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EXCEL - IDEA: XBRL DOCUMENT - Three Shades for Everybody, Inc.Financial_Report.xls
EX-31.1 - EXHIBIT 31 - Three Shades for Everybody, Inc.exhibit3112014_ex31z1.htm
EX-32 - EXHIBIT 32 - Three Shades for Everybody, Inc.exhibit322014_ex32.htm
EX-23.1 - EXHIBIT 23.1 - Three Shades for Everybody, Inc.exhibit2312014_ex23z1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K


[ X ]  

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2013


[   ]  

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

Commission file number:   000-53385

THREE SHADES FOR EVERYBODY, INC.

(Exact name of registrant as specified in its charter)


DELAWARE                                               87-0430015

(State or Incorporation)                               (I.R.S. Employer Id. No.)


1150 Silverado, Ste. 204, La Jolla, CA  92037                                                             (858) 459-1133

     (Address of principal executive offices)                                                 (Registrant’s telephone number)                           


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


None


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


Common Stock, $0.001 par value per share

(Title of Class)



Indicate by check mark if Three Shades For Everybody, Inc. (Three Shades) is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933.      Yes [  ]       No [x]


Indicate by check mark if Three Shades is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934.               Yes [  ]       No [x]


Indicate by check mark whether Three Shades (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 Three Shades 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Three Shades’ knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.                                                                                         [x]


Indicate by check mark whether Three Shades is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.


Large accelerated filer       Accelerated filer       Non-accelerated filer     

Smaller reporting company  [X]




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


The aggregate market value of Three Shades’ common stock held by non-affiliates of Three Shades as of the last business day of Three Shades’ most recently completed fiscal quarter (June 30, 2014) was approximately $0.00 (based on lack of any trade or posted price reported by OTC on or prior to June 30, 2014). For this purpose, all of Three Shades’ officers and directors and their affiliates were assumed to be affiliates of Three Shades.


There were 2,243,500 shares of Three Shades’ common stock outstanding as of September 1, 2014.


DOCUMENTS INCORPORATED BY REFERENCE:       None.


 



iii



THREE SHADES FOR EVERYBODY, INC.

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED JUNE 30, 2014

INDEX

 



  PART I

 

 

Item 1

Business

1

Item 1A

Risk Factors

2

Item 2

Properties

7

Item 3

Legal Proceedings

7

Item 4

Submission of Matters to a Vote of Security Holders

7

 

 

 

  PART II

 

 

Item 5

Market for Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

8

Item 6

Selected Financial Data

9

Item 7

Management’s Discussion and Analysis of Financial Condition and Results of Operation

9

Item 7A

Quantitative and Qualitative Disclosure About Market Risk

10

Item 8

Financial Statements and Supplementary Data

10

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

22

Item 9A

Controls and Procedures

22

Item 9B

Other Information

22

 

 

 

  PART III

 

 

Item 10

Directors, Executive Officers, and Corporate Governance

22

Item 11

Executive Compensation

23

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

24

Item 13

Certain Relationships and Related Transactions and Director Independence

24

Item 14

Principal Accounting Fees and Services

25

 

 

 

  PART IV

 

 

Item 15

Exhibits and Financial Statement Schedules

25

 

 

 

SIGNATURES

 

26



iv




PART I


                            

ITEM 1.       DESCRIPTION OF BUSINESS


FORWARD-LOOKING STATEMENTS

 

Our disclosure and analysis in this Annual Report on Form 10-K contains some forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements since they do not relate strictly to historical or current facts. Such statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “hope” and other words and terms of similar meaning. In particular, these include, among others, statements relating to our business plan and our intention to seek a business combination with an operating entity, the impact of new accounting pronouncements, and other statements regarding matters that are not historical facts or statements of current condition.


There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.


We undertake no obligation (and expressly disclaim any such obligation) to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our filings with the United States Securities and Exchange Commission (the “SEC”), all of which are available in the SEC EDGAR database at www.sec.gov and from us.


Background and Prior Names


Three Shades for Everybody, Inc. (the "Company") was incorporated in July 1985 as Na Pali Funding, Inc. under the laws of the State of Delaware. The Company was initially formed to invest in new business ventures; it registered its shares with the SEC and conducted an Initial Public Offering of its stock in 1986. In March, 1987, it acquired Vutek Systems, Inc., a California corporation, and the name was changed to Vutek Systems, Inc. In July, 1999 the Company agreed to acquire an apparel design and manufacturing business and on July 9, 1999 the name was again changed, this time to Three Shades for Everybody, Inc. While the name was changed, the acquisition of the apparel business was never completed.


From March, 1987 until March, 1990 the Company operated as Vutek Systems, Inc. (“Vutek”). Vutek was primarily engaged in the design, manufacture, and sale of image capturing or processing products for IBM personal computers and compatibles. The flagship product, FreezFrame allowed a picture or image from a standard video source such as a video camera, VCR or video disk player to be digitized and combined with text and graphics or otherwise altered for more useful display on a computer screen. The software allowed it to be used with other commercial off-the-shelf software programs such a dBASE III Plus, ShowPartner, and Storyboard. The company had intended to develop an entire line of products for this market. The company raised funds through the exercise of outstanding warrants, however the funds raised were insufficient to maintain operations. As a result of the Company’s failure to generate adequate capital, it continued to operate at a loss. By March 1, 1990 all funds had been expended, and the Company thereafter became dormant.


In 1998 the Company was revived and the search for a successor business was commenced. On July 9, 1999 the Company changed its name to Three Shades for Everybody, Inc. (“Three Shades”), with the intent of going into clothing design, manufacture, and sales by acquiring a private business, also named Three Shades for Everybody, however the private operating business experienced a reversal and the acquisition was never completed. Thus there was no business activity from 1990 until June of 2010



1



when the Company embarked upon its current business which is the purchase and sale of art and collectibles.


Description of Current Business


In June of 2010 management decided to take the Company in a new business direction and agreed on a plan to market fine art and collectibles on a retail basis via the internet and also via consignment placements with traditional art galleries. We initially believed that our primary sales outlets would be Ebay, Amazon, and similar online sales venues, where we could receive maximum marketing exposure with minimal expense. However we have recently arranged to place works on consignment with a traditional, brick and mortar gallery in Southern California. The Alexander Salazar Gallery is preparing an exhibition of twenty works which we are supplying. We have also embarked upon a program of offering works for auction by charities at their fundraisers where we are paid a minimum price and the charity retains all funds above the minimum.


We expect to purchase fine art and collectibles and to sell these from our own inventory. In 2010 we acquired an initial inventory of art and collectibles consisting of 87 lithographic art works by the comedian and artist Red Skelton. We also plan to sell art and collectibles owned by others who consign them to us. Like our own inventory sales, consigned items will be offered for sale both online and through galleries in the Southern California region. We have recently accepted a consignment of original paintings by the well known actor, Tony Curtis.


In June of 2010 we issued a total of 2,000,000 restricted common shares in exchange for the 87 signed, numbered, limited edition, lithographic art works by the comedian and artist Red Skelton referred to above. This was a related party transaction. The seller of the Red Skelton art was our president. For accounting purposes the art was valued at $10,000 or $0.005 per share. There was no independent appraisal. In the most recent quarter we sold two of these art works.



ITEM 1A.      RISK FACTORS


Our business is subject to numerous risk factors, including the following:


Our business is relatively new, we have no substantial operating history in this business, and we have never been profitable.  As a result, we may never become profitable, and, as a result, our investors could lose some or all of their investment.        (1,464,649)


Although we were organized as a corporation in 1985, we began preparation for our current business, the sale of fine art and collectibles, in June 2010.  From the inception of the corporation in July, 1985 through June 30, 2014, we generated a net loss of $1,464,649, most of which is related to the video imaging business we operated in the late 1980s. In the year ended June 30, 2014 we had sales revenues of $450, cost of sales of $345, and generated a net loss of $12,895. In the year ended June 30, 2013 we had sales revenues of $150 and cost of sales of $115, and generated a net loss of $1,183. We cannot guarantee we will ever develop a substantial volume of sales. Even if we develop a substantial number of sales, there is no assurance that we will become a profitable company. We may never become profitable on an ongoing basis, and, as a result, our investors could lose some or all of their investment.


