10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2013

Or

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

For the transition period from ________ to _________

___________________________________

Commission File Number 333-174404

___________________________________

M STREET GALLERY, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Florida	45-1443512
(State or other jurisdiction or incorporation or organization)	(I.R.S. Employer Identification No.)
5175 Club Rd., Haverhill, FL	33415
(Address of principal executive offices)	(Zip Code)

Registrants telephone number, including area code: 561-200-7721

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

Yes [ X ] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ ] No [ ]

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

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller Reporting Company [X]

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

Yes [ ] No [X]

The registrant had 2,645,000 shares of common stock outstanding as of January 31, 2013

-1-

M STREET GALLERY, INC

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET

	January 31, 2013 (UNAUDITED)	April 30, 2012
Assets
Current Assets
Cash	$ 209	$ 1,074
Total current assets	$ 209	$ 1,074
Total assets	$ 209	$ 1,074
Liabilities and Stockholders’ (Deficit)
Current Liabilities
Accounts payable and accrued liabilities	$5,000	$ 6,750
Accrued compensation related party	50,000	20,000
Total liabilities	$55,000	$ 26,750
Stockholders’ (Deficit)
Common Stock (50,000,000 shares authorized at $.0001 par, 2,645,000 shares issued and outstanding at January 31, 2013 and April 30, 2012, respectively)	264	264
Additional paid in capital	26,636	15,986
Accumulated deficit during development stage	(81,691)	(41,926)
Total Stockholders’ (Deficit)	(54,791)	(25,676)
Total Liabilities and Stockholders’ (Deficit)	$ 209	$ 1,074

The accompanying notes are an integral part of the financial statements

-2-

M STREET GALLERY, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2013 AND 2012 AND CUMULATIVELY FROM MARCH 11, 2011 (DATE OF INCEPTION) TO

JANUARY 31, 2013

(UNAUDITED)

	Three Months Ended	Three Months Ended	Nine Months Ended	Nine Months Ended	Cumulative From March 11, 2011 (Inception) to
	January 31, 2013	January 31, 2012	January 31, 2013	January 31, 2012	January 31, 2013
Revenues (net)	$ -	$ 2,800	$ -	$2,800	$ 2,800
Operating Expenses	12,195	13,299	39,765	32,204	84,491
Net (Loss) from Operations Before Provision for Income Tax	$ (12,195)	$ (10,499)	$(39,765)	$(29,404)	$(81,691)
Provision For Income Tax	-	-	-	-	-
Net (Loss)	$ (12,195)	$ (10,499)	$(39,765)	$(29,404)	$(81,691)
Net (Loss) per common share, Basic	$(0.00)	$(0.00)	$(0.01)	$(0.00)	$ (0.03)
Weighted average number of common shares outstanding	2,645,000	2,645,000	2,645,000	2,645,000	2,645,000

The accompanying notes are an integral part of the financial statements

-3-

M STREET GALLERY, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED JANUARY 31, 2013 AND 2012 AND CUMULATIVELY FROM MARCH 11, 2011 (DATE OF INCEPTION) TO

JANUARY 31, 2013

(UNAUDITED)

	Nine Months Ended January 31, 2013	Nine Months Ended January 31, 2012	Cumulative From March 11, 2011 (Inception) to January 31, 2013
Cash Flows From Operating Activities:
Net (Loss)	$(39,765)	$(29,404)	$(81,691)
Adjustments to reconcile Net (Loss) to Net Cash Provided (Used) in Operating Activities: Expenses paid by stockholder	-	1,500	1,500
Changes in operating assets and liabilities:
(Increase) Decrease in accounts receivable	-	-	-
Increase (Decrease) in accounts payable and accrued liabilities	(1,750)	5,000	5,000
Increase in accrued compensation related party	30,000	10,000	50,000
Net Cash (Used) in Operating Activities	(11,515)	(12,904)	(25,191)
Cash Flows From Financing Activities:
Proceeds of sale of common stock to founder	-	-	250
Proceeds of sale of common stock	-	-	14,500
Capital contribution by shareholder	10,650	-	10,650
Net cash provided in financing activities	$ 10,650	-	$ 25,400
Net Increase(Decrease) in cash	(865)	(12,904)	209
Cash beginning of period	1,074	14,750	-0-
Cash end of period	$ 209	$ 1,846	$ 209
Supplemental Disclosures of Cash Flow Information:
Expenses paid with cash
Income taxes	$0	$0	$0
Interest expense	$0	$0	$0

The accompanying notes are an integral part of the financial statements

-4-

M STREET GALLERY, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

January 31, 2013

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company was organized under the laws of the State of Florida on March 11, 2011.

