UNITED STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-K





(Mark
One)





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





For the
fiscal year ended December 31, 2009





or





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





For the
transition period from _______  to _______





Commission
file number: 333-144596





Medical
      Design Studios, Inc.(Exact
      Name of Registrant as Specified in its
Charter)





Nevada
            
            26-0482524(State
      or Other Jurisdiction of Incorporation or
              Organization)
            
            (I.R.S.
      Employer
              Identification
      No.)7231
      South Rome StreetAurora,
      Colorado
            
            80016(Address
      of Principal Executive Offices)
            
            (Zip
      Code)





Registrant’s
telephone number, including area code:  303-956-7197





Securities
registered pursuant to Section 12(b) of the Act:


None





Securities
registered pursuant to Section 12(g) of the 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 oNo þ





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


Yes oNo þ





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


Yes þNo o





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 (Section 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).  (not
required)


Yes oNo o





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.


Yes þNo o





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





Large accelerated filer o                                                                                   Accelerated
filer o





Non-accelerated filer o                                                                                     Smaller
reporting company þ


(Do not check if a smaller reporting
company)





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


Yes þNo o


The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant, as of June 30, 2009, was $39,200 based on the
sale price of the shares in a private resale transaction completed on March 14,
2008, of $.07 per share.  The shares of our company did not trade
publicly in 2009.





Number of
shares outstanding of the registrant’s common stock as of March 31, 2010:
7,142,946 shares.





DOCUMENTS
INCORPORATED BY REFERENCE





None










PART I





Note
Regarding Forward-Looking Statements





Certain
matters discussed in this annual report on Form 10-K are forward-looking
statements.  Such forward-looking statements contained in this annual
report involve risks and uncertainties, including statements as to:





·
            our
      future operating results,




·
            our
      business prospects,




·
            our
      contractual arrangements and relationships with third
    parties,




·
            the
      dependence of our future success on the general
  economy,




·
            our
      possible financings, and




·
            the
      adequacy of our cash resources and working
  capital.





These
forward-looking statements can generally be identified as such because the
context of the statement will include words such as we “believe,” “anticipate,”
“expect,” “estimate” or words of similar meaning.  Similarly, statements
that describe our future plans, objectives or goals are also forward-looking
statements.   Such forward-looking statements are subject to certain
risks and uncertainties which are described in close proximity to such
statements and which could cause actual results to differ materially from those
anticipated as of the date of this annual report on Form
10-K.  Shareholders, potential investors and other readers are urged
to consider these factors in evaluating the forward-looking statements and are
cautioned not to place undue reliance on such forward-looking
statements.  The forward-looking statements included herein are only
made as of the date of this annual report and we undertake no obligation to
publicly update such forward-looking statements to reflect subsequent events or
circumstances.





We have
obtained a trading symbol for our common stock so that the shares may be quoted
on the OTC Bulletin Board (“OTCBB”). However, no public trades of our common
stock have occurred since April 30, 2007. Our current trading symbol is
MEDD.





Item 1.  Business





Overview





We were
founded as an unincorporated business in January 2004 and became a C corporation
in the State of Nevada on February 1, 2005.  As of March 31, 2010, we
had one employee, Justin N. Craig, our founder and President. Mr. Craig devotes
his full time to our business.





We are a
digital medical illustrator and animator providing digital displays and
enhancements to companies that assist attorneys to prepare or enhance exhibits
for trials involving medical issues. Approximately 85% of our work is ultimately
used by plaintiff counsel and 15% is used by defense counsel.





A digital
medical illustrator is a professional who interprets and creates visual material
to help record and disseminate medical, biological and related knowledge.
Medical illustrators create medical illustrations using traditional and digital
techniques which can appear in medical textbooks, medical advertisements,
professional journals, instructional videotapes and films, animations,
computer-assisted learning programs, exhibits, lecture presentations, general
magazines and television.  We specialize in creating and enhancing
digital images that will be used as exhibits in legal trials. Specifically, we
create demonstrative exhibits and animations that are designed to clearly and
concisely communicate the testimony of expert medical witnesses. These exhibits
are developed in a variety of media (including illustrations, diagrams, computer
animations and 3D models) best suited for the type of information that needs to
be conveyed.




2





Recent
Developments





We
effected a 1-for-3.5 reverse stock split of our outstanding shares of common
stock on March 30, 2009, and the Company’s ticker symbol was changed to “MEDD”
on April 3, 2009.  As a result, the total number of outstanding shares
of our common stock is 7,142,946 shares.





Products





Our
principal output is:





·
            Image enhancements are
      a dramatic and realistic way of clarifying organic tissues on any type of
      radiographic film. MRIs, CAT scans, myleograms, arteriograms, ultrasound
      images and mammograms, among others, can be enhanced with color to point
      out pertinent structures on the films, making them easier for laypersons
      on a jury to comprehend. Disease processes such as inflammatory arthritis,
      arterial aneurysms, metastasizing cancer and deep vein thrombosis can be
      emphasized as well. This same technique can also be applied to
      radiographic video images such as cardiac catheterizations, ultrasounds
      and arteriorgrams.  These color-enhanced films also make it
      easier for expert witnesses and counsel to describe and highlight key
      points in their testimony or
argument.




·
            3D Animation software
      is utilized to produce still frames of complex information and products.
      These images can be incorporated into settlement packages, timelines, or
      printed as large trial exhibits.




·
            Real-time Animation is
      used in certain instances in which issues of a case deal with time,
      complex element relationships or motion, because real-time animation may
      very well be the best medium to accurately demonstrate the facts of these
      types of cases to juries.




3




We use a
standard price list for much of our work. We also negotiate prices for very
specialized projects. Our typical price list follows:





Description
      of Visuals
            
            Sample
            
            Price2D
      MRI/CT Colorization
              
              ·Image 01: CTs, MRIs, Ultrasounds (and X-rays if the 3D option is not
      preferred) are colorized in such a way that the original film is still
      seen (as well as included on the exhibit in B&W). Fractures and other
      viewable features are illustrated in for best understanding of the
      radiographic film.
              Sample
      image = $400
            
            mricolorization logo
            
            $200/MRI
      or CT3D
      X-ray Colorization
              
              ·Image 01: X-rays converted to a 3D illustration, showing fracture
      ends, malformations, degenerative bone loss, internal and external
      hardware.
              
              ·Hardware
      Design: Hardware cost is in addition to the 3D X-ray.  Prices
      vary for the amount of hardware modeled, ranging from 1⁄2 hour to 3hr design
      time at $75/hr
              Sample
      image = $675
            
            xraycolorization logo
            
            $300/X-ray
              
              $75/hr
      for hardware




Medical
      Illustration – Custom
              
              ·Image 01: Custom illustration is created to specifically match the
      details of a case, and anytime that a library illustration is not
      available.
              
              ·Image 02:
      Subsequent images in a series that are based off a custom illustration are
      then treated as modified library (discounted) images.
              Sample
      image = $700
            
            custom logo
            
            $300/image
      (custom)




4




Medical
      Illustration – Client Likeness
              
              ·Image 01: If the
      illustration likeness is to match provided photographs of the client, the
      usual custom illustration is increased to reflect the addition
      work.
              Sample
      image = $400
            
            clientlikeness logo
            
            $400/
      client likenessMedical
        Illustration – Library
              
              ·Image 01: Exhibits already created and not needing alterations are
      sold as library exhibits (a library exhibit is copyrighted and usable only
      for the case for which it is purchased).  Some custom illustrated
      series are partly billed as library if they are based off a previous image
      for the same job.
              
              ·Image
      02:Library exhibits needing changes can still be
      purchased with design time added on for the changes.
              Sample
      image = $350
            
            library logo
            
            $150/
      library image
              
              $75/hr
      on alterations




5


3D/2D
      Animation
              
              ·Animation: All animation is begun with a written storyboard first, then
      progresses to a visual storyboard, which is approved before animation is
      begun.  A cost breakdown of the projected price (ranging from
      $50-$75/hr depending on 2D or 3D animation, illustrations included,
      rendering time, etc.) Additions and revisions beyond the scope of the
      original quote are at an additional cost.
            
            
            
            $50-$75/hr
      for 2D or 3D animation




For the
year ended December 31, 2009, two unrelated customers, Trial Exhibits, Inc.
(67.4%) and Legal Wizards (13.0%) comprised 80.4% of total
revenues.  For the year ended December 31, 2008, two unrelated
customers, Legal Wizard (60.0%) and Trial Exhibits, Inc. (10.51%) comprised
70.51% of total revenues.  This trend of relying on a very limited
number of customers is likely to continue for the foreseeable
future.





Our
customers are almost always companies that assist attorneys to prepare or
enhance a wide range of exhibits for trials. We perform the digital medical
imaging that is needed by these companies. There are a limited number of these
companies. Four of them make up our principal client base, and an additional
four are smaller clients. The loss of business from a significant client or our
failure to continue to obtain new business to replace completed or canceled
projects would have a material adverse effect on our business and
revenues.





Our
images are approved by the expert witness(es) who will use them in their
testimony  and by counsel. We do not release images that are not acceptable
to and approved by the expert witness.





Competition





Mr. Craig
is a member of the Association of Medical Illustrators. We believe that this
Association has approximately 1,000 members, although all members are not
competitors. Medical illustrators create medical illustrations using traditional
and digital techniques which can appear in medical textbooks, medical
advertisements, professional journals, instructional videotapes and films,
animations, computer-assisted learning programs, exhibits, lecture
presentations, general magazines and television. We do not know how many
illustrators perform in the same market niche as do we.