Because we have incurred operating losses from our inception, our accountants have expressed doubts about our ability to continue as a going concern.

 

For the periods ended June 30, 2014 and 2013 our accountants have expressed doubt about our ability to continue as a going concern as a result of our net losses and lack of working capital. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:


 

·

our ability to sell our art and collectibles at a price which will provide us a profit; and


 

·

our ability to attract consignment clients whose art and collectibles will sell.


Based upon current plans, we may incur operating losses in future periods because we may, from time to time, be incurring expenses but not generating sufficient revenues. We expect approximately $11,500 in operating costs over the next twelve months. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. Failure to generate sufficient revenues will cause us to go out of business.


Our limited operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance.


We have a limited operating history in our current business, minimal revenues and a lack of profitability. These factors make it difficult to evaluate our business on the basis of historical operations. As a consequence, our past results may not be indicative of future results. Although this is true for any business, it is particularly true for us because our limited operating history means that we do not have a historical basis for making future management decisions. This may hinder our ability to anticipate and timely adapt to increases or decreases in sales, revenues or expenses. For example, if we overestimate our future sales for a particular period or periods based on our very limited historical growth rate, we may increase our overhead and other operating expenses to a greater degree than we would have if we correctly anticipated the lower sales level for that period and reduced our controllable expenses accordingly. If we make poor budgetary decisions as a result of unreliable historical data, we could continue to incur losses and our investors could lose some or all of their investment.


We have a lack of liquidity and may need additional financing in the future. Additional financing may not be available when needed, which could delay, indefinitely postpone, or prevent our successful development.


Because we are only minimally capitalized, we expect to experience a lack of liquidity for the foreseeable future in our proposed operations. We will adjust our expenses as necessary to prevent cash flow or liquidity problems. However, it is possible that we will need additional financing of some type, which we do not now possess, to fully develop our operations. Our ability to raise additional financing cannot be guaranteed. If needed, we will look at both equity and debt financing, including loans from our principal shareholder. However, at the present time, we have no definitive plans for financing in place, other than any funds which may be generated from sales of our inventory, and any funds which may be loaned to us by Mr. Masters, our President. In the event that we need additional capital, Mr. Masters has agreed to loan such funds as may be necessary through June 30, 2015 for working capital purposes. To the extent that we experience a substantial lack of liquidity, our development in accordance with our proposed plan may be delayed or indefinitely postponed, our operations could be impaired, we may never become profitable, fail as an organization, and our investors could lose some or all of their investment.


As a company with no profitable operating history, and a relatively new business with little history, we are an inherently risky investment. An investor could lose his entire investment.


Although we are a 28 year old corporation, we are a new entrant in the art business. Because we are a business with little history, the operations which we engage in, the sale of fine art and collectibles, is an extremely risky business for us. An investor could lose his entire investment.

 

  

Our growth will depend primarily on our ability to execute our business plan.

 

Our growth will depend upon our ability to execute our business plan, which in turn depends on various factors including the ability to: 1) negotiate and maintain contracts and agreements with acceptable terms; 2) maintain marketing and development costs at affordable rates; 3) hire and train qualified personnel when needed; and 4) identify and maintain the necessary relationships within our industry.

 



3





Our failure to manage growth effectively could harm our business and operating results.

  

Financial and management controls, and information systems may be inadequate to support our expansion.  Managing our growth effectively will require us to continue to enhance these systems, procedures and controls, and to hire, train, and retain management and staff.  We may not respond quickly enough to the changing demands that our expansion will impose on our management.  Our failure to manage our growth effectively could harm our business and operating results.


Because we are small and do not have much capital, we must limit our operations. A company in our industry with limited operations has a smaller opportunity to be successful. If we do not make a profit, we may have to suspend or cease operations.


Because we are small and do not have much capital, we must limit our operations. We must limit our consignment gallery operations to the Southern California area for the foreseeable future. Because we must limit our operations, we may not generate sufficient sales to make a profit. If we do not make a profit, we may have to suspend or cease operations.


Our success will depend upon our ability to develop relationships with our clients and customers. If we cannot develop sufficient relationships, we may never become profitable.  An investor could lose his entire investment.


Our business model requires that we develop successful relationships with art buyers, who will purchase from us via the internet, with art collectors / sellers, who will either sell to us or consign with us, and with management of art galleries where we plan to sell fine art and collectibles on a retail consignment basis. Our performance depends, in large part, on our ability to develop relationships with these potential customers, clients and colleagues. We have no contracts or other assurances that we will be able to sell from or buy for inventory, or that we will be able to obtain art works on consignment or that we will be able to sell art on consignment, all of which could have a material adverse effect on our financial condition and results of operations. There can be no assurance that we will be able to acquire desired merchandise in sufficient quantities on terms acceptable to us, or that an inability to acquire  suitable merchandise, or the loss of one or more key sources of supply to us, will not have a material adverse effect on our financial condition and results of operations. As a result, we may never become profitable. An investor could lose his entire investment.


We are dependant on third-party providers for internet services and may not be able to continue operations if there is a disruption in the supply of such services.


We depend and will continue to depend upon third-party independent contractors such as art galleries and Ebay for providing a sales venue .  We cannot guaranty that these third party independent contractors will continue to allow us to utilize their services. We also anticipate hiring contractors to create and maintain a website for us. Such third party contractors have no fiduciary duty to the shareholders of our company and may not perform as expected. Inasmuch as the capacity for certain services by certain third-parties may be limited, the inability of those third-parties, for economic or other reasons, to provide services could have a material adverse effect upon the results of our operations and financial condition.


Intense competition in our market could prevent us from developing revenue and prevent us from achieving annual profitability. In either situation, we may never become profitable, fail as an organization, and our investors could lose some or all of their investment.


The secondary market for fine art and collectibles is intensely competitive and has become more so as a result of the recent financial recession in the country. Fewer customers are expected to purchase art and more collectors are expected to attempt to sell some or all of their collections. This is expected to result in price reductions, fewer customer orders, and reduced gross margins.  We are aware of a number of



4



other companies that are presently retailing fine art and/or collectibles online.  We believe that there will be an increasing number of online  retailers of fine art and  collectibles of the types we offer and, in the instance of certain reproductions, identical to the reproductions we offer. Some of our competitors may be able to secure  merchandise from suppliers on more favorable terms, fulfill customer orders more efficiently, and adopt more aggressive pricing or inventory availability policies than we can.


Our business has a seasonal fluctuation in sales, which can develop fluctuating quarterly results in our operations.


The gallery industry can be subject to seasonal variations in demand. For example, we expect that most of our operations will see the greatest demand during the winter holiday shopping period. Consequently, we expect to be most profitable during the fourth quarter of the calendar year.  Quarterly results may also be materially affected by the timing of new product introductions, the gain or loss of significant customers or product  lines and  variations in merchandise  mix. Accordingly, our performance in any particular quarter may not be indicative of the results that can be expected for any other quarter or for the entire year. Significant deviations from projected  demand for merchandise  could have a material adverse effect on our financial condition  and  quarterly or annual  results of  operations.


We expect to be directly affected by fluctuations in the general economy.


