UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X]       Annual  Report  Pursuant  to  Section  13 or 15(d)  of The  Securities
          Exchange Act of 1934

                   For the Fiscal Year Ended December 31, 2006

[ ]       Transition  Report  Pursuant to Section 13 or 15(d) of The  Securities
          Exchange Act of 1934

                        Commission File Number: 000-51872

                                   LILM, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

           Nevada                                              87-0645394
-------------------------------                             -------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

           1390 South 1100 East # 204, Salt Lake City, Utah 84105-2463
               (Address of principal executive offices) (Zip Code)

Issuer's telephone no.:  (801) 322-0253

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

Securities registered pursuant to Section 12(g) of the Exchange Act:   Common

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes[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 the  Registrant's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

         State the issuer's revenues for its most recent fiscal year.  $ 2,984

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and ask prices of such stock as of a specified date within 60
days. $ 73,063 (Based on bid price $0.10 per share on April 13, 2007)

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

        Class                            Outstanding as of March 31, 2007
-----------------------                  --------------------------------
Common Stock, Par Value                              2,583,750
   $0.001 par value

                       DOCUMENTS INCORPORATED BY REFERENCE

A description of "Documents Incorporated by Reference" is contained in Part III,
Item 14.


Transitional Small Business Disclosure Format.   Yes [ ]   No [X]


<PAGE>

<TABLE>
<CAPTION>
                                           LILM, INC.

                                        TABLE OF CONTENTS

                                                                                       Page
                                                                                       ----
                                             PART I

<S>         <C>                                                                         <C>
Item 1.     Description of Business .................................................     3

Item 2.     Description of Property..................................................    10

Item 3.     Legal Proceedings........................................................    10

Item 4.     Submission of Matter to a Vote of Security Holders.......................    10

                                                PART II

Item 5.     Market for Common Equity and Related Stockholder Matters.................    10

Item 6.     Management's Discussion and Analysis or Plan of Operation................    12

Item 7.     Financial Statements.....................................................    17

Item 8.     Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure...............................................    17

Item 8A.    Controls and Procedures..................................................    17

Item  8B    Other Information........................................................    18

                                               PART III

Item 9.     Directors, Executive Officers, Promoters and Control Persons;
               Corporate Governance; Compliance with Section 16(a)
               of the Exchange Act...................................................    18

Item 10.    Executive Compensation...................................................    20

Item 11.    Security Ownership of Certain Beneficial Owners and Management...........    20

Item 12.    Certain Relationships and Related Transactions
              and Director Independence..............................................    20

Item 13.    Exhibits.................................................................    21

Item 14.    Principal Accountant Fees and Services...................................    21

            Signatures...............................................................    23
</TABLE>

                                                 -2-

<PAGE>



                                     PART I

Item 1.       Description of Business

     History
     -------

     LILM,  Inc. was  organized on December 30, 1999 under the laws of the State
of Nevada as a wholly owned subsidiary of LiL Marc, Inc., a Nevada  corporation.
On that date we acquired from LiL Marc,  Inc. the U.S.  patent rights to the LiL
Marc  "Training  Urinal" a plastic  toilet-training  device (U.S.  Patent Number
318,325,  issued July 16, 1991).  We also acquired the trade name "LiL Marc" and
rights to manufacture and market the product. We submitted the Patent Assignment
to the United  States  Patent  Office in  Washington,  D.C. and, on February 10,
2000, the assignment was recorded.

     We are primarily involved in the manufacture and marketing of the LiL Marc,
a plastic boys toilet-training  device constructed of white polyethylene plastic
having  the  appearance  of white  porcelain.  We also  intend  to  explore  the
potential  development,   marketing  and  manufacturing  of  complementary  baby
products.

     The LiL Marc  training  urinal was  invented  by James Curt  McKiney  and a
patent was issued to him on July 16, 1991.  Approximately  3,500 units were sold
by the  inventor,  primarily  between  1992 and 1994.  In 1997,  LiL Marc,  Inc.
(Nevada),  our predecessor company,  acquired the marketing and patent rights to
the LiL Marc training urinal from the inventor.  On December 30, 1999, LiL Marc,
Inc.  (Nevada)  created LILM,  Inc., as a wholly owned subsidiary and the patent
and marketing rights to the LiL Marc were conveyed to LILM, Inc..

     In June 2000, our current President,  George I. Norman,  III, acquired in a
private  transaction 100% of the 1,000,000 issued and outstanding  shares of our
common  stock and we  ceased to be a  subsidiary  of LiL  Marc,  Inc.  (Nevada).
Subsequently  in  October  2002,  LiL  Marc,  Inc.   (Nevada)  acquired  InkSure
Technologies,  Inc. and became engaged as a developer and marketer of customized
authentication systems designed to enhance the security of documents and branded
products for protection from  counterfeiting and diversion.  Since June 2000, we
have not had any connection or relationship  with LiL Marc, Inc.  (Nevada),  now
known as InkSure Technologies, Inc.

     Since 2000, we have  maintained  our  corporate  offices in Salt Lake City,
Utah and also kept an  adjunct  office  in Las  Vegas,  Nevada  until  2004.  In
December of 2004,  we closed our Las Vegas  office and moved all  operations  to
Salt Lake City,  Utah.  In  connection  with this move, on December 10, 2004, we
created a new Utah  corporation as a wholly owned  subsidiary  under the name of
LiL Marc, Inc. We then transferred all of our assets to LiL Marc, Inc. (Utah) in
January  2005,  in  exchange  for  all  1,500,000  shares  (100%  of LiL  Marc's
outstanding  common  stock.  By  incorporating  in Utah as LiL  Marc,  Inc.,  we
consolidated  our  operations in one location and reduced  duplicated  operating
expenses.

     On February 25, 2005,  we submitted a subsequent  Patent  Assignment to the
United  Sates  Patent  Office  conveying  the patent  rights to our wholly owned
subsidiary,  LiL Marc,  Inc.  (Utah).  In connection  with the assignment of the
patent,  LiL Marc, Inc.  (Utah) will pay to James Curt McKiney,  the inventor of
the LiL Marc training  urinal,  an ongoing royalty of $0.25 per urinal sold, due
each year on March 31  beginning  in 2005.  As of December  31, 2006, a total of
$36.00 in royalty payments have been paid to the inventor.

     Stock Offering
     --------------

     On February 21, 2002, we commenced an offering of our common stock pursuant
to an exemption from  registration  under the Securities Act of 1933 provided by
Rule 504 of Regulation D promulgated thereunder.  The offering was for 1,500,000
shares of common stock at the offering price of $0.08 per share. We sold a total
of 763,750  shares to 59  investors  for gross  proceeds  of $61,100 and filed a
final Form D with the SEC in March 2003.  The term of the  offering  was for one
year commencing February 21, 2002.

     In  connection  with the  offering,  we engaged  Stanley K. Stilwell of Las
Vegas,  Nevada to act as our sales  representative.  Mr.  Stilwell is a licensed
securities representative with the State of Nevada and for the past 18 years has
been engaged in the securities  industry as a self-employed  business consultant
and sales representative.  Prior to serving as LILM's sales representative,  Mr.
Stilwell has been a sales representative for three other companies in connection
with their securities  offerings.  Except for acting as our sales representative
for the stock  offering,  Mr.  Stilwell  has not had any other  relationship  or
affiliation with LILM or our management.

                                       -3-

<PAGE>

     Registration Statement
     ----------------------

     We have  filed  a  registration  statement  with  the  SEC on  Form  10-SB.
Management  believes  that  becoming a reporting  company  under the  Securities
Exchange  Act of 1934 will enable us to make an  application  to have our common
stock  traded in the public  over-the-counter  market.  Also,  being a reporting
company will make  information  concerning us more  accessible to  stockholders,
prospective  stockholders and the public trading market. As a result of filing a
registration statement under the Exchange Act, we are obligated to file with the
SEC certain interim and periodic reports  including an annual report  containing
audited financial statements.

     Our principal  executive offices are located at 1390 South 1100 East # 204,
Salt Lake City, Utah 84105-2463 and our telephone number is (801) 322-0253.

LiL Marc Training Urinal

     The  LiL  Marc is a  simple  to use  plastic  urinal  used in the  bathroom
("potty") training of young boys. The LiL Marc is constructed from high quality,
recyclable,  high density,  white polyethylene plastic and, because of its white
porcelain appearance,  looks like a full-sized urinal found in public restrooms,
only on a smaller  scale.  It is intended  to assist in the  training of daytime
bladder  control  of young  boys.  By using  the LiL Marc,  a male  child can be
potty-trained  standing up like a little boy,  instead of being trained sit-down
fashion like a little girl.

     The LiL Marc is marketed as a stand alone unit with a removable  support to
stand the unit at the proper height for young boys. It can be easily transported
to another room or used when  traveling.  The LiL Marc may also be attached to a
wall or door using the mounting bracket and screws, both provided with the unit.
The mounting  bracket holds the unit securely and slides off easily to empty and
clean with any detergent or bathroom  cleaner.  The LiL Marc features a built-in
pour spout  that  makes it easy to empty and  clean.  The LiL Marc is a one-time
purchase and does not need any other supplies. It is designed so that young boys
of all sizes can comfortably  stand while facing the unit. It has a height of 24
inches and a width of just over 10 inches.

Production

     In  addition  to  acquiring  the  patent  rights to the LiL  Marc,  we also
acquired the  production air mold and  rotational  mold used to manufacture  the
training  unit and its stand.  The molds are located at Blow Molded  Products in
Glen Avon,  California,  a specialty boutique blow mold manufacturer.  By having
another  company  manufacture  the LiL  Marc,  we are able to  produce a quality
product in mass at a competitive price. Using the air mold enables us to produce
large or small orders and,  during test marketing by the inventor,  the air mold
produced  over 3,000 units with a high quality  finish.  We have an  arrangement
with Blow Mold Products whereby we will use the air mold to manufacture the wall
mount  and LiL Marc  urinal  for a  specified  production  price.  The  stand is
manufactured elsewhere.

     The  arrangement  with Blow Molded  Products  consists of our  submitting a
purchase  order and payment  terms are  discussed at the time of the order.  All
orders are FOB shipping point with shipping and delivery  arranged by us. We are
required to provide a production  ready mold,  which is currently onsite at Blow
Molded  Products.   Each  order  includes  the  standard  terms  and  conditions
concerning  any  individual  order.  We do not have a formal  contract with Blow
Molded Products other than individual purchase orders.

     We use a subcontractor, Rotational Molding of Utah located in Brigham City,
Utah, that uses custom rotation molds to manufacture the stands. Our arrangement
with  Rotational  Molding is that we submit a  purchase  order on the terms that
payment  is due  within 30 days of  completing  the  order.  All  orders are FOB
shipping  with  shipping  and  delivery  arranged by us. We do not have a formal
contract with Rotational Molding other than individual  purchase orders for each
order.

     Cost of production,  based on a projected 5,000 LiL Marcs manufactured,  is
approximately $2.94 per urinal and $2.00 per stand. Due to the size and shape of
the LiL Marc,  packaging  and shipping  initially  required a special order box.
However,  we have developed a shrink wrap package that costs approximately $1.50
per unit.  We currently  assemble the product at our Salt Lake City facility and
individually shrink wraps each product using an American International Electric,
Inc. shrink packaging system.  This system can wrap one unit in a two-and-a-half
minute time period.  The product is then placed in a brown  shipping box.  Thus,

                                      -4-
<PAGE>

the total  manufacturing and packaging cost are approximately $6.44 per finished
LiL Marc, which has a suggested retail price of $19.95.

