U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K








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





For the fiscal year ended December 31, 2009








Commission File No.333-140305





EXCLUSIVE APPAREL, INC.


(Exact name of small business issuer as specified in its charter)





Nevada
20-5567127(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)





8860 Greenlawn Street, Riverside, California 92508


(Address of Principal Executive Offices)





(951) 902-2022


(Issuer’s telephone number)








(Former name, address and fiscal year, if changed since last report)





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





Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value





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 twelve months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.





Yes  [X]     No  [   ]





Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B not contained in this form, and no disclosure will be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  (   )





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





Revenues for year ended December 31, 2009:   $-0-





Aggregate market value of the voting common stock held by non-affiliates of the registrant as of March 18, 2010 was:  $-0-





Number of shares of our common stock outstanding as of March 18, 2010 is: 37,000,000





The Company has retained the services of Pacific Stock Transfer Company to facilitate the processing of the stock certificates.  Pacific Stock Transfer Company is a registrar and transfer agency located at 4045 South Spencer Street, Suite 403, Las Vegas, Nevada 89119 having a telephone number of (702) 361-3033





State the number of shares outstanding of each of the issuer’s classes of common equity, as of March 18, 2010:  37,000,000 shares of common stock.








PART I





ITEM 1.  DESCRIPTION OF BUSINESS





GENERAL





Exclusive Apparel, Inc., Inc. (“Company”) was incorporated in the State of Nevada on September 8, 2006. Exclusive Apparel, Inc., Inc. is a developmental stage company with a principal business objective of offering premium baseball cap type headwear for women with exquisite taste and extravagant appetites as exclusive accessories to differentiate themselves.  Exclusive Apparel, Inc is committed to producing exclusive ball-type caps that are stylish and unique that caters to a more progressive clientele.  The Company will focus on baseball hat type headwear before it expands to belts, handbags and other similar accessories.





Exclusive Apparel, Inc. is a development stage company that has not significantly commenced its planned principal operations. Exclusive Apparel, Inc. operations to date have been devoted primarily to startup and development activities, which include the following:





1.
Formation of the Company;





2.
Development of the Exclusive Apparel, Inc. business plan;





3.
Conducted research on potential markets;





4.
Identified contract designer, graphic artist, sewing manufacturer, screen printer and embroider to design and manufacturer our products.





5.
Formulated multi-faceted marketing plan and marketing campaign in an effort to introduce our products to the market on a broader scope;





6.
Formulated pilot programs for prospective markets;





7.
Finalized sketches and chose fabric and materials for initial pilot production;





8.
Identified appropriate distribution channels utilizing independent sales representatives and middlemen.





Exclusive Apparel, Inc., Inc. is attempting to become operational. In order to generate revenues, Exclusive Apparel, Inc. must address the following areas:





1.
Develop and Implement a Marketing Plan:In order to penetrate our targeted market, Exclusive Apparel, Inc. will use a multi-faceted marketing plan that includes a high-end website, exclusive catalogs, and a target specific marketing campaign directed to design consultants that cater to celebrities and higher-end income clients.





2


Phase II of the marketing effort will commence once we have gained recognition among celebrities and the more affluent fashionable consumer.  The phase II plan will consist of exploiting the appropriate distribution channels using independent representatives who are experienced in accessory sales to high-end boutiques and upscale department stores. These independent representatives work as middlemen between Exclusive Apparel and the retailer.  They are aggressive in that they will go directly to the retailers, work applicable trade shows, send samples and CAD sheets, and work directly with other accessory representatives to penetrate their desired retail accounts.  Independent Representatives are paid a commission that is typically 15% plus expenses.  Sales representatives will have a set monthly budget for samples and supplies provided by Exclusive Apparel.





2.
Tailoring our website: Exclusive Apparel, Inc. has secured a web site domain located at www\\exclusiveapparel.biz.  The site is currently under construction and upon securing additional funding, the Company has plans to enhance the web site.





