Framewaves Inc - Annual Report (Small Business Issuers) (10KSB)


	SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-KSB	OMB APPROVAL
	OMB Number: 3235-0420
	OMB Number: 3235-0420
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(Mark One)

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

For the fiscal year ended December 31, 2007

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

For the transition period from ______________ to________________

Commission file number ___________________________________

FRAMEWAVES, INC.

(Name of small business issuer in its charter)



Nevada	82-0404220
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1981 East 4800 South, Suite 100, Salt Lake City, UT	84117
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number (801) 272-9294

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

Title of each class Name of each exchange on which registered

_________________________________

______________________________________

_________________________________

______________________________________

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

________________________________________________________________________

(Title of class)

_________________________________________________________________________

(Title of class)

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. S

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

SEC 2337 (12-05)

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 S No £

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will 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. S

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

State issuer’s revenues for its most recent fiscal year. $-0-

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 sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.) The Company’s voting securities are traded on the Over the Counter (OTC) Electronic Bulletin Board under the symbol FWAV. There was not an active market and no significant trading volume for the issuer’s common stock during fiscal year 2007, therefore the aggregate market value of the voting common equities securities held by non-affiliates of the Registrant at December 31, 2007 is deemed to be $-0-.

Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

Yes £ No S

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 1,258,994 shares of common stock, $.001 par value

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (“Securities Act”). The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990).

Transitional Small Business Disclosure Format (Check one): Yes £ ; No S

FORWARD-LOOKING STATEMENT NOTICE

When used in this report, the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company’s future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors. Such factors are discussed under the headings”Item 1. Description of Business,” and “Item 6. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and also include general economic factors and conditions that may directly or indirectly impact the Company’s financial condition or results of operations.

PART I

Item 1. Description of Business

Our History

FrameWaves, Inc. (the “Company” or “FrameWaves”) was originally incorporated under the name of Messidor Limited on December 23, 1985 as a development stage company for the purpose of engaging in all lawful transactions permitted under the State of Nevada, including the acquisition of various business opportunities to provide profit and maximize shareholder value.

On December 27, 2000, the shareholders, at a special meeting, changed the Company’s name from Messidor Limited to FrameWaves, Inc. The shareholders also approved the acquisition of Corners, Inc. (“Corners”), a Nevada corporation, whereby the Company exchanged 1,000,000 shares of the Company’s common stock for all of Corner’s issued and outstanding shares of common stock. Corners had incorporated on November 17, 1998 in the State of Nevada to provide custom framing for interior designers in conjunction with business contacts provided by Corners’ officers and directors. Since its inception, Corners has had limited operations.

Our Business

FrameWaves originally intended to use Corners as an operating subsidiary and to actively pursue the custom framing business by utilizing Corners’ business contacts to procure contracts for future operations, and to engage in a comprehensive and aggressive marketing campaign, including but not limited to, soliciting unknown but potential business contacts through direct mailings, media, and other mediums that might generate leads to contracts for future operations.

As of the date of this report, Framewaves has been unsuccessful in implementing its business plan and has no ongoing operations. Due to other obligations the Company’s officers and directors have been unable to devote adequate time to developing the business and have yet to engage in any contract negotiations with frame suppliers, interior designers or retail consumers. Framewaves has had only limited operations since inception and has not generated any revenues since the fourth quarter of 2001.

The Company has now focused its efforts on seeking a business opportunity. The Company will attempt to locate and negotiate with a business entity for the merger of that target company into the Company. In certain instances, a target company may wish to become a subsidiary of the Company or may wish to contribute assets to the Company rather than merge. No assurances can be given that the Company will be successful in locating or negotiating with any target company. The Company will provide a method for a foreign or domestic private company to become a reporting (“public”) company whose securities are qualified for trading in the United States secondary market. We are now considered a “blank check” company.

The Company will attempt to locate and negotiate with a business entity for the merger of that target company into the Company. In certain instances, a target company may wish to become a subsidiary of the Company or may wish to contribute assets to the Company rather than merge. No assurances can be given that the Company will be successful in locating or negotiating with any target company. The Company will provide a method for a foreign or domestic private company to become a reporting (“public”) company whose securities are qualified for trading in the United States secondary market.