We
compete based on quality and speed of service combined with price. It is
important that counsel is successful in cases in which our illustrations are
used. If counsel does not believe that our products are helping their cases,
they will change the company that assists in preparing their litigation
exhibits.





No
assurance can be given that our competitive strategy will be
successful.




6





Intellectual
Property





We have
no patents or trademarks.





Employees





As of
March 31, 2010, we had one employee, Justin N. Craig, our founder and President.
Mr. Craig devotes his full time to our business. There are no written employment
contracts or agreements.





Item
1A.  Risk Factors





Risks
Related to our Business





We
have limited financial resources which may make it more difficult for us to
raise capital or other financing. Absent financial resources we will be unable
to undertake programs designed to expand our business.





We have
limited financial resources and have not established a source of equity or debt
financing. In addition, we had negative working capital ($8,436) at December 31,
2009.  If we are unable to generate additional revenue or obtain
financing or if the financing we do obtain is insufficient to cover any
operating losses we may incur, we may have to substantially curtail our
operations.





We
are and will continue to be completely dependent on the services of our founder
and President, Justin N. Craig, the loss of whose services may cause our
business operations to cease, and we will need to engage and retain qualified
employees and consultants to further implement our strategy.





Our
operations and business strategy are completely dependent upon the knowledge and
business contacts of Justin N. Craig, our President, Chief Executive Officer and
Chief Financial Officer.  He is under no contractual obligation to remain
employed by us.  If he should choose to leave us for any reason before we
have hired additional personnel, our operations may 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 described in this annual report.
We will fail without Mr. Craig or an appropriate replacement(s).





We intend
to acquire key-man life insurance on the life of Mr. Craig naming us as the
beneficiary when and if we obtain the resources to do so and Mr. Craig remains
insurable. We have not yet procured such insurance, and there is no guarantee
that we will be able to obtain such insurance in the future.  Accordingly,
it is important that we are able to attract, motivate and retain highly
qualified and talented personnel and independent contractors.





Justin
N. Craig, also our chief financial officer, has 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.





Justin N.
Craig has no meaningful financial reporting education or experience. He is
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.




7





We
depend on a small number of industries and clients for all of our business, and
the loss of any one significant client could cause revenues to drop quickly and
unexpectedly.





For the
year ended December 31, 2009, two unrelated customers, Trial Exhibits, Inc.
(67.4%) and Legal Wizards (13.0%) comprised 80.4% of total
revenues.  For the year ended December 31, 2008, two unrelated
customers, Legal Wizard (60.0%) and Trial Exhibits, Inc. (10.51%) comprised
70.51% of total revenues.  This trend of relying on a very limited
number of customers is likely to continue for the foreseeable
future.





Our
customers are companies that assist attorneys to prepare or enhance exhibits for
trials involving medical issues. There are a limited number of these companies.
Four of them make up our principal client base, and an additional four are
smaller clients. The loss of business from a significant client or our failure
to continue to obtain new business to replace completed or canceled projects
would have a material adverse effect on our business and revenues.





Changes
in outsourcing trends could adversely affect our operating results and growth
rate.





The
practice of companies that assist counsel to prepare or enhance exhibits for use
in trials has been to engage outside organizations like us to help complete the
projects. This practice has grown in the last decade, and we have benefited from
this trend. However, if this trend changes and companies in these industries
were to perform a greater percentage of projects with their own employees or
seek lower cost services outside of the United States, our business could be
materially adversely affected.




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





We are
required to file periodic reports with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder. In order to comply with these requirements, our
independent registered auditors must review our financial statements on a
quarterly basis and audit our financial statements on an annual basis. Moreover,
our legal counsel must review and assist in the preparation of such reports. The
costs charged by these professionals for those services cannot be accurately
predicted at this time 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.





Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we were required,
beginning with our fiscal year ending December 31, 2008, to include in our
annual report our assessment of the effectiveness of our internal control over
financial reporting as of the end of fiscal 2008. Furthermore, our independent
registered public accounting firm will be required to attest to whether our
assessment of the effectiveness of our internal control over financial reporting
is fairly stated in all material respects and separately report on whether it
believes we have maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2010. 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.




8





We do not
have a sufficient number of employees to segregate responsibilities and may be
unable to afford 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 the adequacy of our 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 would 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.





Having
only two directors limits our ability to establish effective independent
corporate governance procedures and increases the control of our
President.





We have
only two directors, one of which is our President.  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, which gives him significant control
over all corporate issues.





Until we
have a larger board of directors that may 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 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 shares
of common stock. 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.





We also
believe that the potential of issuing restricted shares of our common stock to
vendors or others who may be in a position to refer business or customers to us
would enable us to operate and expand our business more
effectively.  We will also consider attempting to satisfy vendor
obligations through the issuance of shares.




9





The
foregoing 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. If the shares distributed to vendors or others are sold into any
trading market that develops, the impact may be to cause share prices to
decrease materially.  Alternatively, we may incur significant expenses that
contractors/vendors will not be willing to accept shares of our stock in lieu of
cash payment.  Such issuances may also serve to enhance existing
management’s ability to maintain control of us because the shares may be issued
to parties or entities committed to supporting existing management.





Our
articles of incorporation provide for indemnification of officers and directors
at our expense and limit their liability which 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 therefor 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 which we
will 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 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, either of which factors are likely to materially
reduce the market and price for our shares, if such a market ever develops.





Currently,
there is no public market for our securities, and there can be no assurance that
any 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.





We have a
trading symbol for our common stock which permits our shares to be quoted on the
OTCBB. However, no public trades of our shares have occurred since April 30,
2007, and there is currently no public market whatsoever for our securities.
There can be no assurances as to whether:





·
            any
      market for our shares will develop,




·
            the
      prices at which our common stock will trade,
or




·
            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.




10




In
addition, 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 our common stock is fully distributed and 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 us and
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.





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





The
trading of our securities, if any, will be in the over-the-counter market which
is commonly referred to as 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
stock 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 stock 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 stock, 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 stock 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
stock.





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 stock.




11





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 and 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, 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 stock has experienced numerous frauds and abuses which could
adversely impact investors in our stock.





We
believe that the market for penny stock has suffered from patterns of fraud and
abuse. Such patterns include:





·
            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 inexperienced 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.




We
believe that many of these abuses have occurred with respect to the promotion of
lower-priced stock companies that lacked experienced management, adequate
financial resources, an adequate business plan and/or marketable and successful
business or product.





Our
board of directors has the authority, without shareholder approval, to issue
preferred stock with terms that may not be beneficial to common shareholders and
with the ability to affect adversely shareholder voting power and perpetuate
their control over us.





Our
articles of incorporation allow us to issue shares of preferred stock without
any vote or further action by our shareholders. Our board of directors has the
authority to fix and determine the relative rights and preferences of preferred
stock. Our board of directors also has the authority to issue preferred stock
without further shareholder approval, including large blocks of preferred stock.
As a result, our board of directors could authorize the issuance of a series of
preferred stock that would grant to holders the preferred right to our assets
upon liquidation, the right to receive dividend payments before dividends are
distributed to the holders of common stock and the right to the redemption of
the shares, together with a premium, prior to the redemption of our common
stock.




12





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





Our
President is currently in a position to continue to elect our board of
directors, decide all matters requiring shareholder approval and determine our
policies. The interests of our president 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. This level of control may also have an adverse
impact on the market value of our shares because our president 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.





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





We have
never paid any 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.





Because
we are not subject to compliance with rules requiring the adoption of certain
corporate governance measures, our shareholders 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 Stock Exchange 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 which
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 necessary, we have not
yet adopted these measures.





Because
none of our directors are independent directors, we do not currently have
independent audit or compensation committees. As a result, these directors have
the ability, among other things, to 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 shareholders without protections against interested
director transactions, conflicts of interest and similar matters and 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, if and when required.





For all
of the foregoing reasons and others set forth herein, an investment in our
securities involves a high degree of risk.  Any person considering an
investment in such securities should be aware of these and other risk factors
set forth in this report.




13





Item
1B.  Unresolved Staff Comments





None





Item 2.  Properties





Our
office and mailing address is 7231 South Rome Street, Aurora, Colorado 80016,
which is provided to us by our President and serves as our principal executive
offices. We paid rent of $4,800 in each of 2009 and 2008 for use of these
facilities. There is no written lease agreement.





Item 3.  Legal Proceedings





As of the
date hereof, there are no pending legal proceedings to which we are a party or
of which any of our property is subject.





Item 4.  Reserved




14





PART
II





Item 5.  Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities





We became
subject to Securities Exchange Act reporting requirements in August 2007. There
is no established current public market for our shares of common stock.  A
symbol was assigned for our common stock so that our common stock may be quoted
for trading on the OTCBB under MEDD.  No public trades have occurred
since April 30, 2007.  There can be no assurance that a liquid market
for our securities will ever develop. Transfer of our common stock may also be
restricted under the securities or blue sky laws of various states and foreign
jurisdictions. Consequently, investors may not be able to liquidate their
investments and should be prepared to hold the common stock for an indefinite
period of time.





We have
never paid any cash dividends on shares of our common stock and do not
anticipate that we will pay dividends in the foreseeable future. We intend to
apply any earnings to fund the development of our business. The purchase of
shares of common stock is inappropriate for investors seeking current or near
term income.





We have
never repurchased any of our equity securities.