Since our inception on September 8, 2006 to December 31, 2009, the Company did not generate any significant revenues and has incurred a cumulative net loss of $232,332.  The Company has been unable to raise the necessary capital in order to implement its business and it is necessary for the Company to review other business models and opportunities in order to continue as a going concern.  There can be no assurance that we will be able to raise any capital or find a business opportunity that will allow the Company to become operational.  As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors’ report to the financial statements included in the registration statement.





Exclusive Apparel, Inc., Inc. currently has one officer and one director. This individual allocates time and personal resources to Exclusive Apparel, Inc. on a part-time basis.





As of the date of this report, Exclusive Apparel, Inc. has 37,000,000 shares of $0.001 par value common stock issued and outstanding.





Exclusive Apparel, Inc., Inc.’s fiscal year end is December 31.





EMPLOYEES





We have no full time employees.  Georgette Mathers, our President, Secretary and Treasurer has agreed to allocate a portion of her time to our activities without compensation.





ITEM 2.  DESCRIPTION OF PROPERTY





Exclusive Apparel, Inc. uses an administrative office located at 8860 Greenlawn Street, Riverside, California 92508. The office space is free of charge and no lease exists. There are currently no proposed programs for the renovation, improvement or development of the facilities currently use.





Exclusive Apparel, Inc. management does not currently have policies regarding the acquisition or sale of real estate assets primarily for possible capital gain or primarily for income. Exclusive Apparel, Inc. does not presently hold any investments or interests in real estate, investments in real estate mortgages or securities of or interests in persons primarily engaged in real estate activities.





ITEM 3.  LEGAL PROCEEDINGS





There is no litigation pending or threatened by or against us.





3


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





None.





PART II





ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





On December 31, 2009, there were twenty-nine (29) shareholders of record of our common stock.  Our shares of common stock have never been traded on any recognized stock exchange.





DIVIDENDS





We intend to retain future earnings to support our growth.  Any payment of cash dividends in the future will be dependent upon: the amount of funds legally available therefore; our earnings; financial condition; capital requirements; and other factors which our Board of Directors deems relevant.





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





Plan of Operation





On February 27, 2007 we received approval from the Securities and Exchange Commission of our Registration Statement on Form SB-2 wherein we registered 15,000,000 shares of our $.001 common stock in order to raise $150,000.00 as our initial capital prior to filing an application with the NASD on Form 211 to be listed on a public exchange.  To date we have raised the $147,000.00 and our application to the NASD on Form 211 was approved.  The Company now trades on the OTC:BB under the symbol EXLA.





Results of Operation





We did not have any operating income from inception (September 8, 2006) through December 31, 2009.  For the year ended December 31, 2009, we recognized a net loss of $22,896.  Some general and administrative expenses during the year were accrued.  Expenses for the year were comprised of costs mainly associated with legal, accounting, and office.





Liquidity and Capital Resources





At December 31, 2009, we had no capital resources and will rely upon the issuance of common stock and additional capital contributions from shareholders to fund administrative expenses.








4


ITEM 8.  FINANCIAL STATEMENTS





Our financial statements, together with the report of auditors, are as follows:





EXCLUSIVE APPAREL, INC.





FINANCIAL STATEMENTS





AS OF DECEMBER 31, 2009





Exclusive Apparel, Inc.


Financial Statements Table of Contents





PageREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-1BALANCE SHEETS
F-2STATEMENTS OF OPERATIONS
F-3STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
F-4STATEMENTS OF CASH FLOWS
F-5FOOTNOTES TO THE FINANCIAL STATEMENTS
F-6




















5


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM











To the Board of Directors and


Stockholders of Exclusive Apparel, Inc.








We have audited the accompanying balance sheets of Exclusive Apparel, Inc. as of December 31, 2009 and 2008, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2009 and for the period from Inception (September 8, 2006) through December 31, 2009. Exclusive Apparel, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Exclusive Apparel, Inc. as of December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2009 and for the period from Inception (September 8, 2006) through December 31, 2009 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 1 to the financial statements, the Company's significant operation losses raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ EFP Rotenberg, LLP





EFP Rotenberg, LLP


Rochester, New York


March 26, 2010














EXCLUSIVE APPAREL, INC.


