UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





Form
10-KSB


(Mark
one)





x ANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
fiscal year ended May 31, 2008





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





For the
transition period from ___________ to _____________





Commission
File Number:  000-52007








LID HAIR
STUDIOS INTERNATIONAL, INC


(Name of
small business issuer in its charter)





Nevada
            20-2718075(State
      or other jurisdiction of
            I.R.S.
      Employerincorporation
      or organization)
            Identification
      No.)





Avenida
Atlantica 1260, Apt 801, Rio de Janeiro, RJ Brazil 22021-000


Tel:
604-628-4658 Fax:  425-920-1020


(operating
office)


or


Incorp
Services


3155 East
Patrick Lane, Suite 1, Las Vegas, NV 89120-3481


Tel:
702-866-2500


(Name,
address and telephone number for Agent for Service)





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





Securities
registered under Section 12(g) of the Exchange Act





Common
Shares


(Title of
class)





Check
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 past 12 months (or
for such shorter period that the Registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90
days.    Yes x    No
o




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




Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is 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-KSB
or any amendment to this Form 10-KSB.x  The Company's revenues for
the most recent fiscal year were $70,822.  The aggregate market value
of the voting stock held by non-affiliates of the Company on July 24, 2008 was
$3,714,000.  As of
August 22, 2008 the Company had 9,300,000 issued and outstanding shares of
common stock.
  
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)
 Table of Contents
   PART
      I
                    1Item 1.  Description of
    Business
                    1Item 2. Description of Property
                    3Item 3. Legal Proceedings
                    3Item 4. Submission of Matters to a Vote of Security
      Holders
                    3PART II
                    4Item 5.  Market for Common Equity and Related
      Stockholder Matters
                    4Item 6.  Management’s Discussion and Analysis or
      Plan of Operation
                    4Item 7. Financial Statements
                    9Item 8.  Changes in and disagreements with
      Accountants on Accounting and Financial Disclosure
                    24Item 8A. Controls and Procedures
                    24Item 8B. Other Information
                    25PART
    III
                    25Item 9. Directors, Executive Officers, Promoters and
      Control Persons; Compliance with Section 16(a) of the Exchange
      Act
                    25Item 10. Executive Compensation
                    26Item 11. Security Ownership of Certain Beneficial Owners
      and Management and Related Stockholder Matters
                    27Item 12. Certain Relationships and Related
      Transactions
                    27Item 13. Exhibits
                    27Item 14. Principal Accountant Fees and
    Services
                    28Exhibit 31.1 -
Certifications
                    30Exhibit 32.1 -
Certifications
                    31Exhibit 14.1 – Code of
Ethics
                    32
         
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)
  Part I





Item 1.  Description of Business





Business
Development


Lid Hair
Studios International, Inc. was established on April 20, 2005 in the state of
Nevada.  The company was originally incorporated under the name
Belford Enterprises, Inc. and changed its name to Lid Hair Studios International
Inc. on August 15, 2005. Our operating subsidiary Belford Enterprises B.C. Ltd.,
doing business as Lid Hair Studio was established June 7, 2005, in the City of
Vancouver, British Columbia Canada.  There are no bankruptcies,
receivership, or similar proceedings against the parent or operating
subsidiary.





On June
18, 2005, the company purchased hair salon equipment and the rights to an office
lease from Farideh Jafari in the amount of approximately $39,150 US
($45,000CDN).





On July
4, 2005 we entered into a lease agreement by way of Assignment of Lease by
Tenant with Landlord’s Consent. The lease commenced July 1, 2005 and terminates
June 30, 2015.





Business
of Issuer


We are in
the hair salon and personal services business and provide related personal
services including but not limited to hair cuts, permanents, styling, manicures,
and pedicures.





We
currently employ one manager and two stylists.  Our hours of operation
are Monday to Saturday, 10 a.m. until 6 p.m.  As our client base
expands we expect that we will hire additional stylists and extend our hours of
operation to include early evenings. We consider our employee relations to be
good and to date we have experienced no work stoppages, strikes, or labor
disputes. None of the company’s employees are covered by a collective bargaining
agreement. There are no employee agreements.





Our
clientele base consists of approximately 60% walk-ins and 40% of the
customer-base is from the manager’s and stylists’ previous positions at other
salons.





The
company engaged ADP, a payroll service, to prepare the payroll including
calculating appropriate tax deductions and issuing cheques to staff and Canada
Revenue Agency.  We have contracted the monthly bookkeeping to an
outside source.





Marketing
Strategy


We
continue our marketing activities by distributing flyers and print advertising
in local publications. We will introduce special events during Valentine’s Day
and other holiday and occasion times such as Mother’s Day. We are in the process
of having our salon brochure with price lists printed and we will introduce gift
cards available for purchase.





We rely
on a significant number of walk-ins so offer extended hours of operations when
requested.  We have adequate signage identifying our
business.





Corporate
History


Lid Hair
Studios International, Inc. was established on April 20, 2005 in the state of
Nevada.  The company was originally incorporated under the name
Belford Enterprises, Inc. and changed its name to Lid Hair Studios International
Inc. on August 15, 2005. Our operating subsidiary Belford Enterprises B.C. Ltd.,
doing business as Lid Hair Studio was established June 7, 2005, in the City of
Vancouver, British Columbia Canada.  There are no bankruptcies,
receivership, or similar proceedings against the parent or operating
subsidiary.





On June
18, 2005, the company purchased hair salon equipment and the rights to an office
lease from Farideh Jafari in the amount of approximately $39,150US
($45,000CDN).





On July
4, 2005 we entered into a lease agreement by way of Assignment of Lease by
Tenant with Landlord’s Consent. The lease commenced July 1, 2005 and terminates
June 30, 2015.





Page
1
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


Future
Development Projects


The
Company is actively and pursuing other hair salon locations and opportunities
within the downtown core of Vancouver, Canada.  Currently there are no
specific locations or existing salons identified.





Relevant
Regulations


The
Cosmetologist industry is subject to extensive licensing and regulation by state
and/or Provincial and local departments and bureaus of cosmetology, health,
sanitation, and fire and to periodic review by the state and municipal
authorities for areas in which the salons are located.





Primarily,
the company must comply with very stringent regulations through the British
Columbia Cosmetologist Act imposed on the business and its operations designed
to protect the public or its ability to operate will be restricted. Some
jurisdictions may impose restrictions or licensing requirements on the company’s
salon services and products.  In addition, we are subject to local
land use, zoning, building, planning, and traffic ordinances and regulations in
the selection and acquisition of suitable sites for constructing new
salons.  Delays in obtaining, or denials of, or revocation or temporary
suspension of, necessary licenses or approvals could have a material adverse
impact on our development of salons.





Various
Federal, State and/or Provincial, and local laws affect our business.  The
development and operation of salons depend on a significant extent of the
selection and acquisition of suitable sites.  These sites are subject to
zoning, land use, environmental, traffic, and other regulations of state and
local governmental agencies.  City ordinances or other regulations, or the
application of such ordinances or regulations, could impair our ability to
construct or acquire salons in desired locations and could result in costly
delays.




The delay
or failure to obtain or maintain any licenses or permits necessary for
operations could have a material adverse effect on our business.  In
addition, an increase in the minimum wage rate, employee benefit costs, costs of
installing fixtures or accommodations for handicapped individuals or other costs
associated with employees could adversely affect our business.  We also are
subject laws and regulations that, among other things, may require us to install
certain fixtures or accommodations in new salons or to renovate existing salon
to meet federally mandated requirements.





Products
and Services Offered


Our
principal services include hair cuts, styling, colouring, hi-lites, permanents,
hair straightening, facials, manicures and pedicures.





We offer
a variety of brand name styling aids available for client
purchase.  These include shampoos, conditions, gels, nail polish and
body creams and are displayed in the reception area of the salon.





