ALLDIGITAL HOLDINGS, INC. - FORM 10-K

Attached files

file	filename
EX-32.1 - ALLDIGITAL HOLDINGS, INC.	afte_ex32.htm
EX-31.1 - ALLDIGITAL HOLDINGS, INC.	afte_ex31-1.htm
EX-23.1 - ALLDIGITAL HOLDINGS, INC.	afte_ex23-1.htm
EX-31.2 - ALLDIGITAL HOLDINGS, INC.	afte_ex31-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

[ ] 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: 333-141676

Aftermarket Enterprises, Inc.
(Exact name of registrant as specified in charter)

Nevada	20-5354797
State or other jurisdiction of	(I.R.S. Employer I.D. No.)
incorporation or organization

933 S. 4th Street, Unit A, Grover Beach, California	93433
(Address of principal executive offices)	(Zip Code)

Issuer's telephone number, including area code: (805) 457-6999

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

Title of each class	Name of each exchange on which registered
None	N/A

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

Common Stock, $0.001 par value
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes [ ] No [X]

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

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 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 [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained herein, and not be contained, to the best of 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]

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 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 [ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: The Registrant’s shares trade on the OTCBB with no bid or ask price. The shares trade very sporadically and the bid price on any given day may not be indicative of the actual price a stockholder could receive for their shares.

As of March 25, 2010, the Registrant had 2,776,996 shares of common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the part of the Form 10-K (e.g., part I, part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or other information statement; and (3) Any prospectus filed pursuant to rule 424(b) or (c) under the Securities Act of 1933: NONE

PART I

ITEM 1. BUSINESS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities for existing products, plans and objectives of management. Statements in this periodic report that are not historical facts are hereby identified as “forward-looking statements”.

BUSINESS

Aftermarket Enterprises was incorporated in August 2006 in the state of Nevada. We were formed with the intention of acquiring all of the assets and operations of Aftermarket Express, Inc. which operates a web site called www.EverythingSUV.com and related automotive accessories sales business. The web site www.EverythingSUV.com was formed in 2002 to sell automotive accessories over the internet. In September 2006, we acquired Aftermarket Express, Inc. which is now our wholly owned subsidiary.

Through our website, www.EverythingSUV.com, we sell automotive accessories to owners of sport utility vehicles. We maintain relationships with approximately two dozen manufacturers and distributors who ship our orders directly to our customers, enabling us to avoid the need to carry any inventory for more than 99% of the products we currently sell.

We receive and process all of our orders electronically. Once the order is received from the website, the customer’s credit card is authorized for the total cost of the sale, including shipping and handling. Upon successful authorization of the credit card, the order is sent to the appropriate supplier via fax or email. Upon confirmation that the order has been shipped by the supplier, the customer’s credit card is charged for the full value of the sale. Since we do not maintain an inventory, credit cards are not charged until shipment to assure the manufacture has the item in stock for immediate shipment. If the item is not available for immediate shipment, electronic communication is sent to the customer informing them of any delays.

In the event, although infrequent, that a customer chooses to return an item, we promptly refund the charge to their credit card upon notification from the supplier that the item has been received back from the customer.

Market Overview

The industry that we are active in is referred to as the “Specialty Automotive Equipment Industry,” and the companies manufacturing products and/or providing services in our industry are called “specialty automotive equipment companies.” They can be grouped into one of three major functional segments:

- Specialty Accessories and Appearance Products

- Racing and Performance

- Wheels, Tires and Suspension Components

We sell primarily products from the Specialty Accessories and Appearance Products segment and we currently cater specifically to the owners/drivers of sport utility vehicles. The Specialty Accessories and Appearance Products market segment includes interior trim and accessories such as floor mats and dashboard trim kits, brush bars, exterior side steps, cargo area liners, bug deflectors, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others.

We believe most consumers approach modifying their vehicles from one of four basic perspectives:

Maintaining the vehicles value

Matching the vehicle to their lifestyle

Improving the utility value of the vehicle

Personalizing their vehicle just to make it more unique

Business Strategy

Aftermarket currently operates out of an office in Grover Beach, California which contains computers and other office equipment necessary for the operation of the company. Management believes that this location will suffice to accommodate the operation of the company for at least the next twelve months.

Our business strategy is to focus on superior customer service, constantly striving to provide the most current products available in the marketplace. In addition, we will attempt to consistently increase website traffic, to expand into market segments that appear to be available to us, capitalize on existing opportunities to cross promote and strive to maximize the dollar value of each customer.

We strive to update our website as quickly as possible whenever new products are released. We buy 61% of our products from three suppliers. Surco, Inc. supplies 26% of our products, WAAG Los Angeles supplies 22% of our products and Keystone Automotive Operations, Inc. supplies 13% of our products. Surco and Keystone are general distributors that supply us with a wide range of products. There are other general distributors active in our industry that we also purchase products from. If either Surco or Keystone were to go out of business, refused to ship products to our customers or our relationship with them was otherwise damaged, we believe we could procure the products we need from other general distributors. WAAG is a specialty manufacturer of brush bars and grill guards for trucks and sport utility vehicles. If WAAG were to go out of business, refused to ship products to our customers or our relationship with them was otherwise damaged we would attempt to provide our customers with an alternative brand of brush bars and/or grill guards. However, if these suppliers went out of business, if our relationships with them were damaged or if they became unwilling to ship our orders directly to our customers and we were unable to utilize other suppliers for the products they supply, our business could be damaged.

