ITOX 10-K Annual Report Dec. 31, 2009

IIOT-OXYS, INC.

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10-K 1 creativenj10k09.txt FORM 10-K FOR YEAR ENDED DECEMBER 31, 2009 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 Commission File Number: 0-50773 Creative Beauty Supply of New Jersey Corporation (Exact name of Registrant as specified in its charter) NEW JERSEY 56-2415252 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 380 Totowa Road, Totowa, NJ, 07512 (Address of principal executive offices, including zip code) (973) 904-0004 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities Registered Pursuant to Section 12(g) of the Exchange Act: Common Stock, par value $0.001 per share (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in 405 of the Securities Act. Yes [ ] No [x] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [x] Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] Indicate by check mark 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 registrant's 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. [ ] 2 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller Reporting Company [x] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [x] No [ ] As of February 28, 2010, no market price existed for voting and non- voting common equity held by non-affiliates of the registrant. As of February 28, 2010, the registrant had outstanding 10,532,150 shares of Common Stock with a par value of $0.001 per share. DOCUMENTS INCORPORATED BY REFERENCE None 3 TABLE OF CONTENTS ITEM PAGE PART I 1. BUSINESS 4 1A. RISK FACTORS 5 1B. UNRESOLVED STAFF COMMENTS 5 2. PROPERTIES 5 3. LEGAL PROCEEDINGS 5 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 6 PART II 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 7 6. SELECTED FINANCIAL DATA 7 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION 7 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 9 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 10 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES 10 9A(T). CONTROLS AND PROCEDURES 10 9B. OTHER INFORMATION 11 PART III 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS, AND CORPORATE GOVERNANCE 12 11. EXECUTIVE COMPENSATION 13 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 14 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 15 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 15 PART IV 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 17 4 PART I ITEM 1. BUSINESS Creative Beauty Supply of New Jersey Corporation ("Creative NJ" or the "Company") was incorporated in the State of New Jersey on October 1, 2003. It was formed pursuant to a resolution of the board of directors of Creative Beauty Supply Inc. ("CBS"), as a wholly owned subsidiary of that company, a publicly traded New Jersey corporation. On January 1, 2004, the assets and liabilities of CBS were contributed at book value to Creative NJ, and CBS approved a spin-off of this subsidiary to its shareholders. The spin-off was approved in contemplation of a merger which occurred on March 19, 2004 between CBS and Global Digital Solutions, Inc., a Delaware corporation, upon approval by vote of the stockholders of CBS and Global Digital whereby the former shareholders of CBS became the owners of 100 percent of the common stock of Creative NJ. The common shares were transferred upon completion of the Form 10SB. CBS is the predecessor of Creative NJ. Pursuant to the requirements of Staff Legal Bulletin #4, the spin-off was completed in September 2005 with the satisfactory resolution of all SEC comments to the Form 10SB. Pursuant to the terms of the spin-off arrangement, Global Digital provided its shareholders as of January 1, 2004, the record date, one share of Creative NJ for every share of Global Digital owned as of that date. Creative NJ filed its Form 10SB voluntarily. Creative NJ will voluntarily file periodic reports in the event its obligation to file such reports is suspended under the Exchange Act. Corporate Operations Creative NJ operated as a cosmetic and beauty supply distributor at both the retail and wholesale levels. Creative NJ's various beauty and cosmetic products were purchased by it from a number of unaffiliated suppliers and manufacturers and thereafter sold on its premises to retail walk-in customers or directly to beauty salons. On November 30, 2007, Creative NJ's Board of Directors approved a plan to dispose of its wholesale and retail beauty supply business. The Board recognized that this operation has never realized a profit and that sales volumes have been declining each year. Creative NJ's plan was to contact its suppliers and return as much of the inventory as possible and sell the remaining balance to its customers. Creative NJ's objective was to cease all operations by December 31, 2007 and vacate the facility it leased by January 31, 2008. As of December 31, 2007, Creative NJ disposed of all its inventory by way of sales, returns to suppliers and sale to inventory liquidator and ceased its operations. Creative NJ's current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into Creative NJ. In certain instances, a target company may wish to become a subsidiary of Creative NJ or may wish to contribute or sell 5 assets to Creative NJ rather than to merge. No assurances can be given that Creative NJ will be successful in identifying or negotiating with any target company. Creative NJ seeks to provide a method for a foreign or domestic private company to become a reporting or public company whose securities are qualified for trading in the United States secondary markets. A business combination with a target company normally will involve the transfer to the target company of the majority of the issued and outstanding common stock of Creative NJ, and the substitution