     We are  committed to produce our product  solely in America and the product
has an industry  recyclable  rating of 2. This rating appears as a commonly used
recyclable  symbol  (triangular  shape)  with the number 2 and the word  "HOPE",
denoting that the product is made of a plastic resin  consisting of high density
polyethylene.  The recycle applications are common drainage pipe, liquid laundry
detergent bottles, oil bottles, pens, benches, doghouses,  recycling containers,
floor tile, picnic tables, fencing, lumber, and mailbox posts.

     We guarantee  the LiL Marc Potty Trainer  against  defects in materials and
workmanship for a period of two years from the date of purchase.  If the product
is  found  to be  defective,  we will  replace  it with a new LiL  Marc  and pay
shipping for the replaced  product.  To date, there have been no claims filed or
requests for replacement products.

Marketing

     The LiL Marc, it is marketed  through our websites at  www.LiLMarc.com  and
www.BoysPottyTraining.com  The LiL Marc is also  represented  on  several  other
websites that  specialize in the marketing of potty training  products for boys,
which enhances the visibility of the product.  Currently these resellers include
PottyTrainingSolutions.com,     PottyTrainingConcepts.com,    ZipBaby.com    and
Babybungalow.com.  We have realized nominal  international sales. On November 7,
2005,  one LiL Marc was shipped to Japan with a charge of $44.45 USD,  including
shipping.  On April 11, 2005, we shipped one LiL Marc to Canada with a charge of
$25.20 USD including shipping.

     In 2005,  Narmin  Parpia  of  PottyTrainingConcepts.com,  an  internet  web
reseller of our product,  displayed the LiL Marc at a national  trade show,  but
met with little  success.  Management  believes  that we need to sponsor our own
display at future shows for any  meaningful  results.  Due to the extremely high
costs of participating in national trade shows,  management has no current plans
to do so.  Management  believes that the world wide web gives the highest degree
of visibility for the LiL Marc at this time.

     The LiL Marc inventor did perform  limited test  marketing  which  included
pricing  information,  product layout  suggestions,  and some mail order product
introduction.  The inventor arranged for the LiL Marc, on a limited scale, to be
advertised in the 1993 July and August editions of Parenting Magazine and in the
1993 May/June edition of Twins Magazine.  The ads featured the LiL Marc in color
and black and white and offered the  product for sale at prices  between  $19.95
and $24.95.  The inventor  also arranged for the product to be advertised in the
1994 spring  issue of One Step,  a baby care mail order  catalog,  at a featured
price of $19.95.  In reliance upon the best information  available to management
as  provided by the  inventor,  approximately  3,500 units were sold,  primarily
during the period from 1992 through 1994.  These units were sold by the inventor
prior to the involvement of our  predecessor  company LiL Marc,  Inc.,  (Nevada)
which  acquired the marketing and patent rights to the LiL Marc training  urinal
from the  inventor in 1997.  Subsequently  these  rights were  conveyed to us in
1999.

Competition

     Competitive  conditions  in the industry are  dependent on the products and
marketing  ability of the  various  companies  that are  selling  similar  potty
training products. Management believes that are currently four or five companies
marketing  products  similar to the LiL Marc.  These  products range from simple
colored floating targets to complex molded  adaptations that are attached to the
toilet  bowl.  There is  currently  only one other free  standing  urinal in the
marketplace,  the "Peter  Potty," but its retail price of $49.95 far exceeds the
LiL Marc price of $19.95  and its upper  water  reservoir  and  flushing  design
limits its  portability.  We offer the only  free-standing  training urinal that
does  not  require  a water  source,  making  it  completely  portable.  Current
competitors  require  a  commode  basin to  attach  their  product,  such as the
"Weeman," or require a water source to fill the urinal  flushing tank, as in the
"Peter Potty."

     Most of our competitors compete using similar methods, primarily relying on
their  websites and the websites of  resellers  to market  their  products.  Our
competitive  position  against these other  companies  varies  depending on each
individual competitor's  advertising and marketing budgets.  Management believes
we can  compete  against  these  smaller  companies  because  of  our  product's
portability,  ease of  cleaning,  and no  requirement  for a water  source.  Our
product is priced in the middle range of these similar products.

                                      -5-
<PAGE>

     The other  competition  to the LiL Marc is a wide variety of standard potty
trainer  "potties"  designed for either  little boys or girls which are produced
and marketed through much larger  companies.  These competitors have a marketing
advantage  over  the  LiL  Marc  because  their  products  are  usually  sold in
nationwide retail stores through  wholesale  distributors.  Additionally,  these
larger  competitors  have  marketing  budgets  that allow them to  advertise  in
toddler and parenting  magazines and on  television.  We do not have a budget or
the ability for national advertising and marketing and instead, must rely on our
website  and on the  websites  of  resellers  as  well as  word  of  mouth  from
customers.  When compared with these larger  companies,  we are at a competitive
disadvantage  as to marketing  and  advertising.  Management  believes  that our
competitive position is more advantageous against these larger companies because
the LiL Marc is a stand alone urinal compared to standard trainer  potties.  Our
product has similar pricing to most trainer potties.

Research and Development

     Presently,  we are  not  allocating  funds  for  research  and  development
activities to develop new products or technology. Management does not anticipate
allocating  funds for primary  research in the  immediate  future.  We intend to
limit  development  activities  to  improving  the  existing  LiL Marc  product,
production  costs and the possible  development  of  complimentary  accessories.
Management  believes that future LiL Marc  accessories,  once properly  sourced,
would be relatively  inexpensive  and their  addition  could enhance the overall
experience when using the product. Accessories can also help in creating product
loyalty and may also allow us to increase the suggested  retail price.  However,
it will still be difficult  for us to explore any new  products and  accessories
until such time as revenues  from the sale of the LiL Marc product have provided
sufficient  capital  reserves  to  commence  such a venture.  A minimum  capital
reserve of $5,000 would be required to explore any accessory possibilities.

Patents and Trademarks

     The inventor of the LiL Marc applied for and, on July 16, 1991, was granted
a patent relating to the LiL Marc Training Urinal (U.S.  Patent Number 318,325).
The rights to the patent,  the trade name LiL Marc and the right to  manufacture
the  product  were  subsequently  assigned  by the  inventor  to LiL Marc,  Inc.
(Nevada) on November 10, 1997. LiL Marc, Inc.  subsequently assigned the patent,
trade name and rights to  manufacture to LILM on December 30, 1999. We submitted
the Patent  Assignment  to the United  States  Patent Office and on February 10,
2000, the assignment was recorded in the Patent Office.  On February 25, 2005 we
submitted a subsequent  Patent  Assignment  to the United  Sates  Patent  Office
conveying the patent rights to our wholly owned  subsidiary,  LiL Marc,  Inc., a
Utah  corporation.  In  connection  with  the  assignment  of  the  patent,  our
subsidiary,  will  pay to  James  Curt  McKiney,  the  inventor  of the LiL Marc
training  urinal,  an ongoing royalty of $0.25 per urinal sold, due each year on
March 31 beginning in 2005.

     On July 16, 2005 the design patent for the LiL Marc training urinal expired
and as of this date we have not yet applied for a new patent with  modifications
to the LiL Marc's  design.  Management is evaluating  the available  options for
making any new filing. At this time we are relying on the complex engineering in
the  current  production  molds for product  protection  against any copy of the
product.  Management believes that a substantial  investment of $100,000 or more
for  production,  marketing and packaging  would be necessary to bring a similar
product to the market. However,  without patent protection,  current competitors
and/or  other  businesses  could  duplicate  the  product and market the same or
similar product in direct  competition with the LiL Marc.  Presently,  we do not
anticipate filing additional patent applications if new and/or improved products
are developed.

     There can be no assurance that any future patent  applications  will result
in patents  being issued or that the  existing  patent,  or any new patents,  if
issued, will afford any meaningful protection from competitors.  Also, there can
be no assurance that we will have the financial  resources  necessary to enforce
any patent rights we may hold. We are not aware of any claim that our patent may
infringe,  or will infringe any existing  patent.  However,  in the event such a
claim is made and we are unsuccessful  against such claim, we may be required to
obtain  licenses to such other  patents or  proprietary  technology  in order to
develop,  manufacture  or market our product.  There can be no assurance that we
will be able to obtain such licenses on  commercially  reasonable  terms or that
the patents underlying the licenses will be valid and enforceable.

                                      -6-
<PAGE>

Employees and Compensation

     We presently have one full-time employee,  our President,  George I. Norman
III,  and we  anticipate  that Mr.  Norman will devote a minimum of 20 hours per
week to company business.  Laurie Norman, our Secretary/Treasurer,  continues to
assists Mr. Norman when needed as an office manager.  We also have one part-time
laborer and will continue to rely on part-time  help for office and  secretarial
work and labor for packaging,  shipping and inventory  control.  We may also use
the services of certain outside  consultants and advisors as needed on an hourly
basis.  Our web design and packaging art is rendered by third  parties.  When we
have generated sufficient revenues we will consider hiring additional employees.
It is not anticipated that we will have to make significant payroll expenditures
until such time as sales of the LiL Marc  exceed  500 units per month.  However,
there can be no assurance that we will ever achieve or exceed this level of unit
sales.

     The board of directors has considered an employee bonus,  profit sharing or
deferred  compensation  plan,  however  no  such  plans  are  anticipated  to be
finalized in the immediate future.  We do not have any employment  contract with
any director or employee.

Facilities

     Our facilities  consist of a corporate general office located at 1390 South
1100 East,  #204, Salt Lake City, Utah 84105,  consisting of  approximately  440
square feet situated in a professional office building with some additional room
for product and supply storage. We are conveniently  located near a FedEx Kinkos
and US Post  office  for  order  fulfillment.  The  facilities  shared  with the
personal offices of our President,  Mr. Norman, at a month-to-month base rate of
$200 per month plus  utilities and storage as needed.  Mr.  Norman  conducts his
consulting  business  and manages his  personal  investments  in the same office
facilities  and pays an  additional  $250 per month  towards  the  shared  rent.
Management  believes that the current  facilities are adequate for the immediate
future. Additionally, we use storage facilities for inventory located at a local
mini warehouse  facility in the Salt Lake City at a cost of $110 per month. This
facility has the capacity to hold approximately 5,000 LiL Marcs.

Industry Segments

     No information is presented  regarding industry segments.  We are presently
engaged in the production and marketing of a plastic boys toilet-training device
and have no current  plans to  participate  in  another  business  or  industry.
Reference is made to the statements of income and financial  statements included
herewith.

Risk Factors Related to Our Business

     We are subject to certain  substantial  risks  inherent to our business and
set forth or referred to herein.  Prospective investors in our securities should
carefully  consider,  among other potential risks, the following risk factors as
well as all other information set forth or referred to herein before considering
an investment in our common stock.  An investment in our shares  involves a high
degree of risk.  If any of the  following  events or outcomes  actually  occurs,
business  operating  results and financial  condition would likely suffer.  As a
result,  the trading price of our common stock could decline and an investor may
lose all or part of the money they paid to purchase their shares.