The Company is in the developmental stage. The Company’s plan is to manufacture and sell a comprehensive supply of one of a kind oil on canvas art productions utilizing its website.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development stage companies. A development stage company is one which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues to date.

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US Dollars.

The financial information included herein as of January 31, 2013, for the three and nine month period ended January 31, 2013 and 2012, has been presented without an audit, pursuant to accounting principles for the interim financial information generally accepted in the United States of America and the rules of the Securities and Exchange Commission.

-5-

M STREET GALLERY, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

January 31, 2013

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America ("GAAP" accounting). The Company has adopted an April 30 fiscal year end.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $209 cash as of January 31, 2013.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents. The carrying amounts of cash approximate fair value because of the short term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect those estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.

Income Taxes

In accordance with ASC 740, deferred income taxes and benefits will be provided for the results of operations of the Company. The tax effects of temporary differences and carry-forwards that give rise to significant portion of deferred tax assets and liabilities will be recognized as appropriate.

Use of Estimates

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

-6-

M STREET GALLERY, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

January 31, 2013

Revenue Recognition

The company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Stock Based Compensation

Stock based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of January 31, 2013.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial positions or cash flow.

NOTE 3 Capital Transactions

In March 2011, the Company sold 2,500,000 shares of their restricted common stock to the President and Founder of the company for $250.

In March 2011, the Company sold 91,000 shares of their restricted common stock, under Regulation S of the Securities Act of 1933, as amended, for the above issuances to non US citizens or residents. The shares were offered at a per share price of $.10, for an aggregate sum of $9,100.

In April, 2011, Pursuant to Rule 505 of Regulation D of the Securities Act of 1933, as amended, the company sold 54,000 shares of restricted common stock for $5,400.

In May, 2011, $1,500 in legal costs associated with the registration was paid for by a principal stockholder/officer as a gift to the company and was accounted for as contributed capital.

In June and July 2012, a total of $2,800 was contributed to the company by a principal stockholder/officer as a gift to the company and was accounted for as contributed capital.

In August 2012, a total of $3,900 was contributed to the company by a principal stockholder/officer as a gift to the company, and was accounted for as contributed capital.

In November 2012 and January 2013, a total of $3,950 was contributed to the company by a principal stockholder/officer as a gift to the company, and was accounted for as contributed capital.

NOTE 4 Related Parties

Commencing November 1, 2011 the CEO and President Mr. Mackenroth has begun accruing a salary of $40,000 per year. The payment of this will be deferred until funds are available.

NOTE 5 Income Taxes

As of January 31, 2013, the company had a net operating loss carry forward for income tax reporting purposes of $81,961 that expire in 15 years.

Federal income taxes at statutory rate	34%
State tax rate, net of federal income tax	4
Offsetting Valuation Adjustment	(38)
Effective income tax rate	0%

No tax benefit is being accrued due to no current expectation of profits.

NOTE 6 Subsequent Events

The Company has evaluated subsequent events from January 31, 2013 through the date whereupon the financial statements were issued and has determined that there are no items to disclose.

-7-

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Business Overview

We were incorporated in the State of Florida on March 11, 2011, for the purpose of providing an online marketplace for art work created by German artist Reinhold Mackenroth, on the internet. M Street Gallery is an active participant in the creation and sale of original oil based paintings. We are fully operational and plan to build on that momentum going forward with our business plan. Our website is located at www.MstreetGallery.com.

We offer a modest array of unique and custom oil on canvas artwork, created by German artist Reinhold Mackenroth, marketed towards individual retail customers. In addition, we also offer custom portraits services.