We are not restricting our search to any particular industry or geographical area. We may therefore engage in essentially any business in any industry. Our management has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions and other factors.

The selection of a business opportunity in which to participate is complex and extremely risky and will be made by management in the exercise of its business judgment. There is no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to our company and shareholders.

Because we have no specific business plan or expertise, our activities are subject to several significant risks. In particular, any business acquisition or participation we pursue will likely be based on the decision of management without the consent, vote, or approval of our shareholders.

Sources of Opportunities

We anticipate that business opportunities may arise from various sources, including officers and directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.

We will seek potential business opportunities from all known sources, but will rely principally on the personal contacts of our officers and directors as well as indirect associations between them and other business and professional people. Although we do not anticipate engaging professional firms specializing in business acquisitions or reorganizations, we may retain such firms if management deems it in our best interests. In some instances, we may publish notices or advertisements seeking a potential business opportunity in financial or trade publications.

Criteria

We will not restrict our search to any particular business, industry or geographical location. We may acquire a business opportunity in any stage of development. This includes opportunities involving “start up” or new companies. In seeking a business venture, management will base their decisions on the business objective of seeking long-term capital appreciation in the real value of our company. We will not be controlled by an attempt to take advantage of an anticipated or perceived appeal of a specific industry, management group, or product.

In analyzing prospective business opportunities, management will consider the following factors:

available technical, financial and managerial resources;

working capital and other financial requirements;

the history of operations, if any;

prospects for the future;

the nature of present and expected competition;

the quality and experience of management services which may be available and the depth of the management;

the potential for further research, development or exploration;

the potential for growth and expansion;

the potential for profit;

the perceived public recognition or acceptance of products, services, trade or service marks, name identification; and other relevant factors.

Generally, our management will analyze all available factors and make a determination based upon a composite of available facts, without relying on any single factor.

Methods of Participation of Acquisition

Management will review specific business opportunities and then select the most suitable opportunities based on legal structure or method of participation. Such structures and methods may include, but are not limited to, leases, purchase and sale agreements, licenses, joint ventures, other contractual arrangements, and may involve a reorganization, merger or consolidation transaction. Management may act directly or indirectly through an interest in a partnership, corporation, or other form of organization.

Procedures

As part of the our investigation of business opportunities, officers and directors may meet personally with management and key personnel of the firm sponsoring the business opportunity. We may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and conduct other reasonable measures.

We will generally ask to be provided with written materials regarding the business opportunity. These materials may include the following:

descriptions of product, service and company history; management resumes;

financial information;

available projections with related assumptions upon which they are based;

an explanation of proprietary products and services;

evidence of existing patents, trademarks or service marks or rights thereto;

present and proposed forms of compensation to management;

a description of transactions between the prospective entity and its affiliates;

relevant analysis of risks and competitive conditions;

a financial plan of operation and estimated capital requirements;

and other information deemed relevant.

Competition

We expect to encounter substantial competition in our efforts to acquire a business opportunity. The primary competition is from other companies organized and funded for similar purposes, small venture capital partnerships and corporations, small business investment companies and wealthy individuals.

Employees

The Company currently has no employees. Executive officers will devote only such time to the affairs of the Company as they deem appropriate, which is estimated to be approximately 20 hours per month per person. The need for employees will be addressed at such time operations prove successful.

Item 2. Description of Property

The Company utilizes office space at 1981 East 4800 South, Suite 100, Salt Lake City, Utah, 84117, provided by Thomas A. Thomsen, an officer and director of the Company. The Company does not pay rent for this office space.

Item 3. Legal Proceedings

The Company is not a party to any legal proceedings, and to the best of its knowledge, no such proceedings by or against the Company have been threatened.

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

None.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Our common stock is listed on the Over the Counter Bulletin Board under the symbol FWAV. There is currently no trading volume for our securities. At March 28, 2008, the Company had 473 shareholders owning 1,258,994 shares of FrameWaves’ issued and outstanding common stock.


