UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON
D.C.





FORM
10-KSB





[X]           ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE PROGRAM





For the
fiscal year ended December 31, 2007





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





For the
transition period from _________ to _____________





Commission
file number 000-52764





BEAUTY BRANDS GROUP,
INC.


(Exact
name of Registrant as specified in its charter)





FLORIDA
            59-1213720(State
      of other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification Number)


100 Jericho Quadrangle,
Suite 335, Jericho, New York 11753


Address
of principal executive offices





Registrant’s telephone number,
including area code:  516-939-9400





Securities
registered pursuant to Section 12(b) of the Act:  NONE





Securities
registered pursuant to Section 12(g) of the Act: $0.10 Par Value Common
Stock





Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. o




Check whether the issuer: (1) has
filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.    YES  x    NO  
 ̈




Check if there is no disclosure of
delinquent  filers in response to Item 405 of Regulation S-B contained
in this form, and no disclosure will be contained, to the best of Company's
knowledge, in definitive proxy or information statements
incorporated  by reference  in Part III of this Form 10-KSB
or any  amendment to this Form 10-KSB.   ̈




Indicate by check mark if the
registrant is a Shell company (as defined by Rule 12b-2 of the Exchange
Act). YES  x  NO   ̈





The issuer’s revenues for its most
recent fiscal year were:$--0--





Our common stock can be traded on the
over-the-counter pink sheets.  There was no appreciable market
activity or trading volume during the year ended 12/31/07 and there has been no
appreciable trading volume in 2008.  Accordingly,
the aggregate market value of the voting common equity held by non-affiliates of
the registrant is deemed to be $--0--.   Shares of common stock
held by each officer and director and by each person who owns five percent or
more of the outstanding common stock have been excluded from this calculation as
such persons may be considered to be affiliated with the
issuer.


1





As of March 10, 2008, the registrant
had 15,276,411 shares of Common Stock, $0.001 par value per share, issued and
outstanding.





Documents incorporated by
reference.:  None





Transitional Small Business Disclosure
Format: ̈ Yes x No





BEAUTY
BRANDS GROUP, INC.





Form
10-KSB - Index





For the
Fiscal Year Ended December 31, 2007





PART
      I
            
            PageItem
      1.
            Description
      of Business
            3Item
      2
            Description
      of Property
            7Item
      3.
            Legal
      Proceedings
            7Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            7PART
      IIItem
      5
            Market
      For Common Equity and Related Stockholder Matters and Small Business
      Issuer Purchase of Equity Securities
            7Item
      6
            Management’s
      Discussion and Analysis or Plan of Operation
            8Item
      7
            Financial
      Statements
            F-1Item
      8
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
            F-10Item
      8A
            Controls
      and Procedures
            F-10Item
      8B
            Other
      Information
            F-10PART
      IIIItem
      9
            Directors,
      Executive Officers, Promoters, Control Persons and Corporate Governance;
      Compliance with Section 16(a) of the Exchange Act
            12Item
      10
            Executive
      Compensation
            14Item
      11
            Security
      Ownership of certain Beneficial Owners and Management and Related
      Stockholder Matters
            16Item
      12
            Certain
      Relationships and Related Transactions, and Director
      Independence
            17Item
      13
            Exhibits
            18Item
      14
            Principal
      Accountant Fees and Services
            18








2


PART
I





This
Annual Report on Form 10-K contains forward looking statements that are made
pursuant to the Safe Harbor provisions
of the Private Securities Litigation Reform Act of 1995.  Forward-looking
statements involve risks, uncertainties and assumptions as described from time
to time in registration statements, annual reports, and other periodic reports
and filings of the Company filed with the Securities and Exchange
Commission.  All statements, other than statements of historical facts,
which address the Company’s expectations of sources of capital or which express
the Company’s expectation for the future with respect to financial performance
or operating strategies can be identified as forward-looking statements. 
As a result, there can be no assurance that the Company’s future results will
not be materially different from those described herein as “believed,”
“anticipated,” “estimated” or “expected,” which reflect the current view of the
Company with respect to future events.  We caution readers that these
forward-looking statements speak only as of the date hereof.  The Company
hereby expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any such statement to reflect any change in the
Company’s expectations or any change in events, conditions or circumstances on
which such statement is based.





Item
1.    DESCRIPTION OF BUSINESS





General





BEAUTY
BRANDS GROUP, INC. ("We", "Us" or the "Company") is a Florida corporation and
was incorporated in 1968 as “Chemair Corporation of America.”  In
February 1983, the Company changed its name to Beauty Brands Group,
Inc.




The
Company is now considering business opportunities for merger or acquisition that
might create value for its shareholders.  We have no day-to-day
operations.  Our officers and directors devote limited time and
attention to the affairs of the Company.




Selection
of a Business




Management
has adopted a conservative policy of seeking opportunities that it considers to
be of exceptional quality. Therefore, we may have to wait some time before
consummating a suitable transaction. Management recognizes that the higher the
standards it imposes upon us, the greater may be its competitive disadvantage
when vying with other acquiring interests or entities.




The
Company does not intend to restrict its consideration to any particular business
or industry segment. Due to our lack of financial resources, the scope and
number of suitable business ventures is limited. We are therefore most likely to
participate in a single business venture. Accordingly, the Company may not be
able to diversify and may be limited to one merger or acquisition. The lack of
diversification would prevent us from offsetting losses from one business
opportunity against profits from another.




The
decision to participate in a specific business opportunity will be made upon
management’s analysis of the quality of the opportunity’s management and
personnel, the anticipated acceptability of products or marketing concepts, the
merit of technological changes and numerous other factors which are difficult,
if not impossible, to analyze through the application of any objective criteria.
Further, it is anticipated that the historical operations of a specific venture
may not necessarily be indicative of the potential for the future because of the
necessity to substantially shift a marketing approach, expand operations, change
product emphasis, change or substantially augment management, or make other
changes. The Company will be partially dependent upon the management of any
given business opportunity to identify such problems and to implement, or be
primarily responsible for the implementation of required changes.




Since we
may participate in a business opportunity with a newly organized business or
with a business which is entering a new phase of growth, it should be emphasized
that the Company may incur risk due to the failure of the target’s management to
have proven its abilities or effectiveness, or the failure to establish a market
for the target’s products or services, or the failure to realize
profits.




3


The
Company will not acquire or merge with any company for which audited financial
statements cannot be obtained.
Management anticipates that any opportunity in which we participate will present
certain risks. Many of these risks cannot be adequately identified prior to
selection of a specific opportunity. Our shareholders must therefore depend on
the ability of management to identify and evaluate such risks. Further, in the
case of some of the opportunities available to us, it may be anticipated that
some of such opportunities are yet to develop as going concerns or that some of
such opportunities are in the development stage in that same have not generated
significant revenues from principal business activities prior to our
participation.