     We have a limited operating history and have not recorded operating profits
     since inception.  Continuing losses may exhaust capital resources and force
     us to discontinue operations.
     ---------------------------------------------------------------------------

     We were  incorporated in December 1999 as a wholly owned  subsidiary of LiL
Marc, Inc. (Nevada),  at which time we acquired from LiL Marc, Inc. (Nevada) the
U.S. patent rights to the LiL Marc "Training  Urinal," the trade name "LiL Marc"
and  rights to  manufacture  and  market  the  product.  LiL Marc,  Inc.(Nevada)
initially acquired the rights to the LiL Marc  product in 1997 and  marketed the
product  until the rights  were  assigned  to us in 1999.  Since  acquiring  the
product rights from LiL Marc,  Inc.  (Nevada),  we have had a limited  operating
history and incurred net losses since inception. From inception through December
31, 2006, we have incurred  cumulative losses of approximately  $136,564.  There
can be no assurance  that we will produce  future  material  revenues or achieve
profitability in the immediate future or at any time, or that we will operate on
a profitable  basis. The potential to generate profits from our business depends
on many factors, including the following:

                                      -7-
<PAGE>


     o   the ability to secure adequate  funding to increase  marketing and fund
         future production of our product;

     o   the size and timing of future  customer  orders,  product  delivery and
         customer acceptance, if required;

     o   the costs of maintaining and expanding operations; and

     o   the ability to attract  and retain a  qualified  work force as business
         warrants.

     There  can be no  assurance  that we will  be  able to  achieve  any of the
foregoing  factors or realize  profitability  in the immediate  future or at any
time.

     In order to continue  business,  we may have to secure additional  capital.
     Additional  required capital may not be available at attractive terms which
     would  have a  material  negative  effect  on our  business  and  operating
     results.
     ---------------------------------------------------------------------------

     In the event we need  additional  funds in order to  continue  or  increase
current business  operations,  we may not be able to secure such funding. In the
past we have been  dependent on funds  raised in our stock  offering in 2002 and
the infusion of capital from directors and stockholders in order to continue our
business. Currently,  management estimates recurring annual total expenses to be
approximately $20,000.  Management further expects that general,  administrative
and other  operating  expenses  will  increase  substantially  as we  accelerate
efforts to expand  business and to satisfy  increased  reporting and stockholder
communications obligations under the securities laws.

     There can be no assurance  that we will be able to obtain  necessary  funds
required  to  continue  operations,  or that such  funds  will be  available  on
favorable  terms, or at all. If we borrow funds it will have to pay interest and
may also have to agree to  restrictions  that limit  operating  flexibility.  In
addition,  our cash  requirements may vary materially from those now anticipated
by  management.  These changes may be due to the results of business  expansion,
potential  changes in capital and debt markets,  terms on which financing can be
obtained,  competitive  factors and other  factors.  If  adequate  funds are not
available,  we may be required to curtail operations which would have a negative
effect on our financial condition.

     We may not be able to expand the market for our product,  which could cause
     our business to fail.
     ---------------------------------------------------------------------------

     It is management's intent to expand the market for our product, but only as
ongoing business conditions warrant and, if necessary,  funds are available.  We
presently  operate  in a  limited  geographical  marketing  area  in and via the
Internet.  In order to  expand  the area in which we  operate,  wet must  expand
facilities, purchase additional equipment and retain additional personnel. Also,
there  can be no  assurance  that if we do  expand  into new  areas,  that  such
expansion will be successful or that the business generated from the addition of
markets will warrant the expenses  necessary to facilitate the expansion.  If we
are unable to successfully  expand our marketing area and products offered,  our
business may not be able to grow, or we may possibly  decrease which will have a
negative impact on future operations.

     We have only one  manufacturer  of our product and if this sole producer is
     no longer able to produce the units, we may be unable to find a replacement
     manufacturer and our business could be negatively affected.
     ---------------------------------------------------------------------------

     Blow Molded  Products is presently  the only  manufacturer  of our product,
although  the  stand is  subcontracted  to a  separate  entity.  If Blow  Molded
Products was unable to continue to produce the LiL Marc units,  we would have to
locate another custom blow molded  manufacturing  company.  Although the product
was previously produced by Flambeau Airmold, in Redland,  California, we are not
certain  whether they could currently  produce the product on reasonable  terms.
Management is currently not aware of any other custom blow molded  manufacturers
that  can  offer  the  flexibility  of  orders  as small as 100 and that is also
capable of  producing  orders as large of 10,000.  Accordingly,  there can be no
assurance that we could locate an alternate  manufacturer to produce our product
and, that if we are able to find an  alternate,  that the  production  costs and
associated  expenses would be on terms  favorable to us. In this event, we would
suffer a delay in  production  that could  negatively  affect  sales and have an
adverse effect on our business and financial condition.

                                      -8-
<PAGE>

     The design patent for the LiL Marc training  urinal has expired which could
     allow  competitors  and other  businesses to duplicate and market a similar
     product,  which  would  have a  negative  impact  on  future  revenues  and
     financial condition.
     ---------------------------------------------------------------------------

     The design patent for the LiL Marc, our only product,  expired in July 2005
and we do not anticipate  filing for additional patent  applications  related to
the product. Without patent protection,  we must rely on the complex engineering
in the current  production molds for product  protection against any copy of the
product.  It is possible that a competitor  or other  business may duplicate the
product and market the same or similar  product in direct  competition  with the
LiL Marc.  This could have a severe and  negative  impact on future sales of the
LiL Marc, which would negatively affect our financial condition.

     The  industry in which we operate is highly  competitive  and could  affect
     results of operations,  which would make  profitability even more difficult
     to achieve and sustain.
     ---------------------------------------------------------------------------

     The baby products and related products  industry is highly  competitive and
is marked by many competitors and potential competitors,  many of which are much
larger with much greater financial resources such as Fisher-Price. Most existing
and potential  competitors  also have larger market share and larger  production
capability,  which may enable them to establish a stronger  competitive position
than we have, in part through  greater  marketing  opportunities.  If we fail to
compete effectively with these businesses or to address competitive developments
quickly and  effectively,  we will not be able to grow our  business or remain a
viable entity.

     Our  business  could  be  adversely   affected  by  any  adverse   economic
     developments in the baby products industry and/or the economy in general.
     ---------------------------------------------------------------------------

     We depend on the perceived ongoing demand for our baby products,  which may
be subject  to trends in  discretionary  spending  by the  consumer.  Therefore,
future  business is susceptible  to downturns in the baby products  industry and
the economy in  general.  Any  significant  downturn in the market or in general
economic conditions would likely hurt our business.

     Management will devote only minimal time to our business.
     ---------------------------------------------------------------------------

     Presently,  our three  directors have other full time  obligations and will
devote only such time to our business as necessary, except for our President who
will devote  approximately  20 hours per week.  The other  directors will devote
only such time as may be required as a member of the Board of  Directors.  Thus,
because of their other time commitments,  management  anticipates that they will
devote only a minimal  amount of time to our business,  at least until such time
as business warrants devoting more time.

     Effective voting control of our company is held by its three directors.
     ---------------------------------------------------------------------------

     Our  three  directors  own  in  the  aggregate  approximately  73%  of  our
outstanding  voting  securities.  No other  person owns as much as of 10% of the
outstanding shares. Accordingly,  the current directors will have the ability to
elect all of our directors,  who in turn elect all executive  officers,  without
regard to the votes of other stockholders.

     Currently there is no active market for our common stock.
     ---------------------------------------------------------------------------

     Although  our  shares  are  quoted  in the NASD Pink  Sheets,  there is not
currently an active trading market for the shares.  Following the  effectiveness
of our  registration  statement,  we intend to request  that a broker-  dealer /
market  maker submit an  application  to make a market for our shares on the OTC
Bulletin Board. However,  there can be no assurance that the application will be
accepted or that any trading  market will ever develop or be  maintained  on the
OTC  Bulletin  Board,  pink  sheets or any other  recognized  trading  market or
exchange. Any trading market for the common stock that may develop in the future
will most likely be very volatile,  and numerous  factors beyond our control may
have a  significant  effect on the market.  Only  companies  that  report  their
current financial  information to the SEC may have their securities  included on
the  OTC  Bulletin  Board.  Therefore,  only  upon  the  effective  date  of our
registration  statement will our shares become  eligible to be quoted on the OTC
Bulletin Board.  In the event that we lose this status as a "reporting  issuer,"
any  future  quotation  of our  common  stock on the OTC  Bulletin  Board may be
jeopardized.

                                      -9-
<PAGE>

     The so called "penny stock rule" could make it  cumbersome  for brokers and
     dealers to trade in our common  stock,  making the market less liquid which
     could have a negative effect on the price of the shares .
     ---------------------------------------------------------------------------

     Trading  in our  common  stock is  subject  to  certain  provisions  of the
Exchange Act,  commonly  referred to as the "penny stock" rule. A penny stock is
generally  defined to be any equity  security  that has a market price less than
$5.00 per share,  subject to certain exceptions.  If our stock is deemed to be a
penny stock,  trading will be subject to additional sales practice  requirements
on broker-dealers. These may require a broker-dealer to:

     o   make a special suitability determination for purchasers of the shares;

     o   receive the purchaser's written consent to the transaction prior to the
         purchase; and

     o   deliver to a  prospective  purchaser  of our shares  prior to the first
         transaction,  a risk  disclosure  document  relating to the penny stock
         market.

     Consequently,  penny stock rules may restrict the ability of broker-dealers
to trade  and/or  maintain  a market  in our  common  stock.  Also,  prospective
investors  may not  want to get  involved  with  the  additional  administrative
requirements,  which may have a material  adverse  effect on the  trading of our
shares.

     We have never paid a dividend  and do not intend to do so in the  immediate
     future.
     ---------------------------------------------------------------------------

     We has  never  paid  cash  dividends  and  have  no  plans  to do so in the
foreseeable  future.  Any future dividend policy will be determined by our Board
of Directors  and will depend upon a number of factors,  including our financial
condition  and  performance,   cash  needs  and  expansion  plans,   income  tax
consequences,   and  the   restrictions   that  applicable  laws  and/or  credit
arrangements may impose.

Item 2.       Description of Property

     We do not presently own any property.

Item 3.       Legal Proceedings

     There are no material  pending legal  proceedings to which our company,  or
any  subsidiary  thereof,  is a party or to which any of our property is subject
and, to the best of our knowledge,  no such actions against us are  contemplated
or threatened.

Item 4.       Submission of Matters to a Vote of Security Holders

     No matters were  submitted to a vote of our  securities  holders during the
fourth quarter of the fiscal year ended December 31, 2006.

                                     PART II

Item 5.       Market for Common Equity and Related Stockholder Matters

     Our common  stock is  currently  included  on the "pink  sheets"  under the
symbol  "LILM,"  although  there has not been an active  trading  market for the
shares.  Upon the  effectiveness  of our  registration  statement,  we intend to
request that a broker-dealer / market maker submit an application to the NASD in
order to make a market for our shares and for the shares to be quoted on the OTC
Bulletin Board. Our application will consist of current  corporate  information,
financial  statements  and other  documents  as required by Rule  15c2-11 of the
Securities  Exchange Act.  Inclusion on the OTC Bulletin Board will permit price
quotations  for our  shares to be  published  by such  service.  There can be no
assurance  that the  application  will be  accepted  or that the shares  will be
traded in the  public  market.  Also,  secondary  trading  of our  shares may be
subject to certain state imposed restrictions.  Except for being included in the
pink sheets and making  applying to have our shares  quoted on the OTC  Bulletin
Board, there are no plans,  proposals,  arrangements or understandings  with any
person concerning the development of a trading market in any of our securities.