Marketing and Promotion

We utilize search engine optimization activities, email marketing, linking agreements and key vendor relationships to drive our business. Our marketing strategy is designed to increase customer traffic to our website, drive awareness of products and services we offer, promote repeat purchases and develop incremental product revenue opportunities.

Competition

The environment for our products and services is intensely competitive. Our current and potential competitors include: (1) brick and mortar retailers, catalog retailers, publishers, vendors, distributors and manufacturers of our products, many of which possess significant brand awareness, sales volume, and customer bases, and some of which currently sell, or may sell, products or services through the Internet, mail order, or direct marketing; (2) other online e-commerce sites; (3) a number of indirect competitors, including media companies, Web portals, comparison shopping websites, and Web search engines, either directly or in collaboration with other retailers; and (4) companies that provide e-commerce services, including website development; third-party fulfillment and customer-service. We believe that the principal competitive factors in our market segments include selection, price, availability, convenience, information, discovery, brand recognition, personalized services, accessibility, customer service, reliability, speed of fulfillment, ease of use, and ability to adapt to changing conditions, as well as our customers’ overall experience and trust in transactions with us. We believe by bringing an assortment of various products onto one web site geared to a niche market we can compete effectively with the larger all encompassing sites. However, due to the number of competitors we will constantly face and with price pressures from such competitors, we will have to be able to operate on small margins. Other companies also may enter into business combinations or alliances that strengthen their competitive positions.

Intellectual Property

We currently own no intellectual property.

Seasonality

Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter.

Employees

The Company has no employees. Orders are processed by our President with support from a single independent contractor on an as needed basis.

ITEM 2. PROPERTIES

The Company owns no properties and utilizes office space located at 433 S. 4th Street, Unit A, Grover Beach, California, which it rents on a month to month basis. This arrangement is expected to continue until and unless such time as the Company becomes involved in a business venture which necessitates its relocation or grows to the extent it requires more space than is currently available. The Company has no agreements with respect to the maintenance or future acquisition of the office facilities.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. (REMOVED AND RESERVED)

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company's Common Stock is quoted on the OTC Bulletin Board, under the symbol “AFTM.” The Company’s common stock has had no trading activity as of March 25, 2010.

Quarter Ended	High Bid	Low Bid
December 2009	5.00	.01
September 2009	n/a	.01
June 2009	n/a	.01
March 2009	n/a	.01

Since its inception, the Company has not paid any dividends on its Common Stock, and the Company does not anticipate that it will pay dividends in the foreseeable future. At March 25, 2010, the Company had approximately 53 stockholders of record. As of March 25, 2010, the Company had 2,776,996 shares of its Common Stock issued and outstanding.

Recent Sales of Unregistered Securities

There were no securities sold or otherwise issued in the Fiscal Year Ending 2009.

ITEM 6 SELECTED FINANCIAL DATA

Summary of Financial Information

We had a net loss of $23,156 for the year ended December 31, 2009. At December 31, 2009, we had cash and cash equivalents of $6,771 and working capital deficit of $11,778.

The following table shows selected summarized financial data for the Company at the dates and for the periods indicated. The data should be read in conjunction with the financial statements and notes included herein beginning on page F-1.

STATEMENT OF OPERATIONS DATA:

	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Revenues	$	95,675		$	143,344
Cost of Goods Sold		73,964			121,081
General and Administrative Expenses		44,867			128,514
Net Loss		(23,156	)		(106,251	)
Basic Income (Loss) per Share		.01			(.05	)
Diluted Income (Loss) per Share		.01			(.05	)
Weighted Average Number of Shares Outstanding		2,776,996			2,032,235
Weighted Average Number of Fully Diluted Shares Outstanding		2,776,996			2,032,235

BALANCE SHEET DATA:

	December 31, 2009			December 31, 2008
Total Current Assets	$	6,771		$	23,016
Total Assets		6,771			30,927
Total Current Liabilities		18,549			19,549
Working Capital		(11,778	)		3,467
Stockholders’ Equity (Deficit)		(11,778	)		11,378

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

Plan of Operation.

We have an established web store presence and supplier relationships in the aftermarket SUV accessories marketplace. This presence was obtained through the purchase of the website and related business of Aftermarket Express, Inc. Currently, our product line focuses on the SUV marketplace.

To expand our concept, we will need to create a broader web presence and may set up additional “web stores” to focus on the different segments in the aftermarket accessories marketplace. Additionally, we will have to establish new supplier relationships to be able to offer a broader product line. We believe the aftermarket accessories marketplace can be served through an online presence. To this end, we purchased the website and related business of Aftermarket Express, Inc. Through this purchase, we were able to obtain an instant online presence and revenue stream. Although this revenue stream is currently not profitable, management believes with minor changes, the current operations can become profitable. This will require additional marketing efforts. Management believes with a more aggressive marketing approach, our online presence can be expanded and sales can be increased.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2008, we had positive working capital of $3,467 primarily as a result of a common stock offering which yielded us $126,485 in cash through the sale of 1,054,544 shares of stock at a price of $.12 per share. For the year ended December 31, 2009, we had working capital deficit of $11,778. We are hopeful that we can increase sales sufficient to cover our operating expenses. However, depending on how our business performs over the next several months, we may have to seek additional capital in the future.