Acquisition
of Business




Implementation
of a structure for any particular business acquisition may involve a merger,
consolidation, reorganization, joint venture, franchise or licensing agreement
with another corporation or entity. The Company may also purchase stock or
assets of an existing business. On the completion of a transaction, it is
possible that present management and shareholders of the Company would not
remain in control of the Company. Further, our officers and directors may, as
part of the terms of any transaction, resign, to be replaced by new officers and
directors without a vote of our shareholders.




We
anticipate that any securities issued in any such reorganization would be issued
in reliance on exemptions from registration under applicable federal and state
securities laws. However, in certain circumstances, as a negotiated element of
any transaction, the Company may agree to register securities either at the time
a transaction is consummated, under certain conditions, or at a specified time
thereafter. The issuance of substantial additional securities and their
potential sale into any trading market may have a depressive effect on such
market.




While the
actual terms of a transaction to which the Company may be a party cannot be
predicted, it may be expected that the parties to a business transaction will
find it desirable to avoid the creation of a taxable event and thereby structure
the acquisition in a so called “tax-free” reorganization under Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended (the “Code”). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, our shareholders would retain less than 20% of the issued
and outstanding shares of the surviving entity, which could result in
significant dilution in the equity of such shareholders.




Our due
diligence process will likely require that management meet personally with the
personnel involved in any given transaction, visit and inspect material
facilities, obtain independent analysis or verification of the information
provided, check references for management and key persons, and take other
reasonable investigative measures, to the extent of our limited financial
resources and management expertise.





The
manner in which we participate in an opportunity will depend on the nature of
the opportunity, the respective needs and desires of the Company and other
parties, the management of the opportunity, and the our relative negotiating
strengths. Negotiations that involve mergers or acquisitions will focus on the
percentage of the Company that the target company shareholders would acquire in
exchange for their shareholdings in the target company. Depending upon, among
other things, the target company’s assets and liabilities, our shareholders will
in all likelihood hold a lesser percentage ownership interest in the Company
following any merger or acquisition. The percentage ownership may be subject to
significant reduction in the event the Company acquires a target company with
substantial assets. Any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of shares held
by our current shareholders.





Operation
of Business After Acquisition




The
Company’s operation following its merger with, or acquisition of a business will
be dependent on the nature of the business and the interest acquired. We are
unable to determine at this time whether the Company will be in control of the
business or whether present management will be in control of the Company
following the acquisition. We may expect that any future business will present
various challenges that cannot be predicted at the present time.





4





RISK
FACTORS




We Incurred Losses for the
Years Ended December 31, 2007 and 2006 and May Not Become a Profitable
Enterprise.




We
incurred an operating loss of approximately $29,977 for the year ended December
31, 2007 and approximately $1,540,603 for the year ended December 31, 2006. Our
profitability is dependent upon management’s ability to identify a business
acquisition and thereafter generate revenues and develop profitable operations.
There can be no assurances that we will achieve our goal of profitable
operations.





Government
Regulation




The
Company cannot anticipate the government regulations, if any, to which we may be
subject until it has acquired an interest in a business. The use of assets to
conduct a business that the Company may acquire could subject it to
environmental, public health and safety, land use, trade, or other governmental
regulations and state or local taxation. Our selection of a business in which to
acquire an interest will include an effort to ascertain, to the extent of the
limited resources of the Company, the effects of any government regulation on
the prospective business of the Company. However, in certain circumstances, such
as the acquisition of an interest in a new or start-up business activity, it may
not be possible to predict with any degree of accuracy the impact of government
regulation.




Competition




We may be
involved in intense competition with other business entities, many of which will
likely have a competitive edge over us by virtue of their stronger financial
resources and prior experience in business. The Company can provide no assurance
that it will be successful in obtaining a suitable business
opportunity.




Marketability




As we
currently are not involved in selling products or services, there can be no
assurance that we will be successful in marketing any such products or services
or whether a market will develop.




Patents, Trademarks,
Licenses, Franchises, Concessions, Royalty Agreements and Labor
Contracts




We
currently have no patents, trademarks, licenses, franchises, concessions,
royalty agreements or labor contracts.




Research and
Development




We spent
no amounts on research and development activities during each of the last two
fiscal years.





Employees




The
Company currently has no employees.  Management uses attorneys and
accountants as necessary and does not plan to engage any full-time employees in
the near future.




Currently,
the Company has no operating business.  It is the intention of the
current management to locate a new business opportunity, either by acquisition
of assets, stock or as a result of a merger.





5


We Will Continue to Incur
Increased Costs as a Result of Being a Reporting Company




We have
incurred, and expect to continue to incur, increased general and administrative
expenses as a reporting company. We also believe that compliance with the myriad
rules and regulations applicable to reporting companies
and related compliance issues will divert time and attention of management away
from operating and growing our business.




Being a
public company also increases the risk of exposure to class action stockholder
lawsuits and SEC enforcement actions, and increases the expense to obtain
appropriate director and officer liability insurance on acceptable or even
reduced policy limits and coverage. As a result, we may find it more difficult
to attract and retain qualified persons to serve on our board of directors or as
executive officers.




If Our Common Stock is
Subject to the SEC’s Penny Stock Rules, Broker-Dealers May Experience Difficulty
in Completing Customer Transactions and Trading Activity in Our Securities May
be Adversely Affected




A penny
stock is generally defined under the Securities Exchange Act of 1934, as amended
(“Exchange Act”) as any equity security other than a security that: (i) is an
national market system stock listed on a “grandfathered” national securities
exchange, (ii) is an national market system stock listed on a national
securities exchange or an automated quotation system sponsored by a registered
national securities association (including Nasdaq) that satisfies certain
minimum quantitative listing standards, (iii) has a transaction price of five
dollars or more, or (iv) is a security whose issuer has met certain net tangible
assets or average revenues, among other exemptions. Our Common Stock is not
currently traded on a national securities exchange or quotation system sponsored
by a national securities exchange and our transaction price is currently less
than five dollars. Therefore, if we have net tangible assets of $5,000,000 or
less, transactions in the Common Stock may become subject to the “penny stock”
rules promulgated under the Exchange Act. In accordance with these rules,
broker-dealers participating in transactions in low-priced securities must first
deliver a risk disclosure document that describes the risks associated with such
stocks, the broker-dealer’s duties in selling the stock, the customer’s rights
and remedies and certain market and other information. Furthermore, the
broker-dealer must make a suitability determination  approving the customer
for low-priced stock transactions based on the customer’s financial situation,
investment experience and objectives. Broker-dealers must also disclose these
restrictions in writing to the customer, obtain specific written consent from
the customer and provide monthly account statements to the customer. The effect
of these restrictions will probably decrease the willingness of broker-dealers
to make a market in our Common Stock, decrease liquidity of our Common Stock and
increase transaction costs for sales and purchases of our Common Stock as
compared to other securities. If our Common Stock becomes subject to these
rules, broker-dealers may find it difficult to effectuate customer transactions
and trading activity in our securities may be adversely affected. As a result,
the market price of our securities may be depressed and stockholders may find it
more difficult to sell their shares of Common Stock.





