the price at which it trades is
likely to fluctuate significantly. Prices for our common stock will be
determined in the marketplace and may be influenced by many factors, including
the depth and liquidity of the market for shares of our common stock,
developments affecting our business, including the impact of the factors
referred to elsewhere in these Risk Factors, investor perception of usand
general economic and market conditions. No assurances can be given that an
orderly or liquid market will ever develop for the shares of our common
stock.





Because
of the anticipated low price of the securities being registered, many brokerage
firms may not be willing to effect transactions in these securities. Purchasers
of our securities should be aware that any market that develops in our stock
will be subject to the penny stock restrictions.


-13-


Any
market that develops in shares of our common stock will be subject to the penny
stock regulations and restrictions pertaining to low priced stocks that will
create a lack of liquidity and make trading difficult or
impossible.





The
trading of our securities, if any, will likely be on the OTCBB as maintained by
FINRA. As a result, an investor may find it difficult to dispose of, or to
obtain accurate quotations as to the price of our securities.





Rule
3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a
"penny stock," for purposes relevant to us, as any equity security that has a
minimum bid price of less than $4.00 per share or with an exercise price of less
than $4.00 per share, subject to a limited number of exceptions which are not
available to us. It is likely that our shares will be considered to be penny
stocks for the immediately foreseeable future. This classification severely and
adversely affects any market liquidity for our common stock.





For any
transaction involving a penny stock, unless exempt, the penny stock rules
require that a broker or dealer approve a person's account for transactions in
penny stocks and the broker or dealer receive from the investor a written
agreement to the transaction setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must obtain financial
information and investment experience and objectives of the person and make a
reasonable determination that the transactions in penny stocks are suitable for
that person and that that person has sufficient knowledge and experience in
financial matters to be capable of evaluating the risks of transactions in penny
stocks.





The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the SEC relating to the penny stock market,
which, in highlight form, sets forth:





·
            the
      basis on which the broker or dealer made the suitability determination,
      and





·
            that
      the broker or dealer received a signed, written agreement from the
      investor prior to the transaction.





Disclosure
also has to be made about the risks of investing in penny stock in both public
offerings and in secondary trading and commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.





Because
of these regulations, broker-dealers may not wish to engage in the
above-referenced necessary paperwork and disclosures and/or may encounter
difficulties in their attempt to sell shares of our common stock, which may
affect the ability of selling shareholders or other holders to sell their shares
in any secondary market. Our common stock’s penny stock status may also have the
effect of reducing the level of trading activity in any secondary market. These
additional sales practice and disclosure requirements could impede the sale of
our securities, if and when our securities become publicly traded. In addition,
the liquidity for our securities may decrease, with a corresponding decrease in
the price of our securities. Our shares, in all probability, if they trade at
all, will be subject to such penny stock rules for the foreseeable future, and
our shareholders will, in all likelihood, find it difficult to sell their
securities.




The
market for penny stocks has experienced numerous frauds and abuses that could
adversely impact investors in our stock.





Company
management believes that the market for penny stocks has suffered from patterns
of fraud and abuse. Such patterns include:


-14-


·
            Control
      of the market for the security by one or a few broker-dealers that are
      often related to the promoter or
issuer;





·
            Manipulation
      of prices through prearranged matching of purchases and sales and false
      and misleading press releases;





·
            "Boiler
      room" practices involving high pressure sales tactics and unrealistic
      price projections by sales persons;





·
            Excessive
      and undisclosed bid-ask differentials and markups by selling
      broker-dealers; and





·
            Wholesale
      dumping of the same securities by promoters and broker-dealers after
      prices have been manipulated to a desired level, along with the inevitable
      collapse of those prices with consequent investor
  losses.





State
securities laws may limit secondary trading, which may restrict the states in
which and conditions under which you can sell shares.





Secondary
trading in our common stock will not be possible in any state until the common
stock is qualified for sale under the applicable securities laws of the state or
there is confirmation that an exemption, such as listing in certain recognized
securities manuals, is available for secondary trading in the state. If we fail
to register or qualify, or to obtain or verify an exemption for the secondary
trading of, the common stock in any particular state, the common stock could not
be offered or sold to, or purchased by, a resident of that state. In the event
that a significant number of states refuse to permit secondary trading in our
common stock, the liquidity for the common stock could be significantly
impacted.





The
ability of our President and majority shareholders to control our business may
limit or eliminate minority shareholders’ ability to influence corporate
affairs.





Our
President and four other principal shareholders beneficially own 95.76% of our
outstanding common stock. Because of this level of beneficial stock ownership,
our President and four other principal shareholders will be in a position to
continue to elect our Board of Directors, decide all matters requiring
stockholder approval and determine our policies. The interests of our President
and four other principal shareholders may differ from the interests of other
shareholders with respect to the issuance of shares, business transactions with
or sales to other companies, selection of officers and Directors and other
business decisions. The minority shareholders would have no way of overriding
decisions made by our President and three other principal shareholders. This
level of control may also have an adverse impact on the market value of our
shares because our President and three other principal stockholders may
institute or undertake transactions, policies or programs that result in losses,
may not take any steps to increase our visibility in the financial community
and/or may sell
sufficient numbers of shares to significantly decrease our price per
share.





Future
sales of common stock by our existing shareholders could adversely affect our
stock price.





As of
September 15, 2009, Ladybug has 11,320,000 issued and outstanding shares of
common stock. Sales of substantial amounts of common stock in the public market,
or the perception that such sales will occur, could have a materially negative
effect on the market price of our common stock if a market ever develops. This
problem would be exacerbated if we issue common stock in exchange for services
or in connection with fund raising transactions.





We
do not expect to pay cash dividends in the foreseeable future





We have
never paid cash dividends on our common stock. We do not expect to pay cash
dividends on our common stock at any time in the foreseeable future. The future
payment of dividends directly depends upon our future earnings, capital
requirements, financial requirements and other factors that our Board of
Directors will consider. Since we do not anticipate paying cash dividends on our
common stock, return on your investment, if any, will depend solely on an
increase, if any, in the market value of our common stock.


-15-


Because
we are not subject to compliance with rules requiring the adoption of certain
corporate governance measures, our stockholders have limited protections against
interested director transactions, conflicts of interest and similar
matters.





The
Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the
SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a
result of Sarbanes-Oxley, require the implementation of various measures
relating to corporate governance. These measures are designed to enhance the
integrity of corporate management and the securities markets and apply to
securities that are listed on those exchanges or the Nasdaq Stock Market.
Because we are not presently required to comply with many of the corporate
governance provisions and because we chose to avoid incurring the substantial
additional costs associated with such compliance any sooner than legally
required, we have not yet adopted these measures.





Because
our Directors are not independent directors, we do not currently have
independent audit or compensation committees. As a result, our Directors have
the ability to, among other things, determine their own level of compensation.
Until we comply with such corporate governance measures, regardless of whether
such compliance is required, the absence of such standards of corporate
governance may leave our stockholders without protections against interested
director transactions, conflicts of interest, if any, and similar matters and
any potential investors may be reluctant to provide us with funds necessary to
expand our operations.





We intend
to comply with all corporate governance measures relating to director
independence as and when required. However, we may find it very difficult or be
unable to attract and retain qualified officers, Directors and members of board
committees required to provide for our effective management as a result of the
Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has
resulted in a series of rules and regulations by the SEC that increase
responsibilities and liabilities of directors and executive officers. The
perceived increased personal risk associated with these recent changes may make
it more costly or deter qualified individuals from accepting these
roles.





We
are required to remain current in our filings with the SEC and our securities
will not be eligible for quotation if we are not current in our filings with the
SEC.





As our
shares are currently quoted on the OTCBB, we are required to remain current
in our filings with the SEC in order for shares of our common stock to remain
eligible for quotation on the OTCBB. In the event that we become delinquent in
our required quarterly and annual filings with the SEC, quotation of our common
stock will be terminated following a 30 day grace period if we do not make our
required filing during that time. If our shares are not eligible for quotation
on the OTCBB, investors in our common stock may find it difficult to sell their
shares.