Our primary source of liquidity in the past has been cash provided by our stock offering, debt instruments and operating activities. Our working capital needs over the next 12 months consist primarily of marketing, legal and audit expenses. We are hopeful that with changes made to the business we will be able to meet our ongoing needs. If our efforts to increase sales are not successful, we will have to obtain additional financing. Presently, we do not feel bank financing is feasible and believe we would have to rely on loans from existing shareholders and management or further equity offerings. At this time there exist no commitments from any parties to provide further financing.

RESULTS OF OPERATIONS

We continued to lose money during the year ended December 31, 2009, with a net loss of $23,156, compared to a loss of $106,251 for the year ended December 31, 2008. We had sales of $95,675 and $143,344 for the years ended December 31, 2009 and December 31, 2008, respectively. Without additional revenue, we will continue to suffer losses as our sales are currently not high enough to cover our fixed expenses, particularly general and administrative. In response to the deteriorating market that has resulted from the current economic conditions and surge in oil and fuel prices that occurred initially during 2008, we have cut our general and administrative expenses such that we are currently producing an operating profit when legal and audit expenses are extracted. We would expect employee costs to increase in the future as we expand operations and require additional personnel. Currently, our president, Adam Anthony, is not taking a salary which is helping to reduce employee expenses. For the year ended December 31, 2009, our legal and professional fees were $12,780 which were primarily associated with the audit and legal costs. We expect legal and accounting fees will continue for the foreseeable future and we expect them to remain at current levels. We are currently not engaged in any fee based marketing or advertising activities.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENATRY DATA

The financial statements of the Company are set forth immediately following the signature page to this Form 10-K.

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

The Company has had no disagreements with its certified public accountants with respect to accounting practices or procedures or financial disclosure.

ITEM 9A(T). CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, which consists of one person and with the assistance of an outside CPA firm, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our President and CFO concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our President and CFO, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. This evaluation was made in light of the fact the Company has no operations or revenue and limited cash on hand.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, which consists of one officer, with the participation of the outside CPA, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2009. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework. Further, our management considered the lack of operations and revenue, the limited cash on hand, the limited transactions which occur on a monthly basis and the use of an outside CPA firm which reconciles all financial transactions prior to being delivered to our auditors. Based on this evaluation, our management, consisting of our sole officer, concluded that, as of December 31, 2009, our internal control over financial reporting was effective. However, management recognized the weaknesses of inadequate segregation of duties consistent with control objectives due to our small size and limited resources but believes the use of an outside CPA firm, in addition to our auditors, helps mitigate this potential weakness.

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

Changes in internal control over financial reporting

There have been no changes in internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table identifies our sole director and executive officer:

Name	Age	Principal Occupation for Past Five Years and Current Public Directorships or Trusteeships
Adam Anthony	44	Mr. Anthony currently serves as our sole officer in the position of president and director. Additionally, Mr. Anthony since April 2006 has served as the VP Corporate Finance, Ascendiant Capital Group, LLC which is a business consulting company located in Irvine, California. From April 2004 through April 2006, Mr. Anthony was the executive vice-president of mergers, acquisitions and corporate affairs for PracticeXpert, Inc. of Calabasas, California which engaged in the provision of medical billing and practice management services to physicians. From April 2003 through April 2004, Mr. Anthony was a business consultant for PracticeXpert, Inc. Prior to joining PracticeXpert, Inc., from January 2001 to April 2003, Mr. Anthony was the CEO of Thaon Communications of Los Angeles California which was primarily involved in the placement of direct response advertising and the marketing of various general consumer products via infomercials. Mr. Anthony received his bachelor’s degree in business administration from Saginaw Valley State University in University Center, Michigan. Mr. Anthony is not an officer or director of any other public companies.

Mr. Anthony was employed by Thaon Communications who’s wholly owned subsidiary PTS TV, Inc. filed for chapter 7 bankruptcy protection. At the time of the filing, Mr. Anthony was also acting as the CEO of the subsidiary in addition to his responsibilities for Thaon Communications. The bankruptcy was filed in December 2002 and discharged in February 2005.

Except as indicated below, to the knowledge of management, during the past five years, no present or former director, or executive officer of the Company:

(1) filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

(2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities:

(i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliate person, director or employee of any investment company, or engaging in or continuing any conduct or practice in connection with such activity;

(ii) engaging in any type of business practice; or

(iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

(4) was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity;

(5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated.

(6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The Company is not aware of any other late reports filed by officers, directors and ten percent stockholders.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth, for the fiscal years indicated, all compensation awarded to, earned by or paid to Aftermarket's chief executive officer and each of the other executive officers that were serving as executive officers at December 31, 2009 (collectively referred to as the "Named Executives"). No other executive officer serving during 2009 received compensation greater than $100,000.