We May Issue Additional
Shares of Common Stock or Other Securities Which Could Dilute the Value of Our
Stockholders’ Securities.




Certain
events over which stockholders have no control could result in the issuance of
additional shares of our Common Stock, which could dilute the value of an
individual stockholder’s ownership in the Company. We may issue additional
shares of Common Stock or other securities:




To
      raise additional capital;Upon
      the exercise or conversion of outstanding options and stock purchase
      warrants;In
      connection with loans or other capital raising transactions;
      orIn
      connection with acquisitions of other businesses or
  assets.


6


Our Common Stock Has a Very
Limited Trading Market.




Our
Common Stock is traded on the over-the-counter Pink Sheets LLC electronic
quotation service, an inter-dealer quotation system that provides significantly
less liquidity than the NASDAQ stock market or any other national
securities exchange. In addition, trading in our Common Stock has historically
been extremely limited. This limited trading adversely affects the liquidity of
our Common Stock, not only in terms of the number of shares that can be bought
and sold at a given price, but also through delays in the timing of transactions
and reduction in security analysts’ and the media’s coverage of us. As a result,
there could be a larger spread between the bid and ask prices of our Common
Stock and you may not be able to sell shares of our Common Stock when or at
prices you desire.




We Do Not Intend To Pay
Dividends.




We
currently intend to retain any future earnings to fund growth and, therefore, do
not expect to pay any dividends to our stockholders in the foreseeable
future.




Item
      2.
            DESCRIPTION
      OF PROPERTY





We maintain our offices at 100 Jericho
Quadrangle, Suite 335, Jericho, New York 11753.   The telephone
number is 516-939-9400. The Company occupies space with Deer Creek Fund,
LLC.  We are not a signatory on the lease and would be considered a
month-to-month tenant, but do not pay rent on this space.  The space
is currently sufficient for our needs because we have no business
operations.





Item
      3.
            LEGAL
      PROCEEDINGS





We
      are not a party to any pending or active legal
  proceeding.





Item
      4.
            SUBMISSION
      OF MATTERS TO VOTE OF SECURITY
HOLDERS





For the fiscal year ended
December 31, 2007, there have been no matters submitted to the vote of the
security holders.




PART
II





Item
      5.
            MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLER MATTERS AND SMALL BUSINESS ISSUER
      PURCHASE OF EQUITY SECURITIES





The Company’s common stock, $0.10 par
value, is traded over-the-counter.  Any bids would be contained in the
National Daily Quotation Service of the National Association of Securities
Dealers (pink sheets) or online at http://www.pinksheets.com, symbol BBGR or
http://www.yahoo.com.  Symbol BBGR.PK




STOCK
PRICE AND DIVIDEND INFORMATION




Stock
      Price2006
            High
            Low
            Dividends
      Paid Per Common ShareFirst
      Quarter
            0.0
            0.0
            NoneSecond
      Quarter
            0.0
            0.0
            NoneThird
      Quarter
            0.0
            0.0
            NoneFourth
      Quarter
            0.0
            0.0
            None




Stock
      Price2007
            High
            Low
            Dividends
      Paid Per Common ShareFirst
      Quarter
            0.0
            0.0
            NoneSecond
      Quarter
            0.0
            0.0
            NoneThird
      Quarter
            0.0
            0.0
            NoneFourth
      Quarter
            0.0
            0.0
            None


7




The
Company has not paid a dividend on its shares of common stock and does not plan
to do so in the foreseeable future. The amount and timing of any dividend and
the determination of when to declare any dividend is subject to the discretion
of the Company's Board of Directors depending on the Company's future results of
operations, financial condition, capital requirements, and other factors deemed
relevant by the Board.




The
number of shareholders of record for the Company’s common stock as of March 10,
2008 is approximately 247.




Item
      6.
            MANAGEMENT’S
      DISCUSSION AND ANAYSIS OF FINANCIAL CONDITION AND PLAN AND RESULTS OF
      OPERATION





This
management’s Plan of Operation and Results of Operations and other parts of this
report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can also be identified by words such as
“anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms.
Forward-looking statements are not guarantees of future performance and our
actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed in the subsections entitled “Forward-Looking Statements and
Factors That May Affect Future Results and Financial Condition” below and
the subsection entitled “Risk
Factors” above. The following discussion should be read in conjunction
with our financial statements and notes thereto included in this report. All
information presented herein is based on our fiscal year ended December 31,
2007.




Plan of
Operation




The Company’s plan of operation for the
coming year is to identify and acquire a favorable business opportunity. The
Company does not plan to limit its options to any particular industry, but will
evaluate each opportunity on its merits.




The Company has not yet entered into
any agreement, nor does it have any commitment or understanding to enter into or
become engaged in any transaction, as of the date of this filing.





Results of
Operations




During the year ended December 31,
2007, and for the year to date, the Company’s operations were limited to seeking
to identify prospective business opportunities.




We do not expect to generate revenues
within the next twelve months of operation or ever, since we have yet to acquire
a favorable business opportunity, which opportunity if acquired, may or may not
produce revenue.




For the current fiscal year, the
Company anticipates incurring a loss as a result of administration expenses,
accounting costs, and expenses associated with maintaining its disclosure
obligations under the Exchange Act of 1934, as amended (“Exchange Act”). Since
we do not anticipate generating any revenues in the near term we will continue
to operate at a loss.





Net Loss




For the years ended December 31, 2007
and 2006, the Company recorded an operating loss of $29,977 and $1,540,603,
respectively.  The Company’s operating loss is attributable to general
and administrative expenses. The general and administrative expenses include
stock based compensation, accounting costs, and costs associated with the
preparation of disclosure documentation in connection with registration pursuant
to the Exchange
Act of 1934 as well as costs associated with the Company’s search for a suitable
business opportunity.  We did not generate any revenues during this
period.  We expect to continue to operate at a
loss through fiscal 2008 and due to the nature of the Company’s search for a
suitable business opportunity cannot determine whether we will ever generate
revenues from operations.


8




Capital
Expenditures




The Company expended no amounts on
capital expenditures for the years ended December 31, 2007 and
2006.




Capital Resources and
Liquidity




The Company had no assets as of
December 31, 2007.  Stockholders’ deficit in the Company was $4,872 at
December 31, 2007.




The Company had negative cash flows
from operations of $38,520 and $13,788 for the years ended December 31, 2007 and
2006, respectively.  Shareholders of the Company paid expenses
totaling $52,308 for the period from January 1, 2006 to December 31, 2007,
including accounting, administration, consulting and professional
fees.





The Company had cash flows from
financing activities of $38,520 and $13,788 for the years ended December 31,
2007 and 2006, respectively.