Demand for art and other collectible merchandise is affected by the general economic conditions in the United States. When economic conditions are favorable and discretionary income increases, purchases of non-essential items like art and other collectible merchandise generally increase. When economic conditions are less favorable, sales of art and other collectibles are generally lower. In addition, we may experience more competitive pricing pressure during economic downturns. Therefore, the recent economic downturn and any future economic downturn, or any future changes in consumer spending habits, could have a material adverse effect on our financial condition and results of operations.


We expect our products to be subject to changes in customer taste.


The markets for our products  are subject to changing  customer tastes and the need to create and market new products.  Demand for collectibles  is  influenced by the popularity of certain  themes, cultural and  demographic  trends,  marketing and advertising expenditures  and general economic conditions.  Because these factors can change rapidly, customer demand also can shift quickly.  Some collectibles appeal to customers for only a limited  time.  The success of new product introductions depends on various factors, including product selection and quality, sales and marketing efforts, timely production and delivery and consumer acceptance. We may not always be able to respond quickly  and  effectively  to changes in customer taste and demand due to the amount of time and financial  resources  that may be required to identify new  products and bring them to market.  If we were to materially misjudge the market, items in our inventory and/or certain of our consignments may remain unsold. The inability to respond quickly  to market  changes  could have a material adverse effect on our  financial  condition  and results of  operations.


We may be affected by sales tax considerations from various states.


Various  states are  increasingly  seeking to impose  sales or use taxes on inter-state mail order sales and are aggressively  auditing sales tax returns of mail order  businesses.  Complex legal issues  arise in these areas,  relating, among other things, to the required nexus of a business with a particular state, which may permit the state to require a business to collect such taxes. Although we believe that we can adequately provide for sales taxes on mail order sales,  there can be no assurance  as to the effect of actions  taken by state tax authorities on our financial condition or results of operations. In the future, we may be required to collect  sales tax on sales made to  customers in all of the states in which we conduct our operations. The imposition of sales taxes on mail order sales generally has a negative effect on mail order sales levels. All of the factors cited above may negatively affect our financial condition and results of operations in the future.  Any such impact cannot currently be quantified.



5




Our business will be concentrated in only one industry.


We plan to be in the art and collectibles business, selling art and collectibles through the Internet and through consignment sales in physical art galleries.  Our proposed operations, even if successful, will result in the operation of only this one business. Our lack of diversity into a number of areas may subject us to economic fluctuations within our industry and therefore increase the risks associated with our proposed operations.


There are factors beyond our control which may adversely affect us. Our investors could lose some or all of their investment.


Our operations may also be affected by factors which are beyond our control, principally general market conditions and changing client preferences.  Any of these problems, or a combination thereof, could have an effect on our viability as an entity. We may never become profitable, we could fail as an organization, and our investors could lose some or all of their investment.


Our success will be dependent upon our management’s efforts. We cannot achieve profitability without the efforts of our management. An investor could lose his entire investment.


Our success will be dependent upon the decision making of our two directors and, especially, of our president, Daniel Masters. Mr. Masters is a practicing attorney and therefore will devote only part time to our business. He is currently devoting about 35 hours per week to his law practice and he expects to devote approximately 10 hours per week to our business. The loss of Mr. Masters, our President, would significantly harm our operations. We have no written employment agreements with Mr. Masters. We have not obtained key man life insurance on the life of Mr. Masters.


Our stock has no public trading market and there is no guarantee a trading market will ever develop for our securities. You may not able to sell your shares when you want to do so, if at all.


There is no public market for our common stock and there has been no trading market since approximately 1998. An active trading market for our shares may never develop or be sustained. If you purchase shares of common stock, you may not be able to resell those shares at or above the initial price you paid. If a public market is established the market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, including the following:


 

·

actual or anticipated fluctuations in our operating results;


 

·

changes in financial estimates by securities analysts or our failure to perform in line with such estimates;


 

·

changes in market valuations of other companies, particularly those that market services and products such as ours;


 

·

announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;


 

·

departures of key personnel.


Additionally, as restrictions on resale end, the market price of our stock could drop significantly if the holders of restricted shares sell them or are perceived by the market as intending to sell them.




6



Applicable SEC rules governing the trading of “Penny Stocks” limit the liquidity of our common stock, which may affect the trading price of our common stock. You may not be able to sell your shares when you want to do so, if at all.

 

Our common stock is currently not quoted in any market. If our common stock becomes quoted, we anticipate that it will trade well below $5.00 per share. As a result, our common stock is considered a “penny stock” and is subject to SEC rules and regulations that impose limitations upon the manner in which our shares can be publicly traded. These regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock and the associated risks. Under these regulations, certain brokers who recommend such securities to persons other than established customers or certain accredited investors must make a special written suitability determination for the purchaser and receive the written purchaser’s agreement to a transaction prior to purchase.  These regulations will have the effect of limiting the trading activity of our common stock and reducing the liquidity of an investment in our common stock.


The over-the-counter market for stock such as ours is subject to extreme price and volume fluctuations. You may not be able to sell your shares when you want to do so, at the price you want, or at all.


The securities of companies such as ours have historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as product developments and trends in our industry and in the investment markets generally, as well as economic conditions and quarterly variations in our operational results, may have a negative effect on the market price of our common stock.


We do not expect to pay dividends on common stock.


We have not paid any cash dividends with respect to our common stock, and it is unlikely that we will pay any dividends on our common stock in the foreseeable future. Earnings, if any, that we may realize will be retained in the business for further development and expansion.




ITEM 2.       PROPERTIES


We presently utilize office space in the home of our president. This space is provided to the Company by our president on a rent free basis, and it is anticipated that this arrangement will continue for at least the next twelve months.




ITEM 3.       LEGAL PROCEEDINGS


There is no litigation, pending or threatened, by or against the Company.




ITEM 4.

       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


  

No matters were submitted to a vote of security holders during the period ended June 30, 2014.





PART II



7




ITEM 5.

MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS,

AND ISSUER PURCHASES OF EQUITY SECURITIES


Market Information


There is no trading market for our Common Stock at present and there has been no trading market since approximately 1998. We do not have a trading symbol. There is no assurance that a trading market will ever develop or, if such a market does develop, that it will continue. The Company intends to request a broker-dealer to make application to Finra to have the Company's securities traded on the OTC Bulletin Board System or published, in print and electronic media, or either, in the Pink Sheets, LLC ("Pink Sheets"), however there is no assurance that a broker-dealer will agree to make such application or, if one does, that Finra will provide us with a symbol.


Holders


As of June 30, 2014, there were approximately 644 stockholders of record holding our common stock.


Dividends


We have never paid a dividend on our common stock and we do not intend to pay a dividend in the foreseeable future. We have had no operating earnings to date and we anticipate that any earnings we may realize in the future will be utilized to build up our inventory of art and collectibles for sale.


Recent Sales of Unregistered Securities


During the fiscal years ended June 30, 2014 and 2013 there were no sales of unregistered securities. The last sale of unregistered securities was on June 28, 2010 when the Company’s president, Daniel Masters purchased unregistered securities from the Company. Mr. Masters received a total of 2,000,000 common shares on June 28, 2010 in exchange for 87 signed, numbered, limited edition, lithographic prints produced by comedian and artist Red Skelton valued by the Company at a total of $10,000 or $0.005 per share of stock issued.  We relied upon Section 4(2) of the Securities Act of 1933, as amended for the above issuances. We believed that Section 4(2) was available because:


       -  The issuance had no underwriters, underwriting discounts or commissions;

       -  We placed a restrictive legend on the certificate issued;

       -  The sale was not made by general solicitation or advertising;

       -  The sales was made to an officer, director, and accredited investor.


       In connection with the above transaction, we provided the following to the investor:


       -  Access to all our books and records.

       -  Access to all material contracts and documents relating to our operations.

       -  The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investor was given access.