Additionally,
pursuant to OTCBB rules relating to the timely filing of periodic reports with
the SEC, any OTCBB issuer which fails to file a periodic report (Form 10-Q's or
10-K's) by the due date of such report (not withstanding any extension granted
to the issuer by the filing of a Form 12b-25), three (3) times during any
twenty-four (24) month period is automatically de-listed from the OTCBB. Such
removed issuer would not be re-eligible to be listed on the OTCBB for a period
of one-year, during which time any subsequent late filing would reset the
one-year period of de-listing. Furthermore, any issuer delisted from the OTCBB
more than one (1) time in any twenty-four (24) month period for failure to file
a periodic report would be ineligible to be re-listed for a period of one-year
year, during which time any subsequent late filing would reset the one-year
period of de-listing.  As such, if we are late in our filings three times
in any twenty-four (24) month period and are de-listed from the OTCBB, or if our
securities are de-listed from the OTCBB two times in any twenty-four (24) month
period for failure to file a periodic report, our securities may become
worthless and we may be forced to curtail or abandon our business
plan.


-16-


You
may have limited access to information regarding our business because our
obligations to file periodic reports with the SEC could be automatically
suspended under certain circumstances.





As of the
effectiveness date of our Registration Statement, September 19, 2008, we are
required to file periodic reports with the SEC which are immediately available
to the public for inspection and copying. Except during the year that our
Registration Statement became effective, these reporting obligations may (in our
discretion) be automatically suspended under Section 15(d) of the Securities
Exchange Act of 1934 if we have less than 300 shareholders. If this occurs after
the year in which our Registration Statement became effective, we will no longer
be obligated to file periodic reports with the SEC and your access to our
business information would then be even more restricted. Although we are
currently required to deliver periodic reports to security holders, we will not
be required to furnish proxy statements to security holders and our Directors,
officers and principal beneficial owners will not be required to report their
beneficial ownership of securities to the SEC pursuant to Section 16 of the
Securities Exchange Act of 1934, as amended, until we have both 500 or more
security holders and greater than $10 million in assets. This means that your
access to information regarding our business will be limited.





For
all of the foregoing reasons and others set forth herein, an investment in our
securities involves a high degree of risk.





ITEM
2. PROPERTIES





We
currently operate out of office space located at 12703 NE 129th Ct. #H102,
Kirkland, Washington 98034-3246 provided to us by our President at no cost. Ms.
Ramage incurs no incremental costs as a result of our using the space which is
in her home. Therefore, she does not charge us for its use. There is no written
lease agreement.





ITEM
3. LEGAL PROCEEDINGS





From time
to time, we may become party to litigation or other legal proceedings that we
consider to be a part of the ordinary course of our business. We are not
currently involved in legal proceedings that could reasonably be expected to
have a material adverse effect on our business, prospects, financial condition
or results of operations. We may become involved in material legal proceedings
in the future.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





No
matters were submitted to a vote of security holders during the fiscal quarter
ended June 30, 2009.





Subsequent
to the quarter ended June 30, 2009, and on or around August 18, 2009, the Board
of Directors of and the Majority Shareholders (defined below) of the Company
approved via a consent to action without meeting (a) an amendment to the
Company’s Bylaws (described in greater detail above under “Recent Events”); and
(b) the filing of Amended and Restated Articles of Incorporation for the Company
(the “Restated Articles”).  The Company’s “Majority Shareholders” who
provided their consent to the action without a meeting included Molly S. Ramage,
the President and Chairman of the Company, Stephen H. Ramage, a Vice President
and a Director of the Company, Benjamin Ramage, the Vice President and a
Director of the Company, and Patricia Barton, who in aggregate voted 10,300,000
shares of the Company’s outstanding common stock, representing approximately 91%
of the Company’s outstanding common stock, which they held as of the date of the
consent, August 18, 2009, to approve the written consent to action without
meeting.


-17-


PART
II





ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES





The
Company's Common Stock has been quoted on the Over-the-Counter Bulletin Board
under the symbol "LBRG" since
approximately December 23, 2008; however, none of our shares have traded to
date. As of September 15, 2009, the Company had 11,320,000 shares of Common
Stock outstanding held by approximately 41 shareholders of record.





DESCRIPTION
OF CAPITAL STOCK





We have
authorized capital stock consisting of 300,000,000 shares of common stock,
$0.001 par value per share, and 20,000,000 shares of preferred stock, $0.001 par
value per share (“Preferred Shares”).  As of the filing of this
report we have 11,320,000 shares of Common stock and no shares of Preferred
Stock issued and outstanding.





Common
Stock





The
holders of outstanding shares of Common Stock are entitled to receive dividends
out of assets or funds legally available for the payment of dividends of such
times and in such amounts as the board from time to time may
determine.  Holders of Common Stock are entitled to one vote for each
share held on all matters submitted to a vote of shareholders.  There
is no cumulative voting of the election of Directors then standing for
election.  The Common Stock is not entitled to pre-emptive rights and
is not subject to conversion or redemption.  Upon liquidation,
dissolution or winding up of our company, the assets legally available for
distribution to stockholders are distributable ratably among the holders of the
Common Stock after payment of liquidation preferences, if any, on any
outstanding payment of other claims of creditors.  Each outstanding
share of Common Stock is duly and validly issued, fully paid and
non-assessable.





Preferred
Stock





The
Preferred Shares shall be issued from time to time in one or more series, with
such distinctive serial designations as shall be stated and expressed in the
resolution or resolutions providing for the issue of such shares from time to
time adopted by the Board of Directors; and in such resolution or resolutions
providing for the issue of shares of each particular series, the Board of
Directors is expressly authorized to fix the annual rate or rates of dividends
for the particular series; the dividend payment dates for the particular series
and the date from which dividends on all shares of such series issued prior to
the record date for the first dividend payment date shall be cumulative; the
redemption price or prices for the particular series; the voting powers for the
particular series, the rights, if any, of holders of the shares of the
particular series to convert the same into shares of any other series or class
or other securities of the corporation, with any provisions for the subsequent
adjustment of such conversion rights; and to classify or reclassify any unissued
preferred shares by fixing or altering from time to time any of the foregoing
rights, privileges and qualifications.   All the Preferred Shares
of any one series shall be identical with each other in all respects, except
that shares of any one series issued at different times may differ as to the
dates from which dividends thereon shall be cumulative.


-18-


ITEM
6. SELECTED FINANCIAL DATA





Not
required pursuant to Item 301 of Regulation S-K.





ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





The
following discussion should be read in conjunction with our financial
statements.





RESULTS
OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2009 COMPARED TO THE YEAR ENDED JUNE
30, 2008




We had total revenue of $52,186 for the
year ended June 30, 2009, compared to total revenues of $22,850 for the period
from November 27, 2007 (inception) through June 30, 2008, which represented an
increase in revenue of $29,336 or 128% from the prior
period.  Revenues increased due to approximately doubling the number
of clients we had during the prior period, including a one-time client involved
in politically oriented web sites. That client, VOF, constituted approximately
24% of our annual revenue for the fiscal year ended June 30, 2009.





We had total expenses of $148,274 for
the year ended June 30, 2009, compared to total expenses of $40,833 for the
period from November 27, 2007 (inception) through June 30, 2008, an increase in
total expenses of $107,441 or 263% from the prior period.  The reason
for the increase in expenses was due to a $63,043 or 383% increase in
professional fees, to $79,483 for the year ended June 30, 2009, compared to
$16,440 for the period from November 27, 2007 (inception) through June 30, 2008,
due to expenses associated with becoming a publicly-traded company and a $50,649
increase in office and subcontractor fees to $50,792 for the year ended June 30,
2009, compared to $143 for the period from November 27, 2007 (inception) through
June 30, 2008, due to health related issues of our President, offset by a $6,300
decrease in organizational expenses to no expenses for the year ended June 30,
2009, compared to $6,300 in total organizational expenses for the period from
November 27, 2007 (inception) through June 30, 2008.