The
Company’s business strategies include the following aspects:




Concentrate on a
Few Carefully Selected Geographic Markets -The Company’s current market
focus includes the West End in Vancouver and the surrounding areas where the
Company is located. The Company selects markets where clients can walk/bike or
drive to the salon as it is located near residential apartment buildings and
condos as well as several office buildings. There is a higher potential for
walk-ins due to the dense population of the area.





Leverage the
Skills of our Management Team -Lid Hair Studios depends on its
management and leveraging to successfully develop, acquire or reposition
salons.  We have raised additional funds to either acquire existing
salons or create new salons which other organizations may not have the resources
to pursue.





Opportunistically
Acquire Assets -The Company will seek to acquire assets and/or salons
which increase the Company’s penetration in the markets where it has chosen to
concentrate and which exhibit an opportunity to improve or sustain returns
through hair salon services.





Competition


We
compete with a variety of established competitors in this market. As an example
there are 13 Hair Studios on Davie Street, the same street where Lid Hair Studio
is located. These competitors may have longer operating histories, greater name
recognition, established customer bases, and substantially greater financial,
technical and marketing resources than the Company. The Company believes that
the principal factors affecting competition in its proposed market include
degree of name recognition (goodwill), ability to differentiate its salon
service offerings, developing aesthetic and pleasing interiors, maintaining a
high level of  customer  service  and customer
satisfaction,  and  the ability to effectively respond
to


Page
2
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)




changing
customer needs and preferences. Currently, there are no significant proprietary
or other barriers of entry that could keep potential competitors from developing
or acquiring similar salon offerings and providing competing services in the
Company's market. The Company's ability to compete successfully in the Hair
Studio industry will depend in large part on its ability to execute acquisitions
of established salon businesses that have developed a core customer base as a
result of developing a sustainable competitive advantage in the market place in
which they compete by offering market-differentiated food services and
products.




There can
be no assurance that the Company will be able to compete successfully in the
future, or that future competition will not have a material adverse effect on
the business, operating results and financial condition of the
Company.





The hair
salon and personal servicesindustry
in general is highly competitive with respect to price, service, and
quality.  Hair salon and personal services operators also compete for high
traffic sites and qualified hairdressers, personnel and managers.  Our
salon will compete with a large number of other salons, including national and
regional salon chains, as well as with locally owned, independent salons. 
Many of our competitors have greater financial resources, more experience, and
longer operating histories than we possess.





Item 2. Description of Property





Lid Hair
Studio is located at 939 Davie Street, Vancouver, Canada. Davie Street is a high
foot and vehicle traffic area that spans from Vancouver’s West End to
Vancouver’s Yaletown areas (approximately 25 blocks).  The salon is
one-quarter block from the busy corner of Burrard and Davie Streets. Burrard
Street is a main thorough-fare to Vancouver’s downtown business
center.





The salon
is approximately 832 square feet and has four stylist chairs with room to expand
to six chairs.  There is a front reception area with waiting area, a
supply and laundry area, staff area, washroom and a private esthetics
room.  The salon is at street level with a coffee shop on the west
side and alley on east side.  There is a pay parking lot located
behind the salon.





Item 3. Legal Proceedings





We are
not aware of any legal proceedings or pending legal proceedings against us. We
may however be involved, from time to time, in various legal proceedings and
claims incident to the normal conduct of our business.





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





None to
report.
















Page
3
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


Part II





Item 5.  Market for Common Equity and Related
Stockholder Matters





Market
Information


The
company received its trading symbol on April 9, 2007 and the company’s common
stock is presently being traded on the over-the-counter market under the symbol
“LHSI” and is quoted on the OTC Bulletin Board.  For the period indicated,
the following table sets forth the high and low sales prices per share of our
common stock.  These prices represent inter-dealer quotations without
retail markup, markdown, or commission and may not necessarily represent actual
transactions.  During 2006, there was only one day during the year in
which trade was reported: 25,000 common shares at $0.10 per
share.





Year
      ended May 31, 2008:
            High
            LowJune
      1, 2007 to August 31, 2007
            $0.10
            $0.10September
      1, 2007 to November 30, 2007
            $0.10
            $1.95December
      1, 2007 to February 29, 2008
            $1.95
            $2.50March
      31, 2008 to May 31, 2008
            $2.50
            $1.10





Year
      ended May 31, 2007:
            High
            LowJune
      1, 2006 to May 31, 2007
            $0.10
            $0.10





To date,
none of our outstanding shares of common stock are subject to outstanding
options, warrants to purchase or securities convertible into common
stock.   We have agreed to register shares of common stock held
by existing security holders for resale with the exception of Eric Anderson’s
and Mrs. Amber Fallis’s shareholdings. We currently have 46
shareholders.





Holders


As of
July 24, 2008, there were 46 holders of record of Lid Hair Studios
International, Inc., holding 9,300,000 shares.





Dividends


Lid Hair
Studios International, Inc. has not declared, and does not foresee declaring,
any dividends now or in the foreseeable future.





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





The
following discussion should be read in conjunction with our consolidated audited
financial statements and the related notes that appear elsewhere in this report.
The following discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our actual results could differ materially from
those discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
below and elsewhere in this report.





Our
consolidated audited financial statements are stated in United States Dollars
and are prepared in accordance with United States Generally Accepted Accounting
Principles.





Our
operating expenses are classified into several categories:





§
            Sales
      – Gross Profit


§
            Professional
      Fees


§
            Depreciation


§
            Other
      Administrative Expenses





Professional
Fees consist primarily of our contracted accounting, legal, audit and other
professional fees. These amounted to $41,849 for the year ended May 31, 2008 and
$46,890 for the year ended May 31, 2007. Professional fees are attributable
primarily to accounting, legal and audit fees for preparation and review of our
filings with the Securities & Exchange Commission (SEC) in
2008.


Page
4
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


Sales
refer to our gross profit – Sales less Cost of Sales.  Our gross
profit increased from $66,945 for the year ended May 31, 2007 to $73,326 for the
year ended May 31, 2008.





Amortization
and depreciation expense charged to operations was $7,462 and $7,749 in 2008 and
2007, respectively.





Other
Administrative Expenses refers to our wages, director’s fees, office supplies,
telephone expenses, bank charges, fees to process and file documents with the
SEC, stock transfer fees and corporate filing fees with the State of Nevada and
other administrative expenses. These amounted to $101,000 for the year ended May
31, 2008 and $95,641 for the year ended May 31, 2007 respectively. The increase
in 2008 versus 2007 is attributable primarily to an increase in directors’ fees
and other administrative expenses.




Overview


Our
accumulated deficit as of our year ended on May 31, 2008 was $219,751 and as of
May 31, 2007, the accumulated deficit was $142,766.  During the fiscal
year ended May 31, 2008, the deficit increased by $76,985 (2007:
$83,335).  The discussion below provides an overview of our
operations, discusses our results of operations, our plan of operations and our
liquidity and capital resources.





Results
of Operations


Net
revenues increased year over year to $73,326 from $66,945 respectively for the
year ended May 31, 2008 versus May 31, 2007. This increase is the result of
increased customer awareness and usage since the salon opened in August
2005.





We
realized a net loss of $76,985 for the fiscal year ended May 31, 2008, compared
to a net loss of $83,335 for the fiscal year ended May 31, 2007.





We do not
expect our rent expenses to increase next year but expect them to remain at the
current level.





We expect
our depreciation expense to increase in the next year due to the depreciation of
the equipment.





We expect
our other administrative expenses to increase in the next year as our legal fees
may increase as we further our strategic goals and additional advice and/or
opinions may be required.