Summary Compensation Table

Name and Principal Position	Year	Salary		Bonus		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		All Other Compensation		Total
Adam	2008		--		--		--		--		--		--		--
Anthony, CEO	2009		--		--		--		--		--		--		--

Option/SAR Grants in Last Fiscal Year

There were no stock option or SAR Grants in fiscal 2008 or 2009

Stock Option Exercise

None of the named executives exercised any options to purchase shares of common stock in fiscal 2008 or 2009.

Long-Term Incentive Plan (“LTIP”)

There were no awards granted during fiscal years 2008 or 2009 under a long-term incentive plan.

Board of Directors Compensation

Each director may be paid his expenses, if any, of attendance at each meeting of the board of directors, and may be paid a stated salary as director or a fixed sum for attendance at each meeting of the board or directors or both. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefore. We did not compensate our directors for service on the Board of Directors during fiscal 2009.

No other compensation arrangements exist between Aftermarket and our sole director.

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

Aftermarket does not have any employment contracts with our executive officers. No other compensatory plan or arrangements exist between Aftermarket and our executive officers that results or will result from the resignation, retirement or any other termination of such executive officer’s employment with Aftermarket or from a change-in-control of the Company.

Report on Repricing of Options/SARs

We did not adjust or amend the exercise price of stock options or SARs previously awarded to any executive officers during fiscal 2008 or 2009.

Report on Executive Compensation

The Board of Directors determines the compensation of Aftermarket’s executive officer and president and sets policies for and reviews with the chief executive officer and president the compensation awarded to the other principal executives, if any. The compensation policies utilized by the Board of Directors are intended to enable Aftermarket to attract, retain and motivate executive officers to meet our goals using appropriate combinations of base salary and incentive compensation in the form of stock options. Generally, compensation decisions are based on contractual commitments, if any, as well as corporate performance, the level of individual responsibility of the particular executive and individual performance. During the fiscal year ended 2009, Aftermarket's chief executive officer was Adam Anthony. There were no other executive officers for Aftermarket during the fiscal year 2009.

Board of Directors Interlocks and Insider Participation in Compensation Decisions

No such interlocks existed or such decisions were made during fiscal year 2009.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of March 25, 2009, the names, addresses and number of shares of common stock beneficially owned by all persons known to the management of Aftermarket to be beneficial owners of more than 5% of the outstanding shares of common stock, and the names and number of shares beneficially owned by our director of Aftermarket and our sole executive officer and director of Aftermarket (except as indicated, each beneficial owner listed exercises sole voting power and sole dispositive power over the shares beneficially owned).

For purposes of this table, information as to the beneficial ownership of shares of common stock is determined in accordance with the rules of the Securities and Exchange Commission and includes general voting power and/or investment power with respect to securities. Except as otherwise indicated, all shares of our common stock are beneficially owned, and sole investment and voting power is held, by the person named. For purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares of common stock, which such person has the right to acquire within 60 days after the date hereof. The inclusion herein of such shares listed beneficially owned does not constitute an admission of beneficial ownership.

All percentages are calculated based upon a total number of 2,776,996 shares of common stock outstanding as of March 25, 2009, plus, in the case of the individual or entity for which the calculation is made, that number of options or warrants owned by such individual or entity that are currently exercisable or exercisable within 60 days.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner		Percentage of Outstanding Common stock
Principal Shareholders
Ascendiant Capital Group, LLC (1) 18881 Von Karman Avenue, 16th Floor Irvine, CA 92612		1,133,301		40.81	%
Jeffrey W. Holmes P.O. Box 11207 Zephyr Cove, NV 89448		444,151		15.99	%
Adam Anthony 2703 Anacapa Irvine, CA 92602		200,000		7.20	%
Officers and Directors
Adam Anthony 2703 Anacapa Irvine, CA 92602		200,000		7.20	%
Director and executive officer of the
Company (1 individuals)		200,000		7.20	%

___________________________

(1) Ascendiant Capital Group, LLC is controlled and owned by Bradley Wilhite and Mark Bergendahl.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Management and Others.

On August 7, 2008, Ascendiant Capital Group, a shareholder, purchased 250,000 shares of stock for $.12 per share as part of our offering. In total, 44 investors, including Ascendiant, purchased 1,054,544 shares of our common stock at $.12 per share for a total of $126,485 in cash. None of the purchasers except Ascendiant were affiliated with us at the time of purchase.

On August 22, 2008, we repaid a loan to Ascendiant Capital Group, a shareholder, in the amount of $14,663.56 consisting of $14,000 of principal and $663.56 of accrued interest. The Note originated on February 29, 2008 and accrued interest at a rate of 10% annually. This paid in full any and all debts the Company had to Ascendiant.

On August 22, 2008, we repaid a loan to Jeff Holmes, a shareholder, in the amount of $7,331.78 consisting of $7,000 of principal and $331.78 of accrued interest. The Note originated on February 29, 2008 and accrued interest at a rate of 10% annually. This paid in full any and all debts the Company had to Mr. Holmes.

On November 19, 2009 we borrowed $3,000 from our President, Adam Anthony. The Note is interest free and is payable upon demand.