Quoting
and Trading of our Common Stock





There is
no established trading market for our common stock.  A symbol was assigned
for our securities so that our securities may be quoted for trading on the OTCBB
under symbol MEDD.  Until our common stock is fully distributed and an
orderly market develops, 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 our shares of common stock, developments affecting
our business generally, including the impact of the factors referred to in “Risk
Factors,” investor perception and general economic and market conditions. No
assurance can be given that an orderly or liquid market will ever develop for
the shares of common stock.





General
Market Risks





There is
no established public market for our common stock, and there can be no assurance
that any established market will develop in the foreseeable future.
 Transfer of our common stock may also be restricted under the securities
or securities regulations laws promulgated by various foreign jurisdictions or
states, commonly referred to as “blue sky” laws.  Absent compliance with
such individual state laws, our common stock may not be traded in such
jurisdictions.  Consequently, investors may not be able to liquidate their
investments and should be prepared to hold the common stock for an indefinite
period of time.





The
market price for our common stock is likely to be highly volatile and subject to
wide fluctuations in response to factors, many of which are beyond our control,
including the following:




·
            actual
      or anticipated variations in quarterly operating
  results,




·
            announcements
      by our competitors of significant acquisitions, strategic partnerships,
      joint ventures or capital
commitments,




·
            additions
      or departures of key personnel,




·
            sales
      or issuances of additional shares of common stock,
  and




15




·
            potential
      litigation or regulatory matters.




The
market prices of the securities of microcap companies like us have been
especially volatile.  Broad market and industry factors may adversely
affect the market price of our common stock, regardless of our actual operating
performance.  In the past, following periods of volatility in the market
price of their stock, many companies have been the subject of securities class
action litigation.  A stockholder lawsuit could result in substantial costs
and a diversion of management’s attention and resources and would adversely
affect our stock price.





We have
74,000,000 authorized shares of common stock, of which 7,142,946 are currently
outstanding.  The board of directors, without stockholder approval, could
issue up to 66,857,142 shares of common stock upon whatever terms it determines
to whomever it determines, including persons or entities that would help our
present management.






Item 6.  Selected Financial
Data




Not applicable





Item 7.Management’s Discussion and Analysis
of Financial Condition and Results of Operations





Safe
Harbor Statement under the Private Securities Litigation Reform Act of
1995





Information
set forth herein contains  ”forward-looking  statements”  which
can be identified by the use of forward-looking  terminology such as
“believes,” “expects,”  ”may,” “should” or  ”anticipates”  or the
negative  thereof or other variations thereon or comparable terminology,
 or by discussions of strategy. No assurance can be given that the future
results covered by the forward-looking statements will be achieved. We caution
readers that important factors may affect our actual results and could cause
such results to differ materially from forward-looking statements made by or on
our behalf. Such factors include, but are not limited to, changing market
conditions, the impact of competitive services, products, pricing, acceptance of
our services and/or products and other risks set forth  herein  and in
other  filings  that we have made with the SEC.





Recent
Developments





We
effected a 1-for-3.5 reverse stock split of our outstanding shares of common
stock on March 30, 2009, and the Company’s ticker symbol was changed to “MEDD”
on April 3, 2009.  As a result, the total number of outstanding shares
of our common stock is 7,142,946 shares.





Operations





We were
founded as an unincorporated business in January 2004 and became a C corporation
in the State of Nevada on February 1, 2005.  As of March 31, 2010, we
had one employee, Justin N. Craig, our founder and President. Mr. Craig devotes
his full time to our business.





We are a
digital medical illustrator and animator providing digital displays and
enhancements to companies that assist attorneys to prepare or enhance exhibits
for trials involving medical issues. Approximately 85% of our work is ultimately
used by plaintiff counsel and 15% is used by defense counsel.




16





Our
customers are almost always companies that assist attorneys to prepare or
enhance a wide range of exhibits for trials. We perform the digital medical
imaging that is needed by these companies. There are a limited number of these
companies.





Customers
typically hear of our services by word of mouth. They continue with us and
expand or decrease the amount of work that they send to us based on the quality
and timing of our output. We retain rights to the digital images that we
produce. These digital images form a library for us. Some of these digital
images can be sold to users who need generic types of images for their purposes.
This enables us to generate revenue without doing additional work. The longer
that we are in operation, the larger our library becomes.





A summary
of our operations for the years ended December 31, 2009 and 2008 is as
follows:




2009
            
            
            2008Revenue
            
            $
            150,646
            
            
            $
            160,491Operating
      Expenses:General
      and administrative
            
            
            47,631
            
            
            
            69,914Professional
      fees
            
            
            13,000
            
            
            
            31,546Compensation
            
            
            115,675
            
            
            
            126,382Total
            
            
            176,306
            
            
            
            227,842Loss
      before  Income Taxes
            
            
            (25,660
            )
            
            
            (67,351
            )Provision
      for Income Taxes
            
            
            -
            
            
            
            -Net
      Loss
            
            
            (25,660
            )
            
            
            (67,351
            )





Revenue - For the year ended
December 31, 2009, two unrelated customers, Trial Exhibits, Inc. (67.4%) and
Legal Wizards (13.0%) comprised 80.4% of total revenues.  For the year
ended December 31, 2008, two unrelated customers, Legal Wizard (60.0%) and Trial
Exhibits, Inc. (10.51%) comprised 70.51% of total revenues.  This
trend of relying on a very limited number of customers is likely to continue for
the foreseeable future.





Compensation
relates entirely to Justin N. Craig.





General
and administrative expenses consist of:





2009
            
            
            2008Automobile
            
            $
            1,871
            
            
            $
            1,434Bad
      debts
            
            
            10,521
            
            
            
            20,000Computer
      supplies
            
            
            2,645
            
            
            
            1,122Depreciation
            
            
            6,954
            
            
            
            7,197Dues
            
            
            988
            
            
            
            782Employee
      benefits
            
            
            8,355
            
            
            
            16,092Entertainment
            
            
            925
            
            
            
            874Internet
      expenses
            
            
            530
            
            
            
            520Office
      expense
            
            
            2,414
            
            
            
            2,207Outside
      services
            
            
            1,800
            
            
            
            8,564Rent
            
            
            4,800
            
            
            
            4,800Repairs
      and maintenance
            
            
            246
            
            
            
            75Salaries
            
            
            2,400
            
            
            
            2,400Taxes
            
            
            934
            
            
            
            184Telephone
            
            
            2,196
            
            
            
            1,597Travel
            
            
            52
            
            
            
            2,066Total
            
            $
            47,631
            
            
            $
            69,914




17




Other





As a
corporate policy, we will not incur any cash obligations that we cannot satisfy
with known resources, of which there are currently none, except as described in
“Liquidity” below and/or elsewhere in this annual report.  We believe
that the perception that many people have of a public company make it more
likely that they will accept restricted securities from a public company as
consideration for indebtedness to them than they would from a private company.
 We have not performed any studies of this matter.  Our conclusion is
based on our own observations.  However, there can be no assurances that we
will be successful in any of those efforts even if we are a public entity.
 Additionally, issuance of restricted shares would necessarily dilute the
percentage of ownership interest of our stockholders.





Liquidity





Private
capital, if sought, will be sought from former business associates of our
founder or private investors referred to us by those business associates. To
date, we have not sought any funding source and have not authorized any person
or entity to seek out funding on our behalf. If a market for our shares ever
develops, of which there can be no assurances, we may use restricted shares of
our common stock to compensate employees/consultants and independent contractors
wherever possible.  We believe that operations are generating sufficient
cash to continue operations for the next 12 months provided that our costs of
being a public company remain equal to or below the maximum estimate provided
below.





We have
become a public company and, by doing so, have incurred and will continue to
incur additional significant expenses for legal, accounting and related
services. Since we became a public entity, subject to the reporting requirements
of the Securities Exchange Act of 1934, we are incurring ongoing expenses
associated with professional fees for accounting, legal and a host of other
expenses for annual reports and proxy statements. These obligations will reduce
our ability and resources to fund other aspects of our business. We will reduce
the compensation levels paid to management if there is insufficient cash
generated from operations to satisfy these costs.





There are
no current plans to seek private investment.  We do not have any current
plans to raise funds through the sale of securities.  We hope to be able to
use our status as a public company to enable us to use non-cash means of
settling obligations and compensate persons and/or firms providing services or
products to us, although there can be no assurances that we will be successful
in any of those efforts.  We believe that the perception that many people
have of a public company make it more likely that they will accept restricted
securities from a public company as consideration for indebtedness to them than
they would from a private company.  We have not performed any studies of
this matter.  Our conclusion is based on our own beliefs. Issuing shares of
our common stock to such persons instead of paying cash to them would increase
our chances to expand our business.  Having shares of our common stock may
also give persons a greater feeling of identity with us which may result in
referrals.  However, these actions, if successful, 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 because the
shares may be issued to parties or entities committed to supporting existing
management.




18





In May
2007, we sold 760,000 shares of our common stock to 38 people for $760. The sale
of such shares was not specifically or solely intended to raise financing since
the funds raised were nominal.  It was also intended to get relatives and
business associates of management involved in our business.  Of the 760,000
shares, 300,000 (39.5%) shares were sold to people directly related to at least
one officer or director and 300,000 (39.5%) shares were sold to our counsel.
Although these stockholders have no obligation to provide any services to us,
management hopes that these new stockholders, their families, friends and/or
business associates may provide us with valuable services such as recommending
our services and providing us with business advice in any areas of expertise or
knowledge that they may have that can be of value and assistance to us.