Due to
the foregoing factors, our operating results are difficult to
forecast.  You should evaluate our prospects in light of the risk,
expenses and difficulties commonly encountered by companies in rapidly evolving
markets.  We cannot assure you that we will successfully address such
risks and challenges.  In addition, even though we have an operational
business with revenues, we cannot assure you that our revenues will increase or
that we will become profitable in the future.





Overview
–June 1, 2007 to May31, 2008


For the
year ended May 31, 2008 we generated revenue of $73,326 and $66,945 for the
previous year ended May 31, 2007. Management expects the vast majority of our
revenue to be generated from operations from future hair salon startups and/or
acquisitions.  Total expenses for the year ended May 31, 2008 were
$150,311 compared to $150,280 for the year ended May 31, 2007. Out of these
total expenses for the year ended May 31, 2008, $41,849 represented professional
fees, $4,746 for supplies, $18,359 rent, $68,957 represent wages and directors’
fees, and $1,720 with the preparation and filing with SEC.





Wages and
directors’ fees increased by $4,143 during the year ended May 31, 2008 from
$64,814 for the year ended May 31, 2007. The increase in wages is consistent
with the increase in revenue.





Liquidity
and Capital Resources


For the
year ended May 31, 2008, cash used by operating activities was $81,840. Cash
used by operating activities for the year ended May 31, 2007 was
$71,121.





No cash
was used or provided by investing activities in the 2007 or 2008 fiscal
years.





Net cash
provided by financing activities for the year ended May 31, 2008 was $10,067.
Cash provided by financing activities for the year ended May 31, 2007 was
$144,382. The change in cash provided by financing activities is due to the
$200,000 received from the issuance of shares and the repayment of a director’s
loan in the 2007 fiscal year, and a director’s loan was received in the 2008
fiscal year.


Page
5
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)




At May
31, 2008 we had $6,917 in cash, compared to $78,629 as at May 31,
2007.





Plan
of Operations


The
Company's primary objective for fiscal year ending May 31, 2009 is to increase
its existing salon sales while controlling costs. We will focus our marketing
efforts on positioning our salon business based on quality services and products
while maintaining affordable pricing for its customers. We intend to build on
the substantial walk-in clientele by hiring additional stylists.




The
Company's other objectives for fiscal 2009 are as follows:




·
            Improve
      customer value by offering a wider range services at a variety of
      prices,


·
            Introduce
      “special occasion” packages for Valentine’s Day, Mother’s Day, Secretary’s
      Day,


·
            Develop
      quality enhancements based on excellent customer service and
      products


·
            Analyze
      our core market and to assess its viability for market growth for
      additional salon locations




Our
ongoing objective is to increase sales through increased services and price
promotions and effective marketing of Lid Hair Studios’ competitive attributes
of quality services and value pricing.





The
Company has plans to fully develop the Vancouver market area in terms of
additional salon locations that will carry the same name. Management estimates
that the Vancouver and surrounding cities will support additional locations
while focusing on brand name recognition of Lid Hair Studios for high quality
service and products and value pricing.  Media advertising is
important to effectively build brand awareness and enhance the positioning of
the Lids Hair Studios in a very competitive Vancouver market. All of our growth
for fiscal 2009 and 2010 will be focused in the Vancouver. These development
plans are highly dependent on the availability of potential sites, lease terms,
financing availability and cost, and availability and quality of management and
staff personnel.





Growth
Strategy


We are
incorporating the following strategy to our future objectives:




·
            Expand
      our salon operations through:


• the
addition and development of additional Lid Hair Studios with additional
locations in our existing market


by
2009;


• the
possible acquisition or development of salons operating under other
names;





·
            Improve
      our profitability by continuing to enhance the salon services for our
      clients and improving operating efficiency of our salon
    brand;





·
            Focus
      on improving efficiency and utilizing creative and aggressive marketing
      initiatives





During
the next twelve months, we intend to continue to make efforts to increase the
number of clients and increase the number of salons. Net income may not be
recognized until 2009 depending on the tenant improvements and commencement of
leases and close dates for sales.





Over the
next twelve months we expect that our number of employees will
increase.  Additional staff will be required when we acquire a salon
or start of a new salon as well fill the remaining chairs in the operating
salon.





We are
currently actively seeking new acquisitions and looking for a suitable location
to start a new salon.





We cannot predict with
certainty what revenues we can expect during the next twelve months, and we
believe that we probably will not have enough revenue, when added to our cash on
hand, to pay our operating expenses for the next twelve months.
Therefore, we anticipate that we will be required to raise additional capital to
pay those expenses. We cannot guarantee that we will be able to raise that
capital, in which event our operations may be required to be
curtailed.


Page
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 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)




Seasonality


Generally
our salon business is not affected by season.  We have regular monthly
clients and walk-in traffic.




Our salon
services including but not limited to cuts, colouring, various hair treatments
and product sales.  Revenue is generated both through sales and hair
services.




Clients


We do not
have a significant concentration of sales with any individual customer and,
therefore, the loss of any one customer would not have a material impact on our
business.




Working
Capital


We had
negative working capital of $17,671 at May 31, 2008 compared to positive working
capital of $44,405 at May 31, 2007.





We fund
the growth of our business through a combination of available cash and cash
equivalents, short-term investments and cash flows generated from operations. In
addition, we raised an additional $200,000 through the sell of 2,000,000 common
shares registered and declared effective May 10, 2006.





Additional
information regarding our "Liquidity and Capital Resources" is included in
Item 6 Management's Discussion and Analysis of Financial Condition and
Results of Operations, of this Annual Report on Form 10-K.





As at May
31, 2008 and May 31, 2007, we had cash and cash equivalents of $6,917 and
$78,629 respectively. Although we believe we are adequately capitalized, based
on the risk factors for a company at our stage of development, we acknowledge we
may need to raise additional capital within the next twelve months.





If cash
generated from operations are insufficient to meet our long-term liquidity
needs, we may need to raise additional funds or seek other financing
arrangements.  Additionally funding may not be available on favorable
terms or at all.





PLAN
OF OPERATIONS




Competitive
Strategy


There are
three major ways in which we will create an advantage over our competitors over
the next twelve months:




·
            Name
      identity, quality service, and value
pricing


·
            high
      employee motivation (bonus
incentives)


·
            innovative
      and aggressive service options.




Operations


Lid Hair
Studios International Inc. commenced daily business operations on August 1, 2005
with the opening of our first salon. In preparation for the opening we leased
space, renovated the space, purchased salon equipment and hired
staff.





Promotion


We expect
to significantly increase our planned expenditures for marketing and promotion
over the next twelve month period. This is essential to increase awareness of
our existing salon.  There are several district newspapers where we
will place advertisements as well as distribute flyers to area
residents.  We expect that promotion expenses will be approximately
$5,000 over the next nine-month period ending February 28, 2009.  The
expenses will be for printing and advertisement placement in local area
newspapers.




Personnel


As of
August 22, 2008, our management and personnel includes our president, Eric S.
Anderson, our salon manager, Mrs. Amber Fallis and one full-time stylist and two
chair renters. Mr. Anderson handles all of the responsibilities in the area of
corporate administration, business development and research. In addition, our
president also provides us with capital raising services. In the twelve months
ending May 31, 2008, we plan to raise our total number of permanent employees to
approximately 4: we will add two more stylists to fill vacant
chairs.  Mrs. Fallis is responsible for the day-to-day operations of
the salon and prepares receipts daily and organizes accounting items for the
accountant.


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 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)




If our
sales and marketing program is successful in growing our sales beyond our
current expectations, we may be required to hire new personnel to meet the
demand and maintain a high level of customer service.




Other
Expenses


We also
incurred expenses unrelated to the business operations including auditing and
legal expenses relating to the preparation of the registration statement and
other required reporting documents. We expect to incur a total of $7,500 in
legal expenses related to the preparation and filing of the registration
statement. Since the effectiveness of our registration statement, we expect our
ongoing legal expenses to be significantly reduced, averaging less than $500 per
month.