(A Development Stage Company)




BALANCE SHEETS







ASSETS

December 31, 2009


December 31, 2008Current assets:Cash

$
-


$
75Total current assets


-



75Total assets

$
-


$
75LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)Current liabilities:Accounts payable and accrued expenses

$
-


$
61Advance from shareholder


39,832



16,950Total current liabilities


39,832



17,011Stockholders' equity (deficit):Preferred stock; $.001 par value, 5,000,000 sharesauthorized, zero shares issued and outstanding


-



-Common stock; $.001 par value, 70,000,000 sharesauthorized, 37,000,000 shares issued and outstanding as of December 31, 2009

and 2008


37,000



37,000Additional paid in capital


155,500



155,500Accumulated (deficit) during development stage


(232,332
)


(209,436
)Total stockholders' equity (deficit)


(39,832
)


(16,936
)$
-


$
75





The accompanying notes are an integral part of these financial statements









EXCLUSIVE APPAREL, INC.


(A Development Stage Company)





STATEMENTS OF OPERATIONS








September 8, 2006(date of inception)For the year ended


For the year ended


throughDecember 31, 2009


December 31, 2008


December 31, 2009Revenues

$
-


$
-


$
-Operating expenses:General and administrative expenses


23,029



21,547



232,465Total operating expenses


23,029



21,547



232,465(Loss) from operations


(23,029
)


(21,547
)


(232,465
)Other income (expenses):Interest (expense)


-



-



-Other income


133



-



133Total other income (expenses)


133



-



133(Loss) before provision for income taxes


(22,896
)


(21,547
)


(232,332
)Provision for income taxes


-



-



-Net (loss)

$
(22,896
)

$
(21,547
)

$
(232,332
)Basic and diluted loss per common share

$
(0.00
)

$
(0.00
)

$
(0.01
)Basic and diluted weighted averagecommon shares outstanding


37,000,000



37,000,000



32,233,543





The accompanying notes are an integral part of these financial statements









EXCLUSIVE APPAREL, INC.


(A Development Stage Company)





STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)





Accumulated(Deficit)Additional


during


TotalPreferred Stock


Common Stock


Paid-in


development


Stockholders'Shares


Amount


Shares


Amount


Capital


stage


Equity (Deficit)$



$



$



$



$Balance at September 8, 2006(Date of Inception)


-



-



-



-



-



-



-Common shares issued for serviceat $0.002 per share


-







2,000,000



2,000



2,000



-



4,000Net (loss) for the period September 8, 2006(inception) to December 31, 2006


-



-



-



-



-



(24,488
)


(24,488
)Balance, December 31, 2006


-



-



2,000,000



2,000



2,000



(24,488
)


(20,488
)Common shares issued for service  at $0.002 per share


-



-



20,000,000



20,000



20,000



-



40,000Common shares issued relating to private placement,at $0.01 per share, net of $1,500 of offering costs


-



-



15,000,000



15,000



133,500



-



148,500Net (loss) for the year ended December 31, 2007


-



-



-



-



-



(163,401
)


(163,401
)Balance, December 31, 2007


-



-



37,000,000



37,000



155,500



(187,889
)


4,611Net (loss) for the year ended December 31, 2008


-



-



-



-



-



(21,547
)


(21,547
)Balance, December 31, 2008


-



-



37,000,000



37,000



155,500



(209,436
)


(16,936
)Net (loss) for the year ended December 31, 2009


-



-



-



-



-



(22,896
)


(22,896
)Balance, December 31, 2009


-


$
-



37,000,000


$
37,000


$
155,500


$
(232,332
)

$
(39,832
)




The accompanying notes are an integral part of these financial statements












EXCLUSIVE APPAREL, INC.