Off-Balance
Sheet Arrangements





We have
no off-balance sheet arrangements, 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.





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. 33-9072 on October 13, 2009. Commencing with its annual report for
the year ending December 31, 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 our financial
reporting;




·
            of
      management’s assessment of the effectiveness of our internal control over
      financial reporting as of year end;
and




·
            of
      the framework used by management to evaluate the effectiveness of our
      internal control over financial
reporting.




Furthermore,
in the following year, the Company 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 August
2009, the FASB issued the FASB Accounting Standards Update No. 2009-04
“Accounting for Redeemable Equity Instruments - Amendment to Section 480-10-S99”
which represents an update to section 480-10-S99, distinguishing liabilities
from equity, per EITF Topic D-98, Classification and Measurement of Redeemable
Securities.  The Company does not expect the adoption of this update
to have a material impact on its consolidated financial position, results of
operations or cash flows.




19





In August
2009, the FASB issued the FASB Accounting Standards Update No. 2009-05 “Fair
Value Measurement and Disclosures Topic 820 – Measuring Liabilities at Fair
Value”, which provides amendments to subtopic 820-10, Fair Value Measurements
and Disclosures – Overall, for the fair value measurement of
liabilities.  This Update provides clarification that in circumstances
in which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using one or
more of the following techniques: 1. A valuation technique that uses: a. The
quoted price of the identical liability when traded as an asset b. Quoted prices
for similar liabilities or similar liabilities when traded as assets. 2. Another
valuation technique that is consistent with the principles of topic 820; two
examples would be an income approach, such as a present value technique, or a
market approach, such as a technique that is based on the amount at the
measurement date that the reporting entity would pay to transfer the identical
liability or would receive to enter into the identical liability. The amendments
in this Update also clarify that when estimating the fair value of a liability,
a reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of the liability. The amendments in this Update also clarify that both
a quoted price in an active market for the identical liability when traded as an
asset in an active market when no adjustments to the quoted price of the asset
are required are Level 1 fair value measurements.  The Company does
not expect the adoption of this update to have a material impact on its
consolidated financial position, results of operations or cash
flows.





In
September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-09
“Accounting for Investments-Equity Method and Joint Ventures and Accounting for
Equity-Based Payments to Non-Employees”.  This Update represents a
correction to Section 323-10-S99-4, Accounting by an Investor for Stock-Based
Compensation Granted to Employees of an Equity Method Investee. Additionally, it
adds observer comment Accounting Recognition for Certain Transactions Involving
Equity Instruments Granted to Other Than Employees to the Codification. The
Company does not expect the adoption to have a material impact on its
consolidated financial position, results of operations or cash
flows.





In
January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-01
“Equity Topic 505 – Accounting for Distributions to Shareholders with Components
of Stock and Cash”, which clarifies that the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a potential
limitation on the total amount of cash that all shareholders can elect to
receive in the aggregate is considered a share issuance that is reflected in EPS
prospectively and is not a stock dividend for purposes of applying Topics 505
and 260 (Equity and Earnings Per Share (“EPS”)).  Those distributions
should be accounted for and included in EPS calculations in accordance with
paragraphs 480-10-25- 14 and 260-10-45-45 through 45-47 of the FASB Accounting
Standards codification.  The amendments in this Update also provide a
technical correction to the Accounting Standards Codification.  The
correction moves guidance that was previously included in the Overview and
Background Section to the definition of a stock dividend in the Master
Glossary.  That guidance indicates that a stock dividend takes nothing
from the property of the corporation and adds nothing to the interests of the
stockholders.  It also indicates that the proportional interest of
each shareholder remains the same, and is a key factor to consider in
determining whether a distribution is a stock dividend.





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.




20





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.





Seasonality





We have
not noted a significant seasonal impact in our business.





Item
7A.  Quantitative and Qualitative Disclosures About Market
Risk





Not applicable





Item 8. Financial Statements and
Supplementary Data





The
financial statements filed as part of this annual report on Form 10-K are set
forth starting on page F-1.





Item 9.  Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure





None





Item
9A.Controls and
Procedures





Evaluation
of Disclosure Controls and Procedures





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




21





Management’s
Annual Report on Internal Control Over Financial Reporting.





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for our company.  Our internal
control system was designed to, in general, provide reasonable assurance to our
management and board regarding the preparation and fair presentation of
published financial statements, but because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements.  Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.





Our
management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2009.  The framework used by management
in making that assessment was the criteria set forth in the document entitled
“Internal Control – Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission.  Based on that assessment,
our management has determined that as of December 31, 2009, our internal control
over financial reporting was effective for the purposes for which it is
intended.





This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management’s report in this annual
report.





Changes
in Internal Control over Financial Reporting





There
have been no changes in our internal control over financial reporting during the
last quarterly period covered by this report that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.





Item
9B.  Other Information





None




22




PART
III





Item 10.Directors, Executive Officers and
Corporate Governance





Our
management consists of:





Name
            
            Age
            
            TitleJustin
      N. Craig
            
            36
            
            President,
      Chief Executive Officer, Chief Financial Officer and
    ChairmanKenneth
       Craig
            
            65
            
            Secretary
      and Director





Justin N.
Craigfounded this
company and has been our President, Chief Executive Officer, Chief Financial
Officer and Chairman since inception.  From November 2002 to December 2003,
Mr. Craig was a digital medical imager for High Impact Litigation, now a major
customer. Mr. Craig holds a B.F.A. from Brigham Young University (2000) and an
M.S. degree in Bio Medical Illustration from the University of Illinois, Chicago
(2002).





Kenneth
Craigbecame
Secretary and a Director in May 2007. He has owned and operated an accounting
practice for more than 30 years with a specialty in taxation. He holds a B.S.
degree from the University of Arizona and is the father of Justin N.
Craig.





Possible
Potential Conflicts





No member
of management is or will be required by us to work on a full time basis,
although our President currently devotes full time to us. Accordingly, certain
conflicts of interest may arise between us and our officer(s) and director(s) in
that they may have other business interests in the future to which they devote
their attention, and they 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 their exercise
of such judgment as is consistent with each officer’s understanding of his
fiduciary duties to us.





Currently,
we have only two officers, both of whom also serve as directors.  We
are in the process of seeking to add additional officers and/or directors as and
when the proper personnel are located and terms of employment are mutually
negotiated and agreed.





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), serve at the
discretion of the board. Currently, directors receive no compensation for their
role as directors but may receive compensation for their role as
officers.





As long
as we have an even number of directors, tie votes on issues are resolved in
favor of the Chairman’s vote.




23





Committees
of the Board of Directors





Concurrent
with having sufficient members and resources, our 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 a stock
option plan and review and recommend compensation arrangements for 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” elsewhere in this annual report.





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.





Legal
Proceedings




No
officer, director, persons nominated for such positions, promoter or significant
employee has been involved in the last ten years in any of the
following:




·
            Any
      bankruptcy petition filed by or against any business of which such person
      was a general partner or executive officer either at the time of the
      bankruptcy or within two years prior to that
  time;




·
            Any
      conviction in a criminal proceeding or being subject to a pending criminal
      proceeding (excluding traffic violations and other minor
      offenses);




·
            Being
      subject to any order, judgment, or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently
      or temporarily enjoining, barring suspending or otherwise limiting his
      involvement in any type of business, securities or banking
      activities;




·
            Being
      found by a court of competent jurisdiction (in a civil action), the
      Commission or the Commodity Futures Trading Commission to have violated a
      federal or state securities or commodities law, and the judgment has not
      been reversed, suspended or
vacated;




·
            Being
      the subject of, or a party to, any Federal or State judicial or
      administrative order, judgment, decree, or finding, not subsequently
      reversed, suspended or vacated, relating to an alleged violation of (i)
      any Federal or state securities or commodities law or regulation, (ii) any
      law or regulation respecting financial institutions or insurance companies
      including, but not limited to, a temporary or permanent injunction, order
      of disgorgement or restitution, civil money penalty or temporary or
      permanent cease-and-desist order, or removal or prohibition order or (iii)
      any law or regulation prohibiting mail or wire fraud or fraud in
      connection with any business entity;
and




·
            Being
      the subject of, or a party to, any sanction or order, not subsequently
      reversed, suspended or vacated, of any self-regulatory organization, any
      registered entity, or any equivalent exchange, association, entity or
      organization that has disciplinary authority over its members or persons
      associated with a member.




24




Section
16(a) Beneficial Ownership Reporting Compliance





We were not subject to Section 16(a)
during our fiscal year ended December 31, 2009, as we did not have a class of
equity securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934.





Item
11.Executive Compensation





The
following table shows for the years ended December 31, 2009 and 2008,
compensation awarded to or paid to, or earned by, our Chief Executive Officer
and our Secretary (the “Named Executive Officers”).


Annual
      Compensation
              
              
              Long Term Compensation
      AwardsName
      and PrincipalPosition
              Year
                Ended
                Dec.
      31
              
              Salary
                ($)
              
              
              Bonus
              
              
              Other
                Annual
      Compensation
              
              
              Restricted
      Stock Award(s)
              
              
              Securities
                Underlying
                Options/SARs
              
              
              Payouts
                LTIP
                Payouts
              
              
              All
      Other CompensationJustin
      N. Craig
              2009
              
              
              115,675
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -President
              2008
              
              
              126,382
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              --
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Kenneth
      Craig
              2009
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Secretary
              2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              --
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -




There is
no employment contract with Justin N. Craig at this time and no agreements for
compensation in the future. Mr. Craig’s compensation has not been fixed or based
on any percentage calculations. He has made all decisions determining the amount
and timing of his compensation and has received the level of compensation each
month that permitted us to meet our immediate obligations.