Future
Operations


Due to
our lack of business operations and resulting operating deficit, in their report
on our audited consolidated financial statements for the period ended May 31,
2008, our independent auditors included an explanatory paragraph regarding
concerns about our ability to continue as a going concern. Our audited financial
statements contain additional note disclosures describing the circumstances that
lead to this disclosure by our independent auditors. With our salon commencing
business in August 2005, we expect this situation to change over future
operating quarters. However, we may still incur losses as we will be expending
funds for expenses unrelated to the operation of the salon business such as
auditing and legal expenses necessary to file our registration statement and
other reporting documents and to raise capital in the future as
needed.





There are
no assurances that we will be able to obtain further funds required for our
continued operations and expansion plans. We are pursuing various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we may not be able to execute our acquisition and expansion plans as
detailed.





Certain
Relationships and Related Transactions


We intend
that any transactions between us and our officers, directors, principal
stockholders, affiliates or advisors will be on terms no less favorable to us
than those reasonably obtainable from third parties.  To date, several
related party transactions have taken place.





Certain
relationships and related transactions are discussed in detail on page 29 in
section Part III Item 12. Certain Relationships and Related
Transactions.





As
      noted in Note 5 of the Interim Consolidated Financial Statements of May
      31, 2008:





a)
            As
      of May 31, 2008, the amount due to the shareholder of $11,009 (2007: $942)
      is uncollateralized, non-interest bearing and due on
    demand.


b)
            During
      the year, the Company paid directors and officers of the Company $47,605
      (2007: $38,849) in wages and directors’
fees.















Page
8
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)




Item 7. Financial Statements






INDEX TO
FINANCIAL STATEMENTS











LID
HAIR STUDIOS INTERNATIONAL, INC.


(Formerly
Belford Enterprises, Inc.)








CONSOLIDATED
FINANCIAL STATEMENTS





MAY
31, 2008





US
FUNDS







PageReport of Independent Registered Public Accounting
      Firm
            F-2Consolidated
      Financial Statements:Consolidated Balance Sheets
            F-3Consolidated
      Statement of Stockholders’ Equity
            F-4Consolidated
      Statements of Operations
            F-5Consolidated
      Statements of Cash Flows
            F-6Notes to
      Consolidated Financial Statements
            F-7 to F-15




















F-1


Page
9
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)





Report of Independent Registered Public Accounting
Firm








Board of
Directors


Lid Hair
Studios International, Inc.





We have
audited the accompanying balance sheets of Lid Hair Studios International, Inc.,
as of May 31, 2008 and 2007, and the related statements of operations,
stockholders' equity, and cash flows for the two years ended May 31, 2008 and
2007. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the company's internal control
over financial reporting.  Accordingly, we express no such opinion. 
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe 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 Lid Hair Studios International,
Inc. as of May 31, 2008 and 2007, and the results of its operations and cash
flows for the two years ended May 31, 2008 and 2007, 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 described in Note 2, the Company has
a working capital deficit and has recurring losses from operations, which raises
substantial doubt about its ability to continue as a going concern. 
Management's plans in regard to this matter are also discussed in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.








SCHUMACHER
& ASSOCIATES, INC.





Denver,
Colorado


August
15, 2008














F-2


Page
10
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(Formerly
Belford Enterprises, Inc.)


CONSOLIDATED
BALANCE SHEETS     Statement
1


Expressed
in US dollars





ASSETS
            
            May
      31
              2008
            
            
            May
      31
              2007CurrentCash
            
            $
            6,917
            
            
            $
            78,629Inventory
            
            
            1,340
            
            
            
            1,3488,257
            
            
            
            79,977Property and equipment,
      net of depreciation (Note
      7)
            
            
            25,924
            
            
            
            29,422Lease rights,net of
      amortization (Note
      8)
            
            
            12,155
            
            
            
            12,821Prepaid
      expenses and deposits
            
            
            1,512
            
            
            
            8,898$
            47,848
            
            
            $
            131,118LIABILITIESCurrentAccounts
      payable
            
            $
            3,919
            
            
            $
            25,630Accrued
      liabilities
            
            
            11,000
            
            
            
            9,000Due
      to shareholder (Note
      5a)
            
            
            11,009
            
            
            
            94225,928
            
            
            
            35,572Commitments and contingencies(Notes 2, 5,
      6,8 and 9)STOCKHOLDERS’
      EQUITYCapital Stock(Note
      4)Authorized:  75,000,000
      common shares at $0.001 par valueIssued,
      allotted and outstanding:  9,300,000 common
    shares
            
            
            9,300
            
            
            
            9,300Additional
      paid-in capital
            
            
            227,200
            
            
            
            227,200Accumulated
      comprehensive income
            
            
            5,171
            
            
            
            1,812Accumulated
      Deficit
            
            
            (219,751
            )
            
            
            (142,766
            )21,920
            
            
            
            95,546$
            47,848
            
            
            $
            131,118




















See
accompanying notes to consolidated financial statements


F-3


Page
11
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(Formerly
Belford Enterprises, Inc.)


CONSOLIDATED
STATEMENT OF


STOCKHOLDERS’
EQUITY    Statement 2


Expressed
in US dollars




Common
      Stock
            
            
            Additional
              Paid-in
            
            
            
            
            
            Accumulated
              Comprehensive
            
            
            Total
      Stockholders’ EquityShares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            Income
      (Loss)
            
            
            (Deficiency)Balance
      – May 31, 2006
            
            
            7,300,000
            
            
            
            7,300
            
            
            
            29,200
            
            
            
            (59,431
            )
            
            
            (1,297
            )
            
            
            (24,228
            )Shares
      issued for cash July 31, 2006 at $0.10
            
            
            2,000,000
            
            
            
            2,000
            
            
            
            198,000
            
            
            
            -
            
            
            
            -
            
            
            
            200,000Loss
      for the year endedMay
      31, 2007
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (83,335
            )
            
            
            -
            
            
            
            (83,335
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            3,109
            
            
            
            3,109Balance
      – May 31, 2007
            
            
            9,300,000
            
            
            $
            9,300
            
            
            $
            227,200
            
            
            $
            (142,766
            )
            
            $
            1,812
            
            
            $
            95,546Loss
      for the year endedMay
      31, 2008
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (76,985
            )
            
            
            -
            
            
            
            (76,985
            )Foreign
      currency translationadjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            3,359
            
            
            
            3,359Balance
      - May 31, 2008
            
            
            9,300,000
            
            
            $
            9,300
            
            
            $
            227,200
            
            
            $
            (219,751
            )
            
            $
            5,171
            
            
            $
            21,920



































See
accompanying notes to consolidated financial statements


F-4


Page
12
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(Formerly
Belford Enterprises, Inc.)