We had a net loss of $96,088 for the
year ended June 30, 2009, compared to a net loss of $18,033 for the period from
November 27, 2007 (inception) through June 30, 2008, an increase in net loss of
$78,055 or 433%, which increase in net loss was primarily due to the increase in
professional fees and office and subcontractor costs.





LIQUIDITY
AND CAPITAL RESOURCES





We had total assets of $12,449 as of
June 30, 2009, consisting of total current assets totaling $9,063, including
cash of $8,213 and accounts receivable of $850, and long-term assets including
computer equipment, net of accumulated depreciation of $3,386.





We had total liabilities, consisting
solely of current liabilities representing accounts payable and accrued
professional fees of $74,930.





We had negative working capital of
$65,867 and an accumulated deficit of $114,121 as of June 30, 2009.





We had total cash used in operating
activities of $14,352 for the year ended June 30, 2009, which was mainly due to
$96,088 of net loss offset by $18,000 of contribution of services and $62,930 of
increase in accrued expenses.





We had net cash used in investing
activities of $2,616 for the year ended June 30, 2009, which was solely due to
the purchase of equipment.





Ladybug
does not have any credit facilities or other commitments for debt or equity
financing. No assurances can be given that advances when needed will be
available. We do not believe that we need funding to cover current operations
because we do not have a capital intensive business plan and can also use
independent contractors to assist in many projects. We will use funding, if
obtained, to cover the salary of our President and to pay for marketing
materials and proposal efforts. We currently have no formal salary arrangements
with Ms. Ramage. While no annual salary or length of employment has been
determined to date, we anticipate providing an annual salary not to exceed
$100,000 commencing after the successful completion of several engagements. The
salary will be paid out of revenues, if any, or accrued if sufficient cash is
not available to make payments.The accrual will begin
after we generate annual revenue of at least $100,000 per year.


-19-


We may
seek private capital at some time in the future. Such funding, which we
anticipate would not exceed $100,000, will, if obtained, be used to pay salaries
and for the production of marketing materials. However, we will conduct
operations and seek client engagements even if no funding is obtained. The
private capital will be sought from former business associates of our President
or private investors referred to us by those associates. If a market for our
shares ever develops, of which there can be no assurances and which is unlikely
in the foreseeable future, we will use shares to compensate
employees/consultants wherever possible. To date, we have not sought any funding
source and have not authorized any person or entity to seek out funding on our
behalf.





We are
subject to the periodic reporting requirements of the Securities Exchange Act of
1934, as amended and as such will incur ongoing expenses associated with
professional fees for accounting, legal and a host of other expenses for annual
reports and proxy statements. We estimate that these costs may range up to
$50,000 per year for the next few years and will be higher if our business
volume and activity increases but lower during the first year of being public
because our overall business volume will be lower, and we will not yet be
subject to the requirements of Section 404 of the Sarbanes-Oxley Act of
2002. These obligations will reduce our ability and resources to fund other
aspects of our business. We hope to be able to use our status as a public
company to increase our ability to use noncash means of settling obligations and
compensating independent contractors who provide services for us, although there
can be no assurances that we will be successful in any of those efforts. We will
reduce the compensation levels paid to management if there is insufficient cash
generated from operations to satisfy these costs.





To meet
commitments that become due more than 12 months in the future, we will have to
obtain engagements in sufficient number and at sufficient levels of
profitability, of which there can be no assurance. There does not currently
appear to be any other viable source of long-term financing except that
management may consider various sources of debt and/or equity financing if the
same financing can be obtained on terms deemed reasonable to
management.







Recently
Issued Accounting Pronouncements





In June
2003, the Securities and Exchange Commission (“SEC”) adopted final rules under
Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC
Release No. 33-8934 on June 26, 2008. Commencing with the Company’s Annual
Report for the fiscal year ended March 31, 2010, the Company is required to
include a report of management on the Company’s internal control over financial
reporting. The internal control report must include a statement of management’s
responsibility for establishing and maintaining adequate internal control over
financial reporting for the Company; of management’s assessment of the
effectiveness of the Company’s internal control over financial reporting as of
year end; of the framework used by management to evaluate the effectiveness of
the Company’s internal control over financial reporting; and that the Company’s
independent accounting firm has issued an attestation report on management’s
assessment of the Company’s internal control over financial reporting, which
report is also required to be filed as part of the Annual Report on Form
10-K.





In
April 2009, the Financial Accounting Standards Board (FASB) issued FASB
Staff Position (FSP) Financial Accounting Standard (FAS) 157-4 “Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly”.
Based on the guidance, if an entity determines that the level of activity for an
asset or liability has significantly decreased and that a transaction is not
orderly, further analysis of transactions or quoted prices is needed, and a
significant adjustment to the transaction or quoted prices may be necessary to
estimate fair value in accordance with Statement of Financial Accounting
Standards (SFAS) No. 157 “Fair Value Measurements”. This FSP is to be
applied prospectively and is effective for interim and annual periods ending
after June 15, 2009 with early adoption permitted for periods ending after
March 15, 2009. The company will adopt this FSP for its quarter ending
June 30, 2009. There is no expected impact on the financial
statements.


-20-


In
April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board
(APB) 28-1 “Interim Disclosures about Fair Value of Financial Instruments”. The
FSP amends SFAS No. 107 “Disclosures about Fair Value of Financial
Instruments” to require an entity to provide disclosures about fair value of
financial instruments in interim financial information. This FSP is to be
applied prospectively and is effective for interim and annual periods ending
after June 15, 2009 with early adoption permitted for periods ending after
March 15, 2009. The company will include the required disclosures in its
quarter ending June 30, 2009.





In
April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful
Life of Intangible Assets”. The FSP states that in developing assumptions about
renewal or extension options used to determine the useful life of an intangible
asset, an entity needs to consider its own historical experience adjusted for
entity-specific factors. In the absence of that experience, an entity shall
consider the assumptions that market participants would use about renewal or
extension options. This FSP is to be applied to intangible assets acquired after
January 1, 2009. The adoption of this FSP did not have an impact on the
financial statements.





In
June 2009, the FASB approved the “FASB Accounting Standards Codification”
(the “Codification”) as the single source of authoritative nongovernmental U.S.
GAAP to be launched on July 1, 2009. The Codification does not change
current U.S. GAAP, but is intended to simplify user access to all authoritative
U.S. GAAP by providing all the authoritative literature related to a particular
topic in one place. All existing accounting standard documents will be
superseded and all other accounting literature not included in the Codification
will be considered nonauthoritative. The Codification is effective for interim
and annual periods ending after September 15, 2009. The Codification is
effective for the Company in the interim period ending September 30, 2009
and the Company does not expect the adoption to have a material impact on its
consolidated financial position, results of operations or cash
flows.





Management
does not believe that any other recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying consolidated financial statements.





Critical
Accounting Policies





The
preparation of financial statements and related notes requires us to make
judgments, estimates, and assumptions that affect the reported amounts of
assets, liabilities, revenue and expenses, and related disclosure of contingent
assets and liabilities.




An
accounting policy is considered to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used, or changes in the accounting estimates that are reasonably
likely to occur periodically, could materially impact the financial
statements.





Financial
Reporting Release No. 60 requires all companies to include a discussion of
critical accounting policies or methods used in the preparation of financial
statements. There are no critical policies or decisions that rely on judgments
that are based on assumptions about matters that are highly uncertain at the
time the estimate is made. Note 2to the financial
statements included herein, includes a summary of the significant accounting
policies and methods used in the preparation of our financial
statements.


-21-


Seasonality





We do not yet have a basis to
determine whether our business will be seasonal.





Off-Balance
Sheet Arrangements





We have
no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of
Regulation S-K, obligations under any guarantee contracts or contingent
obligations. We also have no other commitments, other than the costs of being a
public company that will increase our operating costs or cash requirements in
the future.










