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 December 31, 2007




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




For the
transition period from ___________ to ___________




Commission
File No. 000-51880




HSM
Holdings, Inc.


(Name of
small business issuer in its charter)




DELAWARE(State
      or other jurisdiction of
              incorporation
      or organization)
            (IRS
      Employer Identification No.)




4400
      Route 9 South, #1000, Freehold, New Jersey
            07728(Address
      of principal executive offices)
            (Zip
      Code)




(732)
446-0546


(Registrant’s
telephone number, including area code)




Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class registered:
            Name
      of each exchange on which registered:None
            NoneSecurities
      registered under Section 12(g) of the Exchange Act:Common
      Stock, par value $.001
              (Title
      of class)




Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during he preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yesx Noo




Indicate by check mark whether the
registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yesx Noo




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




Revenues
for year ended December 31, 2007 $0




Aggregate
market value of the voting common stock held by non-affiliates of the registrant
as of December 31, 2007 was: $0




Number of
shares of the registrant’s common stock outstanding as of March 31, 2007 was:
10,000,000




Transitional Small Business Disclosure
Format: Yeso Nox






Table of Contents





TABLE OF CONTENTS




PART
      I
            
            1ITEM 1.
            DESCRIPTION OF BUSINESS
            1ITEM 2.
            DESCRIPTION OF PROPERTY
            2ITEM 3.
            LEGAL PROCEEDINGS
            2ITEM 4.
            SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
            2PART
      II
            
            3ITEM 5.
            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS
            3ITEM 6.
            MANAGEMENT’S DISCUSSION OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS
            4ITEM 7.
            FINANCIAL STATEMENTS AND SUPPLEMENTARY
    DATA
            F-ITEM 8.
            CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURES
            6ITEM 8A.
            CONTROLS AND PROCEDURES
            6PART
      III
            
            7ITEM 9.
            DIRECTORS AND EXECUTIVE OFFICERS OF THE
      REGISTRANT
            7ITEM 10.
            EXECUTIVE COMPENSATION
            8ITEM 11.
            SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT
            9ITEM 12.
            CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS
            9PART
      IV
            
            10ITEM 13.
            EXHIBITS LIST AND REPORTS ON FORM 8-K
            10ITEM 14.
            PRINCIPAL ACCOUNTANT FEES AND SERVICES
            10SIGNATURES






Table of Contents




PART
I




ITEM
1. DESCRIPTION OF
BUSINESS




General




HSM
Holdings, Inc. was incorporated on December 9, 2005 under the laws of the State
of Delaware to engage in any lawful corporate undertaking, including, but not
limited to, selected mergers and acquisitions. We have been in the developmental
stage since inception and have no operations to date other than issuing shares
to our original shareholder.




On
September 19, 2006, pursuant to the terms of a Stock Purchase Agreement, Anthony
Hu and Robert Young purchased a total of 100,000 shares of the issued and
outstanding common stock of 4304, Inc. from Michael Raleigh, the sole officer,
director and shareholder of the Company. Pursuant to the Stock Purchase
Agreement, the following changes to the Company's directors and officers have
occurred:




o
            As
      of September 19, 2006, Anthony Hu was appointed to the Board of Directors
      of the Company.o
            Michael
      Raleigh then resigned as a member of the Company's Board of Directors and
      as the Company's President, Chief Executive Officer, Chief Financial
      Officer, Chairman of the Board and Secretary, effective September 19,
      2006.o
            Also
      as of September 19, 2006, Anthony Hu was appointed as the Company's
      President, Chief Executive Officer, and Chairman of the Board and Simone
      Crighton was appointed the Company's Chief Financial
    Officer.




In
connection with the change in control, the Company changed its executive offices
to P.O. Box 527531, Flushing, N.Y. 11352, and changed the name of the Company to
HSM Holdings, Inc.




We will
attempt to locate and negotiate with a business entity for the combination of
that target company with us. The combination will normally take the form of a
merger, stock- for-stock exchange or stock-for-assets exchange. In most
instances the target company will wish to structure the business combination to
be within the definition of a tax-free reorganization under Section 351 or
Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can
be given that we will be successful in locating or negotiating with any target
company.




We have
been formed to provide a method for a foreign or domestic private company to
become a reporting (“public”) company whose securities are qualified for trading
in the United States secondary market.




