UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Form 10-K




(Mark
      One)x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended December 31, 2008OR
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from
                  
      to


Commission file number: 000-51430





WOOZYFLY
INC.


(Exact
name of registrant as specified in its charter)




Nevada
            20-3768799(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer Identification No.)59
      West 19thStreet,
      6thFloor,New
      York, NY
            91406(Address
      of principal executive offices)
            (Zip
      Code)




Registrant’s
telephone number, including area code:


(949)
903-0468




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


Title
      of each class
            Name
      of each exchange on which registeredNone
            None




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




Common
Stock, par value $0.0001 per share




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




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes   No x




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes x
     No 




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













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


Large
      accelerated filer 
            Accelerated
      filer Non-accelerated
      filer  (Do not check if a smaller reporting company)
            Smaller
      reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined by Rule
12b-2 of the Act).  Yes x
     No   




At April
15, 2009, the there was no aggregate market value of the voting common stock
held by non-affiliates of the Registrant (without admitting that any person
whose shares are not included in such calculation is an affiliate) due to the
lack of trading.  At April 15, 2009, there were 17,610,672 shares of
the Registrant’s common stock outstanding.




DOCUMENTS
INCORPORATED BY REFERENCE




None.



























-
2 -








FORWARD-LOOKING
STATEMENTS





This report includes forward-looking
statements with-in the meaning of Section 27A of the Securities Act (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). We have based these statements on our beliefs
and assumptions, based on information currently available to us. These
forward-looking statements are subject to risks and uncertainties.
Forward-looking statements include the information concerning our possible or
assumed future results of operations, our total market opportunity and our
business plans and objectives set forth under the sections entitled "Business"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."





Forward-looking statements are not
guarantees of performance. Our future results and requirements may differ
materially from those described in the forward-looking statements. Many of the
factors that will determine these results and requirements are beyond our
control. In addition to the risks and uncertainties discussed in "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," investors should consider those discussed under "Risk Factors" and,
among others, the following:





Since the sale of substantially all of
our assets, we are a non-operating company and are seeking a suitable
transaction with a private company; however we may not find a suitable candidate
or transaction.  If we are unable to consummate a suitable transaction
we will be forced to liquidate and dissolve, which will take three years to
complete and may result in our distributing less cash to our
stockholders.  Additionally, we will be spending cash during the
winding down of the Company and may not have enough cash to distribute to our
stockholders.





These forward-looking statements speak
only as of the date of this report. We do not intend to update or revise any
forward-looking statements to reflect changes in our business anticipated
results of our operations, strategy or planned capital expenditures, or to
reflect the occurrence of unanticipated events.





PART
I





Item
1.  Description of Business





General





Woozyfly
Inc., (“Woozyfly,” “Company,” “we,” “us,” or “our”) was organized September 11,
2003 (Date of Inception) under the laws of the State of Nevada, as GPP
Diversified, Inc.  The business of the Company was to sell pet products via
the Internet.




The
Company was initially authorized to issue 25,000,000 shares of its no par value
common stock.  On November 9, 2005, the Company amended its articles of
incorporation to increase its authorized capital to 100,000,000 shares with a
par value of $0.001.  Concurrently, the Company changed its name from GPP
Diversifed, Inc. to Pet Express Supplies, Inc.





On July
28, 2008, Pet Express Supply, Inc. entered into an Exchange Agreement with each
of the shareholders of CJ Vision Enterprises, Inc., a Delaware corporation doing
business as Woozyfly.com, pursuant to which (i) the Company's shareholder
contributed back to the Company's treasury all but 700,000 issued and
outstanding shares of the Company's common stocks, and (ii) Pet Express Supply,
Inc. purchased from the shareholders of CJ Vision Enterprises, Inc. all issued
and outstanding shares of CJ Vision Enterprises, Inc.’s, common stock, preferred
stock and warrants to purchase CJ Vision Enterprises, Inc. stock, in
consideration for the issuance of 13,410,672 shares of common stock of Pet
Express Supply, Inc. and, to one of the shareholders of CJ Vision Enterprises,
Inc., warrants to purchase 3,776,544 shares of common stock of Pet Express. The
Share Exchange resulted in a change in control of Pet Express Supply, Inc. with
the shareholders of CJ Vision Enterprises, Inc. owning 13,410,672 shares of
common stock of Pet Express Supply, Inc. out of a total of 17,610,672
issued and outstanding shares after giving effect to the Share
Exchange.  Also, the shareholders of CJ Vision Enterprises, Inc. were
elected directors of Pet Express Supply, Inc. and appointed as its executive
officers.  As a result of the Exchange Agreement, (i) CJ Vision
Enterprises, Inc. became a wholly-owned subsidiary of Pet Express Supply, Inc.
and (ii) Pet Express Supply, Inc. succeeded to the business of CJVE as its sole
business.  Following the closing of the above transactions, Pet
Express Supply, Inc. changed its corporate name to WoozyFly
Inc. effectuated a 6:1 stock split.


-
3 -





On
January 15, 2009, the Company ceased operations.  Since the ceasing
operations, we have been seeking to restructure the Company’s capitalization in
order to find suitable candidates for a business combination with a private
company.  We have been unsuccessful in this attempt.  We
have a substantial amount of secured and unsecured debt. Failure to settle this
debt will cause us to petition for bankruptcy protection.





Competition





Our
primary goal is the acquisition of a target company or business seeking the
perceived advantages of being a publicly held corporation. The Company faces
vast competition from other shell companies with the same objectives. The
Company is in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. A large number of established and well-financed entities,
including small public companies and venture capital firms, are active in
mergers and acquisitions of companies that may be desirable target candidates
for us. Nearly all these entities have significantly greater financial
resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.





Patent
and Trademarks




We
currently do not own any patents, trademarks or licenses of any
kind.




Government
Regulations




There are
no government approvals necessary to conduct our current business.





Employees





The
Company currently has no employees.  The Company engages the services of
independent consultants to assist it with management.


-
4 -


Item
1A.  Risk Factors





The following important factors, and
the important factors described elsewhere in this report or in our other filings
with the SEC, could affect (and in some cases have affected) our results and
could cause our results to be materially different from estimates or
expectations.  Other risks and uncertainties may also affect our
results or operations adversely.  The following and these other risks
could materially and adversely affect our business, operations, results or
financial condition.





We
have a history of net losses.





We have a history of incurring losses
from operations. As of December 31, 2008, we had an accumulated deficit of
approximately $4,050,924.  Our existing cash and cash equivalents will
not be sufficient to fund our business needs.  We will rely on funding
from additional financing for our cash needs.  Our ability to continue
may prove more expensive than we currently anticipate and we may incur
significant additional costs and expenses in connection with seeking a suitable
transaction.





Continuing
significant uncertainties and bankruptcy.





We have a substantial amount of secured
and unsecured debt. Failure to settle this debt will cause us to petition for
bankruptcy protection.  If the Company proceeds with this it will need
to await a determination from the Bankruptcy Court as to the outcome of its
petition and the determinations that may be made by the Bankruptcy Court. We can
not predict the out come The Company, its assets, and its operations will remain
subject to the review and oversight of the U.S. Bankruptcy Court (the "Court")
until all obligations to creditors and certain other persons have been
satisfied. On this basis, the Company will be subject to continuing
uncertainties and there can be no assurance the Company will emerge from
bankruptcy without shareholders incurring a significant and irreversible loss on
their investment on the Company's Common Stock.





We
are a non-operating company seeking a suitable transaction and may not find a
suitable candidate or transaction.





We are a non-operating company and are
seeking a suitable transaction with a private company; however, we may not find
a suitable candidate or transaction.  If we are unable to consummate a
suitable transaction we will be forced to liquidate and dissolve which will take
three years to complete and may result in our distributing less cash to our
shareholders.  Additionally, we will be spending cash during the
winding down of the Company and may not have enough cash to distribute to our
shareholders.





We
cannot assure you of the exact amount or timing of any future distribution to
our stockholders.





The precise nature, amount and timing
of any future distribution to our stockholders will depend on and could be
delayed by, among other things, the opportunities for a private company
transaction, administrative and tax filings during or associated with our
seeking a private company transaction or any subsequent dissolution, potential
claim settlements with creditors, and unexpected or greater than expected
operating costs associated with any potential private company transaction or any
subsequent liquidation. Furthermore, we cannot provide any assurances that we
will actually make any distributions.  Any amounts we actually
distribute to our stockholders may be less than the price or prices at which our
common stock has recently traded or may trade in the future.




We
will continue to incur claims, liabilities and expenses that will reduce the
amount available for distribution to stockholders.




Claims,
liabilities and expenses incurred while seeking a private company transaction or
any subsequent dissolution, such as legal, accounting and consulting fees and
miscellaneous office expenses, will reduce the amount of assets available for
future distribution to stockholders. If available cash and amounts received on
the sale of non-cash assets are not adequate to provide for our obligations,
liabilities, expenses and claims, we may not be able to distribute meaningful
cash, or any cash at all, to our stockholders.





-
5 -


We
will continue to incur the expenses of complying with public company reporting
requirements.




We have
an obligation to continue to comply with the applicable reporting requirements
of the Securities Exchange Act of 1934, as amended, even though compliance with
such reporting requirements is economically burdensome.




In
the event of liquidation, our Board of Directors may at any time turn management
of the liquidation over to a third party, and our directors may resign from our
board at that time.




If we are
unable to find or consummate a suitable private company transaction, our
directors may at any time turn our management over to a third party to commence
or complete the liquidation of our remaining assets and distribute the available
proceeds to our stockholders, and our directors may resign from our board at
that time. If management is turned over to a third party and our directors
resign from our board, the third party would have sole control over the
liquidation process, including the sale or distribution of any remaining
assets.




If
we are deemed to be an investment company, we may be subject to substantial
regulation that would cause us to incur additional expenses and reduce the
amount of assets available for distribution.