-22-


ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA








LADYBUG
RESOURCE GROUP, INC.
 
 June
30, 2009 and 2008
 
 INDEX
TO FINANCIAL STATEMENTS
 
 Contents
                Page(s)Report
      of Independent Registered Public Accounting Firm
                F-2Balance
      Sheets at June 30, 2009 and 2008
                F-3Statement
      of Operations for the Fiscal Year ended June 30, 2009 and for
      thePeriod
      from November 27, 2007 (inception) through June 30, 2008
                F-4Statement
      of Stockholders’ Equity (Deficit) from November 27, 2007(inception)
      through June 30, 2009
                F-5Statement
      of Cash Flows for Fiscal Year ended June 30, 2009 and for
    thePeriod
      from November 27, 2007 (inception) through June 30, 2008
                F-6Notes
      to the Financial Statements
                F-7
 
 
 F-1
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To the
Board of Directors and Stockholders of
 Ladybug
Resource Group, Inc.
 Kirkland,
Washington
 
 
 We have
audited the accompanying balance sheets of Ladybug Resource Group, Inc. (the
“Company”) as of June 30, 2009 and 2008, and the related statements of
operations, stockholders' equity (deficit), and cash flows for the fiscal year
ended June 30, 2009 and for the period from November 27, 2007 (inception)
through June 30, 2008. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of June 30, 2009 and
2008 and the results of its operations and its cash flows for the fiscal year
ended June 30, 2009 and for the period from November 27, 2007 (inception)
through June 30, 2008 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 3 to the financial
statements, the Company has negative working capital, net losses from
operations, negative cash flows from operations with very limited financial
resources and no sources of committed debt or equity financing, which raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding those matters are also described in Note 3. The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classifications of liabilities that may result from the outcome of this
uncertainty.
 
 /s/ Li & Company, PCLi & Company, PCSkillman,
      New JerseySeptember
      17, 2009
 F-2
 LADYBUG
RESOURCE GROUP, INC.
 
 Balance
Sheets
 
 June
      30, 2009
                  
                  
                  June
      30, 2008CURRENT
      ASSETS:Cash
                  
                  $
                  8,213
                  
                  
                  $
                  25,181Accounts
      receivable
                  
                  
                  850
                  
                  
                  
                  -Total
      Current Assets
                  
                  
                  9,063
                  
                  
                  
                  25,181COMPUTER
      EQUIPMENT – net of accumulated depreciation of $1,725 and $69,
      respectively
                  
                  
                  3,386
                  
                  
                  
                  2,426TOTAL
      ASSETS
                  
                  $
                  12,449
                  
                  
                  $
                  27,607LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)Accounts
      payable and accrued professional fees
                  
                  $
                  74,930
                  
                  
                  
                  12,000Stockholders'
      Equity (Deficit):Preferred
      stock: $0.001 par value; 20,000,000 shares authorized; no shares issued
      and outstanding
                  
                  
                  -
                  
                  
                  
                  -Common
      stock: $0.001 par value; 300,000,000 shares authorized; 11,320,000 shares
      issued and outstanding
                  
                  
                  11,320
                  
                  
                  
                  11,320Additional
      paid-in capital
                  
                  
                  40,320
                  
                  
                  
                  22,320Accumulated
      deficit
                  
                  
                  (114,121
                  )
                  
                  
                  (18,033
                  )Total
      Stockholders’ Equity (Deficit)
                  
                  
                  (62,481
                  )
                  
                  
                  15,607TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
                  
                  $
                  12,449
                  
                  
                  $
                  27,607
 
 See
accompanying notes to the financial statements.
 F-3
 LADYBUG
RESOURCE GROUP, INC.
 
 Statement
of Operations
 
 
 For
      the Fiscal Year Ended June 30, 2009
                  
                  
                  For
      the Period from November 27,2007 (inception) through June 30,
      2008Revenue
                  
                  $
                  52,186
                  
                  
                  $
                  22,850Expenses:Compensation
                  
                  
                  18,000
                  
                  
                  
                  18,000Professional
      fees
                  
                  
                  79,483
                  
                  
                  
                  16,440Office
      and subcontractor costs
                  
                  
                  50,792
                  
                  
                  
                  143Organization
                  
                  
                  -
                  
                  
                  
                  6,300Total
                  
                  
                  148,274
                  
                  
                  
                  40,833Net
      Loss
                  
                  $
                  (96,088
                  )
                  
                  $
                  (18,033
                  )Net
      loss per common share – basic and diluted
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.00
                  )Weighted
      average number of common shares outstanding - basic and
      diluted
                  
                  
                  11,320,000
                  
                  
                  
                  10,762,500
  See
accompanying notes to the financial statements.
 F-4
 LADYBUG
RESOURCE GROUP, INC.
 
 STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT)
 
 For the
Period from November 27, 2007 (inception) through June 30, 2009
 
 Common
      Shares
                    
                    
                    Common
                      Stock
                    
                    
                    Additional
      Paid-in Capital
                    
                    
                    Accumulated
      Deficit
                    
                    
                    TotalIssuance
      of shares to founders
                    
                    
                    6,300,000
                    
                    
                    $
                    6,300
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    6,300Sales
      of shares
                    
                    
                    4,480,000
                    
                    
                    
                    4,480
                    
                    
                    
                    4,320
                    
                    
                    
                    
                    
                    
                    
                    5,250Shares
      issued for services
                    
                    
                    540,000
                    
                    
                    
                    540
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    540Contribution
      of services
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    18,000
                    
                    
                    
                    
                    
                    
                    
                    18,000Operating
      results
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (18,033
                    )
                    
                    
                    (18,033
                    )Balance,
      June 30, 2008
                    
                    
                    11,320,000
                    
                    
                    
                    11,320
                    
                    
                    
                    22,320
                    
                    
                    
                    (18,033
                    )
                    
                    
                    15,607Contribution
      of services
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    18,000
                    
                    
                    
                    
                    
                    
                    
                    18,000Net
      loss
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (96,088
                    )
                    
                    
                    (96,088
                    )Balance,
      June 30, 2009
                    
                    
                    11,320,000
                    
                    
                    $
                    11,320
                    
                    
                    $
                    40,320
                    
                    
                    $
                    (114,121
                    )
                    
                    $
                    (62,481
                    )
  See
      accompanying notes to the financial statements.
 F-5
 LADYBUG
RESOURCE GROUP, INC.
 
 Statement
of Cash Flows
 
 For
      the Fiscal Year Ended June 30, 2009
                  
                  
                  Period
      from November 27, 2007 (Inception) through June 30, 2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                  
                  $
                  (96,088
                  )
                  
                  $
                  (18,033
                  )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Depreciation
                  
                  
                  1,656
                  
                  
                  
                  69Contribution
      of services
                  
                  
                  18,000
                  
                  
                  
                  18,000Common
      stock issued for services
                  
                  
                  -
                  
                  
                  
                  6,840Change
      in operating assets:Increase
      in accounts receivable
                  
                  
                  (850
                  )
                  
                  
                  -Increase
      in accrued expenses
                  
                  
                  62,930
                  
                  
                  
                  12,000Net
      Cash Provided by (Used in) Operating Activities
                  
                  
                  (14,352
                  )
                  
                  
                  18,876CASH
      FLOWS FROM INVESTING
                    ACTIVITIES:Purchase
      of equipment
                  
                  
                  (2,616
                  )
                  
                  
                  (2,495
                  )Net
      Cash Used in Investing Activities
                  
                  
                  (2,616
                  )
                  
                  
                  (2,495
                  )
 
 CASH
      FLOWS FROM FINANCING
                    ACTIVITIES:Sale
      of common stock
                  
                  
                  -
                  
                  
                  
                  8,800Net
      Cash Provided by Financing Activities
                  
                  
                  -
                  
                  
                  
                  8,800CHANGE
      IN CASH
                  
                  
                  (16,968
                  )
                  
                  
                  25,181CASH
      AT BEGINNING OF PERIOD
                  
                  
                  25,181
                  
                  
                  
                  -CASH
      AT END OF PERIOD
                  
                  $
                  8,213
                  
                  
                  $
                  25,181
 
 See
accompanying notes to the financial statements.
 F-6
 LADYBUG
RESOURCE GROUP, INC.
 