The Company’s current assets are
insufficient to conduct its plan of operation over the next twelve (12) months
and it may have to seek debt or equity financing to fund minimum operations. The
Company has no current commitments or arrangements with respect to, or immediate
sources of funding. Further, no assurances can be given that funding, if needed,
would be available or available to the Company on acceptable terms. The
Company’s shareholders would be the most likely source of new funding in the
form of loans or equity placements though none have made any commitment for
future investment and the Company has no agreement formal or otherwise. The
Company’s inability to obtain funding would have a material adverse affect on
its plan of operation.




The Company has no current plans for
the purchase or sale of any plant or equipment.




The Company has no employees and has no
current plans to make any changes in the number of employees.




The Company has no defined benefit plan
or contractual commitment with any of its officers or directors.




Forward Looking Statements
and Factors That May Affect Future Results and Financial
Condition




The
statements contained in the section titled Management’s Plan of Operation, with
the exception of historical facts, are forward looking statements within the
meaning of Section 27A of the Securities Act. A safe-harbor provision may not be
applicable to the forward looking statements made in this prospectus because of
certain exclusions under Section 27A (b). Forward looking statements reflect our
current expectations and beliefs regarding our future results of operations,
performance, and achievements. These statements are subject to risks and
uncertainties and are based upon assumptions and beliefs that may or may not
materialize. These statements include, but are not limited to, statements
concerning:


9


— our
anticipated financial performance and business plan;


— the
sufficiency of existing capital resources;




— our
ability to raise additional capital to fund cash requirements for future
operations;




—
uncertainties related to the Company’s future business prospects;




— the
ability of the Company to generate revenues to fund future
operations;




— the
volatility of the stock market and;




— general
economic conditions.




We wish to caution readers that the
Company’s operating results are subject to various risks and uncertainties that
could cause our actual results to differ materially from those discussed or
anticipated, including the factors set forth in the section entitled “Risk
Factors” included elsewhere in this report. We also wish to advise readers not
to place any undue reliance on the forward looking statements contained in this
report, which reflect our beliefs and expectations only as of the date of this
report. We assume no obligation to update or revise these forward looking
statements to reflect new events or circumstances or any changes in our beliefs
or expectations, other that is required by law.





Critical Accounting
Policies





Our financial statements and
accompanying notes have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis. The preparation of
financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting periods.




We regularly evaluate the accounting
policies and estimates that we use to prepare our financial statements. In
general, management's estimates are based on historical experience, on
information from third party professionals, and on various other assumptions
that are believed to be reasonable under the facts and circumstances. Actual
results could differ from those estimates made by management.





Stock-Based
Compensation




We adopted SFAS No. 123(R), on
January 1, 2006 using the modified prospective method, which required all
share-based payments to employees, including stock options, to be expensed based
on their fair value over the required award service period. We use the straight
line method to recognize compensation expense related to share-based payments.
In prior years, we followed Accounting Principles Board No. 25, “Accounting
for Stock Issued to Employees,” in accounting for stock option awards to
employees, which required recording share-based compensation expense for awards
that were issued at exercise prices less than fair value at the date of grant.
For our non-employees, share-based expense is recorded in accordance with
Emerging Issues Task Force No.  96-18, “Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquisition, or in Conjunction with
Selling, Goods or Services.”




Recent
Accounting Pronouncements





We do not expect the adoption of
recently issued accounting pronouncements to have a significant impact on our
results of operations, financial position or cash flow.


10


Going
Concern


Due to the uncertainty of our ability
to meet our current operating expenses and the capital expenses noted above, in
their report on the annual financial statements as of December 31, 2007, our
independent registered public accounting firm included an explanatory paragraph
regarding concerns about our ability to continue as a going concern. Our
financial statements contain additional note disclosures describing the
circumstances that lead to this disclosure by our independent registered public
accounting firm.




The Company’s ability to continue as a
going concern is subject to the ability of the Company to realize a profit
and/or obtain funding from outside sources. Management’s plan to address the
Company’s ability to continue as a going concern includes: (1) obtaining funding
from related party advances and private placement sources; (2) obtaining
additional funding from the sale of the Company’s securities; (3) establishing
revenues from prospective business opportunities; (4) obtaining loans and grants
from various financial institutions where possible. Although management believes
that it will be able to obtain the necessary funding to allow the Company to
remain a going concern through the methods discussed above, there can be no
assurances that such methods will prove successful.





11


Item
      7.
            FINACIAL
      STATEMENTS





REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board Directors


Beauty
Brands Group, Inc.


Jericho,
New York





We have
audited the accompanying balance sheet of Beauty Brands Group, Inc. (“Beauty
Brands”) as of December 31, 2007 and the related statements of expenses,
shareholders’ deficit, and cash flows for the years ended December 31, 2007 and
2006. These financial statements are the responsibility of Beauty Brands's
management. Our responsibility is to express an opinion on these consolidated
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 an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. Beauty Brands is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits 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 Beauty Brands’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 Beauty Brands Group, Inc. as
of December 31, 2007 and the results of operations and cash flows for the year
then ended, in conformity with accounting principles generally accepted in the
United States of America.





The
accompanying financial statements have been prepared assuming that Beauty Brands
will continue as a going concern. As discussed in Note 2 to the financial
statements, Beauty Brands suffered recurring losses from operations and has a
working capital deficiency, which raises substantial doubt about its ability to
continue as a going concern. Management’s plans regarding those matters also are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.








Malone
& Bailey, P.C.


www.malone-bailey.com


Houston,
TX


March 3,
2008


F-1





BEAUTY
BRANDS GROUP, INC.





BALANCE
SHEET





December
      31,2007ASSETSTotal
      assets
            
            $
            -LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      liabilitiesAccounts
      payable
            
            $
            4,872Total
      current liabilities
            
            
            4,872Stockholders’
      deficit:Common
      stock, $.10 par value, 100,000,000 shares authorized;15,276,411
      share issued and outstanding
            
            
            1,527,641Additional
      paid-in capital
            
            
            1,762,190Accumulated
      deficit
            
            
            (3,294,703)Total
      stockholders’ deficit
            
            
            (4,872)Total
      liabilities and stockholders’ deficit
            
            $
            -








See
summary of accounting policies and notes to financial
statements.


F-2


BEAUTY
BRANDS GROUP, INC.





STATEMENTS
OF EXPENSES





Year
      Ended
            
            
            Year
      endedDecember
      31, 2007
            
            
            December
      31,
              2006Operating
      expenses:Compensation
      expense
            
            $
            -
            
            
            $
            1,520,900Other
      selling, general and administrative
            
            
            29,977
            
            
            
            19,703Net
      loss
            
            $
            (29,977
            )
            
            $
            (1,540,603
            )Basic
      and diluted net loss per common share
            
            $
            (0.00
            )
            
            $
            (1.82
            )Weighted
      Average Number Of Common Shares Outstanding
            
            
            15,276,411
            
            
            
            845,702











See
summary of accounting policies and notes to financial statements.