            Forward Stock Split


There were no stock splits during the years ended June 30, 2014 and 2013. On June 25, 2010 the Company affected a forward split of its existing and outstanding shares on the basis of 12 new shares for each 10 old shares.  


Repurchases




8



We have never repurchased any shares of our common stock, nor were any repurchases made on our behalf, nor have any future repurchases been authorized.




ITEM 6.

SELECTED FINANCIAL DATA


The following balance sheet data and statement of operations data for the years ended June 30, 2014 and 2013 were derived from our audited financial statements. Our audited financial statements for those periods and the notes thereto appear elsewhere herein. The data should be read in conjunction with the annual financial statements, related notes, and other financial information appearing elsewhere herein.


 

June 30, 2014

  June 30, 2013

Statements of Operations Data

 

 

Revenues

Cost of Sales

           450

           345

          150

          115

Expenses

      13,000

         2,500

Gross Profit (Loss)

Other Income

Net Income (Loss)

Earning (Loss) per Share

      (12,895)

        0              

      (12,895)

        (0.006)

         (2,465)

         1,282

         (1,183)

         (0.001)

Weighted Average Common Shares

   2,243,500

   2,243,500

   

 

 

 

 

 

 

 

 

Balance Sheets Data

 

 

Cash

Inventory

             0

        9,195

                      0

                9,540

Total Assets

        9,195

          9,540

 

 

 

Liabilities

      12,550

               0

 

 

 

Stockholders’ Equity(Deficit)

        (3,355)

         9,540




ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS


The following discussion and analysis is intended to help you understand our financial condition and results of operations for the fiscal years ended June 30, 2014 and 2013. You should read the following discussion and analysis together with our audited financial statements and the notes to the financial statements included under Item 8 in this report. Our future financial condition and results of operations will vary from our historical financial condition and results of operations described below based on a variety of factors. You should carefully review the risks described under Item 1A and elsewhere in this report, which identify certain important factors that could cause our future financial condition and results of operations to vary.


1) Liquidity:  On June 30, 2014 the Company had no cash on hand but had an inventory of art and/or collectibles consisting of 80 signed, numbered, limited edition, lithographic prints by artist and comedian Red Skelton. These lithographs are valued at $9,195. On June 30, 2013 the Company had no cash on hand but had an inventory of art and/or collectibles consisting of 83 signed, numbered, limited



9



edition, lithographic prints by artist and comedian Red Skelton. These lithographs were valued at $9,540. It is anticipated that we will incur nominal expenses in the implementation of the business plan described herein. While we have only limited cash with which to pay these anticipated expenses, the President of the Company has agreed that he will pay these charges, if they exceed the cash on hand, with his personal funds as interest free loans to the Company or as capital contributions.


2) Capital Resources:  As noted above, the Company has no liquid capital resources but will rely upon interest free loans or capital contributions from its President to meet its needs.


3) Results of Operations:  In June 2010 the Company acquired an inventory of 87 artworks and determined to enter the business of selling art and collectibles. As of June 30, 2014 seven such sales had been made. In June 2014 the Company received an offer of 20 original paintings by the actor Tony Curtis to be consigned for sale. The consignment was not immediately accepted, but subsequently an unrelated art gallery agreed to accept these works on consignment and the Company is now finalizing the terms of this consignment and re-consignment.


From the inception of the corporation in July, 1985 through June 30, 2014, we generated a net loss of $1,464,649, most of which is related to the video imaging business we operated in the late 1980s.

For the year ended June 30, 2014 we had sales revenues of $450 and cost of sales of $345  and incurred $13,000 in general and administrative expense, and generated a net loss of $12,895. For the year ended June 30, 2013 we had sales revenues of $150 and cost of sales of $115  and incurred $2,500 in general and administrative expense, and generated a net loss of $1,183.


4) Off-Balance Sheet Arrangements:  The Company has no off balance sheet arrangements.


5) Disclosure of Contractual Obligations:  The Company has no contractual obligations.




Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Management believes that the Company bears no direct market risk. The Company holds no debt or equity securities, no foreign currencies, and has no credit facility. The President of the Company has agreed to extend loans to the Company as needed to meet obligations, however these will be interest free. The Company has not made any sales, purchases, or commitments with foreign entities which would expose it to currency risks.



ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


THREE SHADES FOR EVERYBODY, INC.

FINANCIAL STATEMENTS

FOR THE YEARS ENDED

June 30, 2014 and 2013


Immediately following please see:


Report Of Independent Registered Public Accountant

Balance Sheets

Statement of Operations

Statement of Changes in Stockholders’ Equity

Statement of Cash Flows

Notes to Financial Statements



10



PLS CPA, A PROFESSIONAL CORP.

t 4725 MERCURY STREET #210 t SAN DIEGO t CALIFORNIA 92111t

t TELEPHONE (858)722-5953 t FAX (858) 761-0341  t FAX (858) 433-2979

t E-MAIL changgpark@gmail.com t







 Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders

Three Shades For Everybody, Inc.


We have audited the accompanying balance sheets of Three Shades for Everybody, Inc. (A Development Stage “Company”) as of June 30, 2014 and 2013, and the related statements of operations, changes in shareholders’ equity (deficit) and cash flows for the years ended June 30, 2014 and 2013, and the period from July 23, 1985 (inception) to June 30, 2014. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  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 statements presentation.  We believe that our audit provides a reasonable basis for our opinion.  


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Three Shades for Everybody, Inc. as of June 30, 2014 and 2013, and the result of its operations and its cash flows for the years ended June 30, 2014 and 2013, and the period from July 23, 1985 (inception) to June 30, 2014 in conformity with U.S. generally accepted accounting principles.


The financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 7 to the financial statements, the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/PLS CPA

____________________

  PLS CPA, A Professional Corp.


September 8, 2014

San Diego, CA. 92111






11






                                   

THREE SHADES FOR EVERYBODY, INC.

(A Development Stage Company)

 

 

 

 

 

BALANCE SHEETS

 

 

 

 

 

ASSETS

 

 

As of June 30, 2014

 

As of June 30, 2013

Current Assets:

 

 

 

 

 

 

 

 

 

Cash

 

$

-

 

$

-

Inventory

 

9,195

 

9,540

 

 

 

 

 

      TOTAL ASSETS

 

$

9,195

 

$

9,540

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts Payable

 

$

 

$

Note Payable to related party

 

12,550 

 

TOTAL LIABILITIES

 

$

12,550 

 

$

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

Preferred stock, $ .001 par value, 50,000,000 shares authorized, no share issued or outstanding as of June 30, 2014 or 2013

 

 

Common stock, $.001 par value; 200,000,000 shares authorized, 2,243,500 shares issued and outstanding as of June 30, 2014 and 2013

 

2,243 

 

2,243 

Additional paid in capital

 

1,459,051 

 

1,459,051 

Deficit accumulated during development stage

 

(1,464,649)

 

(1,451,754)

 

 

 

 

 

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)

 

$

(3,355)

 

$

9,540 

 

 

 

 

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

 

$

9,195 

 

$

9,540 

 

 

 

 

 

 

 

 

 

 

See Notes to Financial Statements

 

 

 

 












12







THREE SHADES FOR EVERYBODY, INC.