                                      -10-
<PAGE>

     The  ability  of  individual  stockholders  to  trade  their  shares  in  a
particular  state may be subject to various rules and regulations of that state.
A number of states  require that an issuer's  securities  be registered in their
state or  appropriately  exempted from  registration  before the  securities are
permitted  to trade in that state.  Presently,  we have no plans to register our
securities  in any  particular  state.  Further,  our shares most likely will be
subject to the  provisions  of Section 15(g) and Rule 15g-9 of the Exchange Act,
commonly referred to as the "penny stock" rule. Section 15(g) sets forth certain
requirements for transactions in penny stocks and Rule 15g-9(d)(1)  incorporates
the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

     The SEC generally  defines penny stock to be any equity security that has a
market  price  less than $5.00 per share,  subject to certain  exceptions.  Rule
3a51-1  provides  that any equity  security  is  considered  to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting  specified  criteria  set by the SEC;  authorized  for  quotation on The
NASDAQ Stock Market;  issued by a registered  investment company;  excluded from
the  definition on the basis of price (at least $5.00 per share) or the issuer's
net tangible assets; or exempted from the definition by the SEC.  Broker-dealers
who sell penny stocks to persons other than established customers and accredited
investors  (generally  persons  with  assets in excess of  $1,000,000  or annual
income exceeding $200,000,  or $300,000 together with their spouse), are subject
to additional sales practice requirements.

     For transactions covered by these rules, broker-dealers must make a special
suitability  determination  for the  purchase of such  securities  and must have
received  the  purchaser's  written  consent  to the  transaction  prior  to the
purchase.  Additionally,  for any  transaction  involving a penny stock,  unless
exempt,  the rules require the delivery,  prior to the first  transaction,  of a
risk  disclosure  document  relating to the penny stock market.  A broker-dealer
also must disclose the  commissions  payable to both the  broker-dealer  and the
registered representative,  and current quotations for the securities.  Finally,
monthly  statements must be sent to clients  disclosing recent price information
for the penny stocks held in the account and  information  on the limited market
in  penny  stocks.  Consequently,  these  rules  may  restrict  the  ability  of
broker-dealers  to trade  and/or  maintain a market in our common  stock and may
affect the ability of stockholders to sell their shares.

     As of March 15, 2007,  there were 66 holders of record of our common stock,
which does not account for stockholders  whose shares may be held in a brokerage
account or in other nominee name.  Because there has been only a limited  public
trading market for our securities, no trading history is presented herein. We do
not currently  have  outstanding  any options,  warrants or other  securities or
instruments that are convertible into shares of our common stock.

     We have not filed a registration statement under the Securities Act and all
of our  outstanding  shares of common stock were issued  pursuant to  exemptions
under that Act. In February  2003, we completed an offering of 763,750 shares of
common stock to a total of 59  investors  for gross  proceeds of $61,100.  After
deducting  costs and  expenses  associated  with the  offering,  the net  amount
received by us was $55,030.  The offering was made pursuant to an exemption from
registration  under the Securities Act provided by Regulation D, Rule 504 of the
Securities  Act.  Sales were made  pursuant  to an  Offering  Memorandum  and an
initial  Form D was filed with the SEC on April 25,  2002 and an amended  Form D
was filed on March 3, 2003 reporting the completion of the offering.

     As  provided  by Rule  502(d)  of  Regulation  D,  securities  acquired  in
transactions that satisfy the requirements set forth in Rule 504 are not subject
to the resale  limitations  set forth in Rule 502(d).  Accordingly,  the 763,750
shares issued pursuant to the Regulation D offering in 2003 are deemed not to be
"restricted" securities,  unless held by an affiliate or control person of LILM.
The  balance  of  1,820,000   shares   outstanding  are  considered   restricted
securities,  unless sold or  otherwise  transferred  pursuant to a  registration
statement under the Securities Act or pursuant to an appropriate  exemption from
registration.   Presently,   all  the  1,820,000  shares  remain  as  restricted
securities.

     Subsequent to the Regulation D offering, a director purchased 63,475 shares
from two investors in the offering. These shares are deemed "control" shares and
are  included  in our  calculations  for  restricted  shares.  Thus,  a total of
1,883,275  shares  are  considered  restricted  securities  and are  held by our
affiliates  or  controlling  stockholder  and no  restricted  shares are held by
nonaffiliates.  Accordingly, the balance of 700,475 shares are considered freely
tradeable and may be sold,  transferred or otherwise traded in the public market
without  restriction,  unless held by an affiliate or  controlling  stockholder.
Because  all  of  the  outstanding   restricted  shares  have  been  issued  and
outstanding for more than two years, Rule 144 of the Securities Act is available
to the holders of these shares.

                                      -11-
<PAGE>

     In general,  under Rule 144 as  currently  in effect,  a person (or persons
whose shares are aggregated) who has beneficially owned restricted shares for at
least one year,  including any person who may be deemed to be an "affiliate" (as
the term  "affiliate" is defined under the Securities Act), is entitled to sell,
within any three-  month  period,  an amount of shares  that does not exceed the
greater  of (i) the  average  weekly  trading  volume in our  common  stock,  as
reported  through the  automated  quotation  system of a  registered  securities
association,  during the four calendar  weeks  preceding such sale or (ii) 1% of
the shares then  outstanding.  In order for a stockholder to rely on Rule 144, a
company must have available  adequate current public information with respect to
itself.  A person  who is not  deemed to be an  "affiliate"  and has not been an
affiliate for the most recent three months,  and who has held restricted  shares
for at least two years would be entitled to sell such shares  without  regard to
the various resale limitations under Rule 144(k).

     Under Rule 144(k), the requirements of paragraphs (c), (e), (f), and (h) of
Rule 144 do not apply to restricted  securities sold for the account of a person
who is not an affiliate of an issuer at the time of the sale and has not been an
affiliate  during the preceding three months,  provided the securities have been
beneficially  owned by the  seller  for a period of at least two years  prior to
their sale. For purposes of this report, a controlling stockholder is considered
to be a person owning ten percent (10%) or more of our total outstanding shares,
or is otherwise  an  affiliate.  No  individual  person  owning a portion of the
2,583,750  shares  considered  to be not  restricted  owns more than ten percent
(10%) of our total outstanding shares.

     All of the 1,883,475 shares  considered  restricted  securities and held by
our three directors,  are presently eligible for sale pursuant to the provisions
of Rule 144,  subject to the volume and other  limitations  set forth under Rule
144. Accordingly, assuming the conditions of Rule 144 are otherwise met, each of
these individuals could sell up to 25,838 shares per three month period.

Dividend Policy

     We have not declared or paid cash  dividends or made  distributions  in the
past,  and we do not  anticipate  that  we  will  pay  cash  dividends  or  make
distributions  in the  foreseeable  future.  We  currently  intend to retain and
invest future earnings to finance operations.

Item 6.       Management's Discussion and Analysis or Plan of Operation

     The following  information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Form 10-KSB.
--------------------------------------------------------------------------------

     We are considered a development  stage company with minimal cash assets and
with only limited operations and revenue.  Ongoing operating expense,  including
the  costs  associated  with the  preparation  and  filing  of our  registration
statement,  have  been  paid  for by (i)  the net  proceeds  of  $55,030  (after
deducting  offering  costs)  from our  stock  offering  in 2002;  and (ii)  from
advances  from a  stockholder.  A total of $5,797 has been  advanced  by Alewine
Limited  Liability  Company,  a 73% stockholder  that is owned by two directors,
George Norman and Laurie Norman and managed by Mr. Norman,  our  president.  The
debt is evidenced by a note that is payable upon demand with a provision that an
interest rate of 10% would be charged on any  outstanding  balance not paid when
due.

     It is anticipated that we will require  approximately $20,000 over the next
12 months to fund operations and to maintain our corporate viability.  If we are
unable to generate sufficient revenues from sales of our product, we may have to
rely on funds from credit lines, directors and/or stockholders in the future. In
March 2005, our subsidiary LiL Marc,  Inc.  received  tentative  approval for an
unsecured credit line with Wells Fargo Bank in the amount of $15,000. The credit
line was never used and was closed.  There can be no assurance at this time that
the credit line can be reopened  nor do we have any other  potential  sources of
funds  available to us or our  subsidiary  at this time. We also do not have any
further  commitments  from a director or  stockholder  to provide any additional
funding.

Results of Operations

     For the Year Ended  December 31, 2006  Compared to the Year Ended  December
     31, 2005
     ---------------------------------------------------------------------------

     We  realized  revenues  of $2,984  for the year  ended  December  31,  2006
compared  to  revenues  of $1,515  for the year ended  December  31,  2005.  The
increase in sales  during 2006 is  attributed  to an increase in orders from our
website.

                                      -12-
<PAGE>
     Total  expenses for 2006 were  $18,805,  compared to $14,207 for 2005.  The
increase includes a 48% increase in administrative expenses from $12,624 in 2005
to $18,157 in 2006,  primarily due to a 98% increase in professional  fees (from
$5,100 in 2005 to $10,145 in 2006),  including legal and accounting expenses and
an 8% increase in rent related  expenses  from $3,300 in 2005 to $3,565 in 2006.
These increases were partially offset by a 62% decrease in part time office help
and office  expenses (from $698 in 2005 to $266 in 2006). We realized a net loss
of $15,821 during the year ended December 31, 2006 compared to a loss of $12,692
in 2005. The increase in net loss is directly attributed to an increase in legal
and accounting costs in 2006.

Liquidity and Capital Resources

     At December 31, 2006 and 2005,  we had total assets  consisting of cash and
office  equipment of $11,928 and $22,999,  respectively.  Total  liabilities  at
December  31,  2006  and  2005  were  $10,797  and  $6,047  respectively.  Total
liabilities at December 31, 2006 consisted of an invoice in the amount of $5,000
for  professional  fees and a demand  note in the  amount of $5,797  issued to a
private  limited  liability  company owned by two  directors,  George Norman and
Laurie  Norman.  The note is payable  upon  demand and does not bear an interest
rate. If a portion of the principal is not paid when due then the note will bear
an interest rate of 10% per annum.

     Because we currently have only minimal  revenues and limited cash reserves,
we may have to rely on directors  and  stockholders  to pay expenses  until such
time as we realize  adequate  revenues from the production and sales of our baby
product.  There  is no  assurance  that we will  be  able to  generate  adequate
revenues in the immediate future to satisfy cash needs. At December 31, 2005, we
had cash on hand of $21,530,  working capital of $15,483 and total stockholders'
equity of $16,952. At December 31, 2006, we had cash on hand of $10,897, working
capital of $100 and total stockholders' equity of $1,131.

     In the  opinion  of  management,  inflation  has not and  will  not  have a
material effect on our ongoing operations.

Plan of Operation

     During the next 12 months,  we plan to focus on improving our website found
at http://LiLMarc.com and http://Boyspottytraining.com. Anticipated improvements
include simplifying the ordering process, improving the appearance and layout of
the  website,  and making  changes to the website  that would  increase  impulse
purchases.  We will  also  continue  to focus on  improving  relationships  with
resellers  that sell our product on their  websites  and on engaging new website
hosts for the  product.  Management  anticipates  that this can be  accomplished
through individual calls and e-mails to the website hosts. Additionally,  we are
committed to the production of additional  stands when sale of more than 500 LiL
Marcs  is  achieved.  Because  we  lack  immediate  requisite  funds,  it may be
necessary to rely on advances from directors  and/or  stockholders,  although we
have no firm commitment from anyone to advance future funds.  Management intends
to hold expenses to a minimum and to obtain services on a contingency basis when
possible.  Further,  directors  will defer any  compensation  until such time as
business warrants the payment of such.

     If we cannot  generate or secure  adequate funds during the next 12 months,
we may be forced to seek  alternatives  such a joint  venture or  licensing  our
product.  If we are unsuccessful in securing  alternative sources of revenue, we
may have to cease  operations  or sell off  existing  inventory  at  liquidating
prices.