	CLOSING BID		CLOSING ASK
2006	High	Low	High	Low

January 3 through March 31	.12	.12	-0-	-0-

April 3 through June 30	.12	.12	-0-	-0-

July 3 through September 29	.12	.12	-0-	-0-

October 2 through December 29	.12	.12	-0-	-0-

	CLOSING BID		CLOSING ASK
2007	High	Low	High	Low

January 2 through March 31	.12	.02	N/A	N/A

April 1 through June 30	.10	.05	N/A	N/A

July 1 through September 30	.10	.10	N/A	N/A

October 1 through December 31	.10	.10	N/A	N/A

The above quotations, as provided by Pink Sheets, LLC, represent prices between dealers and do not include retail markup, markdown or commission. In addition, these quotations do not represent actual transactions.

FrameWaves has not paid any dividends since its inception, and it is not likely that any dividends on its common stock will be declared at any time in the foreseeable future. Any dividends will be subject to the discretion of FrameWaves' Board of Directors, and will depend upon, among other things, the operating and financial condition of FrameWaves, its capital requirements and general business conditions. Our ability to pay dividends is also subject to limitations imposed by Nevada law. Under Nevada law, dividends may be paid to the extent that a corporation’s assets exceed its liabilities and it is able to pay its debts as they become due in the usual course of business. There can be no assurance that any dividends on FrameWaves common stock will be paid in the future.

Recent Sales of Unregistered Securities

The following is a detailed list of securities sold within the past three years without registration under the Securities Act.

On December 1, 2004, the company issued 50,000 shares of its common stock to a non-affiliate, minority shareholder for $.14 per share for an aggregate cash price of $7,000. The shares were issued in a private transaction, not involving any public solicitation or commissions, and without registration in reliance on the exemption provided by Section 4(2) of the Securities Act.

There were no other sales of unregistered securities within the past thee years.

Item 6.

Management’s Discussion and Analysis or Plan of Operation

Years Ended December 31, 2007 and 2006

The Company did not generate any revenue during the years ended December 31, 2007 and 2006.

General and administrative expenses at December 31, 2007 were $6,073, compared to general and administrative expenses of $5,753 for the year ended December 31, 2006. Interest expense at December 31, 2007 was $843 compared to $565 for the year ended December 31, 2006. Expenses in both years were largely due to accounting, legal and other professional costs.

As a result of the foregoing, the Company realized net losses of $6,916 for the year ended December 31, 2007 and $6,317 for the year ended December 31, 2006. The Company’s net loss is attributable to a lack of business and ongoing professional costs associated with preparing the Company’s public reports.

Liquidity and Capital Resources

At December 31, 2007, assets consisted of $2,422 in cash. Liabilities consisted of $4,230 in accounts payable, $1,406 in accrued interest and a $12,772 note payable to a stockholder, for total liabilities of $18,408, leaving the Company without any working capital.

On October 17, 2005, the Company borrowed $10,000 from Susan Santage, an officer and director of the Company. The note is unsecured, bears interest at 8% starting April 18, 2006 and is due on demand.

Currently, the Company has no material commitments for capital expenditures. Management anticipates that operating expenses for the next twelve months will be approximately $5,000 to $7,000. Management understands that it does not have sufficient cash to meet its immediate operational needs and will require additional capital to cover ongoing operating expenses. Management may attempt to raise additional capital for its current operational needs through loans from its officers, debt financing, equity financing or a combination of financing options. However, there are no existing understandings, commitments or agreements for such an infusion; nor can there be assurances to that effect.

The Company has adopted a code of ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller. The Company will provide, at no cost, a copy of the Code of Ethics to any shareholder of the Company upon receiving a written request sent to the Company’s address shown on Page 1 of this report.

Item 7. Financial Statements

The financial statements of the Company appear at the end of this report beginning with the Index to Financial Statements on page F-1.

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

None.

Item 8A(T). Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our President, 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 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 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 President, 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 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 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 the President, evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. 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. Based on this evaluation, our management, with the participation of the President, concluded that, as of December 31, 2007, our internal control over financial reporting was effective.

Item 8B. Other Information

There are no further disclosures. No information was required to be disclosed in a Form 8-K during the fourth quarter, 2006.

PART III

Item 9.

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

The following table sets forth the name, age, and position of each officer and director of the Company. All directors hold office until the next annual meeting of stockholders or until their successors are duly elected and qualified. Officers serve at the discretion of the Board of Directors.

The Company has no audit committee financial expert, as defined under Section 228.401, serving on its audit committee because it has no audit committee and is not required to have an audit committee because it is not a listed security as defined in Section 240.10A-3.