(A Development Stage Company)

 

 

 

 

 

 

 

STATEMENTS OF OPERATIONS

 

 

Year Ended          June 30, 2014

 

Year Ended              June 30, 2013

 

Accumulated since July 23, 1985 (inception) to June 30, 2014

 

 

 

 

 

 

 

Net Revenue

 

$

450 

 

$

150 

 

$

4,291,286 

 

 

 

 

 

 

 

Cost of Sales

 

345 

 

115 

 

805 

 

 

 

 

 

 

 

Gross Profit

 

105 

 

35 

 

4,290,481 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

General and Administrative Expense

 

13,000 

 

2,500 

 

5,774,988 

 

 

 

 

 

 

 

Total Expenses

 

13,000 

 

2,500 

 

5,774,988 

 

 

 

 

 

 

 

Gross Profit (Loss)

 

(12,895)

 

(2,465)

 

(1,484,507)

 

 

 

 

 

 

 

Other Incomce and Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt Forgiveness

 

 

1,281 

 

19,839 

 

 

 

 

 

 

 

Interest Income

 

 

 

19 

 

 

 

 

 

 

 

Total Other Income and Expense

 

 

1,282 

 

19,858 

 

 

 

 

 

 

 

Provision for Income Tax

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(12,895)

 

$

(1,183)

 

$

(1,464,649)

 

 

 

 

 

 

 

Basic an Diluted Earning (Loss) per Share

 

$

(0)

 

$

(0)

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding

 

2,243,500 

 

2,243,500 

 

 

 

 

 

 

 

 

 

See Notes to Financial Statements





13




THREE SHADES FOR EVERYBODY, INC.

(A Development Stage Company)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

Common Stock

 

 

 

 

Shares

Amount

Additional Paid-in Capital

Deficit Accumulated During Development Stage

Balance

Initial Issuance of Common Stock

26,427 

26 

974 

 

 

Net (loss) in year ended 6/30/85

 

 

 

(18,475)

 

Balance 6/30/85

26,427 

$

26 

$

974 

$

(18,475)

$

(17,475)

 

 

 

 

 

 

Issuance of Common Stock

65,537 

66 

12,334 

 

 

Net (loss) in year ended 6/30/86

 

 

 

(647,204)

 

Balance 6/30/86

$

91,964 

$

92 

$

13,308 

$

(665,679)

$

(652,279)

 

 

 

 

 

 

Issuance of Common Stock for Cash

36,996 

37 

69,963 

 

 

Issuance of Common Stock for Acquisition

90,405 

90 

3,331 

 

 

Net (loss) in year ended 6/30/87

 

 

 

(290,805)

 

Balance 6/30/87

$

219,365 

$

219 

$

86,602 

$

(956,484)

$

(869,663)

 

 

 

 

 

 

Issuance of Common Stock for Cash

9,976 

10 

91,490 

 

 

Net (loss) in year ended 6/30/88

 

 

 

(489,278)

 

Balance 6/30/88

229,341 

$

229 

$

178,092 

$

(1,445,762)

$

(1,267,441)

 

 

 

 

 

 

Issuance of Stock on Warrant Exercise

37,012 

37 

378,513 

 

 

Issuance of Stock for Debt Forgiveness

6,030 

196,463 

196,241 

 

Net (loss) in year ended 6/30/89

 

 

 

(708,631)

 

Balance 6/30/89

272,383 

$

272 

$

753,068 

$

(1,958,152)

$

(1,204,812)

 

 

 

 

 

 

Issuance of Stock for Debt Forgiveness

41,350 

42 

206,943 

205,420 

 

Net (loss) in year ended 6/30/90

 

 

 

(157,399)

 

Balance 6/30/90

313,733 

$

314 

$

960,011 

$

(1,910,131)

$

(949,806)

 

 

 

 

 

 

Net (loss) in year ended 6/30/91

 

 

 

 

 

Balance 6/30/91

313,733 

$

314 

$

960,011 

$

(1,910,131)

$

(949,806)

 

 

 

 

 

 

Net (loss) in year ended 6/30/92

 

 

 

 

 

Balance 6/30/92

313,733 

$

314 

$

960,011 

$

(1,910,131)

$

(949,806)

 

 

 

 

 

 

Net (loss) in year ended 6/30/93

 

 

 

 

 

Balance 6/30/93

313,733 

$

314 

$

960,011 

$

(1,910,131)

$

(949,806)

 

 

 

 

 

 

Debt Eliminated by Statute of Limitations

 

 

463,937 

463,937 

 

Net (loss) in year ended 6/30/94

 

 

 

 

 

Balance 6/30/94

313,733 

$

314 

$

1,423,948 

$

(1,446,194)

$

(21,932)

 

 

 

 

 

 

Net (loss) in year ended 6/30/95

 

 

 

 

 

Balance 6/30/95

313,733 

$

314 

$

1,423,948 

$

(1,446,194)

$

(21,932)

 

 

 

 

 

 

Issuance of Stock for Services

502,099 

502 

$

18,498 

 

 

Net (loss) in year ended 6/30/96

 

 

 

 

 

Balance 6/30/96

815,832 

$

816 

$

1,442,446 

$

(1,446,194)

$

(2,932)

 

 

 

 

 

 

Net (loss) in year ended 6/30/97

 

 

 

 

 

Balance 6/30/97

815,832 

$

816 

$

1,442,446 

$

(1,446,194)

$

(2,932)

 

 

 

 

 

 

Net (loss) in year ended 6/30/98

 

 

 

 

 

Balance 6/30/98

815,832 

$

816 

$

1,442,446 

$

(1,446,194)

$

(2,932)

 

 

 

 

 

 

Reverse Stock Split - 1 for 100

(807,675)

(808)

808 

 

 

Issuance of Common Stock for Cash

26,427 

26 

2,474 

 

 

Net (loss) in year ended 6/30/99

 

 

 

 

 

Balance 6/30/99

34,584 

$

34 

$

1,445,728 

$

(1,446,194)

$

(432)

 

 

 

 

 

 

Stock Split - 2.8 for 1

62,253 

62 

(62)

 

$

Issuance of Stock for Services

11,419 

12 

$

420 

 

$

432 

Net (loss) in year ended 6/30/2000

 

 

 

 

 

Balance 6/30/2000

108,256 

$

108 

$

1,446,086 

$

(1,446,194)

$

 

 

 

 

 

 

Net (loss) in year ended 6/30/01

 

 

 

 

 

Balance 6/30/01

108,256 

$

108 

$

1,446,086 

$

(1,446,194)

$

 

 

 

 

 

 

Net (loss) in year ended 6/30/02

 

 

 

 

 

Balance 6/30/02

108,256 

$

108 

$

1,446,086 

$

(1,446,194)

$

 

 

 

 

 

 

Net (loss) in year ended 6/30/03

 

 

 

 

 

Balance 6/30/03

108,256 

$

108 

$

1,446,086 

$

(1,446,194)

$

 

 

 

 

 

 

Net (loss) in year ended 6/30/04

 

 

 

 

 

Balance 6/30/04

108,256 

$

108 

$

1,446,086 

$

(1,446,194)

$

 

 

 

 

 

 

Net (loss) in year ended 6/30/05

 

 

 

 

 

Balance 6/30/05

108,256 

$

108 

$

1,446,086 

$

(1,446,194)

$

 

 

 

 

 

 

Net (loss) in year ended 6/30/06

 

 

 

 

 

Balance 6/30/06

108,256 

$

108 

$

1,446,086 

$

(1,446,194)

$

 

 

 

 

 

 

Net (loss) in year ended 6/30/07

 

 

 

 

 

Balance 6/30/07

108,256 

$

108 

$

1,446,086 

$

(1,446,194)

$

 

 

 

 

 

 

Issuance of Stock for Services

135,244 

135 

4,965 

 

$

5,100 

Net (loss) in year ended 6/30/08

 

 

 

(5,100)

$

(5,100)

Balance 6/30/08

243,500 

243 

$

1,451,051 

$

(1,451,294)

$

 

 

 

 

 

 

Net (loss) in the year ended 6/30/09

 

 

 

(5,000)

$

(5,000)

Balance 6/30/09

243,500 

243 

$

1,451,051 

$

(1,456,294)

$

(5,000)

 

 

 

 

 

 

Issuance of Stock for Art Works

2,000,000 

2,000 

8,000 

 

$

10,000 

Net (loss) in year ended 6/30/10

 

 