     After paying certain costs and expenses  related to ongoing  administrative
costs and the associated  professional fees, including the cost of preparing and
filing  our  registration  statement,  management  estimates  that it will  have
sufficient  funds to  operate  for the next six to twelve  months.  If  business
revenues do not provide enough funds to continue operations, it may be necessary
for us to seek  additional  financing.  This would most likely come from current
directors,  although the directors are under no obligation to provide additional
funding  and  there  is no  assurance  outside  funding  will  be  available  on
acceptable terms, or at all.

     Because we rely on others for  production of our product,  we do not expect
to make any significant  capital  expenditures for new equipment or other assets
during 2007. If additional  equipment does become necessary,  we believe that we
may have to seek outside financing to acquire the equipment or assets.

     Currently,   we  have  three   employees;   our   President   that  devotes
approximately  20 hours per week to our business,  our Secretary that assists on
an  as-needed  basis  and  a  part-time  laborer  for  packaging  and  shipping.
Management  believes that these  employees will be adequate for the  foreseeable

                                      -13-
<PAGE>

future, or until our production reaches a level to justify additional employees.
Further, we believe that in the event increased business necessitates additional
employees,  we will be able to pay the added  expenses of these  employees  from
increased revenues.

Future Milestones

     Our plan of  operations  for the next twelve months will focus on enhancing
our  Internet  website,  asking for product  input from  resellers  and ordering
additional  stands,  which is dependent on the sales of five hundred  additional
urinals. This 12 month plan includes the following:

<TABLE>
<CAPTION>

            TASK                     RESPONSIBILITY                  START - END                      COST
-------------------------------   ------------------------   -------------------------   -----------------------
<S>                                 <C>                       <C>                        <C>
Ease process for placing
orders.  More order                   George Norman            June 2006 - Sept 2006                $0.00
buttons on multiple web                                               Completed                   In-house
pages.
-------------------------------   ------------------------   -------------------------   -----------------------
Evaluate and implement                George Norman             Nov 2006 - May 2006                 $0.00
more color contrast on                                               In process                   In-house
order buttons.
-------------------------------   ------------------------   -------------------------   -----------------------
Orders and shipping are               George Norman             June 2007 - Sept 2007               $0.00
currently confirmed by                                                 Pending                    In-house
email.  Explore and
implement a letterhead
or logo on email
notifications.
-------------------------------   ------------------------   -------------------------   -----------------------
Product feedback page.                George Norman             Jan 2007 - Sept 2007              $150.00
"It worked for me!"                   Laurie Norman                  Pending              Financing from working
                                      Bottlerocket                                                capital.
                                  Manufacturing Design
                                           Co.
-------------------------------   ------------------------   -------------------------   -----------------------
Change website product                George Norman             June 2007 - Dec 2007                $0.00
page drawings to                                                       Pending                    In-house
photographs.
-------------------------------   ------------------------   -------------------------   -----------------------
Use  photographs of                   George Norman             June 2007 - Dec 2007               $50.00
models with different             using volunteer models                Pending           Financing from working
ethnic backgrounds to                from church and                                              capital.
appeal to a broader                    community.
range of customers.
-------------------------------   ------------------------   -------------------------   -----------------------
Follow-up calls to                    Laurie Norman              Nov 2007 - Mar 2008               $0.00
resellers for product                                                 On-going                    In-house
input.
-------------------------------   ------------------------   -------------------------   -----------------------
Production of 2000                    George Norman              May 2006 - Mar 2008           $7,340.00
additional stands.                Rotational Mold of Utah      Initiated contact with     Financing from product
                                                                    manufacturer.          sales or through loan
                                                              Order pending additional       from director(s).
                                                                  sales of at least
                                                                     500 urinals
-------------------------------   ------------------------   -------------------------   -----------------------
</TABLE>

     To achieve these milestones  during the next twelve months,  will require a
total monthly  estimated  expenditure of  approximately  $550. This monthly cost
will consist of office phone and fax  (approximately  $52 per month), 800 number
(base of $5 plus per call  charge of $0.15 per  minute),  office  rent ($200 per
month),  storage  rent  ($100  per  month),  and part  time  help for  packaging
(estimated to be from $80 to $120 per month).  Additionally,  there is a monthly
internet commerce cost of $65.


                                                       -14-

<PAGE>

     Management  also  estimates  that during the next six months,  depending on
continuing sales, we may need to order an additional 2,000 unit stands at a cost
of $3.67 each,  for a total cost of $7,340.  These  stands will take 10 weeks to
produce on a rotational mold by the manufacturer,  Rotational Mold of Utah. This
production  cost  will be funded  from  product  sales or  through a loan from a
director(s).

     Management  believes that funds for the cost of operations  for the next 12
months will come from current working  capital,  revenue  generated from product
sales,  and possibly loans or advances from officers and directors,  although no
officer or director has made any such commitment.  In the event we are unable to
generate or secure  adequate  funds to achieve the  milestones  set forth above,
management will explore various  alternatives in order to attain our goals. This
may  involve  seeking a joint  venture  with  another  baby  product  company or
marketing company to manufacture and market the LiL Marc training urinal. We may
also consider licensing our product to another baby product or marketing company
in exchange  for a royalty.  Presently,  we have no firm plan or  commitment  to
pursue  any  alternative.  If we  find  it  necessary  to  pursue  one  or  more
alternatives,  it would most likely reduce future  revenues from our own product
sales and such revenues may not be enough to meet all of our obligations.  Also,
if no  viable  alternative  is  available,  we  may  have  to  cease  operations
temporarily or sell off existing inventory at liquidating  prices.  There can be
no  assurance  that we will be able to  generate  or  secure  adequate  funds to
accomplish  our  objectives  during  the next  twelve  months,  nor is there any
assurance  that  alternative  pursuits  will be  successful  in  generating  the
necessary funds needed to continue operations.

Net Operating Loss

     We  have   accumulated   approximately   $84,587  of  net  operating   loss
carryforwards  as of December  31, 2005.  This loss carry  forward may be offset
against taxable income and income taxes in future years and expires  starting in
the year 2021  through  2027.  The use of these losses to reduce  future  income
taxes will depend on the  generation of sufficient  taxable  income prior to the
expiration  of the net  operating  loss  carryforwards.  In the event of certain
changes  in  control,  there will be an annual  limitation  on the amount of net
operating loss carryforwards which can be used. This could occur in the event we
are  purchased,   acquired  by  or  merged  with  another  company  whereby  the
stockholders  of the new or merging  company would be issued the majority of the
issued and outstanding shares and our current stockholders would hold a minority
of the issued and outstanding  shares. This could result in an annual limitation
on the  amount of net  operating  loss  carryforwards  that could be used by the
ongoing business.

     The income tax benefit of  approximately  $25,000 at December 31, 2006 from
the  carryforwards  has been fully offset by a valuation reserve because the use
of the future tax benefit is doubtful since we have not started full operations.

Recent Accounting Pronouncements

     In January 2003, the Financial  Accounting Standards Board, or FASB, issued
Interpretation  No. 46 ("FIN 46"),  Consolidation of Variable Interest Entities,
which addresses the  consolidation of business  enterprises  (variable  interest
entities),  to  which  the  usual  condition  of  consolidation,  a  controlling
financial  interest,  does not apply.  FIN 46  requires  an entity to assess its
business  relationships to determine if they are variable interest entities.  As
defined  in FIN 46,  variable  interests  are  contractual,  ownership  or other
interests in an entity that change with changes in the entity's net asset value.
Variable  interests in an entity may arise from financial  instruments,  service
contracts,  guarantees,  leases or other arrangements with the variable interest
entity.  An entity that will absorb a majority of the variable interest entity's
expected  losses  or  expected  residual  returns,  as  defined  in FIN  46,  is
considered the primary  beneficiary of the variable interest entity. The primary
beneficiary must include the variable interest entity's assets,  liabilities and
results  of  operations  in its  consolidated  financial  statements.  FIN 46 is
immediately  effective for all variable  interest entities created after January
31,  2003.  For  variable  interest  entities  created  prior to this date,  the
provisions  of FIN 46 were  originally  required to be applied no later than the
first  quarter of Fiscal  2004.  On October 8, 2003,  the FASB issued FASB Staff
Position  (FSP)  FIN  46-6,  Effective  Date  of  FASB  Interpretation  No.  46,
Consolidation of Variable Interest Entities. The FSP provides a limited deferral
(until the end of the second  quarter of 2004) of the  effective  date of FIN 46
for certain  interests  of a public  entity in a variable  interest  entity or a
potential variable interest entity. Management will continue to evaluate FIN 46,
but due to the complex nature of the analysis required by FIN 46, management has
not  determined  the impact on  consolidated  results of operations or financial
position.

                                      -15-
<PAGE>
     In April 2003, the FASB issued Statement of Financial  Accounting Standards
(SFAS) SFAS No. 149,  Amendment of Statement 133 on Derivative  Instruments  and
Hedging Activities.  SFAS No. 149 amends and clarifies accounting for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts,  and for hedging  activities under SFAS No. 133. In particular,  this
Statement  clarifies  under what  circumstances  a contract  with an initial net
investment  meets  the  characteristic  of a  derivative  and when a  derivative
contains a financing  component that warrants special reporting in the statement
of cash flows.  We adopted this standard for contracts  entered into or modified
after June 30, 2003. The adoption of SFAS No. 149 did not have a material impact
on our consolidated results of operations or financial position.

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with  Characteristics of both Liabilities and Equity. This Statement
requires certain financial instruments that embody obligations of the issuer and
have  characteristics  of  both  liabilities  and  equity  to be  classified  as
liabilities.  We adopted this standard for financial instruments entered into or
modified  after  May 31,  2003.  The  adoption  of SFAS  No.  150 did not have a
material impact on our consolidated results of operations or financial position.

     On December 16, 2004 the FASB issued SFAS No. 123(R),  Share-Based Payment,
which is an amendment to SFAS No. 123, Accounting for Stock-Based  Compensation.
This new standard eliminates the ability to account for share-based compensation
transactions   using  Accounting   Principles  Board  ("APB")  Opinion  No.  25,
Accounting  for  Stock  Issued  to  Employees,   and  generally   requires  such
transactions  to be  accounted  for  using  a  fair-value-based  method  and the
resulting  cost  recognized  in the financial  statements.  This new standard is
effective  for awards that are  granted,  modified or settled in cash in interim
and annual periods beginning after June 15, 2005. In addition, this new standard
will apply to unvested  options granted prior to the effective date.  Management
will adopt this new standard  effective for the fourth  fiscal  quarter of 2005,
and has not yet determined  what impact this standard will have on our financial
position or results of operations.

     In  November  2004,  the FASB issued  SFAS No.  151,  Inventory  Costs - an
amendment of ARB No. 43,  Chapter 4. This  Statement  amends the guidance in ARB
No. 43, Chapter 4,  "Inventory  Pricing," to clarify the accounting for abnormal
amounts of idle facility expense,  freight,  handling costs, and wasted material
(spoilage).  Paragraph  5 of ARB 43,  Chapter 4,  previously  stated that ". . .
under  some  circumstances,  items  such as  idle  facility  expense,  excessive
spoilage,  double freight, and rehandling costs may be so abnormal as to require
treatment as current period charges.  . . ." This Statement  requires that those
items be recognized as  current-period  charges  regardless of whether they meet
the  criterion of "so  abnormal."  In addition,  this  Statement  requires  that
allocation of fixed production  overheads to the costs of conversion be based on
the normal  capacity of the production  facilities.  This statement is effective
for inventory  costs incurred during fiscal years beginning after June 15, 2005.
Management  does not  believe  the  adoption  of this  Statement  will  have any
immediate material impact on us.