Name	Age	Positions	*Since*
Thomas A. Thomsen	32	President and Director	November, 2000
Dianne Hatton-Ward	51	Vice President and Director	November, 2000
Susan Santage	46	Secretary/ Treasurer and Director	November, 2000

The following is information on the business experience of each officer and director:

Thomas A. Thomsen , President and Director. Mr. Thomsen graduated from the University of Utah in May of 2000 with a BS in Finance. Since March of 1999, Mr. Thomsen has worked for Interwest Transfer Company, and provides stock analysis, issuances and transfers. From 1990 to 1999, Mr. Thomsen was employed by the Granite School District whereby he provided security and maintenance for Granger High School.

Dianne Hatton-Ward , Vice President and Director. Ms. Hatton-Ward is currently a part-time student at Westminster College. Since 1994, Ms. Hatton-Ward has worked as control scheduler for Qwest Communications International, Inc., a telecommunications company, where she is responsible for the design and support of several applications like client interfacing, job applications and job-flows.

Susan Santage , Secretary, Treasurer and Director. Ms. Santage graduated from Salt Lake Community College in 1989 with an AAS in Graphic Design. In 1984, Ms. Santage graduated from the Salt Lake School of Interior Design. From 1989 to the present date, Ms. Santage has engaged in freelance graphic design where she has contracted with several companies including Break-thru Industries, KLCY Radio Station, Phoenix Aviation, Inc., and the Salt Lake Community College.

Item 10. Executive Compensation

The Company has no agreement or understanding, express or implied, with any director, officer or principal stockholder, or their affiliates or associates, regarding compensation in the form of salary, bonuses, stocks, options, warrants or any other form of remuneration, for services performed on behalf of the Company. Nor are there compensatory plans or arrangements, including payments to any officer in relation to resignation, retirement, or other termination of employment, or any change in control of the Company, or a change in the officer’s responsibilities following a change in control of the Company.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth as of March 28, 2008, the name and shareholdings of each person known to us that either directly or beneficially holds more than 5% of our 1,258,994 issued and outstanding shares of common stock, par value $.001. The table also lists the name and shareholdings of each director and of all officers and directors as a group. Except as otherwise indicated, the persons named in the table have sole voting and dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable.


Name and Address of Directors, Executive Officers and 5% Beneficial Owners	Amount and Nature of Beneficial Ownership	Percent of Class of Common Stock

Dianne Hatton-Ward (1) 1981 East 4800 South, Suite 100 Salt Lake City, Utah 84117	333,333	26.5%

Susan Santage (1) 1981 East 4800 South, Suite 100 Salt Lake City, Utah 84117	333,333	26.5%

Directors and Executive Officers as a Group: Three Persons	752,951	59.8%

(1)

Officer and director of the Company.

(2)

Thomas Thomsen owns 83,334 shares directly, and 2,951 shares indirectly through European Holdings, Inc. Mr. Thomsen owns and controls European Holdings, Inc.

Item 12. Certain Relationships and Related Transactions

On October 17, 2005, the Company borrowed $10,000 from Susan Santage, an officer and director of the Company. The note is unsecured, bears interest at 8% starting April 18, 2006 and is due on demand.

Item 13. Exhibits and Reports on Form 8-K

a) Exhibits

Exhibit

Title

Location

Exhibit 3(i)

Exhibit 3(ii)

Exhibit 14

31.1

31.2

32.1

32.2

Amended and Restated Articles of Incorporation*

Amended and Restated Bylaws*

Code of Ethics**

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002***

Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002***

2000 10-KSB

2002 10-KSB

Attached

* Incorporated by reference. Filed as exhibit to 2000 10-KSB filed January 26, 2001

**Incorporated by reference. Filed as exhibit to 2002 10-KSB filed March 26, 2003

***The Exhibit attached to this Form 10-KSB shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 14. Principal Accountant Fees and Services

Audit Fee

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal account for the audit of FrameWaves, Inc. and Subsidiary’s annual financial statement and review of financial statements included in FrameWaves, Inc. and Subsidiary’s 10-QSB reports and services normally provided by the accountant in connection with statutory and regulatory filings or engagements were $2,870 for fiscal year ended 2006 and $2,900 for fiscal year ended 2007.