 June
30, 2009 and 2009
 
 Notes
to the Financial Statements
 
 NOTE 1 -
ORGANIZATION
 
 Ladybug
Resource Group, Inc. (the “Company”) was incorporated in the State of Nevada on
November 27, 2007. Its business purpose is to assist in the design of websites
and website components that use specific marketing messages or themes to reach
target audiences. Its initial marketing focus is the websites of the funeral
industry in the Seattle, Washington area.
 
 NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis
of presentation
 
 The
Company’s financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“U.S.
GAAP”).
 
 Year-end
 
 The
Company has elected a fiscal year ending on June 30.
 
 Use
of Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
 
 Cash
Equivalents
 
 The
Company considers all highly liquid investments with a maturity of three months
or less when purchased to be cash equivalents.
 F-7
 Fair
value of financial instruments
 
 The
Company follows Statement of Financial Accounting Standards No. 107 “Disclosures about fair value of
Financial Instruments” (“SFAS No. 107”) for disclosures about fair value
of its financial instruments and has adopted Financial Accounting Standards
Board (“FASB”) No. 157 “Fair
Value Measurements” (“SFAS No. 157”) to measure the fair value of its
financial instruments.  SFAS No. 157 establishes a framework for
measuring fair value in generally accepted accounting principles (GAAP), and
expands disclosures about fair value measurements. To increase consistency and
comparability in fair value measurements and related disclosures, SFAS No. 157
establishes a fair value hierarchy which prioritizes the inputs to valuation
techniques used to measure fair value into three (3) broad
levels.  The fair value hierarchy gives the highest priority to quoted
prices (unadjusted) in active markets for identical assets or liabilities and
the lowest priority to unobservable inputs.  The three (3) levels of
fair value hierarchy defined by SFAS No. 157 are described below:
 
 Level
      1
                  
                  Quoted
      market prices available in active markets for identical assets or
      liabilities as of the reporting date.Level
      2
                  
                  Pricing
      inputs other than quoted prices in active markets included in Level 1,
      which are either directly or indirectly observable as of the reporting
      date.Level
      3
                  
                  Pricing
      inputs that are generally observable inputs and not corroborated by market
      data.
 
 As
defined by SFAS No. 107, the fair value of a financial instrument is the amount
at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale, which was
further clarified as
the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The
carrying amounts of the Company’s financial assets and liabilities, such as cash
and accrued expenses, approximate their fair values because of the short
maturity of these instruments.
 
 The
Company does not have any assets or liabilities measured at fair value on a
recurring or a non-recurring basis, consequently, the Company did not have any
fair value adjustments for assets and liabilities measured at fair value at June
30, 2009, nor gains or losses are reported in the statement of operations that
are attributable to the change in unrealized gains or losses relating to those
assets and liabilities still held at the reporting date for the year ended June
30, 2009 or for the fiscal year then ended.
 
 Computer
equipment
 
 Computer
equipment is stated at cost less accumulated depreciation. Depreciation is
provided on the straight-line basis over an estimated useful life of three (3)
years.
 F-8
 Revenue
Recognition
 
 The
Company follows the guidance of the United States Securities and Exchange
Commission’s Staff Accounting Bulletin 104 for revenue recognition. The Company
recognizes revenue when it is realized or realizable after the work has been
performed.
 
 Stock-based
compensation and equity instruments issued to other than employees for acquiring
goods or services
 
 The
Company accounted for its stock based compensation under the recognition and
measurement principles of the fair value recognition provisions of Statement of
Financial Accounting Standards No. 123 (revised 2004) “Share-Based Payment” (“SFAS
No. 123R”) using the modified prospective method for transactions in which
the Company obtains employee services in share–based payment transactions and
the Financial Accounting Standards Board Emerging Issues Task Force Issue
No. 96-18“Accounting For Equity Instruments
That Are Issued To Other Than Employees For Acquiring, Or In Conjunction With
Selling Goods Or Services” (“EITF No.
96-18”) for share-based payment transactions with parties other than employees provided in
SFAS No.  123R. All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable.  The
measurement date used to determine the fair value of the equity instrument
issued is the earlier of the date on which the third-party performance is
complete or the date on which it is probable that performance will
occur.
 
 Income
Taxes
 
 The
Company follows Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes”
(“SFAS No. 109”), which requires recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns.  Under this
method, deferred tax assets and liabilities are based on the differences between
the financial statement and tax bases of assets and liabilities using enacted
tax rates in effect for the year in which the differences are expected to
reverse.  Deferred tax assets are reduced by a valuation allowance to
the extent management concludes it is more likely than not that the assets will
not be realized.  Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the Consolidated Statements of Income and
Comprehensive Income in the period that includes the enactment
date.
 
 The
Company adopted the provisions of Financial Accounting Standards Board (“FASB”)
Interpretation No. 48 “Accounting for Uncertainty in
Income Taxes – an interpretation of FASB Statement No.109” (“FIN
48”).  FIN 48 addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the
financial statements.  Under FIN 48, the Company may recognize the tax
benefit from an uncertain tax position only if it is more likely than not that
the tax position will be sustained on examination by the taxing authorities,
based on the technical merits of the position.  The tax benefits
recognized in the financial statements from such a position should be measured
based on the largest benefit that has a greater than fifty (50) percent
likelihood of being realized upon ultimate settlement.  FIN 48 also
provides guidance on de-recognition, classification, interest and penalties on
income taxes, accounting in interim periods and requires increased
disclosures.  The Company had no material adjustments to its
liabilities for unrecognized income tax benefits according to the provisions of
FIN 48.
 F-9
 Net
Loss per Common Share
 
 Net loss
per common share is computed pursuant to Statement of Financial Accounting
Standards No. 128, Earnings
Per Share. Basic and diluted net income per common share has been
calculated by dividing the net income for the period by the basic and diluted
weighted average number of common shares outstanding assuming that the Company
incorporated as of the beginning of the first period presented. Basic net loss
per common share is computed by dividing net loss by the weighted average number
of shares of common stock outstanding during the period. Diluted net loss per
common share is computed by dividing net loss by the weighted average number of
shares of common stock and potentially outstanding shares of common stock during
each period. There were no potentially dilutive shares outstanding as of June
30, 2009 or 2008.
 