Perceived
Benefits




There are
certain perceived benefits to being a reporting company with a class of
publicly- traded securities. These are commonly thought to include the
following:




-
            a
      company for which a primary purpose of becoming public is the use of its
      securities for the acquisition of assets or businesses;-
            a
      company which is unable to find an underwriter of its securities or is
      unable to find an underwriter of securities on terms acceptable to
      it;-
            a
      company which wishes to become public with less dilution of its common
      stock than would occur upon an underwriting;-
            a
      company which believes that it will be able to obtain investment capital
      on more favorable terms after it has become public;-
            a
      foreign company which may wish an initial entry into the United States
      securities market;-
            a
      special situation company, such as a company seeking a public market to
      satisfy redemption requirements under a qualified Employee Stock Option
      Plan;-
            a
      company seeking one or more of the other perceived benefits of becoming a
      public company.






1
 Table of Contents




Potential Target
Companies




A
business entity, if any, which may be interested in a business combination with
us may include the following:




-
            a
      company for which a primary purpose of becoming public is the use of its
      securities for the acquisition of assets or businesses;-
            a
      company which is unable to find an underwriter of its securities or is
      unable to find an underwriter of securities on terms acceptable to
      it;-
            a
      company which wishes to become public with less dilution of its common
      stock than would occur upon an underwriting;-
            a
      company which believes that it will be able to obtain investment capital
      on more favorable terms after it has become public;-
            a
      foreign company which may wish an initial entry into the United States
      securities market;-
            a
      special situation company, such as a company seeking a public market to
      satisfy redemption requirements under a qualified Employee Stock Option
      Plan;-
            a
      company seeking one or more of the other perceived benefits of becoming a
      public company.




A
business combination with a target company will normally involve the transfer to
the target company of the majority of our issued and outstanding common stock,
and the substitution by the target company of its own management and board of
directors.




No
assurances can be given that we will be able to enter into a business
combination, as to the terms of a business combination, or as to the nature of
the target company.




Employees




We have
no full time employees. Our president has agreed to allocate a portion of his
time to the activities of the Company, without compensation. The president
anticipates that our business plan can be implemented by his devoting no more
than 10 hours per month to the business affairs of the Company and,
consequently, conflicts of interest may arise with respect to the limited time
commitment by such officer.




ITEM
2. DESCRIPTION OF
PROPERTY




We have
no properties and at this time have no agreements to acquire any properties. We
currently use the offices of management at no cost to us. Management has agreed
to continue this arrangement until we complete an acquisition or
merger.




ITEM
3. LEGAL
PROCEEDINGS




We are
not presently parties to any litigation, nor to our knowledge and belief is any
litigation threatened or contemplated.




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




None.






2
 Table of Contents




PART
II





ITEM
5. MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS




No Public Market for Common
Stock




There is
no trading market for our Common Stock at present and there has been no trading
market to date. There is no assurance that a trading market will ever develop
or, if such a market does develop, that it will continue.




The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a “penny stock,” for purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require: (i)
that a broker or dealer approve a person’s account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person’s account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience  and objectives of the person; and
(ii) make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.




Holders




There are
three holders of our Common Stock. The issued and outstanding shares of our
Common Stock were issued in accordance with the exemptions from registration
afforded by Section 4(2) of the Securities Act of 1933.




Dividends




Since
inception we have not paid any dividends on our common stock. We currently do
not anticipate paying any cash dividends in the foreseeable future on our common
stock, when issued pursuant to this offering. Although we intend to retain our
earnings, if any, to finance the exploration and growth of our business, our
Board of Directors will have the discretion to declare and pay dividends in the
future.




Payment
of dividends in the future will depend upon our earnings, capital requirements,
and other factors, which our Board of Directors may deem relevant.




Recent Sales of Unregistered
Securities




None.






3
 Table of Contents




Equity Compensation Plan
Information





The
following table sets forth certain information as of March 31, 2008, with
respect to compensation plans under which our equity securities are authorized
for issuance:




(a)
            (b)
            (c)_________________
            _________________
            _________________Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
            Weighted-average
      exercise price of outstanding options, warrants and rights
            Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))Equity
      compensation
            NonePlans
      approved bySecurity
      holdersEquity
      compensation
            NonePlans
      not approvedBy
      security holdersTotal




ITEM
6. MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS




Plan of
Operation




The
Registrant is continuing its efforts to locate a merger Candidate for the
purpose of a merger. It is possible that the registrant will be successful in
locating such a merger candidate and closing such merger. However, if the
registrant cannot effect a non-cash acquisition, the registrant may have to
raise funds from a private offering of its securities under Rule 506 of
Regulation D. There is no assurance the registrant would obtain any such equity
funding.