If we
invest our cash and/or cash equivalents in investment securities, we may be
subject to regulation under the Investment Company Act of 1940. If we are deemed
to be an investment company under the Investment Company Act because of our
investment securities holdings, we must register as an investment company under
the Investment Company Act. As a registered investment company, we would be
subject to the further regulatory oversight of the Division of Investment
Management of the Securities and Exchange Commission, and our activities would
be subject to substantial regulation under the Investment Company Act.
Compliance with these regulations would cause us to incur additional expenses,
which would reduce the amount of assets available for distribution to our
stockholders. To avoid these compliance costs, we intend to invest our cash
proceeds in money market funds and government securities, which are exempt from
the Investment Company Act but which currently provide a very modest
return.




If
we fail to create an adequate contingency reserve for payment of our expenses
and liabilities,  in the event of dissolution, our stockholders could
be held liable for payment to our creditors of each such stockholder’s pro rata
share of amounts owed to the creditors in excess of the contingency reserve, up
to the amount actually distributed to such stockholder.




In the event of dissolution or a
distribution of substantially all our assets, pursuant to the Nevada General
Corporation Law, we will continue to exist for three years after the dissolution
became effective or for such longer period as the Nevada Court of Chancery shall
direct, for the purpose of prosecuting and defending suits against us and
enabling us gradually to close our business, to dispose of our property, to
discharge our liabilities and to distribute to our stockholders any remaining
assets. Under the Nevada General Corporation Law, in the event we fail to create
an adequate contingency reserve for payment of our expenses and liabilities
during this three-year period, each stockholder could be held liable for payment
to our creditors of such stockholder’s pro rata share of amounts owed to
creditors in excess of the contingency reserve, up to the amount actually
distributed to such stockholder.





However, the liability of any
stockholder would be limited to the amounts previously received by such
stockholder from us (and from any liquidating trust or trusts) in the
dissolution. Accordingly, in such event a stockholder could be required to
return all distributions previously made to such stockholder. In such event, a
stockholder could receive nothing from us under the plan of dissolution.
Moreover, in the event a stockholder has paid taxes on amounts previously
received, a repayment of all or a portion of such amount could result in a
stockholder incurring a net tax cost if the stockholder’s repayment of an amount
previously distributed does not cause a commensurate reduction in taxes payable.
There can be no assurance that any contingency reserve established by us will be
adequate to cover any expenses and liabilities.





-
6 -


Our auditors have
expressed a going concern opinion.





Primarily as a result of our recurring
losses and our lack of liquidity, the Company received a report from our
independent auditors that includes an explanatory paragraph describing the
substantial uncertainty as to our ability to continue as a going concern for the
year ended December 31, 2008.





Any
future sale of a substantial number of shares of our common stock could depress
the trading price of our common stock, lower our value and make it more
difficult for us to pursue or consummate a private company
transaction.





Any sale of a substantial number of
shares of our common stock (or the prospect of sales) may have the effect of
depressing the trading price of our common stock. In addition, these sales could
lower our value and make it more difficult for us to engage in a private company
transaction. Further, the timing of the sale of the shares of our common stock
may occur at a time when we would otherwise be able to engage in a private
company transaction on terms more favorable to us.





Our
stock price is likely to be highly volatile because of several factors,
including a limited public float.





The market price of our stock is likely
to be highly volatile because there has been a relatively thin trading market
for our stock, which causes trades of small blocks of stock to have a
significant impact on our stock price. You may not be able to resell our common
stock following periods of volatility because of the market's adverse reaction
to volatility.





Other factors that could cause such
volatility may include, among other things:





·
            announcements
      concerning our strategy;





·
            litigation;
      and





·
            general
      market conditions.





Because
our common stock is considered a "penny stock" any investment in our common
stock is considered to be a high-risk investment and is subject to restrictions
on marketability.





Our common stock is currently traded on
the OTC Bulletin Board and is considered a "penny stock." The OTC Bulletin Board
is generally regarded as a less efficient trading market than the NASDAQ Capital
Market.





The SEC has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks." Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, to deliver a
standardized risk disclosure document prepared by the SEC, which specifies
information about penny stocks and the nature and significance of risks of the
penny stock market. The broker-dealer also must provide the customer with bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and any salesperson in the transaction, and monthly account statements
indicating the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that, prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our common stock.





Since our common stock is subject to
the regulations applicable to penny stocks, the market liquidity for our common
stock could be adversely affected because the regulations on penny stocks could
limit the ability of broker-dealers to sell our common stock and thus your
ability to sell our common stock in the secondary market.  There is no
assurance our common stock will be quoted on NASDAQ or the NYSE or listed on any
exchange, even if eligible.




-
7 -


We
have additional securities available for issuance, including preferred stock,
which if issued could adversely affect the rights of the holders of our common
stock.





Our articles of incorporation authorize
the issuance of 100,000,000 shares of common stock.  The common stock
and the preferred stock can be issued by, and the terms of the preferred stock,
including dividend rights, voting rights, liquidation preference and conversion
rights can generally be determined by, our board of directors without
stockholder approval. Any issuance of preferred stock could adversely affect the
rights of the holders of common stock by, among other things, establishing
preferential dividends, liquidation rights or voting powers. Accordingly, our
stockholders will be dependent upon the judgment of our management in connection
with the future issuance and sale of shares of our common stock and preferred
stock, in the event that buyers can be found therefore. Any future issuances of
common stock or preferred stock would further dilute the percentage ownership of
our Company held by the public stockholders.


-
8 -


Item 1B.  Unresolved Staff
Comments




None




Item
2.  Properties.




The Company's principal office is located in New
York, New York. The Company shares this address at no charge to the Company. The
Company estimates that it uses approximately 25 square feet of office space at
this facility, with the estimated monthly rent value being approximately $100,
which the Company does not deem as material.





Item
3.  Legal Proceedings.




None




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





None





.PART II




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




Market
Prices





The
shares of our common stock have been listed and principally quoted on the OTC
Bulletin Board under the trading symbol “WZYF”




The
following table sets forth, for the fiscal quarters indicated, the high and low
sale price for our common stock, as reported on the OTC Bulletin
Board.





Quarterly
      period
            
            High
            
            
            LowFiscal
      year ended December 31, 2008:Third
      Quarter
            
            $
            5.25
            
            
            $
            0.88Fourth
      Quarter
            
            $
            0.88
            
            
            $
            0.15





Prior to
the third quarter, our stock was not actively traded.





Holders


As of April 15, 2009, there were
approximately 52 registered holders of record of the Company's Common
Stock.





Dividends


The
Company has not paid any cash dividends to date, and it has no intention of
paying any cash dividends on its common stock in the foreseeable future. The
declaration and payment of dividends is subject to the discretion of the
Company’s Board of Directors and to certain limitations imposed under the Nevada
Statutes. The timing, amount and form of dividends, if any, will depend upon,
among other things, the Company’s results of operation, financial condition,
cash requirements, and other factors deemed relevant by the Board of
Directors.





Securities
Authorized for Issuance under Equity Compensation Plans





The
Company does not have any equity compensation plans or any individual
compensation arrangements with respect to its common stock. The issuance of any
of our common is within the discretion of our Board of Directors, which has the
power to issue any or all of our authorized but unissued shares without
stockholder approval.





-
9 -


Recent
Sale of Unregistered Securities.





On
July 28, 2008,we entered into a Exchange Agreement  with each of the
Shareholders of CJ Vision Enterprises, Inc., a Delaware corporation doing
business as Woozyfly., pursuant to which we purchased from the Shareholders all
issued and outstanding shares of CJVE’s common stock, preferred stock and
warrants to purchase CJVE stock in consideration for the issuance of 13,410,672
shares of common stock of Pet Express and, to one of the Shareholders, warrants
to purchase 3,776,544 shares of common stock of Pet Express (the "Share
Exchange").





The Share
Exchange resulted in a change in control of Pet Express with the Shareholders
owning 13,410,672 shares of common stock of Pet Express out of a total of
17,610,672 issued and outstanding shares after giving effect to the Share
Exchange.  Also, the Shareholders were elected directors of Pet
Express and appointed as its executive officers.  As a result of the
Exchange Agreement, (i) CJVE became a wholly-owned subsidiary of Pet Express and
(ii) Pet Express succeeded to the business of CJVE as its sole
business.  Accordingly, Pet Express changed its corporate name to
Woozyfly, Inc.





Additionally,
on July 25, 2008, Woozyfly Inc. entered into a Loan and Security Agreement (the
"Loan Agreement") providing for the issuance to several accredited investors by
Woozyfly Inc. of its 6% Convertible Notes due June 30, 2011 ("Convertible
Notes"). Pursuant to the Loan Agreement an aggregate principal amount of
$1,400,000 of Convertible Notes have been issued; all but $150,000 in aggregate
principal amount of such Convertible Notes were issued in the third quarter. An
aggregate principal amount of $350,000 of such Convertible Notes were issued
pursuant to the Exchange Agreement dated July 25, 2008 to Corporation
Communication Network, Inc., Lynn Cole Capital, and MKM Opportunity Master Fund,
LP in exchange for convertible notes issued in the same principal amount to such
investors by C J Vision Enterprises, Inc. The entire principal amount under the
Convertible Notes plus all accrued and unpaid interest is due on June 30, 2011.
Interest is payable on the last day of each calendar quarter, commencing
September 30, 2008. Woozyfly Inc. may make interest payments in cash, or at its
option through the reduction of the conversion price discussed
below.




The
Convertible Notes may be converted at a time, at the option of the holder, into
shares of common stock of Woozyfly Inc. at $0.67 per share. The conversion price
is subject to adjustment in event Woozyfly Inc. issues shares (or securities
convertible into shares) at a price that is lower than the then applicable
conversion price.