 Recently
Issued Accounting Standards
 
 In
June 2003, the Securities and Exchange Commission (“SEC”) adopted final
rules under Section 404 of the Sarbanes-Oxley Act of 2002
(“Section 404”), as amended by SEC Release No. 33-8934 on
June 26, 2008. Commencing with its annual report for the fiscal year ending
June 30, 2010, the Company will be required to include a report of management on
its internal control over financial reporting. The internal control report must
include a statement of management’s responsibility for establishing and
maintaining adequate internal control over its financial reporting; of
management’s assessment of the effectiveness of its internal control over
financial reporting as of year end; and of the framework used by management to
evaluate the effectiveness of the Company’s internal control over financial
reporting.
  Furthermore,
in the following fiscal year, it is required to file the auditor’s attestation
report separately on the Company’s internal control over financial reporting on
whether it believes that the Company has maintained, in all material respects,
effective internal control over financial reporting.
  In
April 2009, the Financial Accounting Standards Board (FASB) issued FASB
Staff Position (FSP) Financial Accounting Standard (FAS) 157-4 “Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly”.
Based on the guidance, if an entity determines that the level of activity for an
asset or liability has significantly decreased and that a transaction is not
orderly, further analysis of transactions or quoted prices is needed, and a
significant adjustment to the transaction or quoted prices may be necessary to
estimate fair value in accordance with Statement of Financial Accounting
Standards (SFAS) No. 157 “Fair Value Measurements”. This FSP is to be
applied prospectively and is effective for interim and annual periods ending
after June 30, 2009 with early adoption permitted for periods ending after
March 15, 2009. The company adopted this FSP for its year ending
June 30, 2009. There was no impact on the financial
statements.
 F-10
 In
April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board
(APB) 28-1 “Interim Disclosures about Fair Value of Financial Instruments”. The
FSP amends SFAS No. 107 “Disclosures about Fair Value of Financial
Instruments” to require an entity to provide disclosures about fair value of
financial instruments in interim financial information. This FSP is to be
applied prospectively and is effective for interim and annual periods ending
after June 30, 2009 with early adoption permitted for periods ending after
March 15, 2009. The company has included the required
disclosures.
  In
June 2009, the FASB approved the “FASB Accounting Standards Codification”
(the “Codification”) as the single source of authoritative nongovernmental U.S.
GAAP to be launched on July 1, 2009. The Codification does not change
current U.S. GAAP, but is intended to simplify user access to all authoritative
U.S. GAAP by providing all the authoritative literature related to a particular
topic in one place. All existing accounting standard documents will be
superseded and all other accounting literature not included in the Codification
will be considered nonauthoritative. The Codification is effective for interim
and annual periods ending after September 15, 2009. The Codification is
effective for the Company in the interim period ending September 30, 2009
and the Company does not expect the adoption to have a material impact on its
consolidated financial position, results of operations or cash
flows.
  Management
does not believe that any other recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying financial statements.
  NOTE 3 -
GOING CONCERN
 
 The
Company was incorporated on November 27, 2007 and began generating revenues in
early 2008. It has very limited financial resources and no committed sources of
debt or equity financing. At June 30, 2009, the Company has a negative working
capital of $65,867, recurring losses of $96,088 and $18,033 for the fiscal year
ended June 30, 2009 and for the period from November 27, 2007 (inception)
through June 30, 2008, and a negative cash flow from operations at June 30, 2009
of $14,352.
 
 The
Company intends to seek business aggressively through the business contacts of
its management. While the Company believes in the viability of its strategy to
increase revenues and in its ability to raise funds if necessary, there can be
no assurances to that effect. The ability of the Company to continue as a going
concern is dependent upon the Company’s ability to generate increased levels of
revenues. The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going
concern.
 F-11
 NOTE 4 -
RELATED PARTY
 
 The
Company’s President performed work and permitted the Company to use facilities
and equipment owned by her without charge. The estimated cost of this service,
$18,000 for both the fiscal year ended June 30, 2009 and for the period from
November 27, 2007 (inception) through June 30, 2008. These amounts were
recorded as an expense and as a contribution to paid-in-capital in 2009 and
2008.
 
 The
Company paid a director, who is the son of the Company’s President, independent
contractor fees of $10,000 for the fiscal year ended June 30, 2009.
 
 NOTE 5 -
CONCENTRATION OF RISKS
 
 During
the fiscal year ended June 30, 2009, the Company derived 34% of its revenues
from two (2) companies, VOF (23.95%) and Seattle Cremations
(10.45%). During the period from November 27, 2007 (inception) through June
30, 2008, the Company derived all of its revenues from five (5) companies, BFFS
(31.51%), Sterling Trade Group (5.25%), Kibble (28.23%), Cohort Investments
(8.75%) and Golden Age Collectables (26.26%). Golden Age Collectables is a
related party of a Company officer and the other four companies were introduced
by and indirectly related to a minority shareholder of the Company.
 
 NOTE 6
-   INCOME TAXES
 
 Deferred
tax assets
 
 At June
30, 2009, the Company had net operating loss (“NOL”) carry–forwards for Federal
income tax purposes of $38,801 that may be offset against future taxable income
through 2029.  No tax benefit has been reported with respect to these
net operating loss carry-forwards in the accompanying financial statements
because the Company believes that the realization of the Company’s net deferred
tax assets of approximately $38,801 was not considered more likely than not and
accordingly, the potential tax benefits of the net loss carry-forwards are fully
offset by a valuation allowance of $38,801.
 
 Deferred
tax assets consist primarily of the tax effect of NOL
carry-forwards.  The Company has provided a full valuation allowance
on the deferred tax assets because of the uncertainty regarding its
realizability.  The valuation allowance increased approximately
$34,473 and $4,328 for the fiscal year ended June 30, 2009 and for the period
from November 27, 2007 (inception) through June 30, 2008,
respectively.
 
 Components
of deferred tax assets at June 30, 2009 and 2008 are as follows:
 
 June
      30, 2009
                              
                              
                              June
      30, 2008Net
      deferred tax assets – Non-current:Expected
      income tax benefit from NOL carry-forwards
                              
                              
                              38,801
                              
                              
                              
                              4,328Less
      valuation allowance
                              
                              
                              (38,801
                              )
                              
                              
                              (4,328
                              )Deferred
      tax assets, net of valuation allowance
                              
                              
                              -
                              
                              
                              
                              ---
 F-12
 Income taxes in the
statements ofoperations
 
 A
reconciliation of the federal statutory income tax rate and the effective income
tax rate as a percentage of income before income taxes is as
follows:
 
 For
      the Year Ended
                                                                                                      June
      30,
                                                                                                      2009
                                                                                                    
                                                                                                    
                                                                                                    For the Period from
                                                                                                      November
      27, 2007
                                                                                                      (inception)
                                                                                                      through
                                                                                                      June
      30,
                                                                                                      2008Federal
      statutory income tax rate
                                                                                                    
                                                                                                    
                                                                                                    34.0
                                                                                                    %
                                                                                                    
                                                                                                    
                                                                                                    34.0
                                                                                                    %Change
      in valuation allowance on net operating loss
carry-forwards
                                                                                                    
                                                                                                    
                                                                                                    (34.0
                                                                                                    )%
                                                                                                    
                                                                                                    
                                                                                                    (34.0
                                                                                                    )%Effective
      income tax rate
                                                                                                    
                                                                                                    
                                                                                                    0.0
                                                                                                    %
                                                                                                    
                                                                                                    
                                                                                                    0.0
                                                                                                    %
 
 NOTE 7 -
SUBSEQUENT EVENTS
 
 The
Company has evaluated all events that occurred after the balance sheet date
through September 17, 2009, the date these financial statements were issued.
 The Management of the Company determined that there were certain
reportable subsequent events to be disclosed as follows:
 
 On or
around August 18, 2009, the Board of Directors of and the Majority Shareholders,
as defined, of the Company approved via a written consent to action without
meeting (a) an amendment to the Company’s Bylaws and (b) the filing of Amended
and Restated Articles of Incorporation for the Company.  The Restated
Articles affected an increase in the number of the Company’s authorized shares
of common stock to 300,000,000 shares of common stock, $0.001 par value per
share, and authorized 20,000,000 shares of preferred stock, $0.001 par value per
share.  Previously the Company only had 75,000,000 shares of common
stock, $0.001 par value per share and no shares of preferred stock authorized.
The share numbers on the balance sheet have been adjusted retroactively to
reflect these changes.
 F-13
 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE





None.





ITEM
9A. CONTROLS AND PROCEDURES.





(a)           Evaluation
of disclosure controls and procedures. Our Chief Executive Officer and Principal
Financial Officer, after evaluating the effectiveness of our "disclosure
controls and procedures" (as defined in the Securities Exchange Act of 1934
Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this
Annual Report on Form 10-K (the "Evaluation Date"), has concluded that as of the
Evaluation Date, our disclosure controls and procedures were effective to
provide reasonable assurance that information we are required to disclose in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms, and that such information is accumulated
and communicated to our management, including our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.





(b)           This
annual report does not include a report of management's assessment regarding
internal control over financial reporting or an attestation report of the
company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.