Item
12.  Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters





The
following table sets forth information known to us regarding beneficial
ownership of our common stock as of March 31, 2010, by:





·
            each
      person known or believed by us to own, directly or beneficially, more than
      5% of our common stock,




·
            each
      of our directors, and




·
            all
      of our officers and directors as a
group.




25




Except as
otherwise indicated, we believe that the beneficial owners of the common stock
listed below, based on information furnished by the owners, have sole investment
and voting power over the shares.





Name and Address ofBeneficial Owner (a)
            
            Number
      of
              Shares
              Beneficially
              Owned (b)
            
            
            Percent
              of ClassJustin
      N. Craig
            
            
            —
            
            
            
            —Kenneth
      Craig
            
            
            —
            
            
            
            —Vision
      Opportunity Master Fund, Ltd.
            
            
            6,742,859
            
            
            
            94.4
            %Officers
      and directorsas
       a group (2 members)
            
            
            —
            
            
            
            —







(a)
              The
      address for each officer and director is 7231 South Rome Street, Aurora,
      Colorado 80016.  The address for Vision Opportunity Master Fund
      Ltd. is c/o Vision Capital Advisors, LLC, 20 55th Street, 5th Floor, New
      York, NY 10019.


(b)
              Unless
      otherwise indicated, we believe 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.





Shareholder
Matters





As an
issuer of “penny stock,” the protections provided by the federal securities laws
relating to forward-looking statements do not apply to us if our shares are
considered to be penny stock.  Although the federal securities law provide
a safe harbor for forward-looking statements made by a public company that files
reports under the federal securities laws, this safe harbor is not available to
issuers of penny stock. As a result, we will not have the benefit of this safe
harbor protection in the event of any claim that the material provided by us,
including this annual report, contained a material misstatement of fact or was
misleading in any material respect because of our failure to include any
statements necessary to make the statements not misleading.





As a
Nevada corporation, we are subject to the Nevada Revised Statutes (“NRS” or
“Nevada law”). Certain provisions ofNevada law create rights that might
be deemed material to our shareholders. Other provisions might delay or make
more difficult acquisitions of our stock or changes in our control or might also
have the effect of preventing changes in our management or might make it more
difficult to accomplish transactions that some of our shareholders may believe
to be in their best interests. These provisions are described
below.





Dissenters’
Rights.  Among the rights granted under Nevada law which might
be considered material is the right for shareholders to dissent from certain
corporate actions and obtain payment for their shares (see NRS 92A.380-390).
This right is subject to exceptions, summarized below, and arises in the event
of mergers or plans of exchange. This right normally applies if shareholder
approval of the corporate action is required either by Nevada law or by the
terms of the articles of incorporation.




26





A
shareholder does not have the right to dissent with respect to any plan of
merger or exchange, if the shares held by the shareholder are part of a class of
shares which are:





·
            listed
      on a national securities exchange,




·
            included
      in the national market system by Finra,
or




·
            held
      of record by not less than 2,000
holders.




This
exception notwithstanding, a shareholder will still have a right of dissent if
it is provided for in the articles of incorporation or if the shareholders are
required under the plan of merger or exchange to accept anything but cash or
owner’s interests, or a combination of the two, in the surviving or acquiring
entity, or in any other entity falling in any of the three categories described
above in this paragraph.





Inspection
Right.  Nevada law also specifies that shareholders are to have
the right to inspect company records (see NRS 78.105). This right extends to any
person who has been a shareholder of record for at least six months immediately
preceding his demand. It also extends to any person holding, or authorized in
writing by the holders of, at least 5% of outstanding shares. Shareholders
having this right are to be granted inspection rights upon five days’ written
notice. The records covered by this right include official copies of (1) the
articles of incorporation, and all amendments thereto, (2) bylaws and all
amendments thereto, and (3) a stock ledger or a duplicate stock ledger, revised
annually, containing the names, alphabetically arranged, of all persons who are
stockholders of the corporation, showing their places of residence, if known,
and the number of shares held by them, respectively. In lieu of the stock ledger
or duplicate stock ledger, Nevada law provides that the corporation may keep a
statement setting out the name of the custodian of the stock ledger or duplicate
stock ledger, and the present and complete post office address, including street
and number, if any, where the stock ledger or duplicate stock ledger specified
in this section is kept.





Control Share Acquisitions.Sections 78.378 to 78.3793 of Nevada law contain provisions that may
prevent any person acquiring a controlling interest in a Nevada-registered
company from exercising voting rights. To the extent that these rights support
the voting power of minority shareholders, these rights may also be deemed
material. These provisions will be applicable to us as soon as we have 200
shareholders of record with at least 100 of these having addresses in Nevada as
reflected on our stock ledger. While we do not yet have the required number of
shareholders in Nevada or elsewhere, it is possible that at some future point we
will reach these numbers and, accordingly, these provisions will become
applicable. We do not intend to notify shareholders when we have reached the
number of shareholders specified under these provisions of Nevada law.
Shareholders can learn this information pursuant to the inspection rights
described above and can see the approximate number of our shareholders by
checking under Item 5 of this annual report.  This form is required to
be filed with the SEC within 90 days of the close of each fiscal year, absent
timely request for a 15 calendar day extension. You can view these and our other
filings at www.sec.gov.





Under NRS
Sections 78.378 to 78.3793, an acquiring person who acquires a controlling
interest in company shares may not exercise voting rights on any of these shares
unless these voting rights are granted by a majority vote of our disinterested
shareholders at a special shareholders’ meeting held upon the request and at the
expense of the acquiring person. If the acquiring person’s shares are accorded
full voting rights and the acquiring person acquires control shares with a
majority or more of all the voting power, any shareholder, other than the
acquiring person, who does not vote for authorizing voting rights for the
control shares, is entitled to demand payment for the fair value of their
shares, and we must comply with the demand. An “acquiring person” means any
person who, individually or acting with others, acquires or offers to acquire,
directly or indirectly, a controlling interest in our shares. “Controlling
interest” means the ownership of our outstanding voting shares sufficient to
enable the acquiring person, individually or acting with others, directly or
indirectly, to exercise one-fifth or more but less than one-third, one-third or
more but less than a majority, or a majority or more of the voting power of our
shares in the election of our directors. Voting rights must be given by a
majority of our disinterested shareholders as each threshold is reached or
exceeded. “Control shares” means the company’s outstanding voting shares that an
acquiring person acquires or offers to acquire in an acquisition or within 90
days immediately preceding the date when the acquiring person becomes an
acquiring person.




27





These
Nevada statutes do not apply if a company’s articles of incorporation or bylaws
in effect on the tenth day following the acquisition of a controlling interest
by an acquiring person provide that these provisions do not apply.





According
to NRS 78.378, the provisions referred to above will not restrict our directors
from taking action to protect the interests of our company and shareholders,
including without limitation, adopting or executing plans, arrangements or
instruments that deny rights, privileges, power or authority to a holder of a
specified number of shares or percentage of share ownership or voting power.
Likewise, these provisions do not prevent directors or shareholders from
including stricter requirements in our articles of incorporation or bylaws
relating to the acquisition of a controlling interest.





Our
articles of incorporation and bylaws do not exclude us from the restrictions
imposed by NRS 78.378 to 78.3793, nor do they impose any more stringent
requirements.





Certain Business
Combinations.  Sections 78.411 to 78.444 of the Nevada law may
restrict our ability to engage in a wide variety of transactions with an
“interested shareholder.” As was discussed above in connection with NRS 78.378
to 78.3793, these provisions could be considered material to our shareholders,
particularly to minority shareholders. They might also have the effect of
delaying or making more difficult acquisitions of our stock or changes in our
control. These sections of NRS are applicable to any Nevada company with 200 or
more stockholders of record and that has a class of securities registered under
Section 12 of the Securities Exchange Act, unless the company’s articles of
incorporation provide otherwise.





These
provisions of Nevada law prohibit us from engaging in any “combination” with an
interested stockholder for three years after the interested stockholder acquired
the shares that cause him to become an interested shareholder, unless he had
prior approval of our board of directors. The term “combination” is described in
NRS 78.416 and includes, among other things, mergers, sales or purchases of
assets, and issuances or reclassifications of securities. If the combination did
not have prior approval, the interested shareholder may proceed after the
three-year period only if the shareholder receives approval from a majority of
our disinterested shares or the offer meets the requirements for fairness that
are specified in NRS 78.441-42. For the above provisions, “resident domestic
corporation” means a Nevada corporation that has 200 or more shareholders. An
“interested stockholder” is defined in NSR 78.423 as someone who is
either:





·
              the
      beneficial owner, directly or indirectly, of 10% or more of the voting
      power of our outstanding voting shares, or·
              our
      affiliate or associate and who within three years immediately before the
      date in question, was the beneficial owner, directly or indirectly, of 10%
      or more of the voting power of our outstanding shares at that
      time.