F-3


BEAUTY
BRANDS GROUP, INC.





STATEMENT
OF STOCKHOLDERS’ DEFICIT














ADDITIONAL
            
            
            
            
            
            TOTALCOMMON
      STOCK
            
            
            PAID
      IN
            
            
            ACCUMULATED
            
            
            STOCKHOLDERS’SHARES
            
            
            AMOUNT
            
            
            CAPITAL
            
            
            DEFICIT
            
            
            DEFICITBalance,
      December 31, 2005
            
            
            33,411
            
            
            $
            3,341
            
            
            $
            1,713,282
            
            
            $
            (1,724,123)
            
            
            $
            (7,500)Issuance
      of common stock to prior controlling shareholder
            
            
            34,000
            
            
            
            3,400
            
            
            
            186,600
            
            
            
            -
            
            
            
            190,000Issuance
      of cash to prior controlling shareholder
            
            
            -
            
            
            
            -
            
            
            
            (190,000)
            
            
            
            -
            
            
            
            (190,000)Capital
      contribution
            
            
            -
            
            
            
            -
            
            
            
            13,788
            
            
            
            -
            
            
            
            13,788Common
      stock issued for services
            
            
            15,209,000
            
            
            
            1,520,900
            
            
            
            -
            
            
            
            -
            
            
            
            1,520,900Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1,540,603)
            
            
            
            (1,540,603)Balance,
      December 31, 2006
            
            
            15,276,411
            
            
            
            1,527,641
            
            
            
            1,723,670
            
            
            
            (3,264,726)
            
            
            
            (13,415)Capital
      contribution
            
            
            
            
            
            
            
            
            
            
            38,520
            
            
            
            
            
            
            
            38,520Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (29,977)
            
            
            
            (29,977)Balance,
      December 31, 2007
            
            
            15,276,411
            
            
            $
            1,527,641
            
            
            $
            1,762,190
            
            
            $
            (3,294,703)
            
            
            $
            (4,872)





See
summary of accounting policies and notes to financial statements.





F-4


BEAUTY
BRANDS GROUP, INC.





STATEMENTS
OF CASH FLOWS











Year
      Ended
            
            
            Year
      EndedDecember
      31, 2007
            
            
            December
      31, 2006CASH FLOWS FROM
      OPERATING ACTIVITIES:Net
      loss
            
            $
            (29,977)
            
            
            $
            (1,540,603)Adjustments
      to reconcile net loss to net cash used in operating
      activities:Issuance
      of common stock for services
            
            
            -
            
            
            
            1,520,900Changes
      in operating liabilities:Accounts
      payable
            
            
            (8,543)
            
            
            
            5,915Net
      cash used in operating activities
            
            
            (38,520)
            
            
            
            (13,788)CASH FLOWS FROM
      FINANCING ACTIVITIES:Capital
      contribution
            
            
            38,520
            
            
            
            13,788Net
      change in Cash
            
            
            -
            
            
            
            -Cash,
      Beginning of Year
            
            
            -
            
            
            
            -Cash,
      End of Year
            
            $
            -
            
            
            $
            -Supplemental
      Disclosure of Cash Flow Information:Interest
      paid
            
            $
            -
            
            
            $
            -Income
      taxes paid
            
            $
            -
            
            
            
            -





See
summary of accounting policies and notes to financial statements.





F-5


BEAUTY
BRANDS GROUP, INC.





NOTES
TO FINANCIAL STATEMENTS





NOTE 1 – DESCRIPTION OF
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Beauty
Brands Group, Inc. is a holding company that was incorporated in Florida in
1968. It began operations as Chemair and later changed its name to Beauty Brands
Group, Inc.  The company ceased all operations in 1993 and is
currently seeking candidates to acquire its stock or to complete a
merger.





Use of
Estimates.  The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.  While it is
believed that such estimates are reasonable, actual results could differ
significantly from those estimates.





Cash and Cash
Equivalents.  Beauty Brands considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.





Revenue
Recognition.  Beauty Brands has no revenues.





Income
taxes.   Beauty Brands recognizes deferred tax assets and
liabilities based on differences between the financial reporting and tax bases
of assets and liabilities using the enacted tax rates and laws that are expected
to be in effect when the differences are expected to be
recovered.  BBGP provides a valuation allowance for deferred tax
assets for which it does not consider realization of such assets to be more
likely than not.





Basic and diluted net loss
per share.  The basic net loss per common share is computed by
dividing the net loss by the weighted average number of common shares
outstanding.  Diluted net loss per common share is computed by
dividing the net loss adjusted on an "as if converted" basis, by the weighted
average number of common shares outstanding plus potential dilutive
securities.  For the years ended December 31, 2007 and 2006, there
were no potential dilutive securities.







Stock based
compensation.  Beauty Brands adopted SFAS No. 123(R), on
January 1, 2006 using the modified prospective method. SFAS 123(R) requires
all share-based payments to employees, including stock options, to be expensed
based on their fair value over the required award service period. Beauty Brands
uses the straight line method to recognize compensation expense related to
share-based payments. In prior years, Beauty Brands followed Accounting
Principles Board No. 25, “Accounting for Stock Issued to Employees,” in
accounting for its stock option awards to employees, which required recording
share-based compensation expense for awards that were issued at exercise prices
less than fair value at the date of grant. For Beauty Brand’s non-employees,
share-based expense is recorded in accordance with Emerging Issues Task Force
No.  96-18, “Accounting for Equity Instruments That Are Issued
to Other Than Employees for Acquistion, or in Conjunction with Selling, Goods or
Services.”





Recently issued accounting
pronouncements.  Beauty Brands does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on Beauty
Brand’s results of operations, financial position or cash flow.








F-6





NOTE 2 –
            GOING
CONCERN





Beauty
Brands incurred net losses and negative cash flows from operations in fiscal
years 2007 and 2006.  These conditions raise substantial doubt as to
Beauty Brands’ ability to continue as a going concern. The financial statements
do not include any adjustments that might be necessary if Beauty Brands is
unable to continue as a going concern. Management is trying to raise additional
capital through sales of common stock as well as seeking viable candidates to
purchase the Company.





NOTE 3 – STOCKHOLDERS’
    DEFICIT




On
October 4, 2006, the majority shareholders of Beauty Brands approved in a
written consent a 1-for-150 reverse stock split.  The reverse split
became effective November 10, 2006 and reduced the number of shares outstanding
from 10,098,139 to approximately 67,411.  All share and per share
amounts have been retroactively restated to reflect the split as if it occurred
on the first day of the first period presented.