Results of
Operation




The
Company did not have any operating income from inception (December 9, 2005)
through December 31, 2007, the registrant recognized a net loss of $11,350 in
2006 and $3,250 in 2007. Some general and administrative expenses from inception
were accrued. Expenses from inception were comprised of costs mainly associated
with legal, accounting and office.





Liquidity and Capital
Resources




At
December 31, 2007 the Company had no capital resources and will rely upon the
issuance of common stock and additional capital contributions from shareholders
to fund administrative expenses pending acquisition of an operating
company.




Management
anticipates seeking out a target company through solicitation. Such solicitation
may include newspaper or magazine advertisements, mailings and other
distributions to law firms, accounting firms, investment bankers, financial
advisors and similar persons, the use of one or more World Wide Web sites and
similar methods. No estimate can be made as to the number of persons who will be
contacted or solicited. Management may engage in such solicitation directly or
may employ one or more other entities to conduct or assist in such solicitation.






4
 Table of Contents






Management
and its affiliates will pay referral fees to consultants and others who refer
target businesses for mergers into public companies in which management and its
affiliates have an interest. Payments are made if a business combination occurs,
and may consist of cash or a portion of the stock in the Company retained by
management and its affiliates, or both.




Anthony
Hu and Robert Young will supervise the search for target companies as potential
candidates for a business combination. Anthony Hu and Robert Young will pay, as
their own expenses, any costs they incur in supervising the search for a target
company. Anthony Hu may enter into agreements with other consultants to assist
in locating a target company and may share stock received by it or cash
resulting from the sale of its securities with such other consultants. Anthony
Hu controls us and therefore have the authority to enter into any agreement
binding us. Anthony Hu as our sole officer, director and only shareholder can
authorize any such agreement binding us.




ITEM
7. FINANCIAL
STATEMENTS





5
 Table of Contents




HSM
Holdings, Inc.
 (a
development stage company)
  FINANCIAL STATEMENTS
  As
Of December 31, 2007 and 2006
   INDEPENDENT AUDITORS REPORT
              F-1BALANCE SHEET
              F-2STATEMENT OF OPERATIONS
              F-3STATEMENT
      OF STOCKHOLDERS' EQUITY
              F-4STATEMENT
      OF CASH FLOWS
              F-5FINANCIAL
      STATEMENT FOOTNOTES
              F-6
 
 
 Table of Contents
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTING FIRM
 
 The Board
of Directors and Shareholders
 HSM
Holdings, Inc.
   To the
board of directors and stockholders:
 
 We
have audited the accompanying balance sheet of HSM Holdings, Inc. as of December
31, 2007 and 2006  and the related statements of operations,
stockholder’s equity and cash flows for the twelve months ending December 31,
2007 and 2006. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on the audit.
 
 We
conducted the audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). These standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that the audit provides 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 HSM Holdings, Inc. as of December
31, 2007 and 2006, and the results of operations and its cash flows for the
twelve months ending December 31, 2007 and 2006, in conformity with U.S.
generally accepted accounting principles.
 
 
 Gately
& Associates, LLC
 Altamonte
Springs, Florida
 February
1, 2008
 
 
 F-1
 Table of Contents
  HSM
      Holdings, Inc.(a
      development stage company)BALANCE
      SHEETAs
      of December 31, 2007 and December 31, 2006ASSETSCURRENT
      ASSETS
                  
                  12/31/2007
                  
                  
                  12/31/2006Cash
                  
                  $
                  -
                  
                  
                  $
                  -Total
      Current Assets
                  
                  
                  -
                  
                  
                  
                  -TOTAL
      ASSETS
                  
                  $
                  -
                  
                  
                  $
                  -LIABILITIES AND
      STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccrued
      Expenses
                  
                  $
                  5,000
                  
                  
                  $
                  1,750Total
      Current Liabilities
                  
                  
                  5,000
                  
                  
                  
                  1,750TOTAL
      LIABILITIES
                  
                  
                  5,000
                  
                  
                  