28




Directors’
Duties.  Section 78.138 of the Nevada law allows our directors
and officers, in exercising their powers to further our interests, to consider
the interests of our employees, suppliers, creditors and customers. They can
also consider the economy of the state and the nation, the interests of the
community and of society and our long-term and short-term interests and
shareholders, including the possibility that these interests may be best served
by our continued independence. Our directors may resist a change or potential
change in control if they, by a majority vote of a quorum, determine that the
change or potential change is opposed to or not in our best interest. Our board
of directors may consider these interests or have reasonable grounds to believe
that, within a reasonable time, any debt which might be created as a result of
the change in control would cause our assets to be less than our liabilities,
render us insolvent, or cause us to file for bankruptcy protection





Amendments to
Bylaws.Our articles of incorporation provide that the power
to adopt, alter, amend, or repeal our bylaws is vested exclusively with the
board of directors. In exercising this discretion, our board of directors could
conceivably alter our bylaws in ways that would affect the rights of our
shareholders and the ability of any shareholder or group to effect a change in
our control; however, the board would not have the right to do so in a way that
would violate law or the applicable terms of our articles of
incorporation.





Item 13.Certain Relationships and Related
Transactions, and Director Independence





We have
entered into an agreement regarding our President lending funds to us, if
necessary.  No amounts were outstanding under this agreement as of December
31, 2009.





Our
office space is provided to us by our President which serves as our principal
executive offices. We paid rent of $4,800 in each of 2009 and 2008 for use of
these facilities. There is no written lease agreement.





In May
2007, we sold 100,000 shares of our common stock to Kenneth Craig, a director
who is also our President’s father, for $100.





The board
of directors has determined that neither of its two members are currently
“independent directors,” as determined under Nasdaq guidelines, because they are
also executive officers.





Item 14.  Principal Accountant Fees and
Services





Audit
Fees





The
aggregate fees billed for professional services rendered by our principal
accountant for the audit of our annual financial statements and review of
financial statements included in the our Form 10-Q for the fiscal years ended
December 31, 2009 and December 31, 2008 were $14,500 and $14,500,
respectively.





Audit-Related
Fees





During
the fiscal years ended December 31, 2009 and 2008, our principal accountant
did not render assurance and related services reasonably related to the
performance of the audit or review of financial statements.




29





Tax
Fees





During
the fiscal years ended December 31, 2009 and 2008, the aggregate fees
billed for professional services rendered by our principal accountant for tax
compliance, tax advice, and tax planning were $750 and $1,500,
respectively.





All
Other Fees





During
the fiscal years ended December 31, 2009 and 2008, there were no fees
billed for products and services provided by the principal accountant other than
those set forth above.





Audit
Committee Approval





We
currently do not have an audit committee. However, our board of directors has
approved the services described above.




30





PART
IV





Item 15.  Exhibits and Financial Statement
Schedules




Exhibit Number and
Description


3.1
            
            Articles
      of Incorporation.  Incorporated by reference to exhibit 3.1 to
      Registration Statement on Form SB-2 (No. 333-144596), filed with the U.S.
      Securities and Exchange Commission on July 16, 2007.3.2
            
            Certificate
      of Amendment to Articles of Incorporation.  Incorporated by
      reference to exhibit 3.1 to Current Report on Form 8-K filed with the U.S.
      Securities and Exchange Commission on March 17, 2008.3.3
            
            Certificate
      of Amendment of the Articles of Incorporation filed with the Secretary of
      State of the State of Nevada effective March 30,
      2009.  Incorporated by reference to exhibit 3.1 to Current
      Report on Form 8-K filed with the U.S. Securities and Exchange Commission
      on April 4, 2009.3.4
            
            By-Laws.  Incorporated
      by reference to exhibit 3.2 to Registration Statement on Form SB-2 (No.
      333-144596), filed with the U.S. Securities and Exchange Commission on
      July 16, 2007.10.1
            
            2007
      Non-Statutory Stock Option Plan.  Incorporated by reference to
      exhibit 10.1 to Registration Statement on Form SB-2 (No. 333-144596),
      filed with the U.S. Securities and Exchange Commission on July 16,
      2007.10.2
            
            Agreement
      between Medical Design Studios, Inc., its president and its
      counsel.  Incorporated by reference to exhibit 10.2 to
      Registration Statement on Form SB-2 (No. 333-144596), filed with the U.S.
      Securities and Exchange Commission on July 16, 2007.10.3
            
            Form
      of Investment Letter.  Incorporated by reference to exhibit 10.3
      to Registration Statement on Form SB-2 (No. 333-144596), filed with the
      U.S. Securities and Exchange Commission on July 16,
  2007.31.1*
            
            Certification
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Chief Executive
      Officer and Chief Financial Officer.32.1*
            
            Certification
      Pursuant Section 906 of the Sarbanes-Oxley Act of 2002 Chief Executive
      Officer and Chief Financial
Officer.







*
            Filed
      herewith.




31




SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




Date:  March
      31, 2010
              MEDICAL DESIGN STUDIOS,
      INC.By:
              /s/Justin N. CraigJustin
      N. CraigPresident,
      Chief Executive Officer, Chief
                Financial
      Officer and Chairman(principal
      executive officer and principal
                financial
      and 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.


Date:  March 31,
      2010
                
                /s/Justin N. CraigJustin
      N. CraigPresident,
      Chief Executive Officer, Chief
                    Financial
      Officer and Chairman(principal
      executive officer and principal
                  financial
      and accounting officer)
 Date:  March
      31, 2010
                
                /s/ Kenneth
      CraigKenneth
      CraigSecretary
      and Director




32







MEDICAL
DESIGN STUDIOS, INC.
 
 FINANCIAL
STATEMENTS
 
 December
31, 2009 and 2008
 
 TABLE
OF CONTENTS
  
 
 REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                F-1BALANCE
      SHEETS
                F-2STATEMENTS
      OF OPERATIONS
                F-3STATEMENT OF STOCKHOLDERS’ EQUITY
      (DEFICIT)
                F-4STATEMENTS OF CASH
    FLOWS
                F-5NOTES
      TO FINANCIAL STATEMENTS
                F-6
  
  REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the Board of
Directors and Stockholders of
 Medical
Design Studios, Inc.
 Aurora,
Colorado
 
 We have
audited the accompanying balance sheets of Medical Design Studios, Inc. as of
December 31, 2009 and 2008 and the related statements of operations,
stockholders’ equity (deficit) and cash flows for the years then ended. 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 audits 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 audits provide a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Medical Design Studios, Inc. as of
December 31, 2009 and 2008 and the results of its operations and its cash flows
for the fiscal years then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company had a negative working capital and an accumulated
deficit at December 31, 2009 and had a net loss and cash used in operations for
the year ended December 31, 2009. These factors raise substantial doubt about
the Company’s ability to continue as a going concern. Management’s plans in
regards to these matters are also described in Note 3. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
 
 
 /s/ Li & Company,
PC
 Li &
Company, PC
 Skillman,
New Jersey
 March 31,
2010
  F-1
  
 
 MEDICAL
DESIGN STUDIOS, INC.
 Balance
Sheets
 
 
 ASSETSDecember 31,
                  2009
                
                
                December 31,
                  2008Current
      Assets:Cash
                
                $
                100
                
                
                $
                4,766Accounts
      receivable, net of allowance for doubtful accounts of  $30,521
      and $20,000 respectively
                
                
                9,025
                
                
                
                5,734Total
      current assets
                
                
                9,125
                
                
                
                10,500Equipment:Computer
      and video equipment
                
                
                29,793
                
                
                
                29,793Accumulated
      depreciation
                
                
                (20,470
                )
                
                
                (13,516
                )Net
                
                
                9,323
                
                
                
                16,277TOTAL
      ASSETS
                
                $
                18,448
                
                
                $
                26,777LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      LiabilitiesAccrued
      expenses
                
                $
                17,561
                
                
                $
                42,730Stockholders'  Equity
      (Deficit):Preferred
      stock: $0.001 par value; 1,000,000 shares authorized; no shares issued or
      outstanding
                
                
                -
                
                
                
                -Common
      stock: $0.001 par value; 74,000,000 shares authorized; 7,142,946 shares
      issued and outstanding
                
                
                7,143
                
                
                
                7,143Additional
      paid-in capital
                
                
                87,312
                
                
                
                44,812Accumulated
      deficit
                
                
                (93,568
                )
                
                
                (67,908
                )Total
      stockholders’ equity (deficit)
                
                
                887
                
                
                
                (15,953
                )TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
                
                $
                18,448
                
                
                $
                26,777
    See
      accompanying notes to financial
statements.
  F-2
 
 
 MEDICAL
DESIGN STUDIOS, INC.
  Statements
of Operations
 
 For
      the Year Ended
                December
      31,2009
              
              
              2008Revenue
              
              $
              150,646
              
              
              $
              160,491Operating
      Expenses:Selling,
      general and administrative
              
              
              47,631
              
              
              
              69,914Professional
      fees
              
              
              13,000
              
              
              
              31,546Compensation
              
              
              115,675
              
              
              
              126,382Total
      operating expenses
              
              
              176,306
              
              
              
              227,842Loss
      before income taxes
              
              
              (25,660
              )
              
              
              (67,351
              )Provision
      for income taxes
              
              
              -
              
              
              
              -Net
      loss
              
              $
              (25,660
              )
              
              $
              (67,351
              )Net
      loss per common share - basic and diluted
              
              $
              (0.00
              )
              
              $
              (0.01
              )Weighted
      average number of common shares outstanding – basic and
      diluted
              
              
              7,142,946
              
              
              
              7,142,946See
      accompanying notes to the financial statements.
  
  F-3
  MEDICAL
DESIGN STUDIOS, INC.
 