Woozyfly
Inc. has the right to force conversion of the entire outstanding principal
amount (or a portion thereof), provided, generally that there is then an
effective registration statement in effect with the respect to the shares
issuable upon conversion of the Convertible Notes, the trading price of Woozyfly
Inc.'s common stock is greater than $1.17 and the average daily trading volume
for the preceding 15 trading days exceeds 50,000.




The
Convertible Notes are subject to mandatory prepayment by Woozyfly Inc. in the
event of a financing, and the proceeds of such financing exceed $4,000,000, in
which case all of the proceeds of such financing(s) in excess of $4,000,000 must
be used to prepay the Convertible Notes, with the holders of Convertible Notes
receiving a proportionate share of such proceeds.




In
connection with the issuance of the Convertible Notes, Woozyfly Inc. granted to
the investors five-year warrants to purchase an aggregate of 1602,066 shares
of common stock of Woozyfly Inc. at $0.75 per share. The warrants contain
cashless exercise provisions that enable the holder to exercise the warrants
without paying additional consideration and to receive a reduced number of
shares in accordance with a formula set forth in the warrant.




Issuer
Purchases of Equity Securities





None





Item 6.  Selected Financial
Data.





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.





-
10 -


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




The following discussion should be
read in conjunction with the Financial Statements and notes
thereto  included in Item 8 of Part II of this Annual Report on Form
10-K.





Overview





We were
organized September 11, 2003 (Date of Inception) under the laws of the State of
Nevada, as GPP Diversified, Inc.  The business of the Company is to sell
pet products via the Internet.




The
Company was initially authorized to issue 25,000,000 shares of its no par value
common stock.  On November 9, 2005, the Company amended its articles of
incorporation to increase its authorized capital to 100,000,000 shares with a
par value of $0.001.  Concurrently, the Company changed its name from GPP
Diversifed, Inc. to Pet Express Supplies, Inc.





On July
28, 2008, Pet Express Supply, Inc. entered into an Exchange Agreement with each
of the shareholders of CJ Vision Enterprises, Inc., a Delaware corporation doing
business as Woozyfly.com, pursuant to which (i) the Company's shareholder
contributed back to the Company's treasury all but 700,000 issued and
outstanding shares of the Company's common stocks, and (ii) Pet Express Supply,
Inc. purchased from the shareholders of CJ Vision Enterprises, Inc. all issued
and outstanding shares of CJ Vision Enterprises, Inc.’s, common stock, preferred
stock and warrants to purchase CJ Vision Enterprises, Inc. stock, in
consideration for the issuance of 13,410,672 shares of common stock of Pet
Express Supply, Inc. and, to one of the shareholders of CJ Vision Enterprises,
Inc., warrants to purchase 3,776,544 shares of common stock of Pet Express. The
Share Exchange resulted in a change in control of Pet Express Supply, Inc. with
the shareholders of CJ Vision Enterprises, Inc. owning 13,410,672 shares of
common stock of Pet Express Supply, Inc. out of a total of 17,610,672
issued and outstanding shares after giving effect to the Share
Exchange.  Also, the shareholders of CJ Vision Enterprises, Inc. were
elected directors of Pet Express Supply, Inc. and appointed as its executive
officers.  As a result of the Exchange Agreement, (i) CJ Vision
Enterprises, Inc. became a wholly-owned subsidiary of Pet Express Supply, Inc.
and (ii) Pet Express Supply, Inc. succeeded to the business of CJVE as its sole
business.  Following the closing of the above transactions, Pet
Express Supply, Inc. changed its corporate name to WoozyFly
Inc. effectuated a 6:1 stock split.





On
January 15, 2009, the Company ceased operations.  Since the ceasing
operations, we have been seeking to restructure the Company’s capitalization in
order to find suitable candidates for a business combination with a private
company.  We have been unsuccessful in this attempt.  We
have a substantial amount of secured and unsecured debt. Failure to settle this
debt will cause us to petition for bankruptcy protection.





Recently Issued Accounting
Pronouncements





Refer to
Note 1 to the financial statements for a complete description of recent
accounting standards which we have not yet been required to implement and may be
applicable to our operation, as well as those significant accounting standards
that have been adopted during 2008.





Critical Accounting
Policies





The preparation of our financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates, judgments and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amount of expenses during the reporting period. On an ongoing basis, we evaluate
our estimates which are based on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances. The
result of these evaluations forms the basis for making judgments about the
carrying values of assets and liabilities and the reported amount of expenses
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions. The following accounting policies
require significant management judgments and estimates:





-
11 -


We base
our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. There can be no assurance that
actual results will not differ from these estimates.





Certain
reclassifications have been made to the prior fiscal year amounts disclosed in
the financial statements to conform to the presentation for the fiscal year
ended December 31, 2008. These reclassifications had no effect on the reported
net loss or stockholders’ equity.





Fiscal Year 2008 Compared to
Fiscal Year 2007




Results from
Operations




The
information below represents our historical numbers.  These numbers
are not meaningful going forward due to the sale of all of our business
lines.




Revenues




Revenues
were zero for the years ended December 31, 2008 and 2007,
respectively.




Cost
of Sales




Cost of
sales was zero for the years ended December 31, 2008 and 2007,
respectively.




Selling,
General and Administrative Expenses




Selling,
general and administrative expenses were zero for the years ended December 31,
2008 and 2007, respectively.





Discontinued
Operations


Loss from
discontinued operations was $2,865,816 and $20,833 in the years ended December
31, 2008 and 2007, respectively.




Interest
Income, Expense and Other, Net




Interest
expense and other, net was $46,943 and 4,127 in the years ended December 31,
2008 and 2007, respectively.  The increase of $72,136 was due to a
lower cash balance and interest accrued from debt financing.




Liquidity and Capital
Resources




Net cash used in operating activities
from discontinued operations was $2,171,321 and $22,771 in the years ended
December 31, 2008 and 2007, respectively.  The increase was primarily
due to a ramp up in operating activities.





Net cash used in investing activities
was zero in 2008 and 2007, respectively.





Net cash provided by financing
activities was $2,188,777 and $38,827 in 2008 and 2007,
respectively.





We have
suffered recurring losses from operations and have an accumulated deficit of
$4,050,924 and $43,418 in 2008 and 2007, respectively.  Currently, we
are a non-operating public company. We are seeking out suitable candidates for a
business combination with a private company.  We anticipate that our
existing cash and cash equivalents will not be sufficient to fund our business
needs.   Our ability to continue may prove more expensive than we
currently anticipate and we may incur significant additional costs and expenses
in connection with seeking a suitable transaction. Since the ceasing operations,
we have been seeking to restructure the Company’s capitalization in order to
find suitable candidates for a business combination with a private
company.  We have been unsuccessful in this attempt.  We
have a substantial amount of secured and unsecured debt. Failure to settle this
debt will cause us to petition for bankruptcy protection.


-
12 -





Going Concern
Uncertainties





As of the date of this annual report,
there is doubt regarding our ability to continue as a going concern as we have
not generated sufficient cash flow to fund our business operations and loan
commitments.  Our future success and viability, therefore, are
dependent upon our ability to generate capital financing.  The failure
to generate sufficient revenues or raise additional capital may have a material
and adverse effect upon the Company and our shareholders.





Capital
Expenditures





None




Contractual
Obligations




As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.





Off-Balance Sheet
Arrangements




As
of December 31, 2008, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.





Item
7A.   Quantitative and Qualitative Disclosures about Market
Risk.





As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.




-
13 -


Item 8.




WOOZYFLY
INC.








TABLE OF CONTENTS








PAGEREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            
            15FINANCIAL
      STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2008 AND
      2007Balance
      Sheets
            
            16Statements
      of Operations
            
            17Statements
      of Shareholders' Deficit
            
            18Statements
      of Cash Flows
            
            19Notes
      to  Financial Statements
            
            20 to
      28


























-
14 -





To the
Board of Directors and Stockholders


Woozyfly,
Inc.


New York,
New York








REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





We have
audited the balance sheet of Woozyfly, Inc. (formerly Pet Express Supply, Inc.)
as of December 31, 2008 and 2007 and the related statements of operations,
stockholders’ equity, and cash flows for the years then
ended.  Woozyfly, Inc.’s management is responsible for these financial
statements.  Our responsibility is to express an opinion on these
financial statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  Our audit of the financial statements includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Woozyfly, Inc. (formerly Pet
Express Supply, Inc.) as of December 31, 2008 and 2007 and the results of its
operations, stockholders’ equity, and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 12 to the financial
statements, the Company has suffered recurring losses from
operations.  These factors raise substantial doubt about the Company’s
ability to continue as a going concern.  Management’s plans in regard
to these matters are also described in Note 12.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

















Weaver
& Martin, LLC


Kansas
City, Missouri


April 15,
2009








-
15 -





Woozyfly
      Inc.
              (formerly
      Pet Express Supply, Inc.)Balance
      SheetsASSETSDecember
      31,2008
            
            
            2007Current
      assetsCash
      & cash equivalents (held in trust)
            
            $
            37,842
            
            
            $
            20,386Prepaid
      expenses and other current assets
            
            
            -
            
            
            
            777Total
      current assets
            
            
            37,842
            
            
            
            21,163Fixed
      assets, net of accumulated depreciation of $997 as of
              December
      31, 2007
            
            
            -
            
            
            
            702Total
      Assets
            
            
            37,842
            
            
            $
            21,865LIABILITIES
      AND SHAREHOLDERS' DEFICITCurrent
      liabilitiesAccounts
      payable & accrued expenses
            
            $
            76,925
            
            
            $
            300Accrued
      interest
            
            
            48,120
            
            
            
            1,244Current
      portion of notes payable
            
            
            297,507
            
            
            
            10,000Total
      current liabilities
            
            
            422,552
            
            
            
            11,544Long
      term liabilitiesNotes
      Payable
            
            
            1,400,000
            
            
            
            -Total
      Liabilities
            
            
            1,822,552
            
            
            
            11,544Shareholders'
      deficitCommon
      stock, 100,000,000 shares authorized; $0.001 par value;17,610,672
      and 5,455,000 shares issued and outstanding as of
              December
      31, 2008 and 2007, respectively
            
            
            17,610
            
            
            
            5,455Additional
      paid in capital
            
            
            2,248,604
            
            
            
            48,284Accumulated
      deficit
            
            
            (4,050,924
            )
            
            
            (43,418
            )Total
      shareholders' equity / (deficit)
            
            
            (1,784,710
            )
            
            
            10,321Total
      liabilities and shareholders' equity / (deficit)
            
            $
            37,842
            
            
            $
            21,865The
      accompanying notes are an integral part of these financial
      statements.

