                  1,750STOCKHOLDERS'
      EQUITYPreferred
      Stock - Par value $0.001;Authorized:
      10,000,000None
      issues and outstanding
                  
                  
                  -
                  
                  
                  
                  -Common
      Stock - Par value $0.001;Authorized:
      100,000,000Issued
      and Outstanding: 10,000,000
                  
                  
                  10,000
                  
                  
                  
                  10,000Additional
      Paid-In Capital
                  
                  
                  -
                  
                  
                  
                  -Accumulated
      Deficit
                  
                  
                  (15,000
                  )
                  
                  
                  (11,750
                  )Total
      Stockholders' Equity
                  
                  
                  (5,000
                  )
                  
                  
                  (1,750
                  )TOTAL
      LIABILITIES AND EQUITY
                  
                  $
                  -
                  
                  
                  $
                  -
 The
accompanying notes are an integral part of these financial
statements.
   F-2
 Table of Contents
 HSM
      Holdings, Inc.(a
      development stage company)STATEMENT
      OF OPERATIONSFor
      the twelve months ending December 31, 2007 and 2006,and
      from inception (December 9, 2005) through December 31,
200712
      MONTHS
                  
                  
                  12
      MONTHS
                  
                  
                  FROMENDING
                  
                  
                  ENDING
                  
                  
                  INCEPTION12/31/2007
                  
                  
                  12/31/2006
                  
                  
                  TO
      12/31/07REVENUE
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -COST OF
      SERVICES
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -GROSS PROFIT OR
      (LOSS)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -GENERAL AND
      ADMINISTRATIVE EXPENSES
                  
                  
                  3,250
                  
                  
                  
                  11,350
                  
                  
                  
                  15,000NET INCOME
      (LOSS)
                  
                  
                  (3,250
                  )
                  
                  
                  (11,350
                  )
                  
                  
                  (15,000
                  )ACCUMULATED DEFICIT,
      BEGINNING BALANCE
                  
                  
                  (11,750
                  )
                  
                  
                  (400
                  )
                  
                  
                  -ACCUMULATED DEFICIT,
      ENDING BALANCE
                  
                  $
                  (15,000
                  )
                  
                  $
                  (11,750
                  )
                  
                  $
                  (15,000
                  )Earnings (loss) per
      share
                  
                  $
                  0.00
                  
                  
                  $
                  0.00Weighted average
      number of common shares
                  
                  
                  10,000,000
                  
                  
                  
                  10,000,000
 The accompanying notes are
an integral part of these financial statements.
  F-3
 Table of Contents
 
 HSM
      Holdings, Inc.(a
      development stage company)STATEMENT
      OF STOCKHOLDERS' EQUITYFrom
      inception (December 9, 2005) through December 31, 2007COMMON
                  
                  
                  ACCUM.
                  
                  
                  TOTALSHARES
                  
                  
                  STOCK
                  
                  
                  DEFICIT
                  
                  
                  EQUITYStock
      issued on acceptance
                  
                  
                  100,000
                  
                  
                  $
                  100
                  
                  
                  $
                  -
                  
                  
                  $
                  100of
      incorporation expensesDecember
      9, 2005Net
      Income (Loss)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (400
                  )
                  
                  
                  (400
                  )Total,
      December 31, 2005
                  
                  
                  100,000
                  
                  
                  $
                  100
                  
                  
                  $
                  (400
                  )
                  
                  $
                  (300
                  )Stock
      issued as compensation
                  
                  
                  9,900,000
                  
                  
                  
                  9,900
                  
                  
                  
                  
                  
                  
                  
                  9,900during
      September 2006for
      $9,900 or $.001 per shareNet
      Income (Loss)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (11,350
                  )
                  
                  
                  (11,350
                  )Total,
      December 31, 2006
                  
                  
                  10,000,000
                  
                  
                  $
                  10,000
                  
                  
                  $
                  (11,750
                  )
                  
                  $
                  (1,750
                  )Net
      Income (Loss)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (3,250
                  )
                  
                  
                  (3,250
                  )Total,
      December 31, 2007
                  
                  
                  10,000,000
                  
                  
                  $
                  10,000
                  
                  
                  $
                  (15,000
                  )
                  
                  $
                  (5,000
                  )
 The accompanying notes are
an integral part of these financial statements.
  F-4
 Table of Contents
 