(A Development Stage Company)





STATEMENTS OF CASH FLOWS







September 8, 2006(date of inception)For the year ended


For the year ended


throughDecember 31, 2009


December 31, 2008


December 31, 2009Operating activities:Net (loss)

$
(22,896
)

$
(21,547
)

$
(232,332
)Adjustments to reconcile net (loss) tonet cash used in operating activities:Stock issued for services


-



-



44,000Changes in operating assets and liabilities:(Decrease) increase in accounts payable


(61
)


61



-Net cash (used in) operating activities


(22,957
)


(21,486
)


(188,332
)Financing activities:Advance to/ from shareholder


22,882



16,950



39,832Proceeds from issuance of common stock


-



-



148,500Net cash provided by financing activities


22,882



16,950



188,332Net change in cash


(75
)


(4,536
)


-Cash, beginning of period


75



4,611



-Cash, end of period

$
-


$
75


$
-Non Cash Investing and Financing Activities:Issuance of Common Stock for Services

$
-


$
-


$
44,000





The accompanying notes are an integral part of these financial statements












EXCLUSIVE APPAREL, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS





Note 1.  Nature of Business and Summary of Significant Accounting Policies




The summary of significant accounting policies is presented to assist in the understanding of the financial statements.  The financial statements and notes are representations of management.  These accounting policies conform to accounting principles generally accepted




Nature of business and organization


Exclusive Apparel, Inc., a Nevada corporation, (hereinafter referred to as the “Company”) was incorporated in the State of Nevada on September 8, 2006.  The Company is high end clothing and apparel business that is dedicated to producing stylish and unique ball type headwear for women. The goal of the Company is to expand to belts, handbags, and other accessories. The Company's operation has been limited to general administrative operations and is considered a development stage company as defined by FASB ASC Topic 915 (formerly SFAS No. 7.)




Going Concern


The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred recurring losses through December 31, 2009 and has not commenced its operations, rather, still in the development stages, raising substantial doubt about the Company’s ability to continue as a going concern.  The Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.




The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s plan.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.




Estimates


The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  The Company is subject to uncertainty of future events, economic, environmental and political factors and changes in the Company's business environment; therefore, actual results could differ from these estimates.  Accordingly, accounting estimates used in the preparation of the Company's financial statements will change as new events occur; more experience is acquired, as additional information is obtained and as the Company's operating environment changes.  Changes are made in estimates as circumstances warrant.  Such changes in estimates and refinement of estimation methodologies are reflected in the statements.




Cash and cash equivalents


Cash and cash equivalents include interest bearing and non-interest bearing bank deposits, money market accounts, and short-term instruments with a liquidation provision of three month or less.




Revenue recognition


The Company has no revenues to date from its operations.  Once revenues are generated, management will establish a revenue recognition policy.













EXCLUSIVE APPAREL, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS







Note 1.  Nature of Business and Summary of Significant Accounting Policies-continued





Advertising costs


Advertising costs are generally expensed as incurred and are included in selling and marketing expenses in the accompanying statement of operations.





For the years ended of December 31, 2009 and 2008 and for the period from inception to December 31, 2009, there was no advertising cost incurred.





Fair value of financial instruments


The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies.  The carrying amounts of financial instruments including cash, accounts payable and advance from shareholder approximate their fair value because of their short maturities.




Net loss per common share


The Company computes net loss per share in accordance with FASB ASC Topic 260, “Earnings per Share” (formerly SFAS No. 128) and SEC Staff Accounting Bulletin No. 98 (SAB 98).  Under the provisions of ASC 260, basic 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.  The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is antidilutive.




Comprehensive income


The Company accounts for comprehensive income (loss) in accordance with FASB ASC Topic 220 "Reporting Comprehensive income" (formerly SFAS No. 130) which requires comprehensive income (loss) and its components to be reported when a company has items of comprehensive income (loss).  Comprehensive income (loss) includes net income (loss) plus other comprehensive income (loss). There are no differences or reconciling items between net income and comprehensive income for the years ended December 31, 2009 and 2008 and for the period from inception to December 31, 2009.