 

(5,200)

$

(5,200)

Balance 6/30/10

2,243,500 

2,243 

$

1,459,051 

$

(1,461,494)

$

(200)

 

 

 

 

 

 

Net (loss) in the year ended 6/30/11

 

 

 

(4,953)

(4,953)

Balance 6/30/11

2,243,500 

2,243 

$

1,459,051 

$

(1,466,447)

$

(5,153)

 

 

 

 

 

 

Net profit in the year ended 6/30/12

 

 

 

15,876 

15,876 

Balance 6/30/12

2,243,500 

2,243 

$

1,459,051 

$

(1,450,571)

$

10,723 

 

 

 

 

 

 

Net (loss) in the year ended 6/30/13

 

 

 

(1,183)

$

(1,183)

Balance 6/30/13

2,243,500 

2,243 

$

1,459,051 

$

(1,451,754)

$

9,540 

 

 

 

 

 

 

Net (loss) in the year ended 6/30/14

 

 

 

(12,895)

(12,895)

Balance 6/30/14

2,243,500 

2,243 

$

1,459,051 

$

(1,464,649)

$

(3,355)

 

 

 

 

 

 

 

 

 

 

 

 

 

See Notes to Financial Statements

 




16




THREE SHADES FOR EVERYBODY, INC.

(A Development Stage Company)

STATEMENT OF CASH FLOWS

 

Year Ended       June 30, 2014

 

Year Ended       June 30, 2013

 

Accumulated since July 23, 1985 (inception) to June 30, 2014

Cash Flows From Operation Activities

 

 

 

 

 

 

 

 

 

 

 

Net Profit (Loss)

$

(12,895)

 

$

(1,183)

 

$

(1,464,649)

Adjustments to reconcile net Income (Loss) to cash provided       by (used in) operations

 

 

Depreciation

 

 

Common Stock issued for services

 

 

Decrease in payable to a related party for debt forgiveness

 

(1,281)

 

(19,839)

Decrease (Increase) in Inventory

345 

 

115 

 

805 

Increase (Decrease) in accounts Payable

 

(719)

 

(9,946)

 

 

 

 

 

 

Net cash provided by (used in) operating activities

(12,550)

 

(3,068)

 

(1,493,629)

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

 

 

 

Proceeds of loan from related party

12,550 

 

 

1,461,750 

Common stock issued

 

 

10,000 

Net cash provided by (used in) financing activities

12,550 

 

 

1,471,750 

 

 

 

 

 

 

Net increase (decrease) in cash

 

(3,068)

 

(21,879)

 

 

 

 

 

 

Cash beginning of year

 

3,068 

 

 

 

 

 

 

 

Cash end of year

$

 

$

 

$

 

 

 

 

 

 

Supplemental Discolsures of Cash Flow Information

 

 

 

 

 

Interest paid

$

 

$

 

 

Income taxes paid

$

 

$

 

 

 

 

 

 

 

 

See Notes to Financial Statements



18



THREE SHADES FOR EVERYBODY, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2014 and 2013



NOTE 1- ORGANIZATION AND DESCRIPTION OF BUSINESS


THE COMPANY


Three Shades for Everybody, Inc. (the "Company"), was incorporated in the state of Delaware on July 23, 1985 as Na Pali Funding, Inc. and in 1986 the Company registered its stock with the SEC and conducted its Initial Public Offering. The Company was organized to invest in other firms and in 1987 the Company approved the acquisition of Vutek Systems, Inc., a California corporation, and a name change to Vutek Systems, Inc. As a result of this acquisition, the Company was primarily engaged in the design, manufacture, and sale of image capturing or processing products for IBM personal computers and compatibles until 1990. From 1990 to 2010 the Company had no business activity, although the Company changed its name to Three Shades for Everybody, Inc. in 1999. In June 2010 the Company acquired an inventory of 87 lithographic art works and entered the retail art business. The Company is a development stage company, as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915. The Company’s activities since 2010 have been limited to organization, reporting to the SEC under the 1934 Act, and negotiations for sales of a limited number of art works.



NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


BASIS OF PRESENTATION


The financial statements of the Company have been prepared in accordance with General Accepted Accounting Principles (GAAP) accepted in the United States of America applicable to exploration stage enterprises, and are expressed in U.S. dollars. The Company’s fiscal year end is June 30.


USE OF ESTIMATES


The presentation 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, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. Actual results may differ significantly from those estimates.


CASH AND CASH EQUIVALENTS


For purposes of the statements of cash flows, the Company considers cash instruments with original maturities of less than three months to be cash equivalents.


REVENUE RECOGNITION

The Company has realized small revenues from operations and is still in the development stage. The Company will recognize revenue when delivery of goods or completion of services has occurred provided there is persuasive  evidence of an agreement,  acceptance has been approved by its  customers,  the fee is fixed or determinable  based on the  completion  of  stated  terms  and  conditions,  and collection of any related receivable is reasonably assured.





19



START-UP COSTS


Costs of start-up activities, including organization costs, are expensed as incurred, in accordance with Statement of Position (SOP) 98-5.


INCOME TAXES


The Company accounts for income taxes under SFAS No. 109, "Accounting for Income Taxes." This statement requires an asset and liability approach to account for income taxes. The Company provides deferred income taxes for temporary differences that will result in taxable or deductible amounts in future years based on the reporting of certain costs in different periods for financial June 30, 2014 or 2013.


FAIR VALUES OF FINANCIAL INSTRUMENTS


Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability.  ASC 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. FASB ASC 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:

 

·

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.

·

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

·

Level 3: Significant unobservable inputs that reflect a reporting entitys own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.


The recorded amounts of financial instruments, including cash equivalents, accounts payable and notes payable to related party approximate their market values as of June 30, 2014.


STOCK-BASED COMPENSATION


The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification (ASC) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.  Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future consolidated financial statements.



NOTE 3- STOCKHOLDERS' EQUITY


COMMON STOCK



20




The Company has authorized share capital of two hundred million (200,000,000) shares of common stock, having one tenth of a cent ($0.001) par value per share, and fifty million (50,000,000) shares of preferred stock, also having one tenth of a cent ($0.001) par value per share.


In the year ended June 30, 1987 the Company’s S-18 registration statement with the SEC became effective and the Company went public, issuing 1,400,000 units, each consisting of one share and two warrants, at a price of $0.05 per unit. Also in that year it acquired VuTek Systems, Inc., in a stock for stock exchange which resulted in the issuance of an additional 3,421,000 shares. Additional shares were issued in 1988, 1989, and 1990 as a result of warrant exercises, private placements, and issuances for services.


By June 30, 1990 the Company had a total of 11,872,069 shares issued and outstanding. By the end on 1990 the Company closed its business and became dormant. In 1994 the number of shares issued and outstanding remained at 11,872,069, however the additional paid in capital was increased by $463,937 as a result of the expiration and forgiveness of debt through the Statute of Limitations.


In 1996 19,000,000 shares were issued for services and in 1999, with a total of 30,872,069 shares outstanding, a 1 for 100 reverse split was voted which reduced the total number of shares issued and outstanding to 308,721. Also in June 1999 1,000,000 shares were issued in a private placement, bringing the total outstanding to 1,308,721 shares.


In the year ended June 30, 2000 there was a forward split of 2.8 for 1, bringing the total number of shares outstanding to 3,664,419. Additional shares were issued in that year bringing the total outstanding to 4,096,575.


The total number of shares issued and outstanding remained at 4,096,575 until July 23, 2007. On that date an additional 5,100,000 shares were issued to the Company's officers in exchange for services and as reimbursement for expenses paid on behalf of the company, bringing the total outstanding to 9,196,575 shares.