 HSM
      Holdings, Inc.(a
      development stage company)STATEMENTS
      OF CASH FLOWSFor
      the twelve months ending December 31, 2007 and 2006,and
      from inception (December 9, 2005) through December 31,
200712
      MONTHS
                    
                    
                    12
      MONTHS
                    
                    
                    FROMENDING
                    
                    
                    ENDING
                    
                    
                    INCEPTIONCASH FLOWS FROM
      OPERATING ACTIVITIES
                    
                    12/31/2007
                    
                    
                    12/31/2006
                    
                    
                    TO
      12/31/07Net
      income (loss)
                    
                    $
                    (3,250
                    )
                    
                    $
                    (11,350
                    )
                    
                    $
                    (15,000
                    )Stock
      issued as compensation
                    
                    
                    -
                    
                    
                    
                    9,900
                    
                    
                    
                    10,000Increase
      (Decrease) in Accrued Expenses
                    
                    
                    3,250
                    
                    
                    
                    1,450
                    
                    
                    
                    5,000Total
      adjustments to net income
                    
                    
                    3,250
                    
                    
                    
                    11,350
                    
                    
                    
                    15,000Net
      cash provided by (used in) operating activities
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -CASH FLOWS FROM
      INVESTING ACTIVITIESNone
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      cash flows provided by (used in) investing activities
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -CASH FLOWS FROM
      FINANCING ACTIVITIESProceeds from
      capital contributions
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Proceeds from
      stock issuance
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -CASH
      RECONCILIATIONNet
      increase (decrease) in cash
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Cash -
      beginning balance
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -CASH BALANCE - END OF
      PERIOD
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
 The accompanying notes are
an integral part of these financial statements.
  F-5
 Table of Contents
 
 HSM
Holdings, Inc.
 (a
development stage company)
 NOTES
TO FINANCIAL STATEMENTS
   1.   Summary
of significant accounting policies:
 
 Industry:
  HSM
Holdings, Inc. (the Company), a Company incorporated in the state of Delaware as
of December 9, 2005 plans to locate and negotiate with a business entity for thecombination
of that target company with The Company. The combination willnormally
take the form of a merger, stock-for-stock exchange or stock-for-assets
exchange. In most instances the target company will wish to structurethe
business combination to be within the definition of a tax-freereorganization
under Section 351 or Section 368 of the Internal Revenue Code of1986, as
amended. No assurances can be given that The Company will be successfulin
locating or negotiating with any target company.
  The
Company has been formed to provide a method for a foreign or domesticprivate
company to become a reporting ("public") company whose securities arequalified
for trading in the United States secondary market.
  The
Company has adopted its fiscal year end to be December 31.
  Results
of Operations and Ongoing Entity:
  The
Company is considered to be an ongoing entity for accounting purposes;however,
there is substantial doubt as to the Company's ability to continue as agoing
concern. The Company's shareholders fund any shortfalls in The Company'scash flow
on a day to day basis during the time period that The Company is inthe
development stage.
  Liquidity
and Capital Resources:
  In
addition to the stockholder funding capital shortfalls; The Companyanticipates
interested investors that intend to fund the Company's growth once abusiness
is located.
  Cash
and Cash Equivalents:
  The
Company considers cash on hand and amounts on deposit with financialinstitutions
which have original maturities of three months or less to be cashand cash
equivalents.
  Basis
of Accounting:
  The
Company's financial statements are prepared in accordance with U.S.generally
accepted accounting principles.
  Income
Taxes:
  The
Company utilizes the asset and liability method to measure and recorddeferred
income tax assets and liabilities. Deferred tax assets and liabilitiesreflect
the future income tax effects of temporary differences between thefinancial
statement carrying amounts of existing assets and liabilities andtheir
respective tax bases and are measured using enacted tax rates that applyto
taxable income in the years in which those temporary differences are expectedto be
recovered or settled. Deferred tax assets are reduced by a valuationallowance
when in the opinion of management, it is more likely than not thatsome
portion or all of the deferred tax assets will not be realized. At thistime, The
Company has set up an allowance for deferred taxes as there is nocompany
history to indicate the usage of deferred tax assets and
liabilities.
   F-6
 Table of Contents
  Fair
Value of Financial Instruments:
  The
Company's financial instruments may include cash and cash equivalents,short-term
investments, accounts receivable, accounts payable and liabilities tobanks and
shareholders. The carrying amount of long-term debt to banksapproximates
fair value based on interest rates that are currently available tothe
Company for issuance of debt with similar terms and remaining maturities.The
carrying amounts of other financial instruments approximate their fair valuebecause
of short-term maturities.
  Concentrations
of Credit Risk:
  Financial
instruments which potentially expose The Company to concentrations ofcredit
risk consist principally of operating demand deposit accounts. TheCompany's
policy is to place its operating demand deposit accounts with highcredit
quality financial institutions. At this time The Company has no depositsthat are
at risk.
  2.   Related
Party Transactions and Going Concern:
  The
Company's financial statements have been presented on the basis that it is agoing
concern in the development stage, which contemplates the realization ofassets
and the satisfaction of liabilities in the normal course of business. Atthis time
The Company has not identified the business that it wishes to engagein.
  The
Company's shareholder funds The Company's activities while The Company takessteps to
locate and negotiate with a business entity for combination; however,there can
be no assurance these activities will be successful.
  3.   Accounts
Receivable and Customer Deposits:
 