(c)           Changes
in internal control over financial reporting. There were no changes in our
internal control over financial reporting during our most recent fiscal quarter
that materially affected, or were reasonably likely to materially affect, our
internal control over financial reporting.





ITEM
9B. OTHER INFORMATION.





None.


-23-


PART
III





ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





Our
management consists of:





NAME
                AGE
                POSITIONMolly
      S. Ramage
                55
                President,
      Chief Executive Officer, Chief Accounting Officer, and
      ChairmanStephen
      H. Ramage
                53
                Vice
      President, Secretary/Treasurer, and DirectorBenjamin
      Ramage
                25
                Vice
      President, Chief Financial Officer, and
Director





Molly S. Ramage. Ms. Ramage
has served as President and Chairman of the Company since inception.  Ms.
Ramage is also currently a Funeral Director for Barton Family Funeral Service in
Kirkland, Washington, where she has worked since May 2006. Prior to this, Ms.
Ramage was a Business Manager for Swedish Medical Center in Seattle, Washington
from June 1993 to October 2000. From September 1985 to June 1993, she was a
Business Manager for Summit Madison Medical Group.  Prior to this, she
worked as a Claims Adjuster for King County Medical Blue Shield from May 1980 to
May 1985.  From February 1979 to May 1980 Ms. Ramage was a Recreational
Director for Hillcrest Convalescent Center.





Ms. Ramage is a graduate of Eastern Washington University, where
she earned her bachelors degree in Special Education in 1978.





Stephen H. Ramage.Mr. Ramage
has been an officer and Director of the Company since inception. Mr. Ramage is
also currently General Manager for Golden Age Collectibles in Seattle,
Washington, a position he has held since October 2002.  From June 2000 to
October 2002, he worked in the Product Support department of Microsoft
Corporation.  Prior to this, he worked as a Sales Associate for Golden Age
Collectibles from April 1992 to June 2000, and from September 1982 to October
1987.  He also worked as sales associate for Collector’s Book Store from
May 1989 to April 1992.





Mr.
Ramage is a licensed teacher and has 30 years of retail experience with various
independent retailers in the Seattle area. He also holds three bachelors
degrees, one from Eastern Washington University in English, which he earned in
1977, and two from the University of Washington in Theater and Education, which
he earned in 1979 and 1986, respectively.  Mr. Ramage is the husband of
Molly Ramage.





Benjamin Ramage.Mr. Ramage
was appointed as our Vice President, Chief Financial Officer and Director on May
1, 2008 and has assisted with marketing and other duties since our inception.
 He is also currently a counselor with the Boys and Girls Club of King
County, where he has worked since June 2003. Benjamin Ramage is the son of Molly
S. Ramage and Stephen H. Ramage.





The term
of office of each Director expires at our annual meeting of stockholders or
until their successors are duly elected and qualified. No officer or Director
has any prior history with a blank check company.





Possible
Potential Conflicts





The OTCBB
on which our shares of common stock are quoted does not have any director
independence requirements.





No member
of management is or will be required by us to work on a full time basis,
although our President currently devotes approximately 10 hours per week working
for us. Accordingly, certain conflicts of interest may arise between us and our
officer in that she may have other business interests in the future to which she
devotes her attention, and she may be expected to continue to do so although
management time must also be devoted to our business.  As a result,
conflicts of interest may arise that can be resolved only through her exercise
of such judgment as is consistent with her understanding of her fiduciary duties
to us.


-24-


Currently
we have only three officers and three Directors, Molly Ramage, Stephen Ramage
and Benjamin Ramage, and will seek to add additional officer(s) and/or
Director(s) as and when the proper personnel are located and terms of employment
are mutually negotiated and agreed, and we have sufficient capital resources and
cash flow to make such offers.





Board
of Directors





All
Directors hold office until the completion of their term of office, which is not
longer than one year, or until their successors have been elected.   All
officers are appointed annually by the Board of Directors and, subject to
existing employment agreements (of which there are currently none) and serve at
the discretion of the board. Currently, our Directors receive no compensation
for their role as Directors but may receive compensation for their role as
officers.





If we
have an even number of Directors, tie votes on issues will be resolved in favor
of the chairman’s vote.





The Board
of Directors has adopted a Code of Ethics.





Committees
of the Board of Directors





Concurrent
with having sufficient members and resources, the Ladybug Board of Directors
will establish an audit committee and a compensation committee.  We believe
that we will need a minimum of five Directors to have effective committee
systems. The audit
committee will review the results and scope of the audit and other services
provided by the independent auditors and review and evaluate the system of
internal controls.  The compensation committee will manage any stock option
plan we may establish and review and recommend compensation arrangements for the
officers.  No final determination has yet been made as to the
memberships of these committees or when we will have sufficient members to
establish committees.  See “Executive Compensation”
hereinafter.





All
Directors will be reimbursed by us for any expenses incurred in attending
Directors' meetings provided that we have the resources to pay these fees.
 We will consider applying for officers and Directors liability insurance
at such time when we have the resources to do so.





Indebtedness
of Directors and Executive Officers




None of
our directors or executive officers or their respective associates or affiliates
is indebted to us.




Family
Relationships





Molly S.
Ramage and Stephen H. Ramage are married to each other. Benjamin Ramage is their
adult son.





Involvement
In Certain Legal Proceedings





There
have been no events under any bankruptcy act, no criminal proceedings and no
judgments, injunctions, orders or decrees material to the evaluation of the
ability and integrity of any Director or executive officer, of Registrant during
the past five years, other than as provided above.


-25-


Independence
of Directors




We are
not required to have independent members of our Board of Directors, and do not
anticipate having independent Directors until such time as we are required to do
so.





ITEM
11. EXECUTIVE COMPENSATION.




Summary
Compensation Table





The
following table shows, for the years ended June 30, 2009 and 2008, compensation
awarded to or paid to, or earned by, our officers.





Name
      and Principal Position
            Year
            
            Salary
            Bonus
            Option
      Awards
            
            TotalMolly
      S. Ramage(1)
            2009
            $
            -
            -
            -
            $
            -CEO/CFO
            2008
            $
            -
            -
            -
            $
            -Stephen
      H. Ramage
            2009
            $
            -
            -
            -
            $
            -VP/Secretary/Treasurer
            2008
            $
            -
            -
            -
            $
            -Benjamin
      Ramage(2)
            2009
            $
            -
            -
            -
            $
            -VP/Chief
      Financial Officer
            2008
            $
            -
            -
            -
            $
            -





(1) Molly
S. Ramage performed work and permitted us to use facilities and equipment owned
by her without charge during the year ended June 30, 2009 and the period from
inception until June 30, 2008. The estimated cost of this service, $18,000 for
both the fiscal year ended June 30, 2009 and for the period from November 27,
2007 (inception) through June 30, 2008. These amounts were recorded as an
expense and as a contribution to paid-in-capital in 2009 and 2008.





(2) The
Company paid Benjamin Ramage, who is the son of the Company’s President,
independent contractor fees of $10,000 for the fiscal year ended June 30, 2009,
which fees were not paid for services as an officer or Director of the Company
and have not therefore been included in the table above.





Outstanding
Equity Awards at Fiscal Year End





There are
no outstanding equity awards at June 30, 2009.








COMPENSATION
DISCUSSION AND ANALYSIS





Director
Compensation





Our Board
of Directors does not currently receive any consideration for their services as
Directors of the Company.  The Board of Directors reserves the right
in the future to award the members of the Board of Directors cash or stock based
consideration for their services to the Company, which awards, if granted shall
be in the sole determination of the Board of Directors.





Executive
Compensation Philosophy





Our Board
of Directors determines the compensation given to our executive officers in
their sole determination. As our executive officers currently draw no
compensation from us, we do not currently have any executive compensation
program in place. Although we have not to date, our Board of Directors also
reserves the right to pay our executives a salary, and/or to issue them shares
of common stock in consideration for services rendered and/or to award incentive
bonuses which are linked to our performance, as well as to the individual
executive officer’s performance. This package may also include long-term stock
based compensation to certain executives which is intended to align the
performance of our executives with our long-term business strategies.
Additionally, while our Board of Directors has not granted any performance base
stock options to date, the Board of Directors reserves the right to grant such
options in the future, if the Board in its sole determination believes such
grants would be in the best interests of the Company.