On December 7, 2009 we borrowed $10,000 from our President, Adam Anthony. The Note is interest free and is payable upon demand.

Independence of Management

There were no material transactions, or series of similar transactions, since the beginning of the Company's last fiscal year, or any currently proposed transactions, or series of similar transactions, to which the Company was or is to be a party, in which the amount involved exceeds $60,000 and in which any director or executive officer, or any security holder who is known to the Company to own of record or beneficially more than 5% of any class of the Company's common stock, or any member of the immediate family of any of the foregoing persons, has an interest.

Transactions with Promoters

There have been no transactions between the Company and promoters during the last fiscal year.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

1) Audit Fees - The aggregate fees incurred for each of the last two fiscal years for professional services rendered by our principal accountant for the audit of our annual financial statements and review of our quarterly financial statements is approximately $5,500 and $7,800 for each of the years ending December 31, 2009 and 2008.

2) Audit-Related Fees. $1,444 and $2,990.

3) Tax Fees. $200 and $1,000

4) All Other Fees. $0.

5) Not applicable.

6) Not Applicable.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a)(1) FINANCIAL STATEMENTS. The following financial statements are included in this report:

Title of Document	Page

Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets	F-2
Statements of Operations	F-3
Statements of Stockholders’ Deficit	F-4
Statements of Cash Flows	F-5
Notes to Financial Statements	F-6

(a)(2) FINANCIAL STATEMENT SCHEDULES. The following financial statement schedules are included as part of this report:

None.

(a)(3) EXHIBITS. The following exhibits are included as part of this report:

	SEC
Exhibit	Reference
Number	Number	Title of Document	Location

Item 3	Articles of Incorporation and Bylaws

3.01	3	Articles of Incorporation	Incorporated by reference*

3.02	3	Bylaws	Incorporated by reference*

Item 4	Instruments Defining the Rights of Security Holders

4.01	4	Specimen Stock Certificate	Incorporated by reference*

23.01	23	Consent of Auditor	This Filing

31.01	31	CEO certification	This Filing

31.02	31	CFO certification Pursuant	This Filing

32.01	32	CEO certification	This Filing

32.02	32	CFO certification	This Filing

* Incorporated by reference from the Company's registration statement on Form S-1 filed with the Commission, SEC file no. 333-141676.

SIGNATURES

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

Aftermarket Enterprises, Inc.

Date: April 15, 2010	By: /s/ Adam Anthony
	Adam Anthony, President, Director, Principal
	Accounting Officer(Principal Executive Officer)

In accordance with the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/Adam Anthony
Adam Anthony	Director	April 15, 2010

SEALE AND BEERS, CPAs

PCAOB & CPAB REGISTERED AUDITORS

www.sealebeers.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Aftermarket Enterprises, Inc.

We have audited the accompanying consolidated balance sheets of Aftermarket Enterprises, Inc. as of 12/31/09 and 12/31/08, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years ended 12/31/09 and 12/31/08. 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 conduct our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Aftermarket Enterprises, Inc. as of 12/31/09 and 12/31/08, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years ended 12/31/09 and 12/31/08, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 6 to the financial statements, the Company has not yet established an ongoing source of revenues sufficient to cover its operating costs, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 6. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Seale and Beers, CPAs

Las Vegas, Nevada

April 12, 2010

50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351

F-1

AFTERMARKET ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2009			December 31, 2008

ASSETS
Current assets
Cash	$	6,771		$	22,974
Other current assets		-			42
Total current assets		6,771			23,016

Website (net of amortization of $35,609 and $27,701 respectively)		-			7,911
Total assets	$	6,771		$	30,927

LIABILITIES

Current liabilities
Accounts payable	$	2,319		$	17,136
Accrued liabilities		3,005			2,413
Loan Payable: Related Party		13,000			-
Deferred Revenue		225			-

Total current liabilities		18,549			19,549

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock: ($0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding)		-			-
Common Stock: ($0.001 par value, 90,000,000 shares authorized; 2,776,996 outstanding)		2,777			2,777

Additional paid in capital		187,853			187,853
Accumulated deficit		(202,549	)		(179,252	)

Total stockholders’ equity (deficit)		(11,778	)		11,378

Total liabilities and stockholders’ equity (deficit)	$	6,771		$	30,927

The accompanying notes are an integral part of these financial statements.

F-2

AFTERMARKET ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Twelve Months ended December 31, 2009			Twelve Months ended December 31, 2008

Revenues
Sales (net of returns)		95,675			143,344
Costs of goods sold		73,964			121,081

Gross profit		21,711			22,263

Expenses

Amortization expense		7,911			11,872
Credit card discounts		4,432			6,412
Payroll expenses		-			6,695
Other general & administrative		31,642			88,308
Professional Fees – Related Parties					13,000
		43,985			126,287

Loss from operations		(22,273	)		(104,024	)

Other income/expense:
Interest income		-			52
Interest expense		(82	)		(996	)
Penalties and settlements		-			(424	)
		(82	)		(1,368	)
Provision for state taxes		(800	)		(859	)

Net (loss)	$	(23,156	)		(106,251	)


Net (loss) per common share	$	(0.01	)		(.05	)

Weighted average number of common shares outstanding		2,776,996			2,032,235

The accompanying notes are an integral part of these financial statements.