 Statement
of Stockholders’ Equity (Deficit)
 For the
Years Ended December 31, 2009 and 2008
 
 Common
                Shares
              
              
              Amount
              
              
              Additional
                Paid-in
                Capital
              
              
              Accumulated
                Deficit
              
              
              TotalBalance,
      January 1, 2008
              
              
              7,142,946
              
              
              $
              7,143
              
              
              $
              18,409
              
              
              $
              (557
              )
              
              $
              24,995Contribution
      to capital
              
              
              
              
              
              
              
              
              
              
              26,403
              
              
              
              
              
              
              
              26,403Net
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (67,351
              )
              
              
              (67,351
              )Balance,
      December 31, 2008
              
              
              7,142,946
              
              
              
              7,143
              
              
              
              44,812
              
              
              
              (67,908
              )
              
              
              (15,953
              )Contribution
      to capital
              
              
              
              
              
              
              
              
              
              
              42,500
              
              
              
              
              
              
              
              42,500Net
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (25,660
              )
              
              
              (25,660
              )Balance,
      December 31, 2009
              
              
              7,142,946
              
              
              $
              7,143
              
              
              $
              87,312
              
              
              $
              (93,568
              )
              
              $
              887See
      accompanying notes to the financial statements.
 F-4
 MEDICAL
DESIGN STUDIOS, INC.
  Statements
of Cash Flows
 
 For
      the Year Ended
                December
      31,2009
              
              
              2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
              
              $
              (25,660
              )
              
              $
              (67,351
              )Bad
      debt expense
              
              
              10,521
              
              
              
              20,000Depreciation
              
              
              6,954
              
              
              
              7,197Adjustments
      to reconcile net loss to net cash used in operating
      activities:(Increase)
      decrease in accounts receivable
              
              
              (13,812
              )
              
              
              12,091Increase
      (decrease) in accrued expenses
              
              
              (25,169
              )
              
              
              17,644Net
      Cash Used in Operating Activities
              
              
              (47,166
              )
              
              
              (10,419
              )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of computer
              
              
              -
              
              
              
              (11,718
              )Net
      Cash Used in Financing Activities
              
              
              -
              
              
              
              (11,718
              )CASH
      FLOWS FROM FINANCING ACTIVITIESSale
      of common shares
              
              
              
              
              
              
              -Contribution
      to capital
              
              
              42,500
              
              
              
              26,403Net
      Cash Provided by Operating Activities
              
              
              42,500
              
              
              
              26,403NET
      CHANGE IN CASH
              
              
              (4,666
              )
              
              
              4,266CASH
      AT BEGINNING OF YEAR
              
              
              4,766
              
              
              
              500CASH
      AT END OF YEAR
              
              $
              100
              
              
              $
              4,766SUPPLEMENTAL
      SCHEDULE OF CASH FLOW ACTIVITIESCash
      Paid For:Interest
      paid
              
              $
              -
              
              
              $
              -Income
      taxes
              
              $
              -
              
              
              $
              -See
      accompanying notes to the financial statements.
   F-5
  
 
 MEDICAL
DESIGN STUDIOS, INC.
 
 December
31, 2009 and 2008
 Notes to
the Financial Statements
 
 NOTE 1
-ORGANIZATION
 
 Medical
Design Studios, Inc. (“MDS” or the “Company”) was founded as an unincorporated
business in January 2004 and became a C corporation in the State of Nevada on
February 1, 2005. The Company is a digital medical illustrator and animator
providing digital displays and enhancements to companies that assist attorneys
to prepare or enhance exhibits for trials involving medical issues. The Company
applied 505-10-S99-3 of the FASB Accounting Standards Codification, by
reclassifying all of the Company’s undistributed earnings and losses to
additional paid-in capital as of December 31, 2004 and the Company was inactive
for the month ended January 2005.  The accompanying financial
statements have been prepared as if the Company had its corporate capital
structure as of the first date of the first period presented.
 
 The
acquisition of Medical Design Studios (“Predecessor”) by Medical Design Studios,
Inc. (“MDS”) has been accounted for as a reverse acquisition for financial
accounting purposes. The reverse merger is deemed a capital transaction and the
net assets of Predecessor (the accounting acquirer) are carried forward to MDS
(the legal acquirer and the reporting entity) at their carrying value before the
combination. The acquisition process utilizes the capital structure of MDS and
the assets and liabilities of Predecessor which are recorded at historical cost.
Since MDS had no operations prior to the reverse merger, the financial
statements of Predecessor and MDS are being combined for the period from January
1, 2004 through February 1, 2005. The equity of MDS is the historical equity of
Predecessor retroactively restated to reflect the number of shares issued by MDS
in the transaction.
 
 On March 14, 2008, Justin N. Craig, the
Company’sPresident and
Chief Executive Officer, privately sold6,528,572shares ofthe Company’scommon stock, constituting 91.4% ofthe Company’soutstanding shares and all of the
shares owned beneficially by him, to Vision Opportunity Master Fund, Ltd.
Certain other ofthe
Company’sstockholders also
sold shares ofthe
Company’scommon stock to
Vision Opportunity Master Fund. As a result of these privately-negotiated sales,
a change in control occurred from Mr. Craig to Vision Opportunity Master
Fund.
  On March 17, 2008, pursuant to prior
approvals by stockholders owning in excess of a majority of the voting power ofthe Company’s outstanding
shares, the Companyeffected a 2-for-1 reverse stock split ofthe Company’soutstanding shares of common
stock.
  F-6
   After giving effect to the
privately-negotiated transactions described above, Vision Opportunity Master
Fund owns6,742,858shares ofthe Company’scommon stock, or 94.4% ofthe Company’soutstanding shares. Vision Opportunity
Master Fund purchased these shares for approximately $670,000 in cash, inclusive
of related acquisition costs. The source of the funding for the cash payment was
the general working capital of Vision Opportunity Master
Fund.
  The terms of the purchase and sale
transactions were as a result of arm’s-length negotiations between the parties.
None of the parties had any relationship with one another prior to this
transaction.
  The Company’sofficers and directors, and the
business focus of our company, were not changed in connection with the purchase
and sale transactions.
 
 On
November 21, 2008, the Company effectuated a 5 for 1 forward stock
split.
 
 On March
21, 2009, the Company effectuated a 1 for 3.5 reverse stock split.
 
 All share and per share amounts in
these financial statements have been adjusted to give retroactive effect to the
reverse stock split.
 
 NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 a. 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”).
 
 b.
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 c.
Reclassifications
 
 Certain
amounts in the prior period financial statements have been reclassified to
conform to the current period presentation. These reclassifications had no
effect on reported losses.
 
  F-7
  d. Cash
Equivalents
 
 The
Company considers all highly liquid investments with a maturity of three months
or less when purchased to be cash equivalents.
 
 e.
Accounts Receivable and Allowance for Doubtful Accounts
 
 Accounts
receivable are recorded at cost. The Company considers the need for an allowance
for doubtful accounts related to its accounts receivables that are deemed to
have a high risk of collectability. Management reviews its accounts receivables
on a monthly basis to determine if any receivables will potentially be
uncollectible. Management analyzes historical collection trends and changes in
its customer payment patterns, customer concentration, and credit worthiness
when evaluating the adequacy of its allowance for doubtful accounts. The Company
includes any receivables balances that are determined to be uncollectible, along
with a general reserve, in its overall allowance for doubtful accounts. The
allowance for doubtful accounts was $30,521 and $20,000 at December 31, 2009 and
2008, respectively.
 
 f.
Equipment
 
 Equipment,
      which consists of computers and video equipment, is stated at cost less
      accumulated depreciation. Depreciation is calculated on the straight-line
      basis over the estimated useful life of three (3) to five (5) years.
      Depreciation expense for the years ended December 31, 2009 and 2008 was
      $6,954 and $7,197, respectively.
 
 The
carrying values of fixed assets are evaluated whenever changes in circumstances
indicate the carrying amount of such assets may not be recoverable. If
necessary, the Company recognizes an impairment loss for the difference between
the carrying amount of the assets and their estimated fair value. Fair value is
based on current and anticipated future undiscounted cash flows. As of December
31, 2009 or 2008, no impairment was incurred.
 
 g. Fair
value of financial instruments
 
 The
Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification
(“Paragraph 820-10-35-37”) to measure the fair value of its financial
instruments.  Paragraph 820-10-35-37 establishes a framework for
measuring fair value in accounting principles generally accepted in the United
States of America (U.S. GAAP), and expands disclosures about fair value
measurements. To increase consistency and comparability in fair value
measurements and related disclosures, Paragraph 820-10-35-37 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 Paragraph 820-10-35-37 are described below:
  F-8
  
 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.
 