During
2006, Beauty Brands issued 34,000 shares of its common stock under a stock
acquisition agreement dated January 31, 2006.  The transaction
resulted in a change in control.  The shares were issued for $190,000
of cash and notes payable paid directly to Beauty Brand’s current majority
shareholder.  The transaction is accounted for as if Beauty Brands
received the consideration and distributed it to the majority
shareholder.





$38,520
and $13,788 of expenses were paid in 2007 and 2006, respectively, on behalf of
Beauty Brands by the shareholders and is reflected as a capital contribution and
an expense for Beauty Brands.





During
2006, Beauty Brands issued 15,209,000 shares of common stock valued at
$1,520,900 for the following:




·
            13,530,600
      shares valued at $1,353,060 to a related party for consulting
      services·
            1,503,400
      shares valued at $150,340 to a related party for consulting
      services·
            125,000
      shares valued at $12,500 to a related party for consulting
      services·
            33,333
      shares valued at $3,333 to a third party for legal
  services·
            16,667
      shares valued at $1,667 to a third party for
  services





NOTE 4 – RELATED PARTY
      TRANSACTIONS




As Beauty
Brands is operating as a holding company, they are not generating
revenues.  Expenses incurred by Beauty Brands are related to
professional fees such as accounting and legal fees.  These expenses
are paid by a majority shareholder and contributed to capital.





F-7


NOTE 5 –
  COMMITMENTS




Beauty
Brands principal office is in the office of Beauty Brands principal shareholder
pursuant to a verbal agreement on a rent-free month-to-month basis.





NOTE 6 – INCOME
  TAXES





Beauty
Brands uses the liability method, where deferred tax assets and liabilities are
determined based on the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities for financial
and income tax reporting purposes.   During fiscal 2007 and 2006,
Beauty Brands incurred net losses and, therefore, has no tax
liability.  The net deferred tax asset generated by the loss
carry-forward has been fully reserved.  The cumulative net operating
loss carry-forward is approximately $52,000 at December 31, 2007, and will
expire in the years through 2027.





Internal Revenue Section 382 restricts
the ability to use these carryforwards whenever an ownership change as defined
occurs.  Beauty Brands incurred such an ownership change in
2006.  Because Beauty Brands’s stock trading has been limited, no
significant losses occurring prior to that date are
available.


F-8


At
December 31, 2007, deferred tax assets consisted of the
following:


Deferred
      tax assetsNet
      operating losses
            $7,800Less:  valuation
      allowance
            (7,800)Net
      deferred tax asset
            $  
                  0


F-9





Item
      8.
            CHANGES
      IN AND DISAGREEMENTS WITH
ACCOUNTANTS




In connection with the two most recent
fiscal years or subsequent interim periods, there were no disagreements between
the Company and its independent accountant on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure.





Item 8A.




Controls
and Procedures




Evaluation
of Disclosure Controls and Procedures





Our
disclosure controls and procedures are designed to ensure that information
required to be disclosed in reports that we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the United States Securities
and Exchange Commission. Our principal executive and financial officers have
reviewed the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c))
within the end of the period covered by this Annual Report on Form 10-KSB and
have concluded that the disclosure controls and procedures are effective to
ensure that material information relating to the Company is recorded, processed,
summarized, and reported in a timely manner. There were no significant changes
in our internal controls or in other factors that could significantly affect
these controls subsequent to the last day they were evaluated by our principal
executive and financial officers.





Changes in Internal Controls





There
have been no changes in the Company's 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, the Company's internal
control over financial reporting.





Item
      8A(T)
            Controls
      and Procedures




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





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





Item
      8B.
            Other
      Information.





None.





F-10


PART
III





Item
      9.
            DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
  ACT





(a)       
Identification of
Directors




The
Company’s directors, their ages and positions and the periods during which each
has served as such are as follows:





Name
            Age
            Position
            AppointedJames
      Altucher
            40
            Chairman,
      President
            May
      2007Dan
      Kelly
            32
            Director
      and CFO
            May
      2007Terry
      Tecco
            54
            Director
            December
      2006


12




All directors will hold office until
the next annual stockholder’s meeting and until their successors have been
elected or qualified or until their death, resignation, retirement, removal, or
disqualification.  Vacancies on the board will be filled by a majority
vote of the remaining directors.  Officers of the Company serve at the
discretion of the Board of Directors.





James
Altucher, Chairman and President




Mr. Altucher graduated from Cornell
University with a B.A. in computer science and pursued graduate work in computer
science at Carnegie Mellon University.  Mr. Altucher is currently a
managing member of Formula Capital Management, LLC, the general partner of
Formula Capital, L.P.  Prior to forming Formula Capital, LLC, Mr.
Altucher was the managing partner First Angel Capital, a $30M family of hedge
funds and fund of funds.  Mr. Altucher previously acted as
CEO/Director of Vaultus, a wireless date solutions provider for Fortune 50
companies.  During the same time, he was a partner in (212) Ventures,
a New York based venture capital firm funded by Investcorp.  Prior to
Vaultus, Mr. Altucher founded Reset,Inc. an Internet technology firm which was
ultimately sold to Xceed, Inc.  Since 2002, Mr. Altucher has also been
a columnist for TheStreet.com, Steet Insight, Street View, and most recently,
Real Money.  Mr. Altucher, who has appeared regularly on CNBC,
recently authored “Trade Like A Hedge Fund” (Wiley 2005), “TradeLike Warren
Buffet” (Wiley 2005), and $superCash (2006).  He is also a US-ranked
chess master.





Dan Kelly
- Director and Chief Financial Officer




Mr. Kelly is a managing member of
Formula Capital Management, LLC, the general partner of Formula Capital,
L.P.  Mr. Kelly graduated Magna Cum Laude from Georgetown University
with a B.S. in Finance.  Prior to forming Formula Capital, LLC, Mr.
Kelly had been a partner at First Angel Capital, a $30M family of hedge funds
and fund of funds.  Previously, Mr. Kelly was a Principal with (212)
Ventures, a New York based venture capital funded by Investcorp where he focused
primarily on analyzing emerging companies.  Prior to (212) Ventures,
Mr. Kelly was an Associate with Bruckmann, Rosser, Sherill & Co., a $1.2B
private equity firm specializing in management buyouts and recapitalizations of
high quality, middle market companies.  Mr. Kelly began his career as
an Analyst with Credit Suisse First Boston in its leveraged Finance Group, where
he primarily focused on analyzing and executing various financing alternatives,
including debt, equity and hybrid securities for leveraged buyouts, equity
offerings and principal investments across several industries.





Mr. Marc Sharinn previously served as
our President and as a Director.  Marc Sharinn is also a Member
Manager of RPM Trading, LLC.  Additionally, Marc Sharinn, is a
Managing Member of D.C. Fund Management, LLC., the general partner of our
principal shareholder, Deer Creek Capital, L.P. Effective May
2007,  Mr. Sharinn resigned from both positions with the Company,
which resignation was accepted by the Company’s Board.