Income taxes


The Company accounts for its income taxes in accordance with FASB ASC Topic 740 (formerly SFAS no. 109), which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.




Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2009 are as follows:


Deferred tax assets:Net operating loss

$
232,332Income tax rate


34
%78,993Less valuation allowance


(78,993
)$
-














EXCLUSIVE APPAREL, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS





Note 1.  Nature of Business and Summary of Significant Accounting Policies -continued




Through December 31, 2009, a valuation allowance has been recorded to offset the deferred tax assets, including those related to the net operating losses.  At December 31, 2009, the Company had approximately $232,000 of federal and state net operating losses.  The net operating loss carryforwards, if not utilized will begin to expire in 2025.
 
 Reconciliations of the U.S. federal statutory rate to the actual tax rate for the year ended December 31, 2009 is as follows:


2009U.S. federal statutory income tax rate


34.0
%State tax - net of federal benefit


0.0
%34.0
%Increase in valuation allowance


(34.0
%)Effective tax rate


0.0
%





Note 2. Concentration of credit risk





A significant amount of the Company’s assets and resources are dependent on the financial support of the shareholders, should the shareholders determine to no longer finance the operations of the company, it may be unlikely for the company to continue.




The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (FDIC).  This government corporation insured balances up to $100,000 through October 13, 2008.  As of October 14, 2008 all non-interest bearing transaction deposit accounts at an FDIC-insured institution, including all personal and business checking deposit accounts that do not earn interest, are fully insured for the entire amount in the deposit account.  This unlimited insurance coverage is temporary and will remain in effect for participating institutions until December 31, 2009.





All other deposit accounts at FDIC-insured institutions are insured up to at least $250,000 per depositor until December 31, 2009.  On January 1, 2010, FDIC deposit insurance for all deposit accounts, except for certain retirement accounts, will return to at least $100,000


per depositor.  Insurance coverage for certain retirement accounts, which include all IRA deposit accounts, will remain at $250,000 per depositor.





Note 3. Property and equipment





As of December 31, 2009 the Company does not own any property or equipment.




Note 4. Stockholders’ equity (deficit)





The Company's articles of incorporation provide for the authorization of seventy million (70,000,000) shares of common stock and five million (5,000,000) shares of preferred stock with par values of $0.001. Common stock holders have all the rights and obligations that normally pertain to stockholders of Nevada corporations.  As of December 31, 2009 and 2008, the Company had 37,000,000 shares of common stock issued and outstanding.  The Company has not issued any shares of preferred stock.





Note 5.  Related party transactions





During the year ended December 31, 2009 and 2008, advance from shareholders was approximately $40,000 and $17,000, respectively.





During the year ended December 31, 2009 and 2008, the Company paid consulting fee of $0 and $650, respectively, to an individual related to a former stockholder of the Company.











EXCLUSIVE APPAREL, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS





Note 5.  Related party transactions-continued





During the year ended December 31, 2009 and 2008, the Company paid officer’s compensation of $0 and $2,500 to its former president/ shareholder for services provided.





Note 6. Newly issued pronouncements





In February 2010, FASB issued ASU 2010-09 Subsequent Event (Topic 855) Amendments to Certain Recognition and Disclosure Requirements. ASU 2010-09 removes the requirement for an SEC filer to disclose a date in both issued and revised financial statements.  Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of GAAP. All of the amendments in ASU 2010-09 are effective upon issuance of the final ASU, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010. The adoption of FASB ASC 855 had no impact on the Company’s financial condition, results of operations, or cash flows.





Note 7. Litigation




As of December 31, 2009, the Company is not aware of any current or pending litigation which may affect the Company’s operations.




Note 8. Ownership Change





On June 11, 2009, Sharon Lynch, our prior President, resigned as an officer and director of the Company.  Prior to Ms. Lynch’s resignation, she appointed Georgette Mathers as our President, Secretary and Director.  Ms. Lynch transferred all 22,000,000 shares of common stock to Ms. Mathers when she resigned.