 Accounts
receivable and Customer deposits do not exist at this time andtherefore
have no allowances accounted for or disclosures made.
   F-7
 Table of Contents
  4.   Use
of Estimates:
 
 Management
uses estimates and assumptions in preparing these financialstatements
in accordance with generally accepted accounting principles. Thoseestimates
and assumptions affect the reported amounts of assets and liabilities,the
disclosure of contingent assets and liabilities, and the reported revenueand
expenses. Management has no reason to make estimates at this
time.
  5.   Revenue
and Cost Recognition:
 
 The
Company uses the accrual basis of accounting in accordance with generallyaccepted
accounting principles for financial statement reporting.
  6.   Accrued
Expenses:
 
 Accrued
expenses consist of accrued legal, accounting and office costs duringthis
stage of the business.
  7.   Operating
Lease Agreements:
 
 The
Company has no agreements at this time.
  8.   Stockholder's
Equity:
 
 Preferred
stock includes 10,000,000 shares authorized at a par value of $0.001,of which
none are issued or outstanding.
  Common
Stock includes 100,000,000 shares authorized at a par value of $0.001, ofwhich
100,000 have been issued for the amount of $100 on December 9, 2005 inacceptance
of the incorporation expenses for the Company.
  On
September 19, 2006 the Company issued 1,905,000 shares of common stock as
compensation to an officer of the Company for a value of $1,905, or $.001 per
share. These shares are considered restricted shares as section 144 of the
Securities Exchange Commission.
  On
September 19, 2006 the Company issued 80,000 shares of common stock as
compensation to an officer of the Company for a value of $80, or $.001 per
share.  These shares are considered restricted shares as section 144
of the Securities Exchange Commission.
   F-8
 Table of Contents
  On
September 19, 2006 the Company issued 7,915,000 shares of common stock as
compensation to an officer and director of the Company for a value of $7,915, or
$.001 per share.  These shares are considered restricted shares as
section 144 of the Securities Exchange Commission.
  9.   Required
Cash Flow Disclosure for Interest and Taxes Paid:
 
 The
company has paid no amounts for federal income taxes and interest. TheCompany
issued 100,000 common shares of stock to its sole shareholder inacceptance
of the incorporation expenses for the Company.
  10.  Earnings
Per Share:
  Basic
earnings per share ("EPS") is computed by dividing earnings available tocommon
shareholders by the weighted-average number of common shares outstandingfor the
period as required by the Financial Accounting Standards Board (FASB)under
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings perShares".
Diluted EPS reflects the potential dilution of securities that couldshare in
the earnings.
  11.  Income
Taxes:
 