     In December 2004, the FASB issued SFAS No. 152,  Accounting for Real Estate
Time-sharing  Transactions,  which amends FASB statement No. 66,  Accounting for
Sales of Real Estate,  to  reference  the  financial  accounting  and  reporting
guidance  for real estate  time-sharing  transactions  that is provided in AICPA
Statement  of Position  (SOP)  04-2,  Accounting  for Real  Estate  Time-Sharing
Transactions.  This statement also amends FASB Statement No. 67,  Accounting for
Costs and Initial Rental  Operations of Real Estate Projects,  to state that the
guidance  for (a)  incidental  operations  and (b) costs  incurred  to sell real
estate  projects does not apply to real estate  time-sharing  transactions.  The
accounting  for those  operations  and costs is subject to the  guidance  in SOP
04-2.  This  Statement is effective  for financial  statements  for fiscal years
beginning  after  June  15,  2005.  Management  believes  the  adoption  of this
Statement will have no impact on our financial statements.

     In December  2004,  the FASB issued SFAS  No.153,  Exchange of  Nonmonetary
Assets.  This  Statement  addresses the  measurement of exchanges of nonmonetary
assets.  The  guidance  in  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions,  is based on the principle that  exchanges of  nonmonetary  assets
should be measured based on the fair value of the assets exchanged. The guidance
in that Opinion,  however,  included certain exceptions to that principle.  This
Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges
of  similar  productive  assets and  replaces  it with a general  exception  for
exchanges  of  nonmonetary  assets  that do not  have  commercial  substance.  A
nonmonetrary  exchange has commercial  substance if the future cash flows of the
entity are expected to change  significantly  as a result of the exchange.  This
Statement is effective for financial statements for fiscal years beginning after
June 15, 2005. Earlier  application is permitted for nonmonetary asset exchanges
incurred during fiscal years beginning after the date

                                      -16-
<PAGE>

of this statement is issued.  Management believes the adoption of this Statement
will have no impact on our financial statements.

Forward Looking and Cautionary Statements

     This report includes  "forward-looking  statements" that may relate to such
matters as  anticipated  financial  performance,  future  revenues or  earnings,
business prospects,  projected ventures, new products and services,  anticipated
market  performance  and similar  matters.  When used in this report,  the words
"may,"  "will,"  expect,"  anticipate,"   "continue,"   "estimate,"   "project,"
"intend,"  and similar  expressions  are  intended  to identify  forward-looking
statements  regarding events,  conditions,  and financial trends that may affect
future plans of operations,  business strategy, operating results, and financial
position.  We caution  readers that a variety of factors  could cause its actual
results to differ  materially  from the  anticipated  results  or other  matters
expressed in forward-looking statements. These risks and uncertainties,  many of
which are beyond our control, include:

     o   the ability to maintain current  business and, if feasible,  expand the
         marketing of products;

     o   the ability to attract and retain new individual and retail customers;

     o   the sufficiency of existing capital  resources and the ability to raise
         additional capital to fund cash requirements for future operations;

     o   uncertainties involved in the rate of growth of business and acceptance
         of our product and;

     o   anticipated  size or trends of the market  segments in which we compete
         and the anticipated competition in those markets;

     o   future capital requirements and our ability to satisfy these needs;

     o   general economic conditions.

     Although   management   believes  the   expectations   reflected  in  these
forward-looking  statements are reasonable,  such expectations  cannot guarantee
future results, levels of activity, performance or achievements.  Actual results
may differ materially from those included within the forward-looking  statements
as a result  of  various  factors.  Cautionary  statements  in the risk  factors
section and elsewhere in this report identify  important risks and uncertainties
affecting our future, which could cause actual results to differ materially from
the forward-looking statements made herein.

Item 7.       Financial Statements

     Financial  statements for the fiscal years ended December 31, 2006 and 2005
have  been  examined  to the  extent  indicated  in their  reports  by  Madsen &
Associates,  CPA's Inc.,  independent certified public accountants and have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America and pursuant to Regulation  S-B as  promulgated  by the
SEC. The aforementioned  financial  statements are included herein starting with
page F-1.

Item  8.      Changes in  and  Disagreements  with Accountants on Accounting and
              Financial Disclosure

     None

Item 8A.      Controls and Procedures

     As of the end of the period covered by this annual  report,  we carried out
an evaluation,  under the supervision and with the  participation of management,
including our chief executive officer and principal  accounting  officer, of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  as  defined  in Rules  13a-15(e)  and  15d-15(e)  of the  Securities
Exchange Act of 1934. In designing and evaluating  the  disclosure  controls and
procedures,  management  recognizes  that there are inherent  limitations to the
effectiveness of any system of disclosure controls and procedures, including the
possibility of human error and the  circumvention  or overriding of the controls
and procedures.  Accordingly,  even effective disclosure controls and procedures
can only  provide  reasonable  assurance  of  achieving  their  desired  control
objectives.

                                      -17-
<PAGE>

Additionally,  in evaluating and implementing  possible controls and procedures,
management is required to apply its reasonable judgment.

     Based  upon the  required  evaluation,  our  chief  executive  officer  and
principal  accounting  officer concluded as of December 31, 2006, our disclosure
controls  and  procedures  are  effective  in timely  alerting  them to material
information  relating  to the  company  required  to be  disclosed  by us in the
reports that we file or submit under the Exchange Act to be recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms.  There have been no  significant  changes in our internal  controls  over
financial reporting or in other factors that could significantly affect internal
controls  over  financial  reporting  subsequent  to the date we carried out our
evaluation.

Item  8B.     Other Information

     Not applicable.

                                    PART III

Item 9.       Directors,  Executive  Officers,  Promoters  and Control  Persons;
              Corporate  Governance;  Compliance  with  Section   16(a)  of  the
              Exchange Act

     Our executive officers and directors are as follows:

              Name                  Age            Position
              ----                  ---            --------
         George I. Norman III        52      President, Chief Executive Officer
                                               and Director
         Laurie J. Norman            44      Secretary / Treasurer and Director
         Jessie Scott Bean           51      Director
---------------------------

     All directors hold office until the next annual meeting of stockholders and
until  their  successors  have been duly  elected  and  qualified.  There are no
agreements  with respect to the election of directors.  We have not  compensated
directors  for service on the Board of Directors or any committee  thereof,  but
directors are entitled to be reimbursed for expenses  incurred for attendance at
meetings of the Board and any  committee of the Board.  However,  directors  may
defer their  expenses  and/or take payment in shares of our common stock.  As of
the date hereof, no director has accrued any expenses or compensation.  Officers
are  appointed  annually by the Board of Directors  and each  executive  officer
serves at the discretion of the Board. We do not have any standing committees.

     No  director,  officer,  affiliate  or promoter  has,  within the past five
years, filed any bankruptcy  petition,  been convicted in or been the subject of
any  pending  criminal  proceedings,  or is any such  person the  subject or any
order,  judgment,  or decree  involving  the  violation  of any state or federal
securities laws.

     Directors currently devote only such time to company affairs as needed. The
time  devoted  could  amount to as little as 1% of the time they devote to their
own business affairs, or if business conditions  ultimately warrant,  they could
possibly elect to devote their full time to our business.  Presently,  there are
no other persons whose activities are material to our operations.

     Currently,  there is no  arrangement,  agreement or  understanding  between
management  and  non-  management   stockholders   under  which   non-management
stockholders  may  directly  or  indirectly  participate  in  or  influence  the
management of our affairs. Present management openly accepts and appreciates any
input or  suggestions  from  stockholders.  However,  the Board of  Directors is
elected by the stockholders  and the  stockholders  have the ultimate say in who
represents them on the Board.  There are no agreements or understandings for any
officer or director  to resign at the request of another  person and none of the
current  offers  or  directors  are  acting  on  behalf  of,  or will act at the
direction of any other person.

     The business experience of each of the persons listed above during the past
five years is as follows:

                                      -18-
<PAGE>

     George I. Norman,  III has been our President and a director since December
30, 1999. He attended the University of Utah from 1973 to 1975, studying general
education,  accounting,  business  and  finance.  Mr.  Norman  returned  to  the
University  in 1979 and  continued  his  studies  in  humanities,  science,  and
finance.  Mr. Norman has been self-employed  since 1979 in Salt Lake City, Utah,
as a financial and marketing  consultant.  In his business,  Mr. Norman consults
with both  individual  and corporate  clients and provides  consulting  services
related to making  general  business  decisions,  reviewing  business  plans and
providing  recommendations  for  raising  capital.  Also,  Mr.  Norman  provides
consulting services in the area of real estate management.

     Mr.  Norman was the  President  and director from June 5, 1999 to September
29, 2004 of Treasure Mountain Holdings, Inc., a public development stage company
which later became  Vyteris  Holdings,  Inc. From April 22, 1997 to May 19, 2000
Mr. Norman was President  and director of LiL Marc,  Inc., a public  development
stage company  developing  child products  through its wholly owned  subsidiary,
LILM, Inc. On May 19, 2000, Mr. Norman and his self-consulting business, Alewine
Limited Liability  Company,  sold their controlling  interest in LiL Marc to Com
Vest Capital  Partners LLC, a private  equity firm located in New York City, New
York, that makes  investments in businesses and companies.  On May 19, 2000, Mr.
Norman  purchased from LiL Marc a 100% interest in LILM,  Inc. by exchanging his
100,000 shares of LiL Marc, Inc.  (Nevada) common stock for 1,000,000  shares of
LILM, Inc., which represented 100% of the issued and outstanding  shares of LILM
common stock.  This  transaction was finalized on June 16, 2000. Mr. Norman does
not have any past or present affiliation with Com Vest Partners,  other than the
transaction  cited above.  From  November  17, 2004 to November  17,  2005,  Mr.
Norman's business,  Alewine Limited Liability  Company,  had a corporate finance
consulting  agreement with Scientific  Energy,  Inc., a public development stage
company in the laptop  battery  industry.  During this time Mr. Norman  assisted
management  with the  preparation  of a business  plan  concerning  its  battery
products.  He also  consulted  with  Scientific  Energy's  management in matters
related to the preparation  and filing with the SEC of its requisite  compliance
reports. Since its inception on July 15, 1994, Mr. Norman has been the President
and Manager of the Alewine Limited Liability Company. He is married to Laurie J.
Norman, our Secretary-Treasurer.

     Laurie J. Norman has been Secretary-Treasurer and a director since December
30,   1999.   From   April  22,   1997  to  May  19,   2000  Mrs.   Norman   was
Secretary-Treasurer  and director of LiL Marc, Inc., a public  development stage
company  developing  child products through its wholly owned  subsidiary,  LILM,
Inc. She graduated in 1985 from Adams State College in Alamosa, Colorado, with a
Bachelor  of  Science  degree in  biology.  She  studied  German  at the  Goethe
Institute in Murnau,  Republic of Germany in 1990.  Mrs.  Norman has worked with
children  and adults as a ski  instructor  in the United  States and New Zealand
since  1981.  Mrs.  Norman has also  worked in the main  offices of the Alta Ski
Resort  near Salt  Lake  City,  Utah and,  since  November  1991,teaches  skiing
part-time at the Resort from  November to April each year.  Since  January 1997,
Mrs.  Norman  has been the  Secretary/Treasurer  and  Assistant  Manager  of the
Alewine  Limited  Liability  Company.  Laurie J. Norman is the wife of George I.
Norman, III.