Audit-Related Fees

There were no fees for other audit related services for fiscal year ended 2005 and 2006.

Tax Fees

The fees for tax compliance were $100 and $150 for the years ended December 31, 2006 and 2007, respectively.

All Other Fees

There were no other aggregate fees billed in either of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above.

We do not have an audit committee currently serving and as a result our board of directors performs the duties of an audit committee. Our board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. We do not rely on pre-approval policies and procedures.

SIGNATURES

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


	FRAMEWAVES, INC.

Date: March 28, 2008	/s/ Thomas A. Thomsen
	Thomas A. Thomsen
	Chief Executive Officer

Date: March 28, 2008	/s/ Susan Santage
	Susan Santage
	Chief Financial Officer

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


Date: March 28, 2008	/s/ Thomas A. Thomsen
	Thomas A. Thomsen
	Director

Date: March 28, 2008	/s/ Susan Santage
	Susan Santage
	Director

Date: March 28, 2008	/s/ Dianna Hatton-Ward
	Dianne Hatton-Ward
	Director

FRAMEWAVES, INC.

(A Development Stage Company)

TABLE OF CONTENTS


	Page

Report of Independent Registered Public Accounting Firm	F-1

Financial Statements:

Balance Sheets	F-2

Statements of Operations	F-3

Statements of Stockholders' Equity	F-4

Statements of Cash Flows	F-7

Notes to Financial Statements	F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

of FrameWaves, Inc.

We have audited the accompanying balance sheets of FrameWaves, Inc. (a Nevada corporation) as of December 31, 2007 and 2006, and the related statements of operations, stockholders equity and cash flows for the years ended December 31, 2007, 2006 and 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of FrameWaves, Inc. as of December 31, 2007 and 2006, and the results of their operations and their cash flows for the years ended December 31, 2007, 2006 and 2005 in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As disclosed in Note 10 to the financial statements, the Company incurred a net loss of $6,916 and $6,317, respectively, during the years ended December 31, 2007 and 2006, and as of December 31, 2007, the Company's current liabilities exceeded its current assets by $15,986. These factors create an uncertainty as to the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon additional capital contributions from the sale of stock and the ability to generate operating revenue. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

/s/ Burnam and Schumm

Burnam and Schumm

Salt Lake City, Utah

March 13, 2008

F-2

FRAMEWAVES, INC.

(A Development Stage Company)

BALANCE SHEETS

DECEMBER 31, 2007 and 2006


Assets		2007		2006
Current Assets:
Cash	$	2,422	$	2,889

Total current assets		2,422		2,889

Total Assets	$	2,422	$	2,889


Liabilities and Stockholders' Equity

Current Liabilities:
Accounts payable	$	4,230	$	4,915
Accrued interest, stockholder		1,406		564
Note payable, stockholder		12,772		10,000

Total current liabilities		18,408		15,479

Stockholders' Equity:
Common stock, $.001 par value
100,000,000 shares authorized,
1,258,994 issued and outstanding		1,259		1,259
Additional paid-in capital		42,367		38,847
Deficit accumulated during the
development stage		(59,612)		(52,696)

Total stockholders' equity		(15,986)		(12,590)

Total Liabilities and Stockholders'
Equity	$	2,422	$	2,889

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

F-3

FRAMEWAVES, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005


								For the period
								December 31,
								1993
								(Quasi –
								Reorganization)
								Through
								December 31,
		2007		2006		2005		2007

Revenues	$	--	$	--	$	--	$	1,267
Expenses, general
and administrative		6,073		5,753		6,192		59,472

Operating Loss		(6,073)		(5,753)		(6,192		(58,205)

Other Income
(Expense):
Interest expense		(843)		(564)		--		(1,407)

Net Loss	$	(6,916)	$	(6,317)	$	(6,192)	$	(59,612)

Net Loss per Share	$	(.01)	$	(.01)	$	--	$	(.09)

Weighted average
shares		1,258,994		1,258,994		1,258,994		649,499


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

F-4

FRAMEWAVES, INC.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005


							Deficit
							Accumulated
	Common Stock		Additional		During the
					Paid-in		Development
	Shares		Amount		Capital		Stage
Balance, December 31, 1993	65,600	$	66	$	(66)	$	--