 The
Company has available net operating loss carryforwards for financialstatement
and federal income tax purposes. These loss carryforwards expire ifnot used
within 20 years from the year generated. The Company's management hasdecided a
valuation allowance is necessary to reduce any tax benefits becausethe
available benefits are more likely than not to expire before they can beused.  These
net operating losses expire as the following, $400 at 2025, $11,350at 2026,
and $3,250 at 2027.
  The Company has available
net operating loss carry-forwards for financial statement and federal income tax
purposes. These loss carry-forwards expire if not used within 20 years from the
year generated. The Company's management has decided a valuation allowance is
necessary to reduce any tax benefits because the available benefits are more
likely than not to expire before they can be used.
  The Company's management
determines if a valuation allowance is necessary to reduce any tax benefits when
the available benefits are more likely than not to expire before they can be
used.  The tax based net operating losses create tax benefits in the
amount of $3,000 from inception through December 31, 2007.
   F-9
 Table of Contents
  Deferred income taxes
reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial statement purposes and the
amounts used for income tax purposes. Significant components of the Company's
deferred tax liabilities and assets as of December 31, 2007 are as
follows:
  Deferred tax
assets:
 Federal net operating
loss     $  2,250
 State net operating
loss            750
  Total
Deferred Tax Asset          
3,000
 Less valuation
allowance        (3,000)
 0
  The
reconciliation of the effective income tax rate to the federal statutory rate is
as follows:
  Federal income tax
rate                      
15.0%
 State tax, net of federal
benefit           
5.0%
 Increase in valuation
allowance       (20.0%)
  Effective
income tax rate         0.0%
   F-10
 Table of Contents




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




Our
accountant is Gately & Associates, LLC, CPAs, independent certified public
accountants. We do not presently intend to change accountants. At no time have
there been any disagreements with such accountants regarding any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure.




ITEM
8A. CONTROLS AND
PROCEDURES




Evaluation
of disclosure controls and procedures




Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2006. Based
on this evaluation, our principal executive officer and principal financial
officers have concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms and that our disclosure and controls are
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.




Changes in internal
controls




We have
not made any changes to our internal controls subsequent to the Evaluation Date.
We have not identified any deficiencies or material weaknesses or other factors
that could significantly affect these controls, and therefore, no corrective
action was taken.








6
 Table of Contents




PART
III




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




We have 1
Director and 2 Officers as follows:





Name
            Age
            Positions
      and Offices HeldAnthony
      Hu
            43
            President/Director,
      Chief Executive OfficerSimone
      Crighton
            34
            Chief
      Financial Officer





Mr. Hu
has been a very successful entrepreneur with over 15 years of experience in
international trading business with China. He began his business in land and
property sale in China during late 80’s to international trading business and
foreign investors, who established factories in China. He’s also a partner and
investor in many of the Chinese business concerns, with the most current one-
Thomas Morgan Capitals, LLC, a private equity company with a focus to invest
start up companies.





Mrs.
Crighton has over 12 years of experience in several different accounting fields
with most of the fortune 500 corporations. She began her accounting career with
McCann-Erickson- An advertising company, Societe Generale- a French investment
bank, General Electric- a US conglomerates, and a most current managerial
position with Coty Inc.- a manufacturer and distributor of fragrances. She has a
diverse accounting experience from financial audit, fund investment accounting,
manufacturing accounting, royalty accounting, etc. She holds a Bachelor of
Science degree in Accounting from Queens College.





Term of
Office




Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.




All
officers and directors listed above will remain in office until the next annual
meeting of our stockholders, and until their successors have been duly elected
and qualified. There are no agreements with respect to the election of
Directors. We have not compensated our Directors for service on our Board of
Directors, any committee thereof, or reimbursed for expenses incurred for
attendance at meetings of our Board of Directors and/or any committee of our
Board of Directors. Officers are appointed annually by our Board of Directors
and each Executive Officer serves at the discretion of our Board of Directors.
We do not have any standing committees. Our Board of Directors may in the future
determine to pay Directors’ fees and reimburse Directors for expenses related to
their activities.




None of
our Officers and/or Directors have filed any bankruptcy petition, been convicted
of or been the subject of any criminal proceedings or the subject of any order,
judgment or decree involving the violation of any state or federal securities
laws within the past five (5) years.




Audit
Committee




We do not
have a standing audit committee of the Board of Directors. Management has
determined not to establish an audit committee at present because of our limited
resources and limited operating activities do not warrant the formation of an
audit committee or the expense of doing so. We do not have a financial expert
serving on the Board of Directors or employed as an officer based on
management’s belief that the cost of obtaining the services of a person who
meets the criteria for a financial expert under Item 401(e) of Regulation S-B is
beyond its limited financial resources and the financial skills of such an
expert are simply not required or necessary for us to maintain effective
internal controls and procedures for financial reporting in light of the limited
scope and simplicity of accounting issues raised in its financial statements at
this stage of its development.