F-3

AFTERMARKET ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

December 31, 2009

					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Equity (Deficit)


December 31, 2007		1,592,452		1,592	$	58,653	$	(73,001	)	$	(12,756	)


Stock issued for cash at $.12 per share		1,054,544		1,055		125,430					126,485
on August 12, 2008

Stock issued for consulting services at $.03 per share on October 1, 2008		130,000		130		3,770					3,900

Net loss for year		-		-		-		(106,251	)		(106,251	)

Balance, December 31, 2008		2,776,996	$	2,777		187,853		(179,252	)	$	11,378

Net loss for year								(23,156	)		(23,156	)

Balance, December 31, 2009		2,776,996	$	2,777	$	187,853	$	(202,408	)	$	(11,778	)

The accompanying notes are an integral part of these financial statements

F-4

AFTERMARKET ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Twelve months Ended December 31, 2009			Twelve months Ended December 31, 2008

Operating Activities
Net loss	$	(23,156	)	$	(106,251	)
Prior period loss adjustment restated					(6,584	)
Adjustment for items not involving cash:
Amortization expense		7,911			11,872
Deferred Revenue		225
Shares for service					3,900
Change in non-cash working capital items:		(15,021	)		(97,063	)

(Increase) decrease in other current assets		42			1,015
Increase (decrease) in accounts payable		(14,816	)		(8,489	)
Increase (decrease) in accrued liabilities		592			477
Cash provided by (used in) operating activities		(29,203	)		(104,060	)

Investing Activities
None		-
Cash used in investing activities		-

Financing Activities
Proceeds from loan(s) payable – related party		13,000			21,000
Proceeds from sale of common stock					126,486
Payment of loan(s) payable – related party					(21,000	)
Cash provided by financing activities		13,000			126,486

Increase (decrease) in cash position		(16,203	)		22,427

Cash position at beginning of period		22,974			549

Cash position at end of period	$	6,771		$	22,974

Supplemental Information:
Stock for Services					3,900

The accompanying notes are an integral part of these financial statements

F-5

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements

December 31, 2009

NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Aftermarket Enterprises, Inc. (the Company) is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying consolidated financial statements.

Business Activity

Aftermarket Enterprises, Inc. (the Company) is a Nevada corporation organized on August 4, 2006 to market and sell aftermarket automotive products through the Internet. On May 12, 2004, Everything SUV, LLC was organized to sell aftermarket automotive products for SUV’s through the Internet. On July 24, 2006, all rights, titles and interests to any and all memberships and ownership interests in Everything SUV, LLC were transferred to Aftermarket Express, Inc. The Company acquired all the outstanding shares of common stock of Aftermarket Express, Inc. on September 1, 2006 in a business combination. The Company has elected a fiscal year end of December 31st. All intercompany balances have been eliminated on consolidation.

Recently Issued Accounting Pronouncements

Below is a listing of the most recent accounting standards, the Company does not expect that the adoption of any of these changes will have a material impact on the Company’s financial position, or statements.

Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities—Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures. (January 2010) Effective for annual reporting periods ending on or after December 31, 2009. Early adoption is not permitted.

Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. (January 2010) For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first period that an entity adopted FAS 160.

Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). (January 2010) Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis.

Accounting Standards Update 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 167. (December 2009) (See FAS 167 effective date below)

Accounting Standards Update 2009-16, Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets. (December 2009) This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 166. (See FAS 166 effective date below)

Accounting Standards Update 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. (October 2009) This Accounting Standards Update amends the FASB Accounting Standard Codification for EITF 09-1. (See EITF 09-1 effective date below)

Accounting Standards Update 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements. (October 2009) Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted.

F-6

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2009

Accounting Standards Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. (October 2009) Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted.

Accounting Standards Update 2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). (September 2009) It is effective for interim and annual periods ending after December 15, 2009. Early application is permitted in financial statements for earlier interim and annual periods that have not been issued.

EITF No. 09-1, (ASC Topic 470) “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance” (“EITF 09-1”). (July 2009). Effective for fiscal years that beginning on or after December 15, 2009 and requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. Effective for share-lending arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009.

SFAS No. 168 (ASC Topic 105), “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162” (“SFAS No. 168”). (June 2009) Effective for financial statements issued for interim and annual periods ending after September 15, 2009. SFAS No. 168 is effective for the Company’s interim quarterly period beginning July 1, 2009.

SFAS No. 167 (ASC Topic 810), “Amendments to FASB Interpretation No. 46(R) (“SFAS 167”). (June 2009) Effective as of the beginning of the first fiscal year that begins after November 15, 2009. SFAS 167 will be effective for the Company beginning in 2010.

SFAS No. 166, (ASC Topic 860) “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). (June 2009) Effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009.

SFAS No. 164, (ASC Topic 810) “Not-for-Profit Entities: Mergers and Acquisitions – including an amendment of FASB Statement No. 142” (“SFAS 164”). (April 2009) Effective for mergers occurring on or after the beginning of an initial reporting period beginning on or after December 15, 2009 and acquisitions occurring on or after the beginning of the first annual reporting period beginning on or after December 15, 2009.