by the target company of its own management and board of directors. No assurances can be given that Creative NJ will be able to enter into a business combination, or, if Creative NJ does enter into such a business combination, no assurances can be given as to the terms of a business combination, or as to the nature of the target company. The current and proposed business activities described herein classify Creative NJ as a blank check company. The Securities and Exchange Commission and many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies. Management does not intend to undertake any efforts to cause a market to develop in Creative NJ's securities until such time as Creative NJ has successfully implemented its business plan described herein. ITEM 1A. RISK FACTORS Not applicable ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable ITEM 2. PROPERTIES Creative NJ has no properties and, at this time, has no arrangements to acquire any properties. Creative NJ currently uses for its principal place of business the home office of Carmine Catizone, an officer and director of Creative NJ, at no cost to Creative NJ, an arrangement which management expects will continue until Creative NJ completes an acquisition or merger. ITEM 3. LEGAL PROCEEDINGS There is no litigation pending or threatened by or against Creative NJ. 6 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the last quarter of the fiscal year ended December 31, 2009, no matters were submitted to a vote of Creative Beauty Supply of New Jersey Corporation security holders, through the solicitation of proxies or otherwise. 7 PART II ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Market Information. There has been no trading market for Creative NJ's Common Stock for at least the last three years. There can be no assurance that a trading market will ever develop or, if such a market does develop, that it will continue. Holders. There were approximately 101 record holders of Creative NJ's common stock as of March 19, 2010. The issued and outstanding shares of Creative NJ's common stock were issued in accordance with the exemptions from registration afforded by Sections 3(b) and 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. Dividends. Holders of the registrant's common stock are entitled to receive such dividends as may be declared by its board of directors. No dividends on the registrant's common stock have ever been paid, and the registrant does not anticipate that dividends will be paid on its common stock in the foreseeable future. Securities authorized for issuance under equity compensation plans. No securities are authorized for issuance by the registrant under equity compensation plans. Performance graph. Not applicable. Sale of unregistered securities. None. (b) Use of Proceeds. Not applicable. (c) Purchases of Equity Securities by the issuers and affiliated purchasers. None. ITEM 6. SELECTED FINANCIAL DATA Not applicable to a smaller reporting company. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements Statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as in certain other parts of this Annual Report on Form 10-K (as well as information included in oral statements or other written statements made or to be made by Creative NJ) that look forward in time, are forward- looking statements made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, expectations, predictions, and assumptions and other statements which are other than statements of historical facts. Although Creative NJ believes such forward-looking statements are reasonable, it can give no assurance 8 that any forward-looking statements will prove to be correct. Such forward-looking statements are subject to, and are qualified by, known and unknown risks, uncertainties and other factors that could cause actual results, performances or achievements to differ materially from those expressed or implied by those statements. These risk, uncertainties and other factors include, but are not limited to Creative NJ's ability to estimate the impact of competition and of industry consolidation and risks, uncertainties and other factors set forth in Creative NJ's filing with the Securities and Exchange Commission, including without limitation this Annual Report on Form 10-K. Critical Accounting Policies The preparation of our financial statements and notes thereto requires management to make estimates and assumptions that affect the amounts and disclosures reported within those financial statements. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contingencies, litigation and income taxes. Management bases its estimates and judgments on historical experiences and on various other factors believed to be reasonable under the circumstances. Actual results under circumstances and conditions different than those assumed could result in differences from the estimated amounts in the financial statements. There have been no material changes to these policies during fiscal 2009. As of December 31, 2009 and 2008, Creative NJ has not identified any critical estimates that are used in the preparation of the financial statements. Trends and Uncertainties There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on our limited operations. There are no known causes for any material changes from period to period in one or more line items of Creative NJ's financial statements. Liquidity and Capital Resources At December 31, 2009, Creative Beauty Supply of New Jersey Corporation ("Creative NJ" or the "Company") had a cash balance of $177,253, which represents a $22,922 decrease from the $200,175 balance at December 31, 2008. This decrease was primarily the result of cash used to satisfy the requirements of a reporting company. Creative NJ's working capital balance at December 31, 