Common stock issued for cash
and services at $.10/ share
on November 3, 2000	100,000		100		9,900		--

Contribution by shareholder
for Company expenses paid
directly by shareholder	--		--		22,196		--

Common stock issued in acquisition
of subsidiary, Corners, Inc.
on December 27, 2000	1,000,000		1,000		(90)		--

Common stock issued due to
rounding up shareholders with
less than 100 shares after
100 for 1 reverse stock split
effective December 27, 2000	43,394		43		(43)		--

Common stock issued for cash at
$.14 per share on
December 1, 2004	50,000		50		6,950		--

Net loss accumulated for
the period December 31, 1993
(quasi-reorganization)
through December 31, 2004	--		--		--		(40,187)

Balance, December 31, 2004	1,258,994	$	1,259	$	38,847	$	(40,187)

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

F-5

FRAMEWAVES, INC.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS' EQUITY - CONTINUED

YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005


							Deficit
							Accumulated
	Common Stock				Additional		During the
					Paid-in		Development
	Shares		Amount		Capital		Stage

Balance, December 31, 2004	1,258,994	$	1,259	$	38,847	$	(40,187)

Net loss for the year ended
December 31, 2005	--		--		--		(6,192)

Balance, December 31, 2005	1,258,994		1,259		38,847		(46,379)

Net loss for the year
ended December 31, 2006	--		--		--		(6,317)

Balance, December 31, 2006	1,258,994		1,259		38,847		(52,696)

Contribution by shareholder
for Company expenses paid
directly by shareholder	--		--		3,520		--

Net loss for the year
ended December 31, 2007	--		--		--		(6,916)

Balance, December 31, 2007	1,258,994	$	1,259	$	42,367	$	(59,612)

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

F-6

FRAMEWAVES, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005


								For the period
								December 31,
								1993
								(Quasi –
								Reorganization)
								Through
								December 31,
		2007		2006		2005		2007
Cash flows from
operating activities:
Net loss	$	(6,916)	$	(6,317)	$	(6,192)	$	(59,612)

Adjustments to
reconcile net income
to cash provided by
operating activities:
Contribution from
Shareholder		3,520		--		--		25,716
Common stock issued
for services		--		--		--		5,000
Increase (decrease)
in accounts
payable and
accrued interest		157		4,461		(3,073)		5,636

Net cash used
by operating
activities:		(3,239)		(1,856)		(9,265)		(23,260)

Cash flows from
investing activities:
Cash received in
acquisition of
subsidiary		--		--		--		910

Cash flows from
financing activities:
Issuance of
common stock		--		--		--		12,000
Proceeds from
related party
note payable		2,772		--		10,000		12,772

Net cash provided by
financing activities		2,772		--		10,000		24,772
The accompanying notes are an integral part of the financial statements

F-7

FRAMEWAVES, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS – CONTINUED

YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005


								For the period
								December 31,
								1993
								(Quasi –
								Reorganization)
								Through
								December 31,
		2007		2006		2005		2007
Net increase (decrease)
in cash	$	(467)	$	(1,856)	$	735	$	2,422

Cash, beginning
of period		2,889		4,745		4,010		--

Cash, end of period	$	2,422	$	2,889	$	4,745	$	2,422

Interest paid	$	--	$	--	$	--	$	--

Income taxes paid	$	--	$	--	$	--	$	--

The accompanying notes are an integral part of the financial statements

F-8

FRAMEWAVES, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Summary of Business and Significant Accounting Policies

Summary of Business

The Company was incorporated under the laws of the State of Nevada on December 23, 1985. The Company was formed to pursue business opportunities. The Company was unsuccessful in its operations. During 1993, Management determined it was in the best interest of the Company to discontinue its previous operations. The Company is considered to have re-entered into a new development stage on December 31, 1993. Because the Company discontinued its previous operations and is selling new potential business opportunities, the Company adopted quasi-reorganization accounting procedures to provide the Company a “fresh start” for accounting purposes.

The Company has not commenced principal operations and is considered a "Development Stage Company" as defined by the Financial Accounting Standards Board No. 7.

In December 2007, the Company's 100% owned subsidiary Corners, Inc. had its corporate chapter permanently revoked by the state of Nevada. Since Corners, Inc. has no assets or liabilities, the Company has elected to abandon all interests in the common stock of Corners, Inc. Therefore, consolidated financial statements are no longer applicable.