     Jessie Scott Bean has been a director since September 30, 2001.  Since July
7, 2001, he has been employed as a salesperson  for time shares at  Consolidated
Resorts in Las Vegas, Nevada. From June 2, 2000 to June 28, 2001, Mr. Bean was a
salesperson of vacation packages for Vacation  Consultants  International in Las
Vegas and from May 1997 to June 1, 2000, he was a licensed auction and wholesale
salesperson  for Donkey  Motors,  also in Las Vegas.  From  September 8, 1997 to
September  1998,  Mr. Bean was a  salesperson  of vacation  packages  for Global
Odyssey  in  Pleasanton,  California,  and  from  1996 to  1997,  he was an auto
salesperson for Willden Pride Dodge in Las Vegas.  Mr. Bean graduated from Clark
High School in Las Vegas, Nevada.

Compliance With Section 16(a) of the Exchange Act

     Section  16(a) of the Exchange Act requires  our  directors  and  executive
officers,  and persons who own more than 10% of our common  stock,  to file with
the SEC initial  reports of ownership and reports of changes in ownership of our
common stock and other equity  securities.  We are in the process of  completing
the initial forms that will be filed shortly.

                                      -19-
<PAGE>


Item 10.      Executive Compensation

     The following  discussion  addresses any and all  compensation  awarded to,
earned by or paid to our named  executive  officers  for the fiscal  years ended
December 31, 2005 and 2006. We have not had a bonus, profit sharing, or deferred
compensation  plan for the benefit of  employees,  officers or  directors.  Both
production and marketing are the  responsibility of George Norman. We anticipate
that  during  2007 Mr.  Norman will devote a minimum of 20 hours per week to our
business.  Laurie  Norman,  our Secretary / Treasurer,  continues to assists Mr.
Norman when needed as an office manager.

     We have  not  paid  any  salaries  or other  compensation  to  officers  or
directors  for their  service  on the  Board of  Directors  for the years  ended
December  31, 2005 and 2006.  Further,  we have not entered  into an  employment
agreement  with  any  officers,  directors  or any  other  persons  and no  such
agreements  are  anticipated  in  the  immediate  future.  It is  intended  that
directors  will defer any  compensation  until such time as business  operations
provide sufficient cash flow to provide for salaries.  As of the date hereof, no
person has accrued any compensation.

Item 11.      Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth  information,  to the best of our knowledge,
as of  March  31,  2007,  with  respect  to  each  person  known  by  us to  own
beneficially more than 5% of the outstanding common stock, each director and all
directors and officers as a group.

Name and Address                        Amount and Nature of       Percent
of Beneficial Owner                     Beneficial Ownership     of Class(1)
--------------------                    --------------------     -----------
Alewine Limited Liability Company (2)           1,863,475             72%
  1390 South 1100 East Ste. 204
  Salt Lake City, UT  84105
Jessie Scott Bean                                 20,000               1%
  8313 Aspenbrook
  Las Vegas, NV 89145
All directors and officers as                   1,883,475             73%
  a group (3 persons)

      *  Director and/or executive officer

     Note:    Unless otherwise indicated,  we have been advised that each person
              above has sole voting power over the shares indicated above.

     (1) Based upon 2,583,750 shares of common stock outstanding on December 31,
         2006.

     (2) Alewine Limited Liability Company is a Nevada limited liability company
         managed by Mr.  Norman,  our  President,  through  which he manages his
         personal  investments  and  conducts  his  self-employment   consulting
         business in the area of real estate  management and corporate  finance.
         Alewine Limited  Liability Company is owned by George Norman and Laurie
         Norman,  our  Secretary.  By resolution of its members,  Mr. Norman has
         voting and investment control over Alewine.

Item 12.       Certain  Relationships  and  Related  Transactions  and  Director
               Independence.

     There have been no material  transactions  during the past two fiscal years
between us and any officer,  director,  nominee for election as director, or any
stockholder owning greater than five percent (5%) of our outstanding shares, nor
any member of the above referenced individuals' immediate families.

     On May 19, 2000, George Norman, our President, his self-employed consulting
business,  Alewine Limited  Liability  Company,  Laurie Norman,  our Secretary /
Treasurer, and Linda Bryson, a principal stockholder,  sold to Com Vest Partners
an  aggregate of 1,194,166  shares of LiL Marc,  Inc.  (Nevada) for an aggregate
amount of $ 315,000. Of this amount, Mr. Norman received $166,990, including the
amount received by Alewine and Mrs. Norman.

                                      -20-
<PAGE>

     This  transaction  resulted  after Com Vest  Partners  proposed  that, as a
controlling  shareholder,  it could bring greater value to LiL Marc stockholders
by using ComVest's  contacts in the investment  banking field.  Com Vest further
proposed  that it could use its  corporate  client base to find  additional  new
business  opportunities  for LiL Marc by way of an  acquisition,  merger,  joint
venture, and/or license agreement with a prospective business that could advance
LiL Marc's growth by increasing future revenues and its asset base.

     Com Vest had no interest in pursuing sales of the LiL Marc training urinal.
LILM  owned the  patent  to the LiL Marc,  existing  inventory  and the  plastic
injection molds  necessary to manufacture  the LiL Marc product.  In response to
this,  on May 19, 2000 Mr.  Norman  purchased  from LiL Marc a 100%  interest in
LILM, Inc. by exchanging 100,000 shares of LiL Marc, Inc. (Nevada) common stock,
valued at $25,000 for purposes of the  exchange,  for  1,000,000  shares of LILM
common stock,  representing  all the issued and  outstanding  shares of LILM and
also  valued at $25,000 for  purposes  of the  exchange.  This  transaction  was
finalized  on June 16,  2000.  Mr.  Norman  does  not  have any past or  present
affiliation  with Com Vest  Partners,  other  than the stated  transaction.  Ms.
Bryson does not have any current relationship to or affiliation with LILM.

     On June 27, 2001, we sold 820,000 shares of common stock to two persons for
the cash consideration of $20,500,  or $.025 per share. Of these shares,  Jessie
Scott Bean, a director,  purchased  20,000 shares and Peter Karapanos  purchased
800,000 shares.  Then on August 31, 2001, Mr.  Karapanos sold his 800,000 shares
to Alewine for $25,000.

     Currently,   Alewine  owns  1,863,475   shares  (72%)  of  our  issued  and
outstanding  shares. This amount includes the 1,000,000 shares acquired from LiL
Marc,  Inc. in May 2000 and the 800,000  acquired  from Mr.  Karapanos in August
2001.  Alewine also purchased 35,200 shares from Jack Plumb on March 13, 2004 at
a cost of $7,500.  Mr.  Plumb had  previously  purchased  these shares from Kurt
Bean, a subscriber in our Regulation D offering.  Neither Mr.  Karapanos nor Mr.
Plumb is or has been otherwise  affiliated with LILM except as stockholders.  In
February  2005,  Alewine  purchased an additional  28,275 shares for $2,500 from
George and Marlene  Bean  (father and mother of Jessie Scott Bean, a director of
LILM) as payment of a personal loan made to Mr. and Mrs. Bean in February  2003.
These shares were also initially acquired in the Regulation D offering.

Item 13.          Exhibits

         (a)      Exhibits

Exhibit No.                 Exhibit Name
-----------                 ------------
       3.1*          Articles of Incorporation (Nevada)
       3.2*          By-Laws of Registrant
       4.1*          Instrument defining rights of holders (See Exhibit No. 3.1,
                       Articles of Incorporation)
      10.1**         Promissory Note
      21.1*          Subsidiaries
----------------
     *   Included as exhibit to Form 10-SB filed March 30, 2006.
   **    Included as Exhibit to Amendment No. 1 to Form 10-SB/A filed August 22,
         2006

Item 14.          Principal Accountant Fees and Services

     We do not  have an audit  committee  and as a result  our  entire  board of
directors performs the duties of an audit committee. Our board of directors will
approve in advance the scope and cost of the engagement of an auditor before the
auditor  renders audit and non-audit  services.  As a result,  we do not rely on
pre-approval policies and procedures.

                                      -21-
<PAGE>

     Audit Fees
     ----------

     The aggregate fees billed by our independent auditors, Madsen & Associates,
CPA's  Inc.,  for  professional  services  rendered  for the audit of our annual
financial  statements or the year ended December 31, 2005, and for the review of
quarterly financial  statements included in our Quarterly Reports on Form 10-QSB
for the quarters ended June 30 and September 30, 2006,  were $2,670 for 2006 and
$2,725 for 2005.

     Audit Related Fees
     ------------------

     For the years ended  December 31, 2006 and 2005,  there were no fees billed
for  assurance  and  related  services by Madsen &  Associates.  relating to the
performance  of the audit of our  financial  statements  which are not  reported
under the caption "Audit Fees" above.

     Tax Fees
     --------

     For the years  ended  December  31,  2006 and 2005,  no fees were billed by
Madsen & Associates billed us $150 each year for preparation of tax returns.

     We do not use Madsen & Associates for financial  information  system design
and  implementation.  These services,  which include designing or implementing a
system that  aggregates  source data  underlying  the  financial  statements  or
generates  information  that is  significant  to our financial  statements,  are
provided  internally  or by other service  providers.  We do not engage Madsen &
Associates to provide compliance outsourcing services.

     The board of directors has  considered the nature and amount of fees billed
by  Madsen  &  Associates  and  believes  that the  provision  of  services  for
activities  unrelated  to the  audit is  compatible  with  maintaining  Madsen &
Associates' independence.

                                      -22-
<PAGE>


                                   SIGNATURES

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

                                 LILM, Inc.



                                 By:     /S/   GEORGE I. NORMAN, III
                                    --------------------------------------------
                                         George I. Norman, III
                                         President and C.E.O.

Dated:   April 17, 2007

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

        Signature                         Title                          Date
        ---------                         -----                          ----

/S/ GEORGE I. NORMAN, III       President, C.E.O. and director    April 17, 2007
------------------------------  (Principal Accounting Officer)
      George I. Norman, III




/S/ LAURIE J. NORMAN            Secretary / Treasurer             April 17, 2007
------------------------------  and Director
      Laurie J. Norman




/S/ JESSIE SCOTT BEAN           Director                          April 17, 2007
------------------------------
      Jessie Scott Bean



                                           -23-
<PAGE>











                                   LILM, INC.
                          (A Development Stage Company)


                              FINANCIAL STATEMENTS


                                December 31, 2006


                                       F-1

<PAGE>



                                                  C O N T E N T S


Report of Independent Registered Public Accounting Firm....................F-3

Balance Sheet..............................................................F-4

Statements of Operations...................................................F-5

Statements of Stockholders' Equity (Deficit)...............................F-6

Statements of Cash Flows...................................................F-7

Notes to the Financial Statements..........................................F-8


                                       F-2

<PAGE>



MADSEN & ASSOCIATES, CPA's INC.                           684 East Vine St, # 3
-------------------------------                           Murray, Utah 84107
Certified Public Accountants and Business Consultants     Telephone 801-268-2632
                                                          Fax 801-262-3978







Board of Directors
LILM, INC. and Subsidiary and LIL Marc INC. (predecessor)
Salt Lake City, Utah

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the  accompanying  consolidated  balance sheet of LILM, INC. and
Subsidiary  and LIL Marc  INC.  (predecessor)  (development  stage  company)  at
December 31, 2006, and the consolidated statements of operations,  stockholders'
equity,  and cash flows for the years ended  December 31, 2006, and 2005 and the
period April 22, 1997 (date of inception of  predecessor)  to December 31, 2006.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of LILM,  INC. and
Subsidiary and LIL Marc INC. (predecessor) at December 31, 2006, and the results
of operations, and cash flows for the years ended December 31, 2006 and 2005 and
the period April 22, 1997 (date of inception of LIL Marc, INC.  (predecessor) to
December 31, 2006, in conformity with accounting  principles  generally accepted
in the United States of America.