CONSOLIDATED
STATEMENTS OF OPERATIONS     Statement
3


Expressed
in US dollars




May
      31,
              2008
            
            
            May
      31,
              2007REVENUEHair
      salon services
            
            $
            70,882
            
            
            $
            65,584Retail
      sales
            
            
            6,109
            
            
            
            3,386Cost
      of goods sold
            
            
            (3,665
            )
            
            
            (2,025
            )Gross
      profit from retail sales
            
            
            2,444
            
            
            
            1,361Net
      revenue
            
            
            73,326
            
            
            
            66,945EXPENSESAdvertising
      and promotion
            
            
            96
            
            
            
            405Amortization
      and depreciation
            
            
            7,462
            
            
            
            7,749Directors’
      fees
            
            
            27,300
            
            
            
            23,000Insurance
            
            
            1,109
            
            
            
            950Interest
      and bank charges
            
            
            2,308
            
            
            
            2,176Professional
      fees
            
            
            41,849
            
            
            
            46,890Rent
            
            
            18,359
            
            
            
            16,377Supplies
            
            
            4,746
            
            
            
            3,864Telephone
            
            
            420
            
            
            
            433Transfer
      agent and printing
            
            
            1,720
            
            
            
            3,380Utilities
            
            
            3,285
            
            
            
            3,242Wages
            
            
            41,657
            
            
            
            41,814150,311
            
            
            
            150,280NET
      LOSS FOR THE YEAR
            
            $
            (76,985
            )
            
            $
            (83,335
            )Weighted
      average shares outstanding
            
            
            9,300,000
            
            
            
            8,971,233Loss
      per share
            
            $
            (0.01
            )
            
            $
            (0.01
            )Other Comprehensive
      Loss:Net
      loss for the year
            
            $
            (76,985
            )
            
            $
            (83,335
            )Foreign
      currency translation adjustment
            
            
            3,359
            
            
            
            3,109$
            (73,626
            )
            
            $
            (80,226
            )























See
accompanying notes to consolidated financial statements


F-5


Page
13
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(Formerly
Belford Enterprises, Inc.)


CONSOLIDATED
STATEMENTS OF CASH FLOWS     Statement
4


Expressed
in US dollars




Cash
      Flows from (Used By):
            
            May
      31,
              2008
            
            
            May
      31,
              2007OPERATING
      ACTIVITIESNet
      loss for the year
            
            $
            (76,985
            )
            
            $
            (83,335
            )Items
      not involving cash:Amortization
      and depreciation
            
            
            7,462
            
            
            
            7,749(69,523
            )
            
            
            (75,586
            )Changes
      in non-cash working capital:Prepaid
      expenses and deposits
            
            
            7,386
            
            
            
            (7,536
            )Inventory
            
            
            8
            
            
            
            (466
            )Accounts
      payable and accrued liabilities
            
            
            (19,711
            )
            
            
            12,467(81,840
            )
            
            
            (71,121
            )FINANCING
      ACTIVITIESShares
      issued
            
            
            -
            
            
            
            200,000Due
      to (from) shareholder
            
            
            10,067
            
            
            
            (55,618
            )10,067
            
            
            
            144,382Foreign
      Currency Adjustment
            
            
            61
            
            
            
            1,283Increase
      (decrease) in Cash
            
            
            (71,712
            )
            
            
            74,544Cash
      – Beginning of year
            
            
            78,629
            
            
            
            4,085CASH
      – END OF YEAR
            
            $
            6,917
            
            
            $
            78,629SUPPLEMENTAL
      CASH FLOW INFORMATIONInterest
      paid
            
            $
            -
            
            
            $
            -Income
      taxes paid
            
            $
            -
            
            
            $
            -SUPPLEMENTAL
      SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIESForeign
      currency translation adjustment included in property and
      equipment
            
            $
            3,298
            
            
            $
            1,826Purchase
      of property and equipment funded by shareholder
            
            $
            -
            
            
            $
            -























See
accompanying notes to consolidated financial statements


F-6


Page
14
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2008





1.
            Summary
      of Significant Accounting Policies





This
summary of significant accounting policies of the Company is presented to assist
in understanding the Company's financial statements. The financial statements
and notes are representations of the Company's management who are responsible
for their integrity and objectivity. These accounting policies conform to
generally accepted accounting principles in the United States of America and
have been consistently applied in the preparation of the financial
statements.





Organization
and Description of Business





Belford
Enterprises, Inc. (the “Company”) was incorporated in the State of Nevada on
April 20, 2005.  On August 15, 2005, the Company changed its name to
Lid Hair Studios International, Inc. to reflect its business plan, which is to
open a nationwide chain of hair salons.





On June
7, 2005, the Company incorporated a wholly-owned subsidiary, Belford Enterprises
B.C. Ltd., in the Province of British Columbia, Canada. On June 18, 2005, the
Company, through its subsidiary, purchased hair salon equipment and commenced
operations in the hair salon and personal services business and provides related
personal services including but not limited to hair cuts, permanents, styling,
manicures, and pedicures.





Principles
of Consolidation





The
consolidated financial statements include the accounts of both Lid Hair Studios
International, Inc. and Belford Enterprises B.C. Ltd. All inter-company accounts
have been eliminated in the consolidation.





Cash
and Cash Equivalents





Cash and
cash equivalents consist of highly liquid debt instruments purchased with an
initial maturity of three months or less.





Risks
and Uncertainties





The
Company's operations are subject to significant risks and uncertainties,
including financial, operational and other risks associated with operating an
emerging business, including the potential risk of business
failure.





Concentrations




Financial
instruments that potentially subject the Company to concentrations of credit
risk consist principally of cash and cash equivalents.  At May 31, 2008,
the Company had $3,780 (2007: $2,456) of cash or cash equivalents which are not
insured by agencies of the U.S. Government.









F-7


Page
15
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2008





1.
            Summary of Significant
      Accounting Policies - Continued





Inventory





Inventory
is stated at the lower of cost or market. Cost includes all costs of purchase,
cost of conversion and other costs incurred in bringing the inventory to its
present location and condition, and is calculated using the weighted average
method.





Foreign
Currency Translations





The
Company’s functional currency is the Canadian dollar. The Company’s reporting
currency is the U.S. dollar.  All transactions initiated in other
currencies are re-measured into the functional currency as follows:





Monetary
assets and liabilities at the rate of exchange in effect at the balance sheet
date,


ii)                 Non-monetary
assets and liabilities, and equity at historical rates, and


iii)                 Revenue
and expense items at the average rate of exchange prevailing during the
period.





Gains and
losses on re-measurement are included in determining net income for the
period





Translation
of balances from the functional currency into the reporting currency is
conducted as follows:





Assets
and liabilities at the rate of exchange in effect at the balance sheet
date,


ii)                 Equity
at historical rates, and


iii)                 Revenue
and expense items at the average rate of exchange prevailing during the
period.





Translation
adjustments resulting from translation of balances from functional to reporting
currency are accumulated as a separate component of shareholders’ equity as a
component of comprehensive income or loss.





Long-Lived
Assets





Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets might not be recoverable or at
least at the end of each reporting period. Conditions that would necessitate an
impairment assessment include a significant decline in the observable market
value of an asset, a significant change in the extent or manner in which an
asset is used, or a significant adverse change that would indicate that the
carrying amount of an asset or group of assets is not recoverable. For
long-lived assets to be held and used, management measures fair value based on
quoted market prices or based on discounted estimates of future cash
flows.





F-8


Page
16
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


(NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2008





1.
            Summary of Significant
      Accounting Policies - Continued




Loss
per Share





The
Company computes net loss per common share using SFAS No. 128 "Earnings Per
Share."  Basic loss per common share is computed based on the
weighted average number of shares outstanding for the period. Diluted loss per
share is computed by dividing net loss by the weighted average shares
outstanding assuming all dilutive potential common shares were issued. There
were no dilutive potential common shares at May 31, 2008. The Company has
incurred a net loss and has no potentially dilutive common shares, therefore;
basic and diluted loss per share is the same.  Additionally, for the
purposes of calculating diluted loss per share, there were no adjustments to net
loss.





Advertising





The
Company expenses the cost of advertising when incurred. Advertising expenses are
included with marketing and promotion in selling, general and administrative
expenses in the accompanying statements of operations.





Segment
Reporting





SFAS No.
131, "Disclosures about
Segments of an Enterprise and Related Information", changed the way
public companies report information about segments of their business in their
quarterly reports issued to stockholders. It also requires entity-wide
disclosures about the products and services an entity provides, the material
countries in which it holds assets and reports revenues and its major
customers.





The
Company is currently operating in one geographical segment, being
Canada.





Derivative
Financial Instruments





The
Company was not a party to any derivative financial instruments during the
reported fiscal periods.

