-
16 -





Woozyfly
      Inc.
              (formerly
      Pet Express Supply, Inc.)Statements
      of OperationsFor
      the years ended December 31,2008
            
            
            2007Revenue,
      net
            
            $
            -
            
            
            $
            -Operating
      expensesDirectors
      and officers compensation
            
            
            -
            
            
            
            -General
      & administrative expenses
            
            
            -
            
            
            
            -Total
      operating expenses
            
            
            -
            
            
            
            -Loss
      from operations
            
            
            -
            
            
            
            -Other
      expensesInterest
      income / (expense)
            
            
            (46,943
            )
            
            
            (4,127
            )Loss
      from continuing operations
            
            
            (46,943
            )
            
            
            -Loss
      from discontinued operations
            
            
            (2,865,816
            )
            
            
            (20,833
            )Net
      Loss
            
            $
            (2,912,759
            )
            
            $
            (24,960
            )Loss
      per share:Loss
      per share from continuing operation
            
            $
            (0.00
            )
            
            $
            (0.00
            )Loss
      per share from discontinued operations
            
            $
            (0.27
            )
            
            $
            (0.00
            )Basic
      & dilutive loss per share
            
            $
            (0.27
            )
            
            $
            (0.00
            )Basic
      & diluted weighted average shares outstanding
            
            
            10,616,998
            
            
            
            5,320,205The
      accompanying notes are an integral part of these financial
      statements.


-
17 -








Woozyfly
      Inc.
              (formerly
      Pet Express Supply, Inc.)Statements
      of Shareholders' DeficitFor
      the Years Ended December 31, 2008 and 2007Additional
            
            
            
            
            
            TotalCommon
      Stock
            
            
            Paid-in
            
            
            Accumulated
            
            
            Stockholders'Shares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            EquityBalance,
      December 31, 2006
            
            
            5,055,000
            
            
            
            5,055
            
            
            
            9,857
            
            
            
            (18,458
            )
            
            
            (3,546
            )Issued
      for cash
            
            
            400,000
            
            
            
            40,000
            
            
            
            38,427
            
            
            
            -
            
            
            
            38,827Net
      (loss)For
      year endedDecember
      31, 2007
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (24,960
            )
            
            
            (24,960
            )Balance,
      December 31, 2007
            
            
            5,455,000
            
            
            $
            5,455
            
            
            $
            48,284
            
            
            
            (43,418
            )
            
            $
            10,321Shares
      Cancelled
            
            
            (4,755,000
            )
            
            
            (4,755
            )
            
            
            (4,755
            )Stock
      Split 6 for 1
            
            
            3,500,000
            
            
            
            3,500
            
            
            
            (3,500
            )Acquisition
      of CJ Vision Enterprises, Inc.
            
            
            13,410,672
            
            
            
            13,410
            
            
            
            2,199,065
            
            
            
            (1,094,747
            )
            
            
            1,117,728Net
      (loss)For
      year endedDecember
      31, 2008
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (2,912,759
            )
            
            
            (2,912,759
            )Balance,
      December 31, 2008
            
            
            17,610,672
            
            
            
            17,610
            
            
            
            2,248,604
            
            
            
            (4,050,924
            )
            
            
            (1,784,710
            )The
      accompanying notes are an integral part of these financial
      statements.


-
18 -





Woozyfly
      Inc.
              (formerly
      Pet Express Supply, Inc.)Statements
      of Cash FlowsFor
      the Years Ended December 31, 2008 and 2007For
      the Year EndedDecember
      31,2008
            
            
            2007Cash
      flows from operating activitiesNet
      (loss)
            
            $
            -
            
            
            $
            -Depreciation
            
            
            -
            
            
            
            -Common
      stock issued for services
            
            
            -
            
            
            
            -Adjustments
      to reconcile net (loss) to cash
            
            
            -
            
            
            
            -used
      in operating activities:
            
            
            -
            
            
            
            -Prepaid
      and other assets
            
            
            -
            
            
            
            -Accounts
      payable and Accrued expenses
            
            
            -
            
            
            
            -Accrued
      interest
            
            
            -
            
            
            
            -Net
      cash used in operating activities from continuing
    operationsNet
      cash used in operating activities from discontinued
    operations
            
            
            (2,171,321
            )
            
            
            (22,771
            )Net
      cash used in operating activities
            
            
            (2,171,321
            )
            
            
            (22,771
            )Cash
      flows from investing activitiesPurchase
      of fixed assets
            
            
            -
            
            
            
            -Net
      cash used in investing activities
            
            
            -
            
            
            
            -Cash
      flows from financing activitiesProceeds
      from notes payable
            
            
            2,188,777
            
            
            
            -Proceeds
      from sale of common stock
            
            
            -
            
            
            
            38,827Net
      cash provided from financing activities
            
            
            2,188,777
            
            
            
            38,827Net
      increase in cash
            
            
            17,456
            
            
            
            16,056Cash
      - beginning
            
            
            20,386
            
            
            
            4,330Cash
      - ending
            
            $
            37,842
            
            
            $
            20,386Supplemental
      disclosures:Interest
      paid
            
            $
            -
            
            
            $
            -Income
      taxes paid
            
            $
            -
            
            
            $
            -





Non-cash
      transactions:Shares
      issued for services
            
            $
            -Number
      of shares issued for services - related party
            
            
            -Amortization
      of warrants issued for financing costs
            
            $
            3,161Number
      of warrants issued for financing costs
            
            
            -








The
accompanying notes are an integral part of these condensed consolidated
financial statements


-
19 -


WOOZYFLY
INC.


(formerly
Pet Express Supply, Inc.)


NOTES
TO FINANCIAL STATEMENTS


YEARS
ENDED DECEMBER 31, 2008 AND 2007





NOTE
1.    Nature of business and significant accounting
policies





Current
Operations and Background— We were organized September 11, 2003
(Date of Inception) under the laws of the State of Nevada, as GPP Diversified,
Inc.  The business of the Company is to sell pet products via the Internet.




The
Company was initially authorized to issue 25,000,000 shares of its no par value
common stock.  On November 9, 2005, the Company amended its articles of
incorporation to increase its authorized capital to 100,000,000 shares with a
par value of $0.001.  Concurrently, the Company changed its name from GPP
Diversified, Inc. to Pet Express Supplies, Inc.





On July
28, 2008, Pet Express Supply, Inc. entered into an Exchange Agreement with each
of the shareholders of CJ Vision Enterprises, Inc., a Delaware corporation doing
business as Woozyfly.com, pursuant to which (i) the Company's shareholder
contributed back to the Company's treasury all but 700,000 issued and
outstanding shares of the Company's common stocks, and (ii) Pet Express Supply,
Inc. purchased from the shareholders of CJ Vision Enterprises, Inc. all issued
and outstanding shares of CJ Vision Enterprises, Inc.’s, common stock, preferred
stock and warrants to purchase CJ Vision Enterprises, Inc. stock, in
consideration for the issuance of 13,410,672 shares of common stock of Pet
Express Supply, Inc. and, to one of the shareholders of CJ Vision Enterprises,
Inc., warrants to purchase 3,776,544 shares of common stock of Pet Express. The
Share Exchange resulted in a change in control of Pet Express Supply, Inc. with
the shareholders of CJ Vision Enterprises, Inc. owning 13,410,672 shares of
common stock of Pet Express Supply, Inc. out of a total of 17,610,672
issued and outstanding shares after giving effect to the Share
Exchange.  Also, the shareholders of CJ Vision Enterprises, Inc. were
elected directors of Pet Express Supply, Inc. and appointed as its executive
officers.  As a result of the Exchange Agreement, (i) CJ Vision
Enterprises, Inc. became a wholly-owned subsidiary of Pet Express Supply, Inc.
and (ii) Pet Express Supply, Inc. succeeded to the business of CJVE as its sole
business.  Following the closing of the above transactions, Pet
Express Supply, Inc. changed its corporate name to WoozyFly
Inc. effectuated a 6:1 stock split.





On
January 15, 2009, the Company ceased operations.  Since the ceasing
operations, we have been seeking to restructure the Company’s capitalization in
order to find suitable candidates for a business combination with a private
company.  We have been unsuccessful in this attempt.  We
have a substantial amount of secured and unsecured debt. Failure to settle this
debt will cause us to petition for bankruptcy protection.





Basis of
Presentation— The accompanying financial statements have been prepared
in conformity with accounting principles generally accepted in the United States
of America.





Use of
Estimates —The preparation of financial statements in conformity with
generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.





Cash and Cash
Equivalents (Held in Trust)— The Company considers investments with
original maturities of 90 days or less to be cash equivalents.





Income
Taxes —The Company records income taxes in accordance with the provisions
of Statement of Financial Accounting Standards (“SFAS”) No. 109,
“Accounting for Income Taxes.”  The standard requires, among other
provisions, an asset and liability approach to recognize deferred tax
liabilities and assets for the expected future tax consequences of temporary
differences between the financial statement carrying amounts and tax basis of
assets and liabilities.  Valuation allowances are provided if, based
upon the weight of available evidence, it is more likely than not that some or
all of the deferred tax assets will not be realized.