Mr. Colm Wrynn previously served as our
Chief Executive Officer and as a Director.  Colm Wrynn is also a
Member Manager of RPM Trading, LLC.  Additionally, Colm Wrynn is a
Managing Member of D.C. Fund Management, LLC., the general partner of our
principal shareholder, Deer Creek Capital, L.P.  Effective May
2007, Mr. Wrynn resigned from both positions with the Company, which
resignation was accepted by the Company’s Board.





(b)       
Significant
Employees





Not Applicable, the Company has no
employees.





(c)       
Family
Relationships




There are
no family relationships among any directors or executive
officers.


13





(d)        Involvement in certain legal
proceedings.





No director or executive officer has
been involved in any of the following legal proceedings during the past 5
years:





(1) 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;





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





(3) 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; and





(4) 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.


(e)         Section 16(a) Beneficial
Ownership Reporting Compliance
 
 During the year ended December 31,
2007, the following Directors, Officers and holders of 10% or more of the
Company’s issued and outstanding two principal shareholders, Deer Creek Capital
LP and RPM Trading, LLC have not filed reports required by Section 16(a) of the
Exchange Act.
 
 Deer Creek Capital, LLC, did not file
Form 3 to disclose its ownership interest in the Company’s common stock
following the Company’s filing of its’ registration statement on form
10SB.  This is the only report not made on a timely basis and the only
transaction for which a report should have been filed by Deer Creek Capital,
LLC.
 
 RPM Trading, LLC did not file Form 3 to
disclose its ownership interest in the Company’s common stock following the
Company’s filing of its’ registration statement on form 10SB.  This is
the only report not made on a timely basis and the only transaction for which a
report should have been filed by RPM Trading, LLC.
 
 James Altucher, our President and
Chairman, did not file Form 3 to disclose his ownership interest in the
Company’s common stock following the Company’s filing of its’ registration
statement on form 10SB.  This is the only report not made on a timely
basis and the only transaction for which a report should have been filed by Mr.
Altucher.
 
 Dan Kelly, our Chief Financial Officer
President and one of our Directors, did not file Form 3 to disclose his
ownership interest in the Company’s common stock following the Company’s filing
of its’ registration statement on form 10SB.  This is the only report
not made on a timely basis and the only transaction for which a report should
have been filed by Mr. Kelly.
 
 Terry Tecco, one of our Directors, did
not file Form 3 to disclose his ownership interest in the Company’s common stock
following the Company’s filing of its’ registration statement on form
10SB.  This is the only report not made on a timely basis and the only
transaction for which a report should have been filed by Mr.
Tecco.
  14


Item
      10.
            Executive
      Compensation.





(a)
            Summary
      Compensation Table





Annual
      Compensation
            
            Long-term
      CompensationAwards
            
            Payouts(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)
            
            (f)
            
            (g)
            
            (h)
            
            (i)Name
      and Principal Position
            
            Year
            
            Salary
      ($)
            
            Bonus
      ($)
            
            Compensation
      ($)
            
            Award(s)
      ($)
            
            Options/SARs
      (#)
            
            Payouts
      ($)
            
            Compensation
      ($)James
      Altucher, President
            
            2007
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-2006
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            
            
            -0-
            
            -0-Dan
      Kelly, CFO
            
            2007
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-2006
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-(b)
            Option/SAR
      in Last Fiscal Year





Individual
      Grants(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)Name
            
            Number
      of Securities Underlying Options/SARs Granted (#)
            
            %
      Of Total Options/SARs Granted to Employees in Fiscal Year
            
            Exercise
      or Base Price ($/Sh)
            
            Expiration
      DateN/A
            
            —
            
            —
            
            —
            
            —





15


(c)
            Aggregate
      Option/SAR Exercises in Last Fiscal Year and FY-end Option/Share
      Values




(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)Name
            
            Shares
      Acquired
              on
      Exercise (#)
            
            Value
      Realized ($)
            
            Number
      of Securities Underlying Unexercised Options/SARs at FY-End
      (#)
              Exercisable/Unexercisable
            
            Value
      of Unexercised In-the-money Options/SARs at FY-End ($)
              Exercisable/UnexercisableN/A
            
            —
            
            —
            
            —
            
            —





(d)
            Long-term
      Incentive Plans — Awards in Last Fiscal
Year


Estimated
      Future Payouts Under No Stock Priced-Based Plans(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)
            
            (f)Name
            
            Number
      of Shares, Units or Other Rights
            
            Performance
      or Other Period Until Maturation or Payout
            
            Threshold
              ($
      or #)
            
            Target
              ($
      or #)
            
            Maximum
              ($
      or #)N/A
            
            —
            
            —
            
            —
            
            —
            
            —





(e)
            Compensation
      of Directors




None of
our directors receive compensation for their services as directors.




(f)
            Employment
      Contracts and Termination of Employment/Change in Control
      ArrangementsThe
      Company does not have any compensatory plan or arrangement regarding the
      termination of any executive officer or regarding a change in control of
      the Company.





16


Item
      11.
            Security
      Ownership of Certain Beneficial Owners and
  Management.





(a)
            Security
      Ownership Greater than 5%





(2)
            
            (3)
            
            (4)Title
      of Class
            
            Name
      and Address of
              Beneficial
      Owner
            
            Amount
      and Nature
              of
      Beneficial Owner
            
            Percent
      of ClassCommon
      Stock
            
            Deer
      Creek Capital, L.P.
              100
      Jericho Quadrangle, Suite 335
              Jericho,
      New York 11753
            
            13,530,600
      Common Shares
            
            88.57%Common
      Stock
            
            RPM
      Trading, LLC
              100
      Jericho Quadrangle, Suite 335
              Jericho,
      New York 11753
            
            1,537,400
      Common Shares
            
            10.06%


(3)
            Colm
      Wrynn and Marc Sharinn, both former officers and Directors of the Company,
      are managing members of D.C. Fund Management, LLC., the general partner of
      Deer Creek Capital, L.P.


(b)
            Security
      Ownership of Management





(1)
            
            (2)
            
            (3)
            
            (4)Title
      of Class
            
            Name
      and Address of
              Beneficial
      Owner
            
            Amount
      and Nature
              of
      Beneficial Owner
            
            Percent
      of ClassCommon
      Stock
            
            Tecco
      Family Trust*
            
            125,000
      common shares
            
            0.81%


*
            Terry
      Tecco, one of our Directors, is the grantor and a trustee of the Tecco
      Family Trust.





(c)
            Change
      in Control


At
      various times, and from time to time, the Company has engaged, and will
      engage, in discussions with outside parties regarding potential
      transactions for the use of the public entity, which may result in the
      change of control of the company. The Company intends to continue its
      efforts to seek out a suitable transaction in future. However, no formal
      agreement has been made with any outside party at the time of the filing
      of this report.