 The carrying amounts of the Company’s
financial assets and liabilities, such as cash, accounts receivableandaccrued 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
December 31, 2009 or 2008, 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 interim period ended December 31, 2009 or 2008.
 
 h.
Revenue Recognition
 
 The
Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition.  The Company recognizes revenue
when it is realized or realizable and earned less estimated future doubtful
accounts.  The Company considers revenue realized or realizable and
earned when all of the following criteria are met: (i) persuasive evidence of an
arrangement exists, (ii) the product has been shipped or the services have been
rendered to the customer, (iii) the sales price is fixed or determinable, and
(iv) collectability is reasonably assured.
  i. Income
Taxes
 
 The
Company accounts for income taxes under Section 740-10-30 of the FASB Accounting
Standards Codification.  Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when 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 statements of operations in the period that includes the
enactment date.
  F-9
  
 The Company adoptedsection
740-10-25 of the FASB Accounting Standards Codification (“Section
740-10-25”).Section
740-10-25addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements.  UnderSection 740-10-25, 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 percent (50%) likelihood of being realized upon ultimate
settlement.  Section 740-10-25also 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 ofSection 740-10-25.
 
 j. Net
Loss Per Common Share
 
 Net loss
per common share is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification.  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.
Therewereno potentially dilutive shares
outstanding as of December 31, 2009 or 2008.
 
 k.
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. 33-9072 on October 13,
2009. Commencing with its annual report for the fiscal year ending
December 31, 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
  F-10
   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
August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-04 “Accounting for
Redeemable Equity Instruments - Amendment to Section 480-10-S99” which
represents an update to section 480-10-S99, distinguishing liabilities from
equity, per EITF Topic D-98, Classification and Measurement of
Redeemable Securities.  The Company does not expect the
adoption of this update to have a material impact on its consolidated financial
position, results of operations or cash flows.
 
 In
August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-05 “Fair Value
Measurement and Disclosures Topic 820 – Measuring Liabilities at Fair
Value”, which provides amendments to subtopic 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities.  This Update provides clarification that in circumstances
in which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using one or
more of the following techniques: 1. A valuation technique that uses: a. The
quoted price of the identical liability when traded as an asset b. Quoted prices
for similar liabilities or similar liabilities when traded as assets. 2. Another
valuation technique that is consistent with the principles of topic 820; two
examples would be an income approach, such as a present value technique, or a
market approach, such as a technique that is based on the amount at the
measurement date that the reporting entity would pay to transfer the identical
liability or would receive to enter into the identical liability. The amendments
in this Update also clarify that when estimating the fair value of a liability,
a reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of the liability. The amendments in this Update also clarify that both
a quoted price in an active market for the identical liability when traded as an
asset in an active market when no adjustments to the quoted price of the asset
are required are Level 1 fair value measurements.  The Company does
not expect the adoption of this update to have a material impact on its
consolidated financial position, results of operations or cash
flows.
  F-11
  
 In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-09 “Accounting for
Investments-Equity Method and Joint Ventures and Accounting for Equity-Based
Payments to Non-Employees”.  This Update represents a
correction to Section 323-10-S99-4, Accounting by an Investor for
Stock-Based Compensation Granted to Employees of an Equity Method
Investee. Additionally, it adds observer commentAccounting Recognition for Certain
Transactions Involving Equity Instruments Granted to Other Than Employees
to the Codification. The Company does not expect the adoption to have a material
impact on its consolidated financial position, results of operations or cash
flows.
 
 In
January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-01 “Equity Topic 505 –
Accounting for Distributions to Shareholders with Components of Stock and
Cash”, which clarifies that the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a potential
limitation on the total amount of cash that all shareholders can elect to
receive in the aggregate is considered a share issuance that is reflected in EPS
prospectively and is not a stock dividend for purposes of applying Topics 505
and 260 (Equity and Earnings Per Share (“EPS”)).  Those distributions
should be accounted for and included in EPS calculations in accordance with
paragraphs 480-10-25- 14 and 260-10-45-45 through 45-47 of the FASB Accounting
Standards codification.  The amendments in this Update also provide a
technical correction to the Accounting Standards Codification.  The
correction moves guidance that was previously included in the Overview and
Background Section to the definition of a stock dividend in the Master
Glossary.  That guidance indicates that a stock dividend takes nothing
from the property of the corporation and adds nothing to the interests of the
stockholders.  It also indicates that the proportional interest of
each shareholder remains the same, and is a key factor to consider in
determining whether a distribution is a stock dividend.
 
 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
 
  F-12
  The
accompanying financial statements have been prepared on a going concern basis
which contemplates the realization of assets and satisfaction of liabilities in
the normal course of business. At December 31, 2009, the Company has an
accumulated deficit of $93,568and a working capital
deficiency of $8,436 and had a net loss of $25,660 and cash used in operations
of $47,166 for the year ended December 31, 2009, respectively.
 
 These
factors raise substantial doubt about the Company’s ability to continue as a
going concernand aredependent upon its ability to achieve
profitable operations or obtain adequate financing. The financial statements do
not include any adjustments related to the recoverability and classification of
recorded asset amounts or the amounts and classification of liabilities that
might be necessary should the Company be unable to continue in
existence.
 
 While the
Company is attempting to expand operations and produce additional revenues, the
Company’s cash position may not be significant enough to support the Company’s
daily operations. There are no assurances that it will complete the engagements
successfully or that these engagements will be extended or new engagements will
be obtained.
 
 NOTE 4 -
STOCKHOLDERS’ DEFICIT
 
 The Company was incorporated as a C
corporation on February 1, 2005 at which time 6,528,572shares of common stock were
issued to the Company’s founder in exchange for the existing business of Medical
Design Studios.
 
 On May
18, 2007, 542,858 shares of the Company’s common stock were sold to 39
shareholders at $.001 per share, including 71,429 shares sold to a director of
the Company. The director is also the father of the Company’s President. Of the542,858 shares, 214,286 (39.5%) shares were sold
to people directly related to at least one officer or director and 214,286
(39.5%) shares were sold to the Company’s counsel.
 
 On March17, 2008, pursuant to prior approvals by
stockholders owning in excess of a majority of the voting power ofthe Company’s outstanding shares, the
Companyeffectuated a 2-for-1reverse stock split ofthe Company’soutstanding shares of common
stock.
  Vision Opportunity Master Fund owns6,742,858shares ofthe Company’scommon stock, or 94.4% ofthe Company’soutstanding shares. Vision Opportunity
Master Fund purchased these shares for a total of approximately $670,000 in
cash, inclusive of related acquisition costs. The source of the funding for the
cash payment was the general working capital of Vision Opportunity Master
Fund.
   F-13
  The terms of the purchase and sale
transactions were as a result of arm’s-length negotiations between the parties.
None of the parties had any relationship with one another prior to this
transaction.
 
 On
November 21, 2008, the Company effectuated a 5 for 1 forward stock
split.
 
 All share and per share amounts in
these financial statements have been adjusted to give retroactive effect to the
reverse stock split.
 
 Following
the reverse stock split, the majority shareholder contributed $26,403 to the
Company for working capital.
 
 Stock
Option Plan
  Pursuant to a May 22, 2007 Board of Directors approval and
subsequent stockholder approval, the Company adopted its 2007 Non-Statutory
Stock Option Plan (the “Plan”) whereby it reserved for issuance up to 1,500,000
shares of its common stockto directors, officers, employees, consultants and professionals. The purpose of the Plan is to provide
recipientswith additional
incentives by increasing their ownership interest in the Company.
  The Planprovides for the issuance ofNon-Statutory Stock Options
only, which are not intended to qualify as “incentive stock options” within the
meaning of Section 422 of the Internal Revenue Code, as amended.The Plan expires in
2017.
  No options are outstanding or have been
issued under the Plan at
December 31, 2009 or 2008.
  NOTE
5 – INCOME TAXES
 
 Deferred tax
assets
 
 At
December 31, 2009, the Company had net operating loss (“NOL”) carry–forwards for
Federal income tax purposes of $93,568 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 $31,813 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 $31,813.
 
 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 $8,724and $22,211for the years ended December
31, 2009 and2008, respectively.
 
  F-14
  Components of deferred tax assets at
December 31, 2009 and 2008 are as
follows:
 
 December
      31,
                2009
              
              
              December
      31,
                2008Net deferred tax assets –
      Non-current:Expected income tax benefit from
      NOL carry-forwards
              
              $
              31,813
              
              
              $
              23,089Less valuation
      allowance
              
              
              (31,813
              )
              
              
              (23,089
              )Deferred tax assets, net of
      valuation allowance
              
              $
              -
              
              
              $
              -
 
 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
                December 31,
                2009
              
              
              For the
                Year Ended
                December 31,
                2008Federalstatutoryincome tax
    rate
              
              
              34.0
              %
              
              
              34.0
              %Change in valuation allowance on
      net operatingloss
      carry-forwards
              
              
              (34.0
              )%
              
              
              (34.0
              )%Effective income tax
      rate
              
              
              0.0
              %
              
              
              0.0
              %
 
 NOTE 6 –
CONCENTRATION OF RISK
 
 For the
year ended December 31, 2009, two unrelated customers, Trial Exhibits, Inc.
(67.4%) and Legal Wizards (13.0%) comprised 80.4% of total revenues. For the
year ended December 31, 2008, two unrelated customers Legal Wizards (60.0%) and
Trial Exhibits, Inc. (10.51%) comprised 70.51% of total revenues.
 
 At
December 31, 2009, one unrelated customers Legal Wizards comprised 75.3% of
accounts receivable. At December 31, 2008, the Company’s accounts receivable
were comprised of amounts from five (5) unrelated customers all with balances
greater than 10% of accounts receivable.
 
 NOTE 7 –
RELATED PARTY TRANSACTIONS
 
 The
Company’s office space which serves as its principal address is provided to it
by its President. The Company paid rent of $4,800 in each of 2009 and 2008 for
use of these facilities. There is no written lease agreement.
 
 NOTE 8 –
SUBSEQUENT EVENTS
 
  F-15
  The
Company has evaluated all events that occurred after the balance sheet date of
December 31, 2009 through March 31, 2010, the date when the financial statements
were issued.  The Management of the Company determined that there were
no reportable events that occurred during that subsequent period to be disclosed
or recorded.
 
 
  F-16