-
20 -





Stock-Based
Compensation— On January 1, 2006, the Company adopted SFAS No. 123
(revised 2004), “Share-Based Payment,” (“SFAS 123(R)”) which was issued in
December 2004. SFAS 123(R) revises SFAS No. 123, “Accounting for Stock Based
Compensation,” and supersedes APB Opinion No. 25, “Accounting for Stock Issued
to Employees,” and its related interpretations. SFAS 123(R) requires recognition
of the cost of employee services received in exchange for an award of equity
instruments in the financial statements over the period the employee is required
to perform the services in exchange for the award. SFAS 123(R) also requires
measurement of the cost of employee services received in exchange for an award.
SFAS 123(R) also amends SFAS No. 95, “Statement of Cash Flows,” to require the
excess tax benefits be reported as financing cash inflows, rather than as a
reduction of taxes paid, which is included within operating cash flows. The
Company adopted SFAS 123(R) using the modified prospective method. Accordingly,
prior period amounts have not been restated. Under this application, the Company
recorded the cumulative effect of compensation expense for the unvested portion
of previously granted awards that remain outstanding at the date of adoption and
recorded compensation expense for all awards granted after the date of
adoption.





SFAS 123(R) provides that income tax
effects of share-based payments are recognized in the financial statements for
those awards that will normally result in tax deduction under existing law.
Under current U.S. federal tax law, the Company would receive a compensation
expense deduction related to non-qualified stock options only when those options
are exercised and vested shares are received. Accordingly, the financial
statement recognition of compensation cost for non-qualified stock options
creates a deductible temporary difference which results in a deferred tax asset
and a corresponding deferred tax benefit in the income statement. The Company
does not recognize a tax benefit for compensation expense related to incentive
stock options unless the underlying shares are disposed in a disqualifying
disposition.





Net Loss Per
Share — The Company computes net loss per share in accordance with SFAS
No. 128, “Earnings per Share,” and Securities and Exchange Commission (“SEC”)
Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions of SFAS No.
128 and SAB 98, basic and diluted net loss per share is computed by dividing the
net loss available to common stockholders for the period by the weighted average
number of shares of common stock outstanding during the period.  Common
equivalent shares related to stock options and warrants have been excluded from
the computation of basic and diluted earnings per share, for the years ended
December 31, 2008 and 2007 because their effect is anti-dilutive.





Concentration of
Credit Risk — Financial instruments that potentially subject the Company
to a concentration of credit risk consist of cash.  The Company
maintains its cash with high credit quality financial institutions; at times,
such balances with any one financial institution may exceed FDIC insured
limits.





Financial
Instruments — Our financial instruments consist of cash, accounts
payable, and notes payable.  The carrying values of cash, accounts
payable, and notes payable are representative of their fair values due to their
short-term maturities.





Recently Issued
Accounting Pronouncements—


Business Combinations-In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business
Combinations (“SFAS 141R”). SFAS 141R significantly changes the accounting for
business combinations. Under SFAS 141R, an acquiring entity is required to
recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS 141 was dominant
from 2002 to 2008, and business combination whereby the accounting treatment
under SFAS 141 was applied will be reported in financial statements under the
same method for years, However, SFAS 141R replaces SFAS 141, and changes the
accounting treatment for certain specific items for new business combination,
including:





·  Acquisition
costs are generally expensed as incurred;


·  Noncontrolling
interests (formerly known as “minority interests” – see SFAS 160 discussion
below) are valued at fair value at the acquisition date;


·  Acquired
contingent liabilities are recorded at fair value at the acquisition date and
subsequently measured at either the higher of such amount or the amount
determined under existing guidance for non-acquired contingencies;


·  In-process
research and development are recorded at fair value as an indefinite-lived
intangible asset at the acquisition date;


·  Restructuring
costs associated with a business combination are generally expensed subsequent
to the acquisition date; and


·  Changes
in deferred tax asset valuation allowances and income tax uncertainties after
the acquisition date generally affect income tax expense.


-
21 -





SFAS 141R
also includes a substantial number of new disclosure requirements. SFAS 141R
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. Earlier adoption is prohibited. Accordingly, since
we are a calendar year-end company we recorded and disclosed business
combinations following existing GAAP until January 1, 2009. We expect SFAS
141R will have an impact on accounting for business combinations once adopted
but the effect is dependent upon acquisitions at that time.





Noncontrolling Interests in
Consolidated Financial Statements – An Amendment of ARB No. 51-In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51 (“SFAS
160”). SFAS 160 establishes new accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. Specifically, this statement requires the recognition of a
noncontrolling interest (minority interest) as equity in the consolidated
financial statements and separate from the parent’s equity. The amount of net
income attributable to the noncontrolling interest will be included in
consolidated net income on the face of the income statement. SFAS 160 clarifies
that changes in a parent’s ownership interest in a subsidiary that do not result
in deconsolidation are equity transactions if the parent retains its controlling
financial interest. In addition, this statement requires that a parent recognize
a gain or loss in net income when a subsidiary is deconsolidated. Such gain or
loss will be measured using the fair value of the noncontrolling equity
investment on the deconsolidation date. SFAS 160 also includes expanded
disclosure requirements regarding the interests of the parent and its
noncontrolling interest. SFAS 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
Like SFAS 141R discussed above, earlier adoption is prohibited. The Company does
not expect the adoption of SFAS No. 160 to have a material impact on the
financial statements.




In March
19, 2008, FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities. The new standard is intended to improve financial reporting
about derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an
entity's financial position, financial performance, and cash flows. It is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008, with early application encouraged. Currently
the Company does not carry any derivative instruments and the adoption of this
statement may not have any effect on the financial statements.




In May
2008, FASB issued SFASB No.162, “The Hierarchy of Generally Accepted Accounting
Principles”. The pronouncement mandates the GAAP hierarchy reside in the
accounting literature as opposed to the audit literature. This has the practical
impact of elevating FASB Statements of Financial Accounting Concepts in the GAAP
hierarchy. This pronouncement will become effective 60 days following SEC
approval. The Company does not believe this pronouncement will impact its
financial statements.




In May
2008, FASB issued SFASB No. 163, “Accounting for Financial Guarantee Insurance
Contracts-an interpretation of FASB Statement No. 60”. The scope of the
statement is limited to financial guarantee insurance (and reinsurance)
contracts. The pronouncement is effective for fiscal years beginning after
December 31, 2008. The Company does not believe this pronouncement will impact
its financial statements.




On
December 30, 2008 FASB issued FIN 48-3, “Effective Date of FASB Interpretation
No. 48 for Certain Nonpublic Enterprises”. This FSP defers the effective date of
FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, for certain non-public enterprises as defined in paragraph 289, as
amended, of FASB Statement No. 109, Accounting for Income Taxes,
including non-public not-for-profit organizations. However, non-public
consolidated entities of public enterprises that apply U. S. GAAP are not
eligible for the deferral. Nonpublic enterprises that have applied the
recognition, measurement, and disclosure provisions of Interpretation 48 in a
full set of annual financial statements issued prior to the issuance of this FSP
also are not eligible for the deferral. This FSP shall be effective upon
issuance. The Company does not believe this pronouncement will impact its
financial statements.




-
22 -




On
January 12, 2009 FASB issued FSP EITF 99-20-01, “Amendment to the Impairment
Guidance of EITF Issue No. 99-20”. This FSP amends the impairment guidance in
EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on
Purchased Beneficial Interests and Beneficial Interests That Continue to be Held
by a Transferor in Securitized Financial Assets,” to achieve more consistent
determination of whether an other-than-temporary impairment has occurred. The
FSP also retains and emphasizes the objective of an other-than-temporary
impairment assessment and the related disclosure requirements in FASB Statement
No. 115, Accounting for
Certain Investments in Debt and Equity Securities, and other related
guidance. The FSP shall be effective for interim and annual reporting periods
ending after December 15, 2008, and shall be applied prospectively.
Retrospective application to a prior interim or annual reporting period is not
permitted. The Company does not believe this pronouncement will impact its
financial statements.




NOTE 2 - Discontinued
operations




On
January 15, 2009, we ceased operations.  The components of loss from
operations related to the entity held for disposal for the year ended December
31, 2008 and 2007 are shown below.





2008
            
            
            2007Revenue,
      net
            
            $
            15,791
            
            
            $
            951Cost
      of revenue
            
            
            -
            
            
            
            802Gross
      profit
            
            
            15,791
            
            
            
            149Operating
      expenses:Professional
      fees
            
            
            234,528
            
            
            
            -General
      & administrative expenses
            
            
            2,360,295
            
            
            
            20,982Loss
      on fixed assets
            
            
            286,784
            
            
            
            -Total
      operating expenses
            
            
            2,881,607
            
            
            
            20,982Loss
      from operations
            
            
            (2,865,816
            )
            
            
            (20,833
            )Non-operating
      expensesInterest
      (expense)
            
            
            (46,943
            )
            
            
            (4,127
            )Net
      Loss from Discontinued Operations
            
            $
            (2,912,759
            )
            
            $
            (24,960
            )





NOTE
3 - Note Payable





Convertible
Notes




On July
25, 2008, Woozyfly Inc. entered into a Loan and Security Agreement (the "Loan
Agreement") providing for the issuance to several accredited investors by
Woozyfly Inc. of its 6% Convertible Notes due June 30, 2011 ("Convertible
Notes"). Pursuant to the Loan Agreement an aggregate principal amount of
$1,400,000 of Convertible Notes have been issued; all but $150,000 in aggregate
principal amount of such Convertible Notes were issued in the third quarter. An
aggregate principal amount of $350,000 of such Convertible Notes were issued
pursuant to the Exchange Agreement dated July 25, 2008 to Corporation
Communication Network, Inc., Lynn Cole Capital, and MKM Opportunity Master Fund,
LP in exchange for convertible notes issued in the same principal amount to such
investors by C J Vision Enterprises, Inc. The entire principal amount under the
Convertible Notes plus all accrued and unpaid interest is due on June 30, 2011.
Interest is payable on the last day of each calendar quarter, commencing
September 30, 2008. Woozyfly Inc. may make interest payments in cash, or at its
option through the reduction of the conversion price discussed
below.