-26-


Incentive
Bonus





The Board
of Directors may grant incentive bonuses to our executive officers in its sole
discretion, if the Board of Directors believes such bonuses are in the Company’s
best interest, after analyzing our current business objectives and growth, if
any, and the amount of revenue we are able to generate each month, which revenue
is a direct result of the actions and ability of such executives.





Long-term,
Stock Based Compensation





In order
to attract, retain and motivate executive talent necessary to support the
Company’s long-term business strategy we may award certain executives with
long-term, stock-based compensation in the future, in the sole discretion of our
Board of Directors, which we do not currently have any immediate plans to
award.





ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.





As ofSeptember 15,2009, we had 11,320,000
shares of common stock outstanding which are held by approximately 41
shareholders. The chart below sets forth the ownership, or claimed ownership, of
certain individuals and entities. This chart discloses those persons known by
the Board of Directors to have, or claim to have, beneficial ownership of more
than 5% of the outstanding shares of our common stock as ofSeptember 15,2009; of all Directors and
executive officers of Ladybug; and of our Directors and officers as a
group.





Unless otherwise indicated,
Ladybug believes that all persons named in the table have sole voting and
investment power with respect to all shares of the common stock beneficially
owned by them.  A person is deemed to be the beneficial owner of securities
which may be acquired by such person within 60 days from the date indicated
above upon the exercise of options, warrants or convertible securities.
 Each beneficial owner’s percentage ownership is determined by assuming
that options, warrants or convertible securities that are held by such person
(but not those held by any other person) and which are exercisable within 60
days of the date indicated above, have been exercised.





Name
      and Address
                              
                              Amount
      and Nature of Beneficial Ownership
                              
                              Percentage
      of ClassMolly
      S. Ramage
                                12703
      NE 129th
      Ct. #H102
                                Kirkland,
      WA 98034-3246
                              
                              2,800,000
      (1)
                              
                              24.7%Stephen
      H. Ramage
                                12703
      NE 129th
      Ct. #H102
                                Kirkland,
      WA 98034-3246
                              
                              2,800,000
      (2)
                              
                              24.7%Benjamin
      Ramage
                                12703
      NE 129th
      Ct. #H102
                                Kirkland,
      WA 98034-3246
                              
                              3,500,000
                              
                              30.9%Patricia
      Barton
                                12703
      NE 129th
      Ct. #H102
                                Kirkland,
      WA 98034-3246
                              
                              4,000,000
                              
                              35.3%All
      Officers and Directors as a group
                                (3
      individuals)
                              
                              6,300,000
                              
                              55.7%


-27-


1.
            Ms.
      Ramage is President and Chairman of the Company. Her shares include
      2,000,000 shares held by Ms. Ramage’s husband, Stephen H. Ramage, in
      accordance with SEC Release 33-4819 which states, in part, that a person
      is regarded as the beneficial owner of securities held in the name of his
      or her spouse. Ms. Ramage disclaims any beneficial interest in or control
      over any of such shares other than that which may be attributed to her by
      operation of law.





2.
            Mr.
      Ramage is Vice President and Secretary/Treasurer of the Company. His
      shares include 800,000 shares held by Mr. Ramage’s wife, Molly S. Ramage,
      in accordance with SEC Release 33-4819 which states, in part, that a
      person is regarded as the beneficial owner of securities held in the name
      of his or her spouse.  Mr. Ramage disclaims any beneficial interest
      in or control over any of such shares other than that which may be
      attributed to her by operation of
law.





ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





We
currently operate out of office space located at 12703 NE 129th Ct. #H102,
Kirkland, Washington 98034-3246 provided to us by our President at no cost,
which serves as our address. Ms. Ramage incurs no incremental costs as a result
of our using the space. Therefore, she does not charge us for its use. There is
no written lease agreement.





Molly S.
Ramage performed work and permitted us to use facilities and equipment owned by
her without charge during the year ended June 30, 2009 and the period from
inception until June 30, 2008. The estimated cost of this service, $18,000 for
both the fiscal year ended June 30, 2009 and for the period from November 27,
2007 (inception) through June 30, 2008. These amounts were recorded as an
expense and as a contribution to paid-in-capital in 2009 and 2008.





During
the fiscal year ended June 30, 2009, the Company derived 34% of its revenues
from two (2) companies, VOF (23.95%) and Seattle Cremations (10.45%).VOF was introduced by the
husband of an affiliate and Seattle Cremations was introduced by the same
affiliate, Patricia Barton.  VOF is a company involved in political
web sites.  That activity has ceased and it is unlikely that
additional revenue will be generated from VOF in the foreseeable future. We do
not have any agreements or contracts with any of the companies described
above.





During
the period from November 27, 2007 (inception) through June 30, 2008, the Company
derived all of its revenues from five (5) companies, BFFS (31.51%), Sterling
Trade Group (5.25%), Kibble (28.23%), Cohort Investments (8.75%) and Golden Age
Collectables (26.26%). Golden Age Collectables is a related party of a Company
officer and the other four companies were introduced by and indirectly related
to a minority shareholder of the Company.  We do not have any
agreements or contracts with any of the five companies described
above.





The
Company paid Benjamin Ramage, who is the son of the Company’s President,
independent contractor fees of $10,000 for the fiscal year ended June 30,
2009.




ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.





AUDIT
FEES





The
aggregate fees billed for the fiscal years ended June 30, 2009 and 2008, for
professional services rendered by our independent principal accountants, Li
& Company, PC, for the audit of our annual financial statements as included
in our Annual Report on Form 10-K and Registration Statements on Form S-1, and
the review of the financial statements included in our Registration Statement
and Quarterly Reports on Form 10-Q, as well as services provided in connection
with statutory and regulatory filings or engagements for those fiscal years were
$12,500 and $10,000, respectively.


-28-


AUDIT
RELATED FEES





None.





TAX
FEES





None.





ALL
OTHER FEES




None.


-29-


PART
IV





ITEM
15. EXHIBITS





Exhibit Number
                  Description3.1(2)
                  Amended
      and Restated Articles of Incorporation3.2(1)
                  By-Laws3.3(2)
                  Summary
      of Amendment to Bylaws23.1(1)
                  Code
      of Ethics31.1*
                  Section
      302 Certification Of Principal Executive And Principal Financial
      Officer32.1*
                  Certification
      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of
      The Sarbanes-Oxley Act Of 2002 – Principal Executive And Principal
      Financial Officer





* Filed
herewith.





(1) Filed
as exhibits to the Company’s Form S-1 Registration Statement filed with the
Commission on September 3, 2008, and incorporated by reference
herein.





(2) Filed
as exhibits to the Company’s Form 8-K, filed with the Commission on September 3,
2009, and incorporated herein by reference.


-30-


SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





LADYBUG
      RESOURCE GROUP, INC.DATED:
      September 28, 2009
              By:
      /s/Molly S.
RamageMolly
      S. RamagePresident,
      Chief Executive Officer (Principal Executive Officer), and Chief
      Accounting Officer(Principal
      Accounting 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.




Signature(s)
                  Title(s)
                  Date/s/
      Molly S. Ramage
                  President,
      Chief Executive Officer (Principal
                  September
      28, 2009By:
      Molly S. Ramage
                  Executive
      Officer), Chief Accounting Officer (Principal Accounting Officer) and
      Chairman/s/
      Stephen H. Ramage
                  Secretary,
      Treasurer, and Director
                  September
      28, 2009By:
      Stephen H. Ramage/s/
      Benjamin Ramage
                  Chief
      Financial Officer and Director
                  September
      28, 2009By:
      Benjamin Ramage


-31-