Staff Accounting Bulletin (SAB) No. 112. (June 2009)

Cash and Cash Equivalents

The Company considers all highly-liquid instruments with a maturity of three months or less to be cash equivalents. The Company had $6,771, and $22,974 in cash and cash equivalents at December 31, 2009 and December 31, 2008, respectively.

Use of Estimates in the preparation of the financial statements

The preparation of the Company's financial statements in conformity with accounting principles generally accepted 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.

Revenue Recognition

The Company recognizes revenue from product sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured. Product sales and shipping.

F-7

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2009

revenues are recorded when the products are shipped and title passes to customers. The customer’s credit card is authorized at the time the order is placed, thereby providing reasonable assurance of collectability. The credit card is then charged for the amount of the sale when the product is shipped from the supplier. Our suppliers notify us via email when orders have been shipped and, with rare exceptions, all orders for merchandise that is in stock are shipped within 48 hours of the time of the order. Delivery to the customer is deemed to have occurred when the product is shipped from the supplier.

Return/Refund Policy

Customers may return/exchange their merchandise within 30 days of the sale unless the item is embroidered or otherwise customized, in which case all sales are final. Return shipping charges are the responsibility of the customer unless an error has been made on our part. The return of certain items may incur a restocking fee. If so, the customer is made aware at the time of the sale. Refunds for returned merchandise are processed promptly upon confirmation of receipt of the returned merchandise in like-new condition, less any applicable restocking and/or shipping charges. Our revenues and costs of goods sold are reported without making an allowance for returned merchandise due to the fact that our return rate is less than one half of one percent of gross revenue.

Advertising

The Company expenses advertising costs as incurred. There were no advertising costs incurred during the fiscal year 2009.

Shipping and Handling Costs

Shipping and handling costs are included in cost of sales.

Earnings per share

The Company follows ASC Topic 260 to account for the earnings per share. Basic earning per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

NOTE 2 BUSINESS ACQUISITIONS

On September 1, 2006, we acquired Aftermarket Express, Inc. which is now our wholly owned subsidiary. We purchased Aftermarket Express, Inc. from its stockholders for $31,300 paid in the form of $21,300 in cash and $10,000, interest free Promissory Note with a maturity date of November 29, 2006. The Promissory Note was paid in full on November 2, 2006.

NOTE 3 COMMITMENTS

None.

NOTE 4 RELATED PARTY TRANSACTIONS

On March 19, 2008, the Company received a loan in the amount of $14,000 from stockholder, Ascendiant Capital Group. The loan carried an interest rate of 10% per annum. All outstanding principal and interest was paid on August 22, 2008. Ascendiant Capital Group is a holder of more than 10% of the total outstanding stock in the Company.

On March 19, 2008, the Company received a loan in the amount of $7,000 from stockholder, Jeff Holmes. The loan carried an interest rate of 10% per annum. All outstanding principal and interest was paid on August 22, 2008. Jeff Holmes is a holder of more than 10% of the total outstanding stock in the Company.

During the fiscal year ending December 31, 2008, Ascendiant Capital Group was paid a total of $12,000 for consulting services.

F-8

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2009

During the fiscal year ending Decembe 31, 2008, Creocare, a company under common management, was paid $1,000 for professional services.

As of December 31, 2009, the Company had received loans totaling $13,000 from the Company’s President, Adam Anthony. These loans are non-interest bearing and are due upon demand.

NOTE 5 WEBSITE

We receive all of our revenues through our website. Once the order is received from the website, the customer’s credit card is authorized for the total cost of the sale, including shipping and handling. Upon successful authorization of the credit card, the order is sent to the appropriate supplier via email. Upon confirmation that the order has been shipped by the supplier, the customer’s credit card is charged for the full value of the sale. If the item is not available for immediate shipment, electronic communication is sent to the customer informing them of any delays.

The value of our website has been fully ammortized over time. The ammortization schedule is as follows:

Year	Initial Value		Accumulated Ammortization
	$	35,610
2006			$	3,957
2007				11,872
2008				11,872
2009				7,911
12/31/08	$	35,610	$	35,612	*

*the discrepancy between initial value and Accumulated Ammortization is attributable to rounding done for reporting purposes only.

NOTE 6 INCOME TAXES

The Company follows FASB ASB 740-10, “Income Taxes” for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

NOTE 6 GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

F-9

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2009

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 7 STOCKHOLDERS EQUITY

We have 100,000,000 shares of stock authorized for issuance, consisting of 10,000,000 preferred and 90,000,000 common.

Currently there are no shares of preferred stock issued or outstanding.

As of December 31, 2006, there were 1,100,000 shares of common stock issued and outstanding.

During the fiscal year 2007, 492,452 shares of common stock were issued in connection with the conversion of outstanding promissory notes into common stock.

As of December 31, 2007, there were 1,592,452 shares of common stock issued and outstanding.

During the fiscal year 2008, we issued 1,054,544 shares of common stock for cash of $126,485 and 130,000 shares for consulting services valued at $3,900.

As of December 31, 2009, there were 2,776,996 shares of common stock issued and outstanding.