-
23 -


The
Convertible Notes may be converted at a time, at the option of the holder, into
shares of common stock of Woozyfly Inc. at $0.67 per share. The conversion price
is subject to adjustment in event Woozyfly Inc. issues shares (or securities
convertible into shares) at a price that is lower than the then applicable
conversion price.




Woozyfly
Inc. has the right to force conversion of the entire outstanding principal
amount (or a portion thereof), provided, generally that there is then an
effective registration statement in effect with the respect to the shares
issuable upon conversion of the Convertible Notes, the trading price of Woozyfly
Inc.'s common stock is greater than $1.17 and the average daily trading volume
for the preceding 15 trading days exceeds 50,000.




The
Convertible Notes are subject to mandatory prepayment by Woozyfly Inc. in the
event of a financing, and the proceeds of such financing exceed $4,000,000, in
which case all of the proceeds of such financing(s) in excess of $4,000,000 must
be used to prepay the Convertible Notes, with the holders of Convertible Notes
receiving a proportionate share of such proceeds.




In
connection with the issuance of the Convertible Notes, Woozyfly Inc. granted to
the investors five-year warrants to purchase an aggregate of 1,602,066 shares
of common stock of Woozyfly Inc. at $0.75 per share. We valued these
warrants at zero.  The warrants contain cashless exercise provisions
that enable the holder to exercise the warrants without paying additional
consideration and to receive a reduced number of shares in accordance with a
formula set forth in the warrant.




Exchange
Notes




Pursuant
to the Exchange Agreement, Woozyfly Inc. issued to two accredited investors
(assignees of Peter Newman) an aggregate principal amount of $297,504.00 of 6%
Promissory Notes due June 30, 2009 ("Exchange Notes") in exchange for a
convertible note issued to Peter Newman in the same principal amount by C J
Vision Enterprises, Inc. The principal and accrued interest are payable on the
maturity date, June 30, 2009.




One of
the Exchange Notes, in an aggregate principal amount of $36,000, is subject to
mandatory prepayment by Woozyfly Inc. when at least. $800,000 has been raised by
Woozyfly Inc. in connection with the issuance of Convertible Notes pursuant to
the Loan Agreement (the "Funding"). That condition has been met, and
consequently, such Exchange Note is immediately prepayable.




The other
Exchange Note, in an aggregate principal amount of $261,504, is subject to
mandatory prepayment by Woozyfly Inc. as follows: (i) if more than $2,000,000 is
raised in the Funding, 50% of the aggregate amount of the Funding that was not
introduced by MKM Capital, any present or former affiliate of MKM or its
principals, or any officer or director of Woozyfly Inc., shall be applied to
prepayment of such Exchange Note, up to a maximum prepayment amount equal to the
excess of the total amount raised in the Funding over $2,000,000; and (ii) the
balance of unpaid principal and interest is mandatorily prepayable from the
first amounts in excess of $3,000,000 raised in the Funding or in any subsequent
financing by Woozyfly Inc.


-
24 -




The
Convertible Notes and the Exchange Notes rank senior to all current and future
indebtedness of Woozyfly Inc. and are secured by substantially all of the assets
of Woozyfly Inc.




NOTE
4 – Related-party transactions





None





NOTE
5 – Equity





On July
28, 2008, Pet Express Supply, Inc. entered into an Exchange Agreement (the
“Exchange Agreement”) with each of the shareholders of CJ Vision Enterprises,
Inc., a Delaware corporation doing business as Woozyfly.com ("CJVE"), pursuant
to which (i) the stockholders of Pet Express Supply, Inc. contributed back to
the Company’s Treasury all but 4,200,000 of the issued and outstanding
shares of common stock of Pet Express Supply, Inc., and (ii) Pet Express Supply,
Inc. purchased from the shareholders of CJ Vision Enterprises, Inc. all issued
and outstanding shares of CJ Vision Enterprises, Inc.’s, common stock, preferred
stock and warrants to purchase CJ Vision Enterprises, Inc. stock, in
consideration for the issuance of 13,410,672 shares of common stock of Pet
Express Supply, Inc. and, to one of the shareholders of CJ Vision Enterprises,
Inc., warrants to purchase 3,776,544 shares of common stock of Pet Express
(the "Share Exchange") We valued these warrants at
zero.  .





The Share
Exchange resulted in a change in control of Pet Express Supply, Inc. with the
shareholders of CJ Vision Enterprises, Inc. owning 13,410,672 shares of common
stock of Pet Express Supply, Inc. out of a total of 17,610,672 issued and
outstanding shares after giving effect to the Share Exchange.  Also,
the directors of CJ Vision Enterprises, Inc. were elected directors of Pet
Express Supply, Inc. and the officers of CJVE appointed as the
Company's executive officers.  As a result of the Exchange
Agreement, (i) CJ Vision Enterprises, Inc. became a wholly-owned subsidiary of
Pet Express Supply, Inc. and (ii) Pet Express Supply, Inc. succeeded to the
business of CJVE as its sole business.





Pursuant
to the Exchange Agreement, the Shareholders transferred all of their CJVE shares
and warrants to purchase shares to Pet Express in consideration of the issuance
of 13,410,672 shares of common stock Pet express to the Shareholders. One
of the Shareholders also exchanged its warrants to purchase CJVE stock for
warrants to purchase 3,776,544 shares of Pet Express common stock at $0.01 per
share. The common stock was issued as follows:





Name
            
            Number of
              SharesVision
      Opportunity Master Fund Ltd.
            
            
            1,743,456DigitalFX
      International, Inc.
            
            
            5,520,000WF
      Holdings, LLC
            
            
            2,430,000Bleecker
      Holdings, Inc.
            
            
            2,430,000Others
            
            
            1,287,216Total
            
            
            13,410,672




-
25 -


NOTE6- Warrants





The
following summarizes pricing and term information for warrants issued to
investors which are outstanding as of December 31, 2008:





Options
      Outstanding
            
            Options
      ExercisableRange
      of Exercise Prices
            
            Number
      Outstanding at December 31, 2008
            
            Weighted
      Average Remaining Contractual
              Life
            
            Weighted
      Average Exercise Price
            
            Number
      Exercisable at December 31, 2008
            
            Weighted
      Average Exercise Price$0.01
            
            
            3,776,544
            
            
            4.50
            
            
            $0.01
            
            
            3,776,544
            
            
            $0.01$0.75
            
            
            1,602,066
            
            
            4.50
            
            
            $0.75
            
            
            1,602,066
            
            
            $0.75





During
the year ended December 31, 2008, the Company issued 27,066 warrants to
Westminster Securities Corporation and 5,378,610 warrants as discussed in Note 3
and Note 6.  We have 5,378,610 warrants issued and outstanding at December
31, 2008.





Balance
      at December 31, 2007
            
            
            -Issued
            
            
            5,378,610Balance
      at December 31, 2008
            
            
            5,378,610





NOTE
7 – Stock Options





We have issued non-plan options to
various employees, directors and consults.  We believe these options
have no value.  The Board of directors administers the options grants,
selects the individuals to whom options will be granted, determines the number
of options to be granted, and the term and exercise price of each
option.





The
Company has elected to adopt the detailed method provided in SFAS No. 123(R) for
calculating the beginning balance of the additional paid-in capital pool (“APIC
pool”) related to the tax effects of employee stock-based compensation, and to
determine the subsequent impact on the APIC pool and Consolidated Statements of
Cash Flows of the income tax effects of employee stock-based compensation awards
that are outstanding upon the adoption of SFAS No. 123(R).





The fair
value of each stock option granted is estimated on the date of the grant using
the Black-Scholes option pricing model.  The Black-Scholes option
pricing model has assumptions for risk free interest rates, dividends, stock
volatility and expected life of an option grant.  The risk free
interest rate is based upon market yields for United States Treasury debt
securities at a 7-year constant maturity.  Dividend rates are based on
the Company’s dividend history.  The stock volatility factor is based
on the last 60 days of market prices prior to the grant date.  The
expected life of an option grant is based on management’s
estimate.  The fair value of each option grant, as calculated by the
Black-Scholes method, is recognized as compensation expense on a straight-line
basis over the vesting period of each stock option award.





-
26 -


The
following summarizes pricing and term information for options issued to
employees and directors which are outstanding as of December 31,
2008:





Options
      Outstanding
            
            Options
      ExercisableRange
      of Exercise Prices
            
            Number
      Outstanding at December 31, 2008
            
            Weighted
      Average Remaining Contractual
              Life
            
            Weighted
      Average Exercise Price
            
            Number
      Exercisable at December 31, 2008
            
            Weighted
      Average Exercise Price$0.67
            
            
            606,000
            
            
            4.75
            
            
            $0.67
            
            
            606,000
            
            
            $0.67





During
the year ended December 31, 2008, the Company issued 4,177,002 options.  We
have 606,000 options issued and outstanding at December 31, 2008. 3,571,002
options expired during 2008 as a result of the termination in
employment.





Balance
      at December 31, 2007
            
            
            -Issued
            
            
            4,177,002Expired
            
            
            3,571,002Balance
      at December 31, 2008
            
            
            606,000





NOTE
8 – Earnings per Share





The following table sets forth common
stock equivalents (potential common stock) for the years ended December 31, 2008
and 2007 that are not included in the loss per share calculation above because
their effect would be anti-dilutive for the periods indicated:





Year
      Ended December 31,2008
            
            
            2007Weighted
      average common stock equivalents:Non-Plan
      Stock Options
            
            
            606,000
            
            
            
            —Warrants
            
            
            5,378,610
            
            
            
            —





NOTE
9 – Commitments and Contingencies





Leases—The Company currently is not party to any leases





Rent expense charged to operations for
the years ended December 31, 2008 and 2007 was $ 101,225 and zero.