17


Item
      12.
            Certain
      Relationships and Related
Transactions





On
September 26, 2005, Terrence Tecco, one of our current Directors, entered into a
letter of intent with the Company whereby he agreed to acquire such amount of
the Company’s common stock as would equal 51% of the common shares issued and
outstanding following such issuance in exchange for consideration of
$190,000.  That transaction was never consummated as set forth in the
Letter of Intent.





On
November 18, 2005, The Company entered into an Acquisition Agreement with Terry
Tecco and RPM Trading, LLC, whereby Tecco assigned all of his right, title and
interest in and to the Letter of Intent to RPM and agreed to pay the Company the
sum of $190,000, payable in three installments pursuant to a certain promissory
note executed by Tecco.  The Company agreed to amend its Articles of
Incorporation to increase its authorized shares of common stock to 100,000,000
shares and also agreed to issue 5,100,000 shares to RPM.  RPM agreed
to be responsible for the cost of the Company’s auditor fees, transfer agent
fees, Edgar and/or SEC filing fees, all registered agent fees and all fees
necessary to reinstate the Company’s Corporate Charter, all in exchange for
75,000 shares.  Pursuant to the Acquisition Agreement, Tecco agreed to
indemnify and hold harmless RPM from any Losses arising from, among other
things, any breach or inaccuracy of the representations or warrantees made by
the Company in the agreement.  The Agreement also provided for the
resignation of the individuals then serving as the Company’s Officers and
Directors.  Additionally, the Agreement provided for Mary Seymour, an
attorney who previously rendered services to the Company, to receive 50,000
post reverse-split shares of the Company’s common stock in payment of
those legal services.





By letter
dated as of February 15, 2006, Mary Seymour agreed to (i) reduce the amount due
from Terrence Tecco by $5,000; and (ii) reduce the number of post reverse-split
common shares she was to receive from 50,000 shares to 33,333
shares.   The reductions were agreed to as part of an agreement
settling an outstanding judgment against the Company held by A & B Sales
Unlimited, Inc.  That judgment has been settled and removed of
record.





By
agreement dated effective March 16, 2006, (“the “Settlement Agreement”),by and
between the Company , A & B Sales Unlimited, Inc. (“A&B”), Richard
Abrams (“Abrams”), RPM Trading, LLC (“RPM”), and Terry Tecco (“Tecco”), A&B
and Abrams agreed to settle an outstanding judgment that they had previously
obtained against the Company, on the following terms and conditions: (i) the
Company agreed to pay Abrams the sum of $5,000 of on or before April 15, 2006;
(ii) Tecco agreed to pay Abrams’ and A&B’ attorneys the sum of $2,500 in
legal fees on or before April 15, 2006; (iii) the Company agreed to issue Abrams
16,667 post-reverse split shares of common stock, which shares are to have the
same rights and privileges as the 5,100,000 shares of common stock issued to RPM
pursuant to the November 18, 2005 Acquisition Agreement (or such number of
shares as are necessary to provide Abrams with 10.19% of the Company’s non-RPM
owned shares immediately following the reverse-split.  The company,
RPM and Tecco agreed, jointly and severally, to indemnify and hold harmless
Abrams and A&S from claims, expenses and suits resulting or arising from the
Settlement Agreement.  RPM agreed to hold the original judgment
satisfaction in escrow until the closing of the Company’s sale or merger, which
must be completed within 5 years of the date of the Settlement
Agreement.  In the event that the Company is not sold or merged within
said 5 year period, then RPM is to return the Satisfaction to Abrams’ attorneys
and Abrams’ and A&B’s obligation to issue same pursuant to the Settlement
Agreement shall be deemed null and void.





By
Consulting Agreement dated November 16, 2006, the Company retained Deer Creek
Capital, L.P., a New York
limited partnership to provide general business consulting services, including,
but not limited to issues relating to advising the Company on reverse mergers,
corporate structures, transaction structuring, introducing the Company to
potential analysts, introductions to the financial community, introductions to
public relations/investor relations firms, management, law firms, accounting
firms, corporate finance, investment bankers, and stock exchanges in exchange
for consideration of 15,000,000 shares of the Company's common
stock.  In addition to the consideration referred to above, the
Company agreed to pay Deer Creek the reasonable value attributable to all direct
and indirect introductions, including, but not limited to, finders
fees.  The Consulting Agreement also provides that, pursuant to a
Piggy Back Registration Rights Agreement attached thereto as Exhibit A, Deer
Creek shall have  piggy-back registration rights in the event that the
Company registers securities using form S-3, or any successor
thereto.  Deer Creek subsequently assigned 1,503,400 shares of the
Company's common stock to RPM Trading, LLC.  Colm Wrynn and Marc Sharinn,
both former officers and Directors of the Company, are managing members of D.C.
Fund Management, LLC., the general partner of Deer Creek Capital,
L.P.


18




Item
      13.
            Exhibits
      and Reports on Form 8-K





INDEX
TO EXHIBITS





Exhibit
      No.
            Document
      Description2.1*
            Acquisition
      Agreement3.1*
            Articles
      of Incorporation4.1**
            Settlement
      Agreement31.1***
            Certification
      Pursuant to Section 30231.2***
            Certification
      Pursuant to Section 30232.1***
            Certification
      Section 1350 Pursuant to Section 90632.2***
            Certification
      Section 1350 Pursuant to Section 906*
              
              
              **
              
              
              ***
            Filed
      as exhibits to the Company's registration statement on Form 10-SB, as
      filed with the Securities and Exchange Commission on August 13, 2007, and
      incorporated herein by this reference.
              
              Filed
      as exhibits to the Company's registration statement on Form 10-SB/A, as
      filed with the Securities and Exchange Commission on October 15, 2007, and
      incorporated herein by this reference.
              
              Filed herein.





Item
      14.
            Principal
      Accountant Fees and Services





(1)
            Audit
      Fees




The
aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the registrants
financial statements included in the company’s form 10SB, 10SB/A as well as the
company’s annual financial statements and to review the financial statements
included in the registrant’s Form 10-QSB or services that are normally provided
by the accountant in connection with statutory and regulatory filings or
engagements for those fiscal years are:




December
      31, 2007
            $7,180December
      31, 2006
            N/A





(2)
            Audit
      - Related FeesN/A(3)
            Tax
      FeesN/A(4)
            All
      Other FeesN/A




(5)
            Audit
      Committee’s Pre-Approval PoliciesThe
      Audit Committee approves the services for the audit firm before the work
      is performed.(6)
            N/A





19












SIGNATURES






SIGNATURES






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




BEAUTY
      BRANDS GROUP, INC.By:
      /s/
      Dan
      KellyDan
      Kelly, Chief Financial Officer and
Director









In
accordance with the Exchange Act, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated:





BEAUTY
      BRANDS GROUP, INC.By:
      /s/
      Dan
      KellyDan
      Kelly, Chief Financial Officer and
Director








20