F-10

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2009

NOTE 8 RESTATEMENT OF 2008 FINANCIAL STATEMENTS

In connection with the preparation of the Company’s audited financial statements for the year ended December 31, 2009, the Company determined that there were errors in accounting treatment and reported amounts in its previously filed financial statements. As a result, the Company determined to restate its financial statements for the year ended December 31, 2008. The restatements are included in this Annual Report on Form 10-K.

The adjustments are being made to correct timing errors associated with expenses. The adjustments are not material and did not affect the Company’s previously reported cash and cash equivalents balances in prior periods. The following tables present the effect of the restatement adjustments by financial statement line item for the Balance Sheet, Statements of Operations and Statements of Cash Flow.

AFTERMARKET ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

	As of December 31, 2008
	As Previously Stated			Adjustments			As Restated

ASSETS
Current assets
Cash	$	22,974					$	22,974
Other current assets		1,042			(1,000	)		42
Total current assets		24,016						23,016

Website (net of amortization of $27,699)		7,911						7,911
Total assets	$	31,927			(1,000	)	$	30,927

LIABILITIES
Current liabilities
Accounts payable	$	14,086			3,050		$	17,136
Accrued liabilities		695			1,718			2,413

Total current liabilities		14,781			4,768			19,549

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock: ($0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding)		-						-
Common Stock: ($0.001 par value, 90,000,000 shares authorized; 2,776,996 and 1,592,452 shares issued and outstanding , respectively)		2,777						2,777

Additional paid in capital		187,853						187,853
Accumulated deficit		(173,484	)		(5,768	)		(179,252	)

Total stockholders’ equity (deficit)		17,146			(5,768	)		11,378

Total liabilities and stockholders’ equity (deficit)		31,927			(1,000	)		30,927

F-11

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2009

AFTERMARKET ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	As of December 31, 2008
	As Previously Stated			Adjustments			As Restated

Revenues
Sales (net of returns)		143,344						143,344
Costs of goods sold		121,081						121,081

Gross profit		22,263						22,263

Expenses

Amortization expense		11,872						11,872
Credit card discounts		6,412						6,412
Payroll expenses		6,695						6,695
Other general & administrative		53,362						53,362
Legal and professional fees		49,621			(1,675	)		47,946
		127,962			(1,675	)		126,287

Loss from operations		(105,699	)		1,675			(104,024	)
Interest income		52						52
Interest expense		(996	)					(996	)
Penalties and settlements		(424	)					(424	)
		(107,067	)		1,675			(105,392	)

Provision for state taxes		0			(859	)		(859	)

Net loss		(107,067	)		816			(106,251	)


Net loss per common share		(.04	)					(.04	)

Weighted average number of common shares used in calculation		2,776,996						2,032,235

F-12

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2009

AFTERMARKET ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

December 31, 2008

					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Equity (Deficit)

December 31, 2006		1,100,000	$	1,100	$	9,900	$	(5,358	)	$	5,642

Net loss for year, originally stated								(61,059	)		(61,059	)

Restated adjustment								(6,584	)		(6,584	)

Conversion of debt to equity		492,452		492		48,753		-			49,245

December 31, 2007		1,592,452		1,592	$	58,653	$	(73,001	)	$	(12,756	)

Stock issued for cash		1,054,544		1,055		125,430					126,485

Stock issued for consulting services		130,000		130		3,770					3,900

Net loss for year, originally stated		-		-		-		(107,067	)		(107,067	)

Restated adjustment								816			816

Balance, December 31, 2008		2,032,235	$	2,777		187,853		(179,252	)		11,378

F-13

Aftermarket Enterprises, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2009

AFTERMARKET ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	As of December 31, 2008
	As Previously Stated			Adjustments			As Restated

Operating Activities
Net loss	$	(107,067	)		816		$	(106,251	)
Prior period loss adjustment restated					(6,584	)		(6,584	)
Adjustment for items not involving cash:
Amortization expense		11,872						11,872
Shares for services		3,900						3,900
Accrued interest
Change in non-cash working capital items:		(91,295	)		(5,768	)		(97,063	)

(Increase) decrease in other current assets		15			1,000			1,015
Increase (decrease) in accounts payable		(11,539	)		3,050			(8,489	)
Increase (decrease) in accrued liabilities		(1,241	)		1,718			477
Cash provided by (used in) operating activities		(104,060	)		-			(104,060	)

Financing Activities
Proceeds from loan payable – stockholders					21,000			21,000
Proceeds from sale of common stock		126,485						126,485
Payment of loan payable - stockholders					(21,000	)		(21,000	)
Cash provided by financing activities		126,485						126,485

Increase (decrease) in cash position		22,425						22,425

Cash position at beginning of period		549						549

Cash position at end of period	$	22,974					$	22,974

Supplemental Information:
Stock issued for conversion of debt
Stock for Services	$	3,900					$	3,900

NOTE 9 SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through April 12, 2010 and determined there are no items to disclose.

F-14

ALLDIGITAL HOLDINGS, INC. - FORM 10-K - April 15, 2010

Attached files

ALLDIGITAL HOLDINGS, INC. Reports