Litigation— The Company is currently not party to any legal
proceedings.





Consulting
Agreements—On January 7, 2009, we entered into an agreement with Venor,
Inc. to provide consulting services on a month to month basis.   Eric
Stoppenhagen, a principle of Venor, Inc., will provide executive financial
services to the Company.  Venor, Inc. will be paid $15,000 the first
month, $10,000 the second month, $7,500 the third month, $5,000 the fourth
month, and $3,500 every month thereafter.





-
27 -


NOTE
10 – Concentration of Credit Risk





We
maintain our cash balances in various financial institutions that from time to
time exceed amounts insured by the Federal Deposit Insurance Corporation up to
$100,000, per financial institution.  As of December 31, 2008, our deposits
did not exceed insured amounts.  We have not experienced any losses in
such accounts and believe we are not exposed to any significant credit risk on
cash.





NOTE
11 - Going Concern





The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
company as a going concern. However, we have an accumulated deficit of
$4,050,924 as of December 31, 2008. Our total liabilities exceeded its total
assets by $1,784,710 as of December 31, 2008. In view of the matters described
above, recoverability of a major portion of the recorded asset amounts shown in
the accompanying balance sheet is dependent upon our continued operations, which
in turn is dependent upon our ability to raise additional capital, obtain
financing and succeed in seeking out suitable candidates for a business
combination with a private company. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts and classification of liabilities that might be necessary
should we be unable to continue as a going concern.





Furthermore,
to the extent we are unable to negotiate a substantial portion of our debt, we
will need to file a petition for bankruptcy or will not be able to
continue.





NOTE
12 – Subsequent Events





On
December 17, 2008, Emanuel Gerard, director and Chairman of the Board of
Directors of Woozyfly Inc. (the “Company”) resigned effective December 31, 2008,
and Jonathan Bomser, President and Chief Executive Officer of the Company, and
Todd R.  Bomser, Chief Financial Officer of the Company, resigned
effective January 15, 2009.  There was no disagreement or dispute
between any of Mr. Gerard, Jonathan Bomser or Todd R. Bomser and the Company
which led to their resignations.





As a
result of these resignations, on January 7, 2008, we entered into an agreement
with Venor, Inc. to provide consulting services on a month to month
basis.   Eric Stoppenhagen, a principle of Venor, Inc., will provide
executive financial services to the Company.  Venor, Inc. will be paid
$15,000 the first month, $10,000 the second month, $7,500 the third month,
$5,000 the fourth month, and $3,500 every month thereafter.





We ceased
operations on January 15, 2009.  Since the ceasing operations, we have
been seeking to restructure the Company’s capitalization in order to find
suitable candidates for a business combination with a private
company.  We have been unsuccessful in this attempt.  We
have a substantial amount of secured and unsecured debt. Failure to settle this
debt will cause us to petition for bankruptcy protection.





-
28 -







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





Not
applicable




Item
9A(T).  Controls and Procedures.




(a)
Evaluation of Disclosure Controls and Procedures




We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms
and that such information is accumulated and communicated to our management,
including our interim President, who serves as our principal executive officer
and principal financial officer, as appropriate, to allow timely decisions
regarding required disclosure.





Our
interim President reviewed and evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined by Rule
240.13a-15(e) or 15d-15(e)) of the Exchange Act Rule 13a-15 as of the end of the
period covered by this report.  Based upon this evaluation, our interim
President concluded that, as of the end of such period, our disclosure controls
and procedures were effective as of the end of the fiscal year
covered by this Form 10-K.




(b)
Management’s Annual Report on Internal Control over Financial
Reporting




The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act and for assessing the effectiveness of internal
control over financial reporting.




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. In addition, projections of any evaluation of
effectiveness of internal control over financial reporting to future periods are
subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.




Management
has assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2008.  In making its assessment of
internal control over financial reporting, management used the criteria
established in Internal Control — Integrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway
Commission.  This assessment included an evaluation of the design of
the Company’s internal control over financial reporting and testing of the
operational effectiveness of those controls.  Based on the results of
this assessment, management has concluded that the Company’s internal control
over financial reporting was effective as of December 31, 2008.




This
Annual Report on Form 10-K does not include an attestation report of the
Company’s registered public accounting firm regarding internal control over
financial reporting.  Management’s report was not subject to
attestation by the Company’s registered public accounting firm pursuant to
temporary rules of the SEC that permit the Company to provide only management’s
report in this Annual Report on Form 10-K.




(c)
Changes in Internal Control over Financial Reporting




There
were no changes in the Company’s internal control over financial reporting that
occurred during the fourth quarter of the year ended December 31, 2008 that have
materially affected, or that are reasonably likely to materially affect, the
Company’s internal control over financial reporting.




Item
9B.  Other Information.





None


-
29 -


PART
III




Item
10.  Directors, Executive Officers and Corporate
Governance.





We have a
three person Board of Directors, none of whom are employees or affiliates of the
Company.





Name
            Age
            PositionDavid
      Skriloff
            43
            Chairman,
      DirectorKellis
      R. Veach
            66
            DirectorEric
      Stoppenhagen
            35
            Interim
      President, Secretary and Director





Biographical
Information





DAVID
SKRILOFF is Portfolio Manager of MKM Capital Advisors,
LLC.  Previously, he was a managing director at Vision Capital
Advisors, LLC, a position he had held from January 2006 to December 2007. Prior
to Vision, Mr. Skriloff was a managing director at Duncan Capital, from
January 2004 to December 2005. Before Duncan, Mr. Skriloff was EVP of
Business Development for Millivision, Inc. from September 2001 to December 2003.
Mr. Skriloff earned a BS in Electrical Engineering from Carnegie-Mellon
University in 1987 and an MBA from NYU in 1992.





KELLIS R.
VEACH currently serves as Chief Financial Offer of STB TeleMedia,
Inc.  From 2003 to 2008, Mr. Veach served as Vice-President of
Sheridan Square Entertainment, Inc., and as a Chief Financial Officer of its
distribution subsidiary. From 2000 through 2003, Mr. Veach served as CFO of
Hello Network.com, Inc.  From 1998 through 2000, Mr. Veach served as a
Senior Vice-President of Finance and Treasurer of Cognitive Arts Corp., and from
1992 through 1998 as a Senior Vice-President and Controller of Alliance
Entertainment Corp., a NYSE company. Previously Mr. Veach was a partner in the
accounting firm, Grant Thornton International. Mr. Veach graduated from Indiana
University with a Bachelor of Science in Business.





ERIC
STOPPENHAGEN, though his consulting company, Venor, Inc., focuses on financial
management of small to medium businesses desiring to go public or that are
public. He provides temporary CFO services helping with transaction advisory,
security filings, and corporate governance requirements. Mr. Stoppenhagen has
more than 10 years of financial experience, having served in an executive
capacity for several public and private companies; including President of
Trestle Holdings, Inc., CFO of AuraSource, Inc., President of Landbank Group,
Inc., CFO of GHG Trading Platforms, Inc., and CFO of Jardinier Corporation. Mr.
Stoppenhagen is a Certified Public Accountant. He holds a Juris Doctorate and
Masters of Business Administration both from George Washington University.
Additionally, he holds a Bachelor of Science in Finance and a Bachelor of
Science in Accounting both from Indiana University.





Certain
Legal Proceedings




To our
knowledge, during the past five years, none of our directors, executive
officers, promoters, control persons, or nominees has been:




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





•
            convicted
      in a criminal proceeding or is subject to a pending criminal proceeding
      (excluding traffic violations and other minor
  offenses);





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





•
            found
      by a court of competent jurisdiction (in a civil action), the Commission
      or the Commodity Futures Trading Commission to have violated a federal or
      state securities or commodities
law.





-
30 -


Section
16(a) Beneficial Ownership Reporting Compliance.





Section
16(a) of the Securities Exchange Act of 1934 requires that our executive
officers and directors, and persons who own more than ten percent of a
registered class of our equity securities, file reports of ownership and changes
in ownership with the SEC.  Executive officers, directors and
greater-than-ten percent stockholders are required by SEC regulations to furnish
us with all Section 16(a) forms they file.  Based solely on our review
of the copies of the forms received by us and written representations from
certain reporting persons that they have complied with the relevant filing
requirements, we believe that, during the year ended December 31, 2008, all of
our executive officers, directors and greater-than-ten percent stockholders
complied with all Section 16(a) filing requirements.




Director
Independence




Our board
of directors currently consists of three members: David Skriloff, Kellis Veach,
and Eric Stoppenhagen.




We do not
have a separately designated audit, compensation or nominating committee of our
board of directors and the functions customarily delegated to these committees
are performed by our full board of directors.  We are not a “listed
company” under SEC rules and are therefore not required to have separate
committees comprised of independent directors.  We have, however,
determined that Kellis Veach is “independent” as that term is defined in Section
4200 of the Marketplace Rules as required by the NASDAQ Stock
Market.







Item
11.  Executive Compensation





The following table and related footnotes
show the compensation paid during the fiscal years ended December 31, 2008 and
2007, to the Company's named executive officers:





Summary
Compensation Table


All
      OtherName
      and Principal
            Year
            
            Salary
            
            
            Bonus
            
            Option
      Awards
            
            Compensation
            
            
            TotalPosition
            
            
            ($)
            
            
            ($)
            
            ($)
            
            ($)
            
            
            ($)(a)
            (b)
            
            (c)
            
            
            (d)
            
            (f)
            
            (i)
            
            
            (j)Jonathan
      Bomser (1)
            2008
            
            $
            62,500
            
            
            
            
            
            
            
            
            
            
            62,500Former
      Chief Executive OfficerTodd
      Bomser (2)
            2008
            
            $
            10,000
            
            
            
            --
            
            
            
            $
            32,500
            
            
            $
            42,500Former
      Chief Financial OfficerJeanne Drewsen (3)
            2008
            
            $
            39,375
            
            
            
            --
            
            --
            
            
            --
            
            
            $
            39,375Former
      Executive Vice President, Secretary and General Counsel





(1)          Joined
the Company on July 28, 2008 and resigned on January 15, 2009.