7
 Table of Contents




Certain Legal
Proceedings




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




Compliance With Section
16(A) Of The Exchange Act.




Section
16(a) of the Exchange Act requires the Company’s officers and directors, and
persons who beneficially own more than 10% of a registered class of the
Company’s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company’s knowledge, any
reports required to be filed were timely filed in fiscal year ended December 31,
2007.




Code of
Ethics




The
company has adopted a Code of Ethics applicable to its Chief Executive Officer
and Chief Financial Officer. This Code of Ethics is filed herewith as an
exhibit.




ITEM
10. EXECUTIVE
COMPENSATION




Compensation of Executive
Officers





The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers paid by us during the fiscal
years ended December 31, 2007, 2006 and 2005  in all capacities for
the accounts of our executives, including the Chief Executive Officer (CEO) and
Chief Financial Officer (CFO):





SUMMARY
COMPENSATION TABLE




Name
      and Principal Position
            Year
            
            Salary
              ($)
            
            
            Bonus
              ($)
            
            
            Stock
      Awards
              ($)
            
            Option
      Awards
              ($)
            
            
            Non-Equity Incentive Plan
      Compensation ($)
            
            
            Non-Qualified
      Deferred Compensation Earnings
              ($)
            
            
            All
      Other Compensation
              ($)
            
            
            Totals
              ($)Anthony
      Hu, President, CEO and Director
            2007
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            $
            02006
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            $
            02005
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            $
            0Simone
      Crighton, CFO
            2007
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            02006
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            02005
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0Michael
      Raleigh
              Former
      President, Chief
            2007
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0Executive
      Officer,
            2006
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0Chief
      Financial Officer
            2005
            
            $
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0






8
 Table of Contents




Employment
Agreements




We do not
have any employment agreements in place with our sole officer and
director.




ITEM
11. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT




The
following table sets forth each person known by us to be the beneficial owner of
five percent or more of the Company's Common Stock, all directors individually
and all directors and officers of the Company as a group. Except as noted, each
person has sole voting and investment power with respect to the shares
shown.





Name
      and Address of
              Beneficial
      Owner
            Amount
      of
              Beneficial
      Ownership
            Percentage
              of
      ClassAnthony
      Hu
            8,000,000
            80%Simone
      Crighton
            80,000
            .80%Robert
      Young
            1,920,000
            19.2%All
      Executive Officersand
      Directors as a Group
              (1
      Person)
            8,080,000
            80.800%




ITEM
12. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS.




We
currently use the offices of management at no cost to us. Management has agreed
to continue this arrangement until we complete an acquisition or
merger.







9
 Table of Contents






PART
IV




ITEM
13. EXHIBITS




Method
      of Filing
            Exhibit
      Number
            Exhibit
      TitleIncorporated
      by reference to Exhibit 3.1 to Form 10SB filed on April 3, 2006 (File No.
      000-51879)
            3.1
            Certificate
      of Incorporation of HSM Holdings, Inc.Incorporated
      by reference to Exhibit 3.2 to Form 10SB filed on April 3, 2006 (File No.
      000-51879)
            3.2
            By-LawsFiled
      herewith
            14
            Code
      of Ethics31.1
            Certification
      of Anthony Hu pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002.Filed
      herewith
            31.2
            Certification
      of Simone Crighton pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002.Filed
      herwith
            32.1
            Certification
      of Anthony Hu pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002.Filed
      herewith
            32,2
            Certification
      of Simone Crighton pursuant to 18 U.S.C. Section 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.




ITEM
14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES




Audit
Fees




For the
Company’s fiscal year ended December 31, 2007, we were billed approximately
$1,000.00 for professional services rendered for the audit of our financial
statements. We were not billed for the review of financial statements included
in our periodic and other reports filed with the Securities and Exchange
Commission for our year ended December 31, 2007.




Tax Fees




For the
Company’s fiscal year ended December 31, 2007, we were not billed for
professional services rendered for tax compliance, tax advice, and tax
planning.




All Other
Fees




The
Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal year ended December 31, 2007.




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.








10
 Table of Contents







SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.




HSM Holdings,
Inc.




By:
            /s/
      Anthony HuChief
      Executive Officer






Dated:
            March
      31, 2008




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




Name
            Title
            Date/s/
      Anthony Hu
              Anthony
      Hu
            Chief
      Executive Officer
            March
      31, 2008






11