On July 24, 2008 the Company, with the consent of its majority shareholder, adopted a resolution calling for a reverse split of its issued and outstanding common stock at a ratio of one (1) new share for each sixty (60) old shares. As a result the total number of common shares issued and outstanding was reduced to 153,572.


On June 25, 2010 the Company, with the consent of its majority shareholder, adopted a resolution and an amendment to its articles of incorporation calling for a forward split of its issued and outstanding common stock at a ratio of twelve (12) new shares for each ten (10) old shares and for rounding of odd lots to the nearest round lot of shares. As a result, the total number of common shares issued and outstanding was increased to 243,500. The accompanying financial statements have been retroactively adjusted, pursuant to SAB Topic 4:C, to reflect the results of this forward split.


On June 28, 2010 a total of 2,000,000 shares were issued to the President of the Company in exchange for a collection of signed, numbered, lithographs by Red Skelton. The collection consisted of 87 pieces and was valued at $10,000 or $0.005 per share.


As a result of these issuances and the forward split there were a total of 2,243,500 shares of common stock issued and outstanding as of June 30, 2014 and 2013. There are no shares of preferred stock issued and outstanding.



NOTE 4 - EARNINGS PER SHARE


The computations of earnings per share for the years ended June 30, 2014 and 2013 are as follows:



21





 

 

2014

2013

LOSS PER COMMON SHARE, BASIC

 

 

 

 Numerator Net income  

$

(12,895)

$

(1,183)

 

 Denominator Weighted-average shares

2,243,500 

2,243,500 

 

 Net loss per common share

$

(0.006)

$

(0.001)



There are no dilutive instruments outstanding, and therefore basic earnings per share and diluted earnings per share are the same.

 


NOTE 5 - INCOME TAXES


There was no income and no provisions for income taxes for the years ended June 30, 2014 and 2013.



NOTE 6 - RELATED PARTY TRANSACTIONS


In the year ended June 30, 2013 the President advanced $1,281 to cover expenses incurred and forgave these loans during the same year.


During the three months ended June 30, 2014 the President advanced $1,950 to cover expenses incurred and paid during that quarter. The Company issued the President a three years convertible note for the sum of $1,950 at zero interest, convertible into one share of common stock per $0.01 of loan principal. Thus the Note is convertible into a total of 195,000 shares of common stock.


During the three months ended March 31, 2014 the President advanced $2,100 to cover expenses incurred and paid during that quarter. The Company issued the President a three years convertible note for the sum of $2,100 at zero interest, convertible into one share of common stock per $0.01 of loan principal. Thus the Note is convertible into a total of 210,000 shares of common stock.


During the three months ended December 31, 2013 the President advanced $3,500 to cover expenses incurred and paid during that quarter. The Company issued the President a three years convertible note for the sum of $3,500 at zero interest, convertible into one share of common stock per $0.01 of loan principal. Thus the Note is convertible into a total of 350,000 shares of common stock.


During the three months ended September 30, 2013 the President advanced $5,000 to cover expenses incurred and paid during that quarter. The Company issued the President a three years convertible note for the sum of $5,000 at zero interest, convertible into one share of common stock per $0.01 of loan principal. Thus the Note is convertible into a total of 500,000 shares of common stock.


As a result, there are $12,550 of notes issued convertible into a total of 1,255,000 common shares.



NOTE 7 - GOING CONCERN


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company's financial position and operating results raise substantial doubt about the Company's ability to continue.




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The ability of the Company to continue as a going concern is dependent upon developing sales and/or obtaining additional capital and financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.



NOTE 8 - COMMITMENT AND CONTIGENCY


There was no commitment or contingency to disclose during years ended June 30, 2014 and 2013.



NOTE 9 – SUBSEQUENT EVENTS


On August 22, 2014 the Company agreed to accept a consignment of twenty original paintings by the actor Tony Curtis and to re-consign these works with the Alexander Salazar Gallery for sale. The Company will earn 5% of the gross sales price on any works sold as its consignment fee.




*********************************************************************************************************************







ITEM 9.       

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

              

AND FINANCIAL DISCLOSURE.

 

Effective July 30, 2013, the Public Company Accounting Oversight Board ( "PCAOB") issued an order which, among other things, revoked the PCAOB registration of Stan J. H. Lee, CPA, the Company's independent registered public accounting firm. As a result of that revocation, the Company can no longer include the audit report and consent of Stan J.H. Lee, CPA in its filings with the Securities and Exchange Commission. In light of the foregoing actions by the PCAOB, the Company dismissed Stan J. H. Lee, CPA, as the Company's independent registered public accounting firm on August 27, 2013. The Company’s Board of Directors participated in and approved the decision to dismiss Stan J. H. Lee, CPA.


The audit report by Stan J. H. Lee, CPA, on the Company’s financial statements for the years ended June 30, 2012 and June 30, 2011 contained no adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principle, except that the audit reports on the financial statements of the Company for those fiscal years contained uncertainty about the company's ability to continue as a going concern.


During the years ended June 30, 2012 and 2011, and any subsequent interim period through August 27, 2013, there had been no disagreements with our former independent registered public accounting firm, Stan J. H. Lee, CPA, on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which would have caused it to make reference to the subject matter of the disagreement in connection with its report.


On August 27, 2013 we agreed to engage PLS, CPA as our new independent registered public accounting firm. The appointment of PLS, CPA was approved by our Board of Directors. During the fiscal periods ended June 30, 2012, 2011 and 2010 we did not consult with PLS, CPA on (i) the application of



23



accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on our financial statements, and PLS, CPA did not provide either a written report or oral advice to us that was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) the subject of any disagreement, as defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.



ITEM 9A.

CONTROLS AND PROCEDURES.


Evaluation of Disclosure Controls and Procedures  


We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934.  In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met.  Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.  The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Our management, with the participation of our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report.  Based on that evaluation, our Chief Executive Officer who also serves as our Chief Financial Officer, concluded that our disclosure controls and procedures as of the end of the period covered by the Annual Report were not effective and that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 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 Chief Executive Officer who also serves as our Chief Financial Officer, 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.


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 Securities Exchange Act of 1934).  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 of 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, with the participation of our Chief Executive Officer who also serves as our Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of June 30, 2014.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework.  Based on this evaluation, our management concluded that, as of June 30, 2014, our internal controls over financial reporting were not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. In arriving at that conclusion, management identified as materials weaknesses in our internal control over financial reporting: (1) the



24



lack of accounting proficiency of our chief executive officer who is our sole officer and our principal accounting officer which has resulted in a reliance on part-time outside consultants to perform substantially all of our accounting functions and  (2) a lack of adequate segregation of duties and necessary corporate accounting resources in our financial reporting process and accounting function, also arising from our chief executive officer’s lack of accounting training and service in multiple roles as well as our limited financial resources to support hiring of personnel and implementation of accounting systems


This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit smaller reporting companies to provide only management’s report in this annual report.


Changes in Internal Control Over Financial Reporting


There were no changes in our internal control over financial reporting identified in connection with our evaluation that occurred during the quarter ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



ITEM 9B.

OTHER INFORMATION.


None.




PART III


ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.


We currently have only one officer and director:


Name of Director

Age

Positions

Year First Became a Director


Daniel Masters

68

President, Secretary,

       Director since 1986

Treasurer, & Director


Principal Occupations During at Least the Past Five Years and Certain Directorships


Since 2002 Daniel Masters has practiced business law with an emphasis on corporate reorganizations and Chapter 11 bankruptcies. Before establishing his current law practice Mr. Masters served as an independent investment banker and corporate finance consultant from 1990 to 2002. Between 1978 and 1989 he worked as an investment banker with L.F. Thompson & Co., and at Capital Technology Group and as Vice President for Finance with the Trilon Group, a private holding company with over a billion dollars in assets. Prior to 1978 Mr. Masters held positions as a legislative aid on the staff of the U.S. Congress and as executive assistant to the President of the University of California. Mr. Masters received his Bachelor’s Degree (A.B.) from Harvard University and a Juris Doctorate (J.D.) from Thomas Jefferson School of Law where he served on the Editorial Board of the Law Review.  He occasionally serves as an Adjunct Professor of Law at Thomas Jefferson School of Law where he teaches bankruptcy law.