(2)          Joined
the Company on July 28, 2008 and resigned January 15, 2009. Other compensation
relates to amounts paid to Spiewak, Gottesman, Bomser & Company, PA for his
services


(3)          Joined
the Company on July 28, 2008 and resigned January 15, 2009.




-
31 -


Employment
Agreements





On July 28, 2008, Pet Express and Mr. Bomser entered
into an agreement to provide additional incentive compensation to Mr. Bomser in
connection with his services which are over and above the duties and
responsibilities set forth in his employment agreement. Under this incentive
agreement, Mr. Bomser is entitled to receive the following percent of the
proceeds from certain transactions involving the sale of the Company or a major
portion thereof: 5% of the first $10,000,000; 4% of the second $10,000,000, and
2.5% of the next $80,000,000 (and no percent of proceeds in excess of
$100,000,000).





All of
the agreements with Jonathan Bomser have been cancelled.




Outstanding
equity awards at fiscal year-end





As of December 31, 2008, the only
officer or director of the company with equity awards is Jeanne
Drewsen.  She currently has 600,000 options exercisable at $0.67 per
share.





Compensation
of Directors





DIRECTOR
      COMPENSATION FY 2008Name
            Fees
              Earned
      or
              Paid
      in
              Cash
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            Non-Equity
              Incentive
              Plan
              Compensation
              ($)
            Nonqualified
              Deferred
              Compensation
      Earnings
              ($)
            All
              Other
              Compensation
              ($)
            Total
              ($)All
      Directors
            -
            -
            -
            -
            -
            -
            -





We
currently do not pay our directors for service on the board of
directors.





Previously,
we compensated certain of our directors with option grants.





All
former directors of the Company agreed to cancel all stock options previously
granted to them.




-
32 -


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





The
following table sets forth certain information, as of April 15, 2009 with
respect to the beneficial ownership of the Company’s outstanding common stock by
(i) any holder of more than five (5%) percent; (ii) each of the named executive
officers, directors and director nominees; and (iii) our directors, director
nominees and named executive officers as a group. Except as otherwise indicated,
each of the stockholders listed below has sole voting and investment power over
the shares beneficially owned. Unless otherwise indicated, the address for each
shareholder is c/o the Company.




Name
      of Beneficial Owner
            
            
            Common
      Stock
              Beneficially
      Owned
            
            
            Percentage
      of Common
              Stock
      Beneficially
              Owned
      (1)Vision
      Opportunity Master Fund Ltd. (2)
              20
      West 55th
      Street, 5th
      Floor
              New
      York, New York 10019
            
            
            290,576
            
            
            9.9
            %Bleecker
      Holdings, Inc. (3)
              1995
      Broadway, Suite 1600
              New
      York, NY 10023
            
            
            405,000
            
            
            13.8
            %DigitalFX
      International, Inc. (4)
              3035
      East Patrick Lane, Suite 9
              Las
      Vegas, Nevada 89120
            
            
            920,000
            
            
            31.3
            %WF
      Holdings, LLC (5)
              44
      Easton Road
              Westport,
      CT 06880
            
            
            405,000
            
            
            13.8
            %Eric
      Stoppenhagen
            
            
            -0-
            
            
            n/aKellis
      Veach
            
            
            -0-
            
            
            n/aDavid
      Skriloff)
            
            
            -0-
            
            
            n/aAll
      officers and directors as a group (3 persons)
            
            
            -0-
            
            
            n/a
            %


_______________


* Less
than one percent.


(1) Beneficial
ownership percentages gives effect to the completion of the Share Exchange and
issuance of the Notes and Warrants, and are calculated based on 2,935,112
shares of common stock issued and outstanding on July 31,
2008.  Beneficial ownership is determined in accordance with Rule
13d-3 of the Exchange Act.  The number of shares beneficially owned by a
person includes shares of common stock underlying options or warrants held by
that person that are currently exercisable or exercisable within 60 days of July
31, 2008.  The shares issuable pursuant to the exercise of those
options or warrants are deemed outstanding for computing the percentage
ownership of the person holding those options and warrants but are not deemed
outstanding for the purposes of computing the percentage ownership of any other
person.  The persons and entities named in the table have sole voting and
sole investment power with respect to the shares set forth opposite that
person’s name, subject to community property laws, where applicable, unless
otherwise noted in the applicable footnote.


(2) Adam
Benowitz and Randy Cohen share investment and dispositive power of the shares
held by this entity. Does not include warrants to purchase 629,424 shares of
common stock which may not be exercised if such exercise would cause this entity
to hold more than 10% of the common stock of the Company.


(3) Joseph
Bianco holds investment and dispositive power of the shares held by this
entity.


(4) DigitalFX
is a publicly traded company.


(5) Ashok
Narang holds investment and dispositive power of the shares held by this
entity.


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33 -





Securities
Authorized for Issuance Under Equity Compensation Plans





None





Changes in Control
Arrangements





There
existed no change in control arrangements at December 31, 2008.





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





None




Director
Independence





In
conjunction with the preparation of this registration statement, using the
definition of “independence” established by the NASDAQ Stock Market, we have
evaluated all relationships between each director and the Company.





Based on
the foregoing definition, we have determined that one of our directors, Kellis
Veach, currently meet the definition of an “independent” director under the
standards established by NASDAQ. We do not currently have an audit, nominating
or compensation committee.





Our Board
of Directors will continually monitor the standards established for director
independence under applicable law or listing requirements and will take all
reasonable steps to assure compliance with those standards.





Item
14.  Principal Accountant Fees and Services





Independent
Public Accountants





Weaver
& Martin, LLC has audited the Company’s financial statements since fiscal
year 2006, and the Board of Directors of the Company has selected Weaver &
Martin, LLC as the Company’s independent auditors to audit the financial
statements of the Company for the fiscal year ending December 31,
2008.





Fees
Paid to Weaver & Martin, LLC





Audit
Fees





The aggregate fees billed by Weaver
& Martin, LLC for the audit of the Company’s financial statements for the
years ended December 31, 2008 and 2007, the reviews of the quarterly reports on
Form 10-QSB for the same fiscal years and statutory and regulatory filings were
$17,000 for 2008 and $5,000 for 2007.





Audit-Related
Fees





None





Tax
Fees





None




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34 -


Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-audit Services of
Independent Auditors




The Board’s policy is to
pre-approve all audit and permissible non-audit services provided by the
independent registered public accounting firm. These services may include audit
services, audit-related services, tax services and other services. Pre-approval
is generally detailed as to the particular service or category of services and
is generally subject to a specific budget. The independent registered public
accounting firm and management are required to periodically report to the Board
regarding the extent of services provided by the independent registered public
accounting firm in accordance with this pre-approval, and the fees for the
services performed to date. The Board may also pre-approve particular services
on a case-by-case basis.





The Board has determined that
the rendering of the services other than audit services byWeaver &
Martin, LLCis
compatible with maintaining the principal accountant’s
independence.




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35 -


PART
IV




Item
15.  Exhibits and Financial Statement Schedules.




(a)
            The
      following documents are filed as a part of this
  Report:




1.
            Financial
      Statements. The following financial statements of
      Woozyfly Inc. are included in
Item 8:




Reports
of Independent Registered Public Accounting Firms.




Balance
Sheets as of December 31, 2008 and 2007.




Statements
of Operations for the year ended December 31, 2008 and 2007.




Statements
of Stockholders’ Deficit for the years ended December 31, 2008 and
2007.




Statements
of Cash Flows for the years ended December 31, 2008 and 2007.




Notes to
Financial Statements.









2.
            Financial
      Statement Schedule(s):




All
schedules are omitted for the reason that the information is included in the
financial statements or the notes thereto or that they are not required or are
not applicable.




3.
            Exhibits:




EXHIBIT
      NUMBER
            
            DESCRIPTION2.1
            
            Share
      Exchange Agreement (3)3.1
            
            Articles
      of Incorporation (1)3.2
            
            Certificate
      of Amendment to the Articles of Incorporation (4)3.3
            
            Amended
      and Restated By-Laws (4)4.1
            
            Form
      of Warrant (3)4.2
            
            Form
      of Note (3)10.1
            
            Loan
      and Security Agreement (3)10.2
            
            Employment
      Agreement between CJ Vision Enterprises, Inc. and Jonathan Bomser
      (3)10.3
            
            Sublease
      Agreement between JSM Music, Inc. and CJ Vision Enterprises, Inc.
      (3)10.4
            
            Executive
      Compensation Agreement dated July 28, 2008 between the Company and
      Jonathan Bomser (3)10.5
            
            Employment
      Agreement between the Company and Todd Bomser (3)10.6
            
            Consulting
      Agreement between the Company and Spiewak, Gottesman et al.
      (3)10.7
            
            Restricted
      Stock Purchase Agreement (4)10.8
            
            2008
      Employee Option Plan (4)10.9
            
            Consulting
      Agreement between WoozyFly, Inc. and Venor, Inc.( Incorporated by
      reference to Registrant’s Current Report Form 8-K filed on January 20,
      2009)31
            
            Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.32
            
            Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to section 906 of the
      Sarbanes-Oxley Act of 2002.





(1)           Incorporated
by reference to the Registration Statement on Form SB-2, previously filed with
the SEC on September 26, 2006.


(2)           Incorporated
by reference herein to the Form 8-K, previously filed with the SEC on January
30, 2006.


(3)           Incorporated
by reference to Registrant’s Current Report Form 8-K filed on August 1,
2008.


(4)           Incorporated
by reference to Registrant’s Quarterly Report on Definitive Information
Statement filed on September 4, 2008.





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