Cash Flows

For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash or cash equivalents.

Net Loss Per Share

The net loss per share calculation is based on the weighted average number of shares outstanding during the period.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Revenue Recognition

Revenue is recognized on the accrual basis of accounting when earned. The Company's primary business generated revenue from picture framing. The Company has not had any revenue since 2001.

Fair Value of Financial Instruments

The amounts reported for cash and accounts payable and other financial instruments, none of which are held for trading purposes, are considered to approximate fair values based upon comparable market information available at the respective balance sheet date.

F-9

Notes to Financial Statements - Continued

Quasi-Reorganization

December 7, 2000, the shareholders of the Company approved to adopt quasi-reorganization accounting procedures. Quasi-reorganization accounting allowed the Company to eliminate its previous accumulated deficit of approximately $235,000 against additional paid-in capital. Therefore, the adoption of quasi-reorganization accounting procedures gave the Company a “fresh start” for accounting purposes. The Company is also considered as re-entering a new development stage on December 31, 1993, as it discontinued all of its previous operations. These financial statements have been restated to reflect the change.

Note Payable, Stockholder

Since 2005, the Company has borrowed money from a director and officer of the Company. At December 31, 2007 and 2006, the outstanding balance is $12,772 and $10,000, respectively. The note is unsecured, bears interest at 8% and is due on demand.

Stock Split

On December 27, 2000, the Company approved a 100 for 1 reverse split of the issued and outstanding common stock but no shareholder’s ownership shall be less than 100 shares. An additional 43,394 shares were issued as a result of rounding up to the 100 share minimum.

The 100 for 1 reverse split has been retroactively applied in the accompanying financial statements.

Amended Articles of Incorporation

On December 27, 2000, the Company amended its articles of incorporation to change its name from Messidor Limited to FrameWaves, Inc. In addition, the Company decreased its authorized shares from 500,000,000 to 110,000,000 shares of stock of which 100,000,000 shall be designated common stock and 10,000,000 shall be designated preferred stock. At December 31, 2007, no preferred stock has been issued by the Company. The Company has the authorization to issue the preferred stock in one or more series and to determine the voting rights, preferences as to dividends and liquidation, conversion rights, and other rights of each series.

Issuance of Common Stock

On November 3, 2000, the Company issued 100,000 shares of its $.001 par value common stock for an aggregate price of $10,000. $5,000 was received in cash and $5,000 for services rendered.

On December 1, 2004, the Company issued 50,000 shares of its common stock for $.14 per share for an aggregate cash price of $7,000.

Stock Options and Warrants

The Company has designated 2,000,000 shares of its authorized and unissued common stock to a future stock option plan. At September 30, 2007, there are no options or warrants outstanding to acquire the Company’s common stock.

Acquisition of Subsidiary

On December 27, 2000, the Company acquired 100% of the outstanding common shares of Corners, Inc. in exchange for the issuance of 1,000,000 shares of its previously authorized but unissued common stock. Corners, Inc. was purchased at book value of $910 or $.001 per share. The acquisition has been accounted for on the purchase method and 100% of the purchase price was allocated to cash. In December 2007, the state of Nevada revoked the corporate charter of Corners, Inc. Since the subsidiary has no assets or liabilities, the Company has elected to abandoned all interest in its shares of Corners, Inc.

F-10

Notes to Financial Statements - Continued

Income Taxes

The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling $54,612 that may be offset against future federal income taxes. If not used, the carryforwards will expire between 2020 and 2027. Due to the Company being in the development stage and incurring net operating losses, a valuation allowance has been provided to reduce the deferred tax assets from the net operating losses to zero. Therefore, there are no tax benefits recognized in the accompanying statement of operations.

10.

Going Concern

As shown in the accompanying financial statements, the Company incurred a net loss of $6,916 during year ended December 31, 2007 and accumulated losses of $59,612 since quasi-reorganization at December 31, 1993. The Company's current liabilities exceed its current assets by $15,986 at December 31, 2007. These factors create an uncertainty as to the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the success of raising additional capital through the issuance of common stock and the ability to generate sufficient operating revenue. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

F-11

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