F-9


Page
17
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2008





1.
            Summary of Significant
      Accounting Policies - Continued





Stock-Based
Compensation





The
Company accounts for stock-based compensation issued to employees based on SFAS
No. 123R “Share Based
Payment”. SFAS No. 123R is a revision of SFAS No. 123 “Accounting for Stock-Based
Compensation”, and supersedes APB Opinion No. 25, “Accounting for Stock
Issued to Employees” and its related implementation guidance. SFAS 123R
establishes standards for the accounting for transactions in which an entity
exchanges its equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for goods or
services that are based on the fair value of the entity’s equity instruments or
that may be settled by the issuance of those equity instruments. SFAS 123R
focuses primarily on accounting for transactions in which an entity obtains
employee services in share-based payment transactions. SFAS 123R does not change
the accounting guidance for share-based payment transactions with parties other
than employees provided in SFAS 123 as originally issued and Emerging Issues
Task Force Issue No. 96-18, “Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services”.  SFAS 123R does not address the
accounting for employee share ownership plans, which are subject to AICPA
Statement of Position 93-6, “Employers’ Accounting for Employee
Stock Ownership Plans”.





SFAS 123R
requires a public entity to measure the cost of employee services received in
exchange for an award of equity instruments based on the grant-date fair value
of the award (with limited exceptions). That cost will be recognized over the
period during which an employee is required to provide service in exchange for
the award – the requisite service period (usually the vesting period). SFAS 123R
requires that the compensation cost relating to share-based payment transactions
be recognized in financial statements. That cost will be measured based on the
fair value of the equity or liability instruments issued.





As at May
31, 2008, the Company had no stock-based compensation plans nor had it granted
options to employees.  No stock-based employee compensation cost is
reflected in net loss, as no options had been granted.





Revenue
Recognition





Revenues
are recognized in accordance with SEC Staff Accounting Bulletin (SAB) No. 101,
"Revenue Recognition in
Financial Statements." Under SAB 101, product revenues (or service
revenues) are recognized when persuasive evidence of an arrangement exists,
delivery has occurred (or service has been performed), the sales price is fixed
and determinable and collectibility is reasonably assured.





The
Company's revenues are derived principally from hair styling fees, sales of hair
products and other related charges. Revenue is recognized from services when
performed and billed.










F-10


Page
18
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2008





1.
            Summary of Significant
      Accounting Policies - Continued





Use
of Estimates





The
preparation of the Company's 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 amounts reported in
these financial statements and accompanying notes. Actual results could differ
from those estimates.





Estimated
Fair Value of Financial Instruments





The
carrying values of cash, accounts payable and due to shareholder reflected in
the financial statements approximates their fair value due to the short-term
maturity of the instruments.





Comprehensive
Income (Loss)





The
Company has adopted Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive
Income". SFAS 130 requires that the components and total amounts of
comprehensive income be displayed in the financial statements beginning in
1998.  Comprehensive income includes net income and all changes in
equity during a period that arises from non-owner sources, such as foreign
currency items and unrealized gains and losses on certain investments in equity
securities.





Income
Taxes





The
Company records deferred taxes in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes." The statement requires recognition of deferred tax assets and
liabilities for temporary differences between the tax bases of assets and
liabilities and the amounts at which they are carried in the financial
statements, based upon the enacted tax rates in effect for the year in which the
differences are expected to reverse. A valuation allowance is established when
necessary to reduce deferred tax assets to the amount expected to be
realized.





Start-up
Costs





The
Company has adopted Statement of Position No. 98-5 ("SOP 98-5"), "Reporting the Costs of Start-Up
Activities." SOP 98-5 requires that all non-governmental entities expense
the cost of start-up activities, including organizational costs as those costs
are incurred.





Other





The
Company's fiscal year end is May 31.





The
Company paid no dividends during the year presented.





The
Company’s operating assets are principally located in Canada.





F-11


Page
19
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2008





2.
            Basis
      of Presentation - Going Concern





The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America,
assuming that the Company will continue as a going concern, which contemplates,
among other things, the realization of assets and satisfaction of liabilities in
the normal course of business. As of May 31, 2008, the Company has a working
capital deficit and had recurring losses from operations totaling
$219,751.  The Company intends to fund operations through equity
financing arrangements, which may be insufficient to fund its capital
expenditures, working capital and other cash requirements for the year ending
May 31, 2009.




In
response to these problems, management has taken the following
actions:




·
            The
      Company’s SB-2 Registration Statement has become effective,
      and


·
            Management
      intends to raise additional funds through public or private placement
      offerings.




There is
no assurance that the Company will be able to raise sufficient funds to complete
its business plan.  As a result of the foregoing, there exists
substantial doubt about the Company’s ability to continue as a going
concern.  The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.





3.
            Recent
      Accounting Pronouncements





There
were various accounting standards and interpretations issued during 2008 and
2007, none of which are expected to have a material impact on the Company’s
consolidated financial position, operations or cash flows.





4.
            Capital
      Stock





a)  
      On May 11, 2005, the Company issued 5,000,000 common shares at $0.005 to
      its sole shareholder for $25,000. These shares were issued during the
      period ended May 31, 2005.b)  
      On June 20, 2005, the Company issued 2,300,000 common shares at $0.005 per
      share to various shareholders for total cash consideration of
      $11,500.




c)  
      On July 31, 2006, the Company issued 2,000,000 common shares at $0.10 per
      share to various shareholders for total cash consideration of
      $200,000.














F-12


Page
20
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2008





5.
            Related
      Party Balances and Transactions





a)
            As
      of May 31, 2008, the amount due to shareholder of $11,009 (2007: $942) is
      uncollateralized, non-interest bearing and due on
  demand.





b)
            During
      the year, the Company paid directors and officers of the Company $47,605
      (2007: $38,849) in wages and directors’
fees.





6.
            Commitments





On July
4, 2005, the Company, through its wholly owned subsidiary, as the assignee,
signed an agreement for the assignment of lease by tenant with landlord’s
consent.  The lease is personally guaranteed by the President of the
Company.  The assigned lease was amended and renewed by the previous
tenant on July 1, 2005 for an additional term of nine (9) years commencing on
July 1, 2006 and ending on June 30, 2015.  The monthly rental payments
from July 1, 2005 to June 30, 2015 are as follows:





Periods
            
            Monthly
      Rental PaymentJuly
      1, 2005 to June 30, 2006
            
            $1,407July
      1, 2006 to June 30, 2009
            
            $1,407July
      1, 2009 to June 30, 2015
            
            $1,543





Future
minimum lease payments are as follows:




Year
      ending May 31,
            
            Future
      minimum lease payments2009
            
            $17,0202010
            
            $18,5162011
            
            $18,5162012
            
            $18,516Thereafter
            
            $57,091$129,659

















F-13


Page
21
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2007





7.
            Property
      and Equipment





The
Company applies the following depreciation policies:




Leasehold
      improvements
              
              9 years
      straight lineFurniture and
      equipment
              
              20% declining
      balance over 5 yearsComputer
      equipment
              
              30% declining
      balance over 3 years


2008
            
            
            2007Cost
            
            
            Accumulated
              Depreciation
            
            
            Net
              Book
      Value
            
            
            Cost
            
            
            Accumulated
              Depreciation
            
            
            Net
              Book
      ValueLeasehold
      improvements
            
            $
            10,970
            
            
            $
            3,047
            
            
            $
            7,923
            
            
            $
            10,140
            
            
            $
            1,690
            
            
            $
            8,450Furniture
      and equipment
            
            
            29,427
            
            
            
            12,478
            
            
            
            16,949
            
            
            
            27,200
            
            
            
            7,616
            
            
            
            19,584Computer
      equipment
            
            
            2,521
            
            
            
            1,469
            
            
            
            1,052
            
            
            
            2,330
            
            
            
            942
            
            
            
            1,388$
            42,918
            
            
            $
            16,994
            
            
            $
            25,924
            
            
            $
            39,670
            
            
            $
            10,248
            
            
            $
            29,422





8.
            Lease
      Rights





On June
18, 2005, the Company entered into an Agreement of Purchase and Sale of
Equipment to purchase furniture and equipment and obtain an assignment of lease
for approximately $40,000 ($45,000 Canadian $).  According to FASB
141, the purchase price was allocated first to the fair market value of the
fixed assets, and then to the intangible rights to the lease received. A total
of $25,403 was allocated to furniture and equipment, and the balance of $14,375
to lease rights. The lease rights are being amortized over ten years through
June 30, 2015, the remaining life of the lease. Amortization expense for the
year ended May 31, 2008 was $1,680 (2007: $1,499). The net book value of the
lease rights at May 31, 2008 was $12,155 (2007: $12,821).