Salt Lake City, Utah
February 28, 2007

/s/ Madsen & Associates, CPA's Inc.


                                       F-3

<PAGE>



           LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor)
                          ( Development Stage Company )
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2006

--------------------------------------------------------------------------------



ASSETS
CURRENT ASSETS

   Cash                                                             $    10,897

         Total Current Assets                                            10,897
                                                                    -----------

OFFICE EQUIPMENT - net of accumulated depreciation                        1,031
                                                                    -----------

                                                                    $    11,928


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES

      Accounts payable                                              $     5,000
      Accounts payable - related party                                    5,797
                                                                    -----------

         Total Current Liabilities                                       10,797
                                                                    -----------

STOCKHOLDERS' EQUITY

    Common stock
         25,000,000 shares authorized  at $0.001 par value;
         2,583,750 shares issued and outstanding                          2,584
     Capital in excess of par value                                     135,111
    Accumulated deficit during development stage                       (136,564)
                                                                    -----------
          Total Stockholders' Equity                                      1,131
                                                                    -----------

                                                                    $    11,928





    The accompanying notes are an integral part of these financial statements

                                      F-4
<PAGE>


           LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor)
                          ( Development Stage Company )
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 For the Years Ended December 31, 2006 and 2005
                and the Period April 22, 1997 (date of inception
              of LIL Marc, INC. (predecessor) to December 31, 2006

--------------------------------------------------------------------------------



                                                                    Apr 22, 1997
                                        Dec 31,         Dec 31,      to Dec 31,
                                         2006            2005           2006
                                      -----------    -----------    -----------


REVENUES                              $     2,984    $     1,515    $    17,718
                                      -----------    -----------    -----------

EXPENSES

   Administrative                          18,157         12,624        125,265
   Royalties                                   16             21             81
   Depreciation and amortization              632          1,562         28,936
                                      -----------    -----------    -----------
                                           18,805         14,207        154,282
                                      -----------    -----------    -----------

NET LOSS                              $   (15,821)   $   (12,692)   $  (136,564)
                                      ===========    ===========    ===========







NET LOSS PER COMMON SHARE

   Basic and diluted                  $      --      $      --
                                      -----------    -----------



AVERAGE OUTSTANDING SHARES

    Basic (stated in 1000's)                2,584          2,584
                                      -----------    -----------



    The accompanying notes are an integral part of these financial statements

                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                     LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor)
                                    ( Development Stage Company )
                            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
             For the Period December 30, 1999 (date of inception) to December 31, 2006

----------------------------------------------------------------------------------------------------


                                                  Common Stock           Capital in
                                           --------------------------     Excess of     Accumulated
                                              Shares         Amount       Par Value        Deficit
                                           -----------    -----------    -----------    -----------
<S>                                        <C>           <C>           <C>            <C>
Balance December 30,  1999 (predecessor)          --     $      --     $    51,977    $   (51,977)

Issuance of common shares for cash and a
    patent at $.0129 - December 30, 1999     1,000,000         1,000        11,963           --
Net operating loss for the year ended
   December 31, 2000                              --            --            --           (8,867)
Issuance of common shares for cash
 at $.025 - June 27, 2001                      800,000           800        19,200           --
Issuance of common shares for cash
   at $.025 - August 31, 2001                   20,000            20           480           --
Stock offering costs                              --            --            (375)          --
Capital contribution - related party              --            --             100           --
Net operating loss for the year
    ended December 31, 2001                       --            --             --          (13,537)
Stock offering costs                              --            --          (2,500)          --
Net operating loss for the year
   ended December 31, 2002                        --            --            --          (13,858)
Issuance of common shares for cash
   at $.08 - February 20, 2003                 763,750           764        60,336           --
Stock offering costs                              --            --          (6,070)          --
Net operating loss for year
   ended December 31, 2003                        --            --            --          (18,081)

Net operating loss for the year
   ended  December 31, 2004                       --            --            --           (1,731)
                                           -----------    -----------    -----------    -----------

Balance December 31, 2004                    2,583,750         2,584       135,111       (108,051)

Net operating loss for the year
   ended December 31, 2005                        --            --            --          (12,692)


Balance December 31, 2005                    2,583,750         2,584       135,111       (120,743)

Net operating loss for the year
   ended December 31, 2006                        --            --            --          (15,821)


Balance December 31, 2006                    2,583,750    $     2,584    $   135,111    $  (136,564)
                                           ===========    ===========    ===========    ===========

              The accompanying notes are an integral part of these financial statements.
</TABLE>

                                                F-6

<PAGE>

<TABLE>
<CAPTION>
                   LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor)
                                  ( Development Stage Company )
                              CONSOLIDATED STATEMENT OF CASH FLOWS
                  For the Years Ended December 31, 2006 and 2005 and the Period
         April 22, 1997 (date of inception of LIL Marc, Inc. (predecessor) to December 31, 2006

---------------------------------------------------------------------------------------------------------


                                                                Dec 31,        Dec 31,    Apr 22, 1997 to
                                                                 2006           2005       Dec 31, 2003
                                                             -----------    -----------    ------------
CASH FLOWS FROM
   OPERATING ACTIVITIES
<S>                                                          <C>            <C>            <C>
   Net loss                                                  $   (15,821)   $   (12,692)   $  (136,564)

   Adjustments to reconcile net loss to
       net cash provided by operating
       activities

          Issuance of common stock for expenses                     --             --            8,700
          Depreciation and amortization                              632          1,562         28,786
          Changes in accounts payable                              4,750           (200)         6,409
          Contributions to capital - expenses                       --             --              100


          Net Cash Flows Used in Operations                      (10,439)       (11,330)       (92,569)
                                                             -----------    -----------    -----------

CASH FLOWS FROM INVESTING
   ACTIVITIES

      Purchase of patent                                            --             --          (28,650)
      Purchase office equipment                                     (194)          (503)        (2,096)
                                                             -----------    -----------    -----------

CASH FLOWS FROM FINANCING
   ACTIVITIES

       Proceeds from issuance of common stock net of costs          --             --          134,212
                                                             -----------    -----------    -----------


   Net Change  in Cash                                           (10,633)       (11,833)        10,897
    Cash at Beginning of Period                                   21,530         33,363           --
                                                             -----------    -----------    -----------

   Cash at End of Period                                     $    10,897    $    21,530    $    10,897
                                                             ===========    ===========    ===========


NON CASH  FLOWS  FROM OPERATING AND INVESTING ACTIVITIES

        Issuance of  922,900 common shares for a patent - 2000                             $    11,963
                                                                                           -----------
        Contributions to capital - expenses - 2001                                                 100
                                                                                           -----------


             The accompanying  notes are an integral part of these financial statements.
</TABLE>

                                              F-7

<PAGE>

           LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor)
                          ( Development Stage Company )
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2006

--------------------------------------------------------------------------------

1.     ORGANIZATION

The Company was  incorporated  under the laws of the state of Nevada on December
30, 1999 with authorized  common stock of 25,000,000  shares with a par value of
$.001.

The principal  business activity of the Company is to manufacture and market the
"LiL Marc" urinal used in the training of young boys.

During  January 2005 the Company  organized  "LiL Marc,  Inc.",  in the state of
Utah, and  transferred all its assets,  liabilities,  and operations to LiL Marc
Inc. in exchange  for all of the  outstanding  stock of LiL Marc,  Inc.  for the
purpose of continuing the operations in the subsidiary.

"LiL Marc, Inc."  (predecessor) was incorporated  under the laws of the state of
Nevada on April 22,  1997 for the  purpose  of  marketing  and sales of the "Lil
Marc"  training  urinal for use by young boys.  The marketing and sales activity
was transferred to LILM, Inc. on December 30, 1999.

Included in the following  financial  statements  are the combined  statement of
operations  of LIL Marc,  Inc.  (predecessor)  for the period  April 22, 1997 to
December 30, 1999 and LILM,  Inc., and its  subsidiary,  for the period December
30, 1999 to December 31, 2006.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The  Company  recognizes  income and  expenses  based on the  accrual  method of
accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Income Taxes

The Company utilizes the liability method of accounting for income taxes.  Under
the liability method deferred tax assets and liabilities are determined based on
the differences  between financial reporting and the tax bases of the 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.  An allowance  against
deferred tax assets is recorded,  when it is more likely than not, that such tax
benefits will not be realized.

On December  31,  2006,  the  Company had a net  operating  loss  available  for
carryforward of $84,587.  The income tax benefit of  approximately  $25,000 from
the carryforward has been fully offset by a valuation reserve because the use of
the future tax  benefit is  doubtful  since the  Company  has not  started  full
operations. The net operating loss will expire starting in 2021 through 2027.


                                      F-8
<PAGE>

           LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor)
                          ( Development Stage Company )
                    NOTES TO FINANCIAL STATEMENTS (Continued)
                                December 31, 2006

--------------------------------------------------------------------------------


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Revenue Recognition

Revenue  is  recognized  upon the  completion  of the sale and  shipment  of the
training urinal products.

Advertising and Market Development

The company expenses advertising and market development costs as incurred.

Financial Instruments

The  carrying  amounts of  financial  instruments,  including  cash and accounts
payable,  are considered by management to be their  estimated fair values due to
their short term maturities.

Basic and Diluted Net Income (Loss) Per Share

Basic net income  (loss) per share  amounts are  computed  based on the weighted
average  number of shares  actually  outstanding.  Diluted net income (loss) per
share amounts are computed  using the weighted  average  number of common shares
and common  equivalent  shares  outstanding  as if shares had been issued on the
exercise of any common share rights unless the exercise becomes antidilutive and
then only the basic per share amounts are shown in the report.

Financial and Concentrations Risk

The Company does not have any concentration or related financial credit risk.

Estimates and Assumptions

Management uses estimates and assumptions in preparing  financial  statements in
accordance with accounting principles generally accepted in the United States of
America.  Those  estimates and  assumptions  affect the reported  amounts of the
assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported revenues and expenses. Actual results could vary from the estimates
that were assumed in preparing these financial statements.

Principles of Consolidation

The accompanying  consolidated  financial statements include the accounts of the
Company and its subsidiary  from its  inception.  All  significant  intercompany
accounts and balances have been eliminated in consolidation.

                                      F-9
<PAGE>


           LILM, INC. and SUBSIDIARY and LIL MARC, INC. (predecessor)
                          ( Development Stage Company )
                    NOTES TO FINANCIAL STATEMENTS (Continued)
                                December 31, 2006

--------------------------------------------------------------------------------

Office Equipment

Office  equipment  consists of computers and is depreciated  over three years on
the straight method.

Recent Accounting Pronouncements

The  Company  does not  expect  that the  adoption  of other  recent  accounting
pronouncements will have a material impact on its financial statements.

3.  PATENT

The Company acquired a patent, from a related party, for the "LiL Marc" training
urinal and was recorded at the predecessor cost, less  amortization.  The patent
was issued on July 16, 1991 and has been fully amortized.

The terms of the  acquisition  of the patent  includes a royalty of $.25, due to
the inventor, on the sale of each training urinal.

4.  SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

Officer-directors  have  acquired  73% of the  outstanding  common  stock of the
Company and have made demand, no interest, loans to the Company of $5,797.

                                      F-10