Results of Operations – Three Months and Nine Months Ended January 31, 2013 compared to the Three Months and Six Months Ended January 31, 2012

Revenue

For the three and nine months ended January 31, 2013, we have had no revenue. For the three and nine months ended January 31, 2012, we had revenue of $2,800 and $2,800 respectively.

Other General and Administration Expenses

For the three and nine months ended January 31, 2013, other general and administration expenses were $12,195 and $39,765 as compared to $13,299 and $32,204 for the three months and six months ended January 31, 2012. The decrease of $1,104 or 8.3% for the three months period ended January 31, 2013 and 2012 is viewed as the normalization of our quarterly expenses, now that costs associated with registration have been completed; these expenses are mainly focused on compensation and professional fees. The increase of $7,561 or 23.5% for the nine months period ended January 31, 2013 and 2012 are costs mainly associated with compensation and professional fees. The $10,000 in compensation has been deferred until funds are available.

Net Loss

The net loss for the three and nine months ended January 31, 2013 was $12,195 and $39,765 as compared to $13,299 and $32,204 for the comparable periods in 2012. Change in losses is a result of the above items listed.

Liquidity and Capital Resources

At January 31, 2013, the company had $209 in available cash compared to $1,074 in available cash at April 30, 2012.

For the three months ended January 31, 2013 a total of $3,950 was contributed to the company by a principal stockholder as contributed capital to the company.

Since our current available cash is $209, our principal stockholder has made a commitment to continue providing the company with needed capital contributions until the foreseeable future.

-8-

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable

Item 4. Controls and Procedures.

Our management, including the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the "1934 Act"), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer

concluded; that our disclosure controls and procedures are effective in ensuring that information required to be disclosed by us in the reports we file or submit under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

There have been no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the period covered by this report.

-9-

Part II

Item 1. Legal Proceedings

None

Item 1.a.

Not Applicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults upon Senior Securities

None

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

None

-10-

Item 6. Exhibits

31. Certification of the Principal Executive Officer and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act

32. Certification of the Principal Executive Officer and Chief Financial Officer, pursuant to section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act

101.       Financial statements from the quarterly report on Form 10-Q of the Company for the quarter ended January 31, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Statement of Operations, (ii) the Balance Sheet, (iii) the Statement of Cash Flows (iv) the Notes to Financial Statements tagged as blocks of text.

-11-

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  March 11, 2013	M STREET GALLERY, Inc.
	By:	/s/ Reinhold Mackenroth
	Reinhold Mackenroth, Chief Executive Officer, Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer

-12-

EX-31

Exhibit 31

CERTIFICATION

I, Reinhold Mackenroth, certify that:

1.	I have reviewed this report on Form 10-Q of M Street Gallery, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report.
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date March 11, 2013

/s/ Reinhold Mackenroth

Chief Executive Officer, Principal Executive Officer, Principal Financial Officer

EX-32

Exhibit 32

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of M Street Gallery, Inc. (the "Company") on Form 10-Q for the quarter ended January 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the "Periodic Report"), I, Reinhold Mackenroth, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.   The Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  March 11, 2013	/s/ Reinhold Mackenroth
	Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to M Street Gallery, Inc and will be retained by M Street Gallery, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Balance Sheet (USD $)	Jan. 31, 2013	Apr. 30, 2012
Cash	$ 209	$ 1,074
Accounts Receivable	0	0
Current assets	209	1,074
Total Assets	209	1,074
Accounts payable and accrued liabilities	5,000	6,750
Total liabilities	55,000	26,750
Common Stock (50,000,000 shares authorized at $.0001 par, 2,645,000 shares issued and outstanding at January 31, 2013 and April 30, 2011, respectively)	264	264
Additional paid in capital	26,636	15,986
Accumulated deficit	(81,691)
Total Stockholders' Equity	(54,791)	(25,676)
Total Liabilities and Stockholders' Equity	$ 209	$ 1,074