Estimated
future amortization expense:




Year
      ending May 31,
            
            Future
      estimated amortization expense2009
            
            $1,4382010
            
            $1,4382011
            
            $1,4382012
            
            $1,438Thereafter
            
            $6,403$12,155

















F-14


Page
22
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


LID
HAIR STUDIOS INTERNATIONAL, INC.


(FORMERLY
BELFORD ENTERPRISES, INC.)


NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS


US
FUNDS
 YEAR
ENDED MAY 31, 2008





9.
            Income
      Taxes





The
Company is subject to foreign and domestic income taxes.  The Company
has had no income, and therefore has paid no income tax.





Deferred
income taxes arise from temporary timing differences in the recognition of
income and expenses for financial reporting and tax purposes. The Company’s
deferred tax assets consist entirely of the benefit from net operating loss
(NOL) carryforwards. The net operating loss carry forwards expire in various
years through 2028.  The Company’s deferred tax assets are offset by a
valuation allowance due to the uncertainty of the realization of the net
operating loss carryforwards. Net operating loss carryforwards may be further
limited by a change in company ownership and other provisions of the tax
laws.





The
Company’s deferred tax assets, valuation allowance, and change in valuation
allowance are as follows:





Year
      Ending
            
            Estimated
              NOL
      Carry-forward
            
            NOL
      Expires
            
            Estimated
      Tax Benefit from NOL
            
            Valuation
      Allowance
            
            Change
      in Valuation Allowance
            
            Net
      Tax BenefitMay
      31, 2007
            
            142,766
            
            various
            
            35,691
            
            (35,691)
            
            (20,833)
            
            -May
      31, 2008
            
            219,751
            
            various
            
            54,938
            
            (54,938)
            
            (19,247)
            
            -




Income
taxes at the statutory rate are reconciled to the Company’s actual income taxes
as follows:




Income
      tax benefit at statutory rate resulting from net operatingloss
      carryforward
            
            (25%)Deferred
      income tax valuation allowance
            
            25%Actual
      tax rate
            
            0%




















F-15





Page
23
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)




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





There
have been no disagreements on accounting and financial disclosures from the
inception of the Company through to the date of this Report.





Item 8A. Controls and Procedures





Evaluation
of Disclosure Controls and Procedures





The
Company maintains disclosure controls and procedures that are designed to ensure
that information required to be disclosed in the Company's Exchange Act reports
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-15(e). The Company’s disclosure controls
and procedures are designed to provide a reasonable level of assurance of
reaching the Company’s desired disclosure control objectives. In designing and
evaluating the disclosure controls and procedures, management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.  The
Company’s certifying officer has concluded that the Company’s disclosure
controls and procedures are effective in reaching that level of
assurance.





As of the
end of the period being reported upon, the Company carried out an evaluation,
under the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and the Company's Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective.





Management's Report on
Internal Control over Financial Reporting




Management
of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Section 13a-15(f) of the
Securities Exchange Act of 1934, as amended). Internal control over financial
reporting is a process designed by, or under the supervision of, the Company's
CEO who is also the company’s CFO to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of the Company's
financial statements for external reporting purposes in conformity with U.S.
generally accepted accounting principles and include those policies and
procedures that (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and disposition
of the assets of the company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and
(iii) 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.




As of May
31, 2008, management conducted an assessment of the effectiveness of the
Company's internal control over financial reporting based on the framework
established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on the
criteria established by COSO management concluded that the Company's internal
control over financial reporting was not effective as of May 31, 2008, as a
result of the identification of the material weakness described
below.




A
material weakness is a deficiency or combination of deficiencies in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the annual or interim financial statements will
not be prevented or detected on a timely basis.




Our
management, including our chief executive officer who is also chief financial
officer, does not expect that our disclosure controls and procedures or our
internal control over financial reporting will prevent or detect all errors and
all fraud. A control system, no matter how well designed and operated, can
provide only reasonable, not absolute, assurance that the control system's
objectives will be met. Further, the design of a control system must reflect the
fact that there are


Page
24
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Controls can also be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. Over
time, controls may become inadequate because of changes in conditions or
deterioration in the degree of compliance with associated policies or
procedures. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.





The
Company's management has identified a material weakness in the effectiveness of
internal control over financial reporting related to a shortage of resources in
the accounting department required to close its books and records effectively at
each reporting date, obtain the necessary information from operational
departments and to complete the work necessary to file its financial
reports timely.




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 Exchange Commission that
permit  the company to provide only management’s report in this annual
report.





Recent
Accounting Pronouncements


The
following is disclosure regarding recent accounting pronouncements and their
effect or potential effect on the Company’s financial statements.





The
Company adopted Statement of Position No. 98-5 (“SOP 98-5”), “Reporting the
Costs of Start-Up Activities.” SOP 98-5 requires that all non-governmental
entities expense the cost of start-up activities, including organizational costs
as those costs are incurred.





The
Company adopted Statement of Financial Accounting Standards (“FAS”) No. 130,
“Reporting Comprehensive Income”. FAS No.130 requires that the components and
total amounts of comprehensive income be displayed in the financial statements.
Comprehensive income includes net income and all changes in equity during a
period that arises from non-owner sources, such as foreign currency items and
unrealized gains and losses on certain investments in equity securities. The
Company’s components of comprehensive income (loss) consist of a net
loss.





In
December 1999, The United States Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements."  SAB 101 summarized certain of the SEC's views
regarding the application of generally accepted accounting principles to revenue
recognition in financial statements. In June 2000, the SEC amended SAB 101 to
require companies with fiscal years beginning after December 15, 1999 to
implement the provisions of SAB 101 no later than the fourth fiscal quarter. The
Company adopted the provisions of SAB 101 at its inception. The Company does not
believe that the adoption has any material effect on its financial
statements.





Item 8B. Other Information





None to
Report.




Part III





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





The
following table sets forth certain information as of August 22,
2008.





Executive
Compensation





The
following table sets forth the salaries and directors’ fees we expect to pay to
our executives on an annual basis.


Page
25
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)




Person
            Age
            Position
            TermMr.
      Eric Steven Anderson (1)
            40
            President
      & Director
            1
      YearMrs.
      Amber Fallis (2)
            34
            Manager
      & Director
            1
      Year





(1)
            Mr.
      Eric Steven Anderson is the President and Director of Lid Hair Studios
      International, Inc.;


(2)
            Mrs.
      Amber Fallis is the Manager and Director of Lid Hair Studios
      International, Inc.





We do not
have an audit committee, nor do we have a compensation committee.  We
anticipate forming these committees at a future Board of Directors’
meeting.