       

In addition to Three Shades For Everybody, Inc., Daniel Masters is currently an officer and a Director of Golden Edge Entertainment, Inc. and of MedBook World, Inc., and a director of BullsNBears.com, Inc. Golden Edge Entertainment, Inc. operates a recording studio near Nashville,



25



Tennessee; MedBook World is a dormant shell company; and BullsNBears.com, Inc., is developing a website for the delivery of financial information and trading simulations for investors.



Code of Ethics.


     

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, and persons performing similar functions. The code of ethics will be posted on the investor relations section of the Company's website in the event that we develop a website. At such time as we have posted the code of ethics on our website, we intend to satisfy the disclosure requirements under Item 10 of Form 8-K regarding any amendment to, or waiver from, a provision of the code of ethics by posting such information on the website.


Audit Committee.


     

Our board of directors has not established an audit committee. In addition, we do not have a compensation committee or executive committee or similar committees. We will not, in all likelihood, establish an audit committee until such time as the Company generates a positive cash flow of which there can be no assurance, and develops a lager Board of Directors. We recognize that an audit committee, when established, will play a critical role in our financial reporting system by overseeing and monitoring management's and the independent auditors' participation in the financial reporting process. At such time as we establish an audit committee, its additional disclosures with our auditors and management may promote investor confidence in the integrity of the financial reporting process. Until such time as an audit committee has been established, the full board of directors will undertake those tasks normally associated with an audit committee to include, but not by way of limitation, the (i) review and discussion of the audited financial statements with management, and (ii) discussions with the independent auditors of matters required to be discussed by the Statement On Auditing Standards No. 61 and No. 90, as may be modified or supplemented.



ITEM 11.      EXECUTIVE COMPENSATION.


        

No current officer or director has received any cash compensation for services rendered to the Company since its inception, nor are there any agreements in place or contemplated to provide cash compensation to any officer or director. However, our officer and director received stock as compensation for past services and reimbursement for past expenses in 2008. There are no agreements in place or contemplated at this time to provide stock compensation to our directors or officers in the future. We have no retirement, pension, profit sharing, stock option or insurance programs or other similar programs for the benefit of our officers, directors, or employees, and we have no employees at this time.



ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS


The following table sets forth certain information as of June 30, 2014 regarding the beneficial ownership of our common stock (i) by each person known by the Company to be the beneficial owner of more than five percent of the outstanding common stock, (ii) by each director of the Company, (iii) by each executive officer of the Company and (iv) by all executive officers and directors of the Company as a group.


    Name and                    

Number of

    Address of                  

Shares

    Beneficial                  

Beneficially        

Percent

    Owner                       

Owned               

of Class

____________________________________________________________________________



26




Daniel Masters           

   

  2,100,000         

93.60%

1150 Silverado, Ste 204

La Jolla, CA 92037

                   

All Officers and             

     

 2,100,000         

93.60%

Directors as a Group

(one individual)


The remaining 143,500 shares of the Company's outstanding common shares are held by 643 persons, no one of which is known to be the beneficial owner of five percent (5%) or more of the Company’s common shares. There are, as of the date hereof, a total of 2,243,500 common shares issued and outstanding.   



ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS AND

DIRECTOR INDEPENDENCE


On June 28, 2010 the president and majority shareholder of the Company, Daniel Masters, sold 87 signed, numbered, limited edition, lithographs produced by comedian and actor Red Skelton to the Company in exchange for 2,000,000 shares of restricted stock. The transaction was valued at $10,000 or $0.005 per share. During the fiscal year ended June 30, 2014 Mr. Masters loaned the Company a total of $12,550 to cover expenses incurred and paid during that year. The Company issued the President a series of three years convertible notes totaling $12,550 at zero interest, convertible into one share of common stock per $0.01 of loan principal. Thus the Note is convertible into a total of 1,255,000 shares of common stock. There were no reportable transactions with related persons during fiscal 2013.


The Company’s one director is also its one officer. Therefore it has no independent directors.



ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES


 Stan J. H. Lee, CPA was the Company’s independent audit firm during fiscal 2013. The following table sets forth the aggregate fees billed by Stan J. H. Lee, CPA to the Company during those years:


2014

2013

Audit fees, including the audit of the Company’s

annual financial statements and fees related to

consents and review of registration statements

      

$ 0                                  $2,000

      


Audit related fees

       

   0

   

   0             


Tax fees and tax related fees

   

   0

  

   0             


All other fees for other services

   

   0

   

   0




PLS, CPA has audited the Company’s financial statements for the years 2014 and 2013. The following table sets forth the aggregate fees billed by PLS, CPA to the Company during the years covered by this report:


2014

2013

Audit fees, including the audit of the Company’s

annual financial statements and fees related to



27



consents and review of registration statements

      

 $9,500

                           $0

      


Audit related fees

        

 $0

   

   0             


Tax fees and tax related fees

   

   0

  

   0             


All other fees for other services

   

   0

   

   0

            

The Board of Directors acts as the Audit Committee. The Board pre-approves the engagement of accountants to render all audit services for the Company, as well as any changes to the terms of the engagement. The Board will also pre-approve all non-audit related services proposed to be provided by the Company’s independent registered public accounting firm. The Board reviews the terms of the engagement, a description of the engagement and a budget for the engagement.

 


PART IV


ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


The following documents are filed as part of this report or incorporated by reference:


The financial statements listed below are included under Item 8 of this report:

   

Balance Sheets as of June 30, 2014 and 2013;

   

Statements of Operations for the years ended June 30, 2014 and 2013;

   

Statements of Stockholders’ Equity since 1985 (inception);

   

Statements of Cash Flows for the years ended June 30, 2014 and 2013; and

   

Notes to Financial Statements.


Exhibit 3.1      

Articles of Incorporation.

Incorporated by reference to Exhibit 3.1 of our Form 10-12G,

filed on Aug. 25, 2008


Exhibit 3.1.1   

Amendment to Articles of Incorporation.

Incorporated by reference to Exhibit 3.1.1 of our Form 10-K for the

year ended June 30 2010, filed on Sept. 14, 2010


Exhibit 3.2   

By-Laws of the Corporation.

Incorporated by reference to Exhibit 3.2 of our Form 10-12G,

filed on Aug. 25, 2008


Exhibit 23.1  

Consent of Independent Registered Public Accounting Firm  

Filed herewith


Exhibit 31.1  

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

Filed herewith


Exhibit 31.2  

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

Filed herewith


Exhibit 32    

Section 1350 Certification

Filed herewith

 

 

 

 

 

 

 

Exhibit 101

The following materials from the Company’s Annual Report on Form 10-K for

the year ended June 30, 2014, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at June 30, 2014 and June 30, 2013, (ii) Statement of



28



Operations for the years ended June 30, 2014 and June 30, 2013, (iii) Statements of Stockholders’ Equity since 1985 (inception); (iv) Statements of Cash Flows for the years ended June 30, 2014 and June 30, 2013, and (v) Notes to Financial Statements.




                                   

SIGNATURES


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


Date: September 9, 2014

  

THREE SHADES FOR EVERYBODY, INC.



                                   

By: /s/ Daniel Masters

                                       

_________________________________

                                       

Daniel Masters

                                      

Chief Executive Officer


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


Signature

Title

Date


/s/ Daniel Masters

President, Secretary,

September 9, 2014

(Daniel Masters)

Treasurer and Director

(Chief Executive Officer)

(Chief Financial Officer)







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