XML

STATEMENT OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended		23 Months Ended
	Jan. 31, 2013	Jan. 31, 2012	Jan. 31, 2013	Jan. 31, 2012	Jan. 31, 2013
Revenues (net)	$ 0	$ 2,800	$ 0	$ 2,800	$ 2,800
Expenses	12,195	13,299	39,765	32,204	84,491
Net (Loss) from operations	$ (12,195)	$ (10,499)	$ (39,765)	$ (29,404)	$ (81,691)
Net (Loss) per common share, Basic	$ 0.00	$ 0.00	$ 0.01	$ 0.00	$ (0.03)
Weighted average number of common shares outstanding	2,645,000	2,645,000	2,645,000	2,645,000	2,645,000

XML

Document and Entity Information	3 Months Ended
	Jan. 31, 2013
Document and Entity Information
Entity Registrant Name	M Street Gallery Inc.
Document Type	10-Q
Document Period End Date	Jan. 31, 2013
Amendment Flag	false
Entity Central Index Key	0001518720
Current Fiscal Year End Date	--04-30
Entity Common Stock, Shares Outstanding	2,645,000
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	No
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

XML

STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended		23 Months Ended
	Jan. 31, 2013	Jan. 31, 2012	Jan. 31, 2013
Net (Loss)	$ (39,765)	$ (29,404)	$ (81,691)
Expenses Paid by Stockholder	0	1,500
(Increase) Decrease in accounts receivable	0	0	0
Increase (Decrease) in accounts payable and acrued liabilities	(1,750)	5,000	5,000
Net Cash (Used) in operating activities	(11,515)	(12,904)	(25,191)
Proceeds of Sale of Common Stock to Founder	0	0	250
Proceeds of Sale of Common Stock	0	0	14,500
Net cash provided in Financing Activities	10,650		25,400
Net Increase(Decrease) in Cash	(865)	(12,904)	209
Cash and at end of period	$ 209	$ 1,846	$ 209

XML

Accounting Policies

3 Months Ended

Jan. 31, 2013

Accounting Policies

Significant Accounting Policies [Text Block]

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company was organized under the laws of the State of Florida on March 11, 2011. The Company is in the developmental stage. The Company is currently manufacturing and selling a comprehensive supply of one of a kind, oil on canvas, art productions utilizing the Internet. With the recent launch of its functional website, the company is fully operational and achieved its first sale.

NOTE 2

Development Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development stage companies. A development stage company is one which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US Dollars.

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America ("GAAP" accounting). The Company has adopted an April 30 Fiscal year end.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $209 cash as of January 31, 2013.

Fair Value of Financial Instruments

The Company's financial instruments consist of cash and cash equivalents. The carrying amounts of cash approximate fair value because of the short term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect those estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.

Income Taxes

In accordance with ASC 740, deferred income taxes and benefits will be provided for the results of operations of the Company. The tax effects of temporary differences and carry-forwards that give rise to significant portion of deferred tax assets and liabilities will be recognized as appropriate.

Use of Estimates

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

Revenue Recognition

The company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Stock Based Compensation

Stock based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of January 31, 2013.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Companys results of operations, financial positions or cash flow.

NOTE 3 Capital Transactions

In March 2011, the Company issued 2,500,000 shares of their restricted common stock to the President and Founder of the company for the sum of $250. In March 2011, The Company issued 91,000 shares of their restricted common stock. The shares were offered under Regulation S of the Securities Act of 1933, as amended for the above issuances to non US citizens or residents. The shares were offered at a per share price of $.10, for an aggregate sum of $9,100. In April, 2011, Pursuant to Rule 505 of Regulation D of the Securities Act of 1933, as amended the company sold 54,000 shares of restricted common stock for $5,400. In May, 2011, $1,500 in legal costs associated with the registration was paid for by a principal stockholder as a gift to the company, and thus was accounted for as contributed capital.

NOTE 4 Related Parties

The officers/stockholders of the Company have incurred De minimis operating costs in their development. In October, the officers/stockholders of the Company donated two paintings at no cost to the company. Commencing November 1, 2011 the CEO and President Mr. Mackenroth salary is being deferred until there is sufficient working capital. Accrued deferred compensation at January 31, 2013 was $50,000.

NOTE 5 Subsequent Events

The Company has evaluated subsequent events from January 31, 2013 through the date whereupon the financial statements were issued and has determined that there are no items to disclose.