Note 9.  Subsequent Events





There have been no material subsequent events.  Subsequent events were evaluated through March 26, 2010, the date these financial statements were issued.
























ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





On August 7, 2009 the Board of Directors of Exclusive Apparel dismissed Moore & Associates, Chartered, Certified Public Accountants, and engaged the services of Seale and Beers, CPA as its independent auditor.  On September 22, 2009 the Board of Directors of Exclusive Apparel dismissed Seale and Beers, CPA as its independent auditor, and engaged the services of Rotenberg & Co., LLP as its independent auditor.  On October 1, 2009 Rotenberg and Company LLP merged with another CPA firm, EFP Group, to form a new firm.  All of the partners and employees of Rotenberg and Company LLP and EFP Group joined the new firm, EFP Rotenberg LLP.  EFP Rotenberg LLP succeeds Rotenberg and Company LLP as the independent registered public accounting firm for Exclusive Apparel, Inc. At no time have there been any disagreements with any accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.




On August 27, 2009, the PCAOB issued PCAOB Release No. 105-2009-006 revoking the registration of Moore & Associates, Chartered and barring Michael J. Moore, CPA, from being an associated person of a registered public accounting firm. The PCAOB imposed these sanctions on the basis of its findings concerning the alleged violations of Moore & Associates, Chartered and Michael J. Moore of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, PCAOB rules and auditing standards in auditing the financial statements, PCAOB rules and quality controls standards, and noncooperation with a Board investigation. A copy of the PCAOB Release can be accessed at the PCAOB website at http:www.pcaobus.org.





ITEM 9A(T)  CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure controls and procedure include, without limitations, controls and procedures designed to ensure that information required to be disclosed by an issurer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.





In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed by the Company’s President, Secretary and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report.  Based on that evaluation, the Company’s sole officer concluded that the Company’s disclosure controls and procedures were not effective in providing reasonable assurance that the information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms.





Management’s Report On Internal Control Over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:





·
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;


·
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and


·
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.





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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.





As of December 31, 2009 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments.  Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below.  This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.





The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes.  The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of December 31, 2009.





Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results.  However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.





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





Management’s Remediation Initiatives





In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:





We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us.  And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.





Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.





ITEM 9B.  CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING





There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





This annual report 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 Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10-K.


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PART III





ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT





The directors and officers as of December 31, 2009, are set forth below.  The directors hold office for their respective term and until their successors are duly elected and qualified.  Vacancies in the existing Board are filled by a majority vote of the remaining directors.  The officers serve at the will of our Board of Directors.





Name
Age
Positions and Offices HeldGeorgette Mathers
56
President/Secretary/Director





BUSINESS EXPERIENCE





Set forth below is the name of our director and officer, all positions and offices held, the period during which he has served as such, and the business experience during at least the last five years:





Georgette Mathers, 56 years of age, President, Chief Executive Officer, Chief Financial Officer, Secretary and Director.





Ms. Mathers is a corporate paralegal and has worked in the legal profession for over 20 years.  Ms. Mathers was appointed to the Board of Directors of the Company on June 11, 2009 and is now the President, Secretary, and Treasurer of the Company.





As of the date of this filing, there has not been any material plan, contract or arrangement (whether or not written) to which Ms. Mathers is a party in connection with this appointment as a director and an officer of this Company.





No transactions occurred in the last two years to which the Company was a party in which Ms. Mathers had or is to have a direct or indirect material interest.





CERTAIN LEGAL PROCEEDINGS





No director, nominee for director, or executive officer has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.





COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT





To date, we have not filed Form 5 for the year ended December 31, 2009.





ITEM 11.  EXECUTIVE COMPENSATION





Since Exclusive Apparel, Inc., Inc.’s incorporation on September 8, 2006, Exclusive Apparel, Inc. has not paid any compensation to any officer, director, or employee.  Exclusive Apparel, Inc. does not have any employment agreements.  The Board of Directors will determine future compensation and, as approved, employment agreements.





No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees.





ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





We have issued a total of 22,000,000 shares of our common stock to the following persons for services:





Name
Number of Total Shares
% of ShareholdingsSharon M. Lynch
22,000,000
59%





The address for Ms. Lynch is 2620 Regatta Drive, Suite 102, Las Vegas, Nevada 89128.





On June 11, 2009, Sharon Lynch, our prior President, resigned as an officer and director of the Company.  Prior to Ms. Lynch’s resignation, she appointed Georgette Mathers as our President, Secretary and Director.  Ms. Lynch transferred all 22,000,000 shares of common stock to Ms. Mathers when she resigned.


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ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





On September 9, 2006 Sharon M. Lynch, President, Secretary, Treasurer, and Director, received 2,000,000 shares of Exclusive Apparel, Inc., Inc. common stock, par value $0.001 per share, for services.





All shares issued to Mrs. Sharon M. Lynch were at a par price per share of $0.001. The price of the common stock issued to Mrs. Sharon M. Lynch was arbitrarily determined and bore no relationship to any objective criterion of value. At the time of the issuance, Exclusive Apparel, Inc. was recently formed or in the process of being formed and possessed no assets.





On September 12, 2006 Sharon M. Lynch, President, Secretary, Treasurer, and Director, received 20,000,000 shares of Exclusive Apparel, Inc., Inc. common stock, par value $0.001 per share, for services.





All shares issued to Mrs. Sharon M. Lynch were at a par price per share of $0.001. The price of the common stock issued to Mrs. Sharon M. Lynch was arbitrarily determined and bore no relationship to any objective criterion of value.  At the time of the issuance, Exclusive Apparel, Inc. possessed no assets.





During the year ended December 31, 2007, the Company purchased $42,000 of inventories from LVNV Apparel, LLC, a company related by common ownership.





During the year ended December 31, 2007, the Company paid consulting fee of $9,500 to an individual related to a stockholder of the Company.





During the years ended December 31, 2009 and 2008 the Company paid consulting fee of $0 and $650, respectively, to an individual related to a stockholder of the Company.





During the year ended December 31, 2008, the Company paid officer’s compensation of $2,000 to its president/ shareholder for services provided.





During the years ended December 31, 2009 and 2008, advance from shareholders were approximately $39,800 and $16,950, respectively.




Exclusive Apparel, Inc., Inc.’s principal office space is free of charge at the present time.  Please refer to the section titled “Description of Property” herein.








PART IV





ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K





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





1.   Financial statements; see index to financial statements and schedules in Item 8 herein.





2    Financial statement schedules; see index to financial statements and schedules in Item 8 herein.





3.   Exhibits:





The following exhibits are filed with this Form 10-K and are identified by the numbers indicated; see index to exhibits immediately following financial statements and schedules of this report.




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EXHIBIT INDEX





3.1   Articles of Incorporation    (1)


3.2   By-laws    (1)





(1)
Incorporated by reference to our Form SB-2 (SEC File No. 333-140305).





ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES





Audit Fees





For the Company's fiscal year ended December 31, 2009, we were billed $7,500 for professional services rendered for the audit and review of our financial statements.





For the Company’s reaudit of fiscal year ended December 31, 2008, we were billed $4,500 for professional services rendered for the reaudit and review of our financial statements.





Tax Fees





For the Company's fiscal years ended December 31, 2009 and 2008, we were billed approximately $0 for professional services rendered for tax compliance, tax advice, and tax planning.





All Other Fees





The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended December 31, 2009 and 2008.



















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SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.








EXCLUSIVE APPAREL, INC.Date: March 26, 2010
By:/s/ Georgette MathersGeorgette MathersChief Executive Officer







Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:




Signature
Title(s)
Date/s/ Georgette Mathers
Chief Executive Officer and Director
March 26, 2010Georgette Mathers
(Principal Executive Officer)/s/ Georgette Mathers
Chief Financial Officer and Director
March 26, 2010Georgette Mathers
(Principal Financial and Accounting Officer)


































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