Chairman,
Chief Executive Officer, President, Chief Financial Officer and Chief Accounting
Officer


Eric Steven Anderson was born
February 1967, in Canada. Mr. Anderson in addition to his obligations at Lid
Hair Studios, is a Subway Restaurant franchisee from October 2004 to
present.  Prior to October 2004, Mr. Anderson was the proprietor of a
personal fitness training company, “Physical Intensity” based in Vancouver,
Canada since November 1995.  During this same period, Mr. Anderson
held positions at different nightclubs in Vancouver, Canada:  November
1995 – August 1998 – Bartender at Big Bam Boo, Vancouver; August 1998 – January
2000 – Manager at On the Rox, Vancouver; January 2000 – August 2002 – Bartender
at Au Bar, Vancouver.





Mr.
Anderson resides in Rio de Janeiro, Brazil however he has daily contact with the
Lid Hair Studios on a daily basis via telephone, email and fax.





Director,
Manager


Mrs. Amber Fallis was born
November 1972, in Canada. Mrs. Fallis is employed as full-time permanent
Manager/Stylist of Lid Hair Studios International, Inc. since July
2005.  Prior to her employment with our company Mrs. Fallis was
employed with New Mondo for Hair and Spa in Vancouver as a full-time stylist
from 1999 to 2004 when she was promoted to Salon Coordinator while continuing
her position as stylist.  Mrs. Fallis remained with New Mondo until
June 2005.  Mrs. Fallis was employed with Elizabeth Arden Red Door
Salon & Spa in Vancouver from 1997 to 1998 as a full-time
stylist.  Mrs. Fallis was also a free-lance stylist during this
time.  From 1995 to 1997 Mrs. Fallis was employed with Beauty Club in
Vancouver as full-time stylist and had a second position with Scrunch Hair
Studio in 1997 employed as a stylist.





Mrs.
Fallis resides in Vancouver, Canada





Compliance
with Section 16(a) of Securities Exchange Act of 1934





During
the fiscal year ended May 31, 2008, our Directors and Officers complied with all
applicable Section 16(a) filing requirements. This statement is based solely on
a review of the copies of such reports that reflect all reportable transactions
furnished to us by our Directors and Officers and their written representations
that such reports accurately reflect all reportable transactions.




Item 10. Executive Compensation





The
following table sets forth the salaries and directors’ fees paid to our
executives on an annual basis.




Executive
Compensation





The
following table sets forth the salaries and directors’ fees we expect to pay to
our executives on an annual basis.




Person
            Position
            Salary
            Directors’
      feesMr.
      Eric Steven Anderson(1)
            President
      & Director
            $0.00
            $0.00Mrs.
      Amber Fallis(2)
            Manager
      & Director
            $24,197
      ($24,000CDN)
            $18,000


(1)
              Mr.
      Eric Steven Anderson is the President and Director of Lid Hair Studios
      International, Inc.;
 (2)
              Mrs.
      Amber Fallis is the Manager and Director of Lid Hair Studios
      International, Inc.
 We do not
have an audit committee, nor do we have a compensation committee. We anticipate
forming these committees at a future Board of Directors’
meeting.
  Page
26
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


Person
            
            Director’s
              Position
            
            Stock
      Based
              Salary
            
            
            Fees
            
            
            Compensation
            
            
            Total2007
            
            
            2008
            
            
            2007
            
            
            2008
            
            
            2007
            
            
            2008
            
            
            2007
            
            
            2008Eric
      Steven Anderson
            
            Chair,
      CEO, CFO, CAO
            
            $
            0
            
            
            $
            0
            
            
            $
            20,000
            
            
            $
            8,500
            
            
            $
            0
            
            
            $
            0
            
            
            $
            20,000
            
            
            $
            8,500Mrs.
      Amber Fallis
            
            Director,
      Manager
            
            $
            0
            
            
            $
            0
            
            
            $
            3,000
            
            
            $
            18,800
            
            
            $
            15,849
            
            
            $
            20,305
            
            
            $
            18,849
            
            
            $
            39,105





We
currently have two directors.





As of May
31, 2008, there are no other arrangements, standard or otherwise, with any
director or officer wherein the director or officer is compensated other than as
stated above.





We intend
to do one or a combination of the following to compensate our employees,
officers and directors so that they are retained and so that we can attract
qualified personnel as we deem appropriate.





Develop a
stock option plan and have our employees, officers and directors opt in to the
plan at their choosing; and/or issue shares to our employees, officers and
directors.





We do not
have an audit committee or a compensation committee.




Item 11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters





On July
31, 2006, the company accepted 9 subscription agreements for the sale of
2,000,000 shares registered under the SB-2 Registration Statement which was
declared effective May 10, 2006.  The shares were issued by resolution
on July 31, 2006.





The
following table sets forth, as of  August 22, 2008, certain
information as to shares of our common stock owned by (i) each person known by
us to beneficially own more than 5% of our outstanding common stock, (ii) each
of our directors, and (iii) all of our executive officers and directors as a
group:




NAME
            
            AMOUNT
      AND NATURE
              OF
      BENEFICIAL SHARES
              OWNED
            
            PERCENT
      OF
              OUTSTANDING
              OWNERSHIPEric
      Steven Anderson
            
            5,000,000
      common shares
            
            53.76%Mrs.
      Amber Fallis
            
            160,000
            
            1.72%


_____________


Mr.
Anderson’s and Ms. Warren’s shares are not registered.





Item 12.Certain Relationships and Related
Transactions





We intend
that any transactions between us and our officers, directors, principal
stockholders, affiliates or advisors will be on terms no less favorable to us
than those reasonably obtainable from third parties.  To date, several
related party transactions have taken place.





Item 13.Exhibits





EXHIBITS


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27
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


(a)       Audited
Consolidated Financial Statements (included in Part 11 of this
Report):





Auditor’s
Report


Consolidated
Balance Sheet – May 31, 2008


Consolidated
Statements of Operations and Deficit – May 31, 2008


Consolidated
Statements of Cash Flows – May 31, 2008


Consolidated
Statement of Stockholders’ Equity – May 31, 2008


Notes
to Consolidated Financial Statements – May 31, 2008





(b)     
None.





(c)     
Exhibit




14.1
            Code of Ethics31.1
            Certification of Chief Executive Officer and
      Chief Financial Officer and Chief Accounting
Officer32.1
            Certification of Chief Executive Officer, Chief
      Financial Officer and Chief Accounting
  Officer





Item 14.Principal Accountant Fees and Services.





Our audit
fees have remained consistent the last two years. However, we are aware that
audit fees have generally increased as a function of the increased reporting
requirements mandated by the enacted Sarbanes-Oxley Act.  We are also
optimistic that our business activities will increase, which will require
auditing procedures over a greater transaction base.





AUDIT
FEES.   The aggregate fees billed by our auditors for
professional services rendered for the audits of our annual financial statements
for the fiscal years ended May 31, 2008 and 2007 and for the reviews of the
financial statements included in our Quarterly Reports on Form 10-QSB during the
fiscal year ended May 31, 2008 and 2007 were $13,000 and $12,500
respectively.





AUDIT
RELATED FEES.  We did not incur any fees to auditors for audit related
fees during the fiscal years ended May 31, 2008 and 2007.





TAX
FEES.  We did not incur any fees to auditors for tax compliance, tax
advice or tax compliance services during the fiscal years ended May 31, 2008 and
2007.





ALL OTHER
FEES.  We did not incur any other fees billed by auditors for services
rendered to our Company, other than the services covered in “Audit Fees”
for  the fiscal years ended May 31, 2008 and 2007.












Page
28
 Table of Contents
 LID
HAIR STUDIOS INTERNATIONAL, INC.
 (Formerly
Belford Enterprises, Inc.)


SIGNATURES





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





LID
      HAIR STUDIOS INTERNATIONAL, INC.
                (Registrant)By:
              /s/ Eric
      Steven AndersonEric
      Steven AndersonChief
      Executive Officer, Chief Financial Officer, Chief
      Accounting OfficerDate
              August
      22, 2008
















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