2009 was $157,175, as compared to a December 31, 2008 balance of $183,776. The focus of Creative NJ's efforts is to acquire or develop an operating business. Despite no active operations at this time, management intends to continue in business and has no intention to liquidate Creative NJ. Creative NJ does not contemplate limiting the scope of its search to any particular industry. Management has considered the risk of possible opportunities as well as their potential rewards. Management has invested time evaluating several proposals for possible acquisition or combination; however, none of 9 these opportunities were pursued. Creative NJ's sole expected expenses are comprised of professional fees primarily incident to its reporting requirements. Discontinued Operations On November 30, 2007, the Company's Board of Directors approved a plan to dispose of its wholesale and retail beauty supply business. The Board recognized that this operation has never realized a profit and that sales volumes have been declining each year. The Company contacted its suppliers and returned as much of the inventory as possible and sold the remaining balance to its customers. The Company's objective was to cease all operations by December 31, 2007 and vacate the facility it leased by January 31, 2008. The Company completed its plan on January 1, 2009. Recent Issued Accounting Standards Effective July 1, 2009, the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) became the single official source of authoritative, nongovernmental generally accepted accounting principles in the United States ("GAAP"). The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission. Our accounting policies were not affected by the conversion to ASC. However, references to specific accounting standards in the footnotes to our financial statements have been changed to refer to the appropriate section of ASC. Results of Operations for the Year Ended December 31, 2009 compared to the Year Ended December 31, 2008 Creative NJ incurred a net loss of $26,601 in 2009 versus a net loss of $47,432 in 2008. Operating expenses were incurred primarily to enable Creative NJ to satisfy the requirements of a reporting company. For the years ended December 31, 2009 and 2008, professional fees necessary to remain a reporting company were $29,045 and $28,186, respectively. For the years ended December 31, 2009 and 2008, Creative NJ incurred losses from discontinued operations of $-0- and $26,920, respectively. During the current and prior period, Creative NJ did not record an income tax benefit due to the uncertainty associated with Creative NJ's ability to merge with an operating company, which might permit Creative NJ to avail itself of those advantages. Off Balance Sheet Arrangements None. Disclosure of Contractual Obligations None. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable. 10 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Creative NJ's financial statements and associated notes are set forth beginning on page 19. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None. ITEM 9A(T). CONTROLS AND PROCEDURES Changes in Internal Controls During the year ended December 31, 2009, there were no changes in our internal controls over financial reporting (as defined in Rule 13a- 15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of December 31, 2009. Based on this evaluation, our chief executive officer and chief principal financial officers have concluded such controls and procedures to be effective as of December 31, 2009 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management's Report on Internal Control over Financial Reporting Management of Creative NJ is responsible for establishing and maintaining adequate internal control over financial reporting as derived in Rule 13a-15(f) under the Securities Exchange Act of 1934. We have assessed the effectiveness of those internal controls as of December 31, 2009, using the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") Internal Control Intergrated Framework as a basis for our assessment. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 11 A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects Creative NJ's ability to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally accepted in the United States of America such that there is more than a remote likelihood that a material misstatement of Creative NJ's annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial reporting, we did not identify any material weakness in our internal control over financial reporting. Therefore, it is our conclusion that Creative NJ's internal controls over financial reporting were effective as of December 31, 2009. This annual report does not include an attestation report of Creative NJ's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by Creative NJ's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit Creative NJ to provide only management's report in this annual report. ITEM 9B. OTHER INFORMATION None. 12 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERANCE Name Position Held Term of Office Carmine Catizone, age 57 President, Director October 1, 2003 to present Daniel Generelli, age 39 Secretary/Treasurer October 1, 2003 Vice-President/Director to present Resumes Carmine Catizone. Mr. Catizone has been President and a director of Creative NJ since its incorporation on October 1, 2003. From June 1988 to July 1994, Mr. Catizone was President and a Director of J&E Beauty Supply, Inc., a retail and wholesale beauty supply distributor. Mr. Catizone served as President and a director of C&C Investments, Inc., a blank check company (now known as T.O.P.S. Medical Corp., which provided chemicals for transportation of organs) from July 1977 to December 1984. From August 1995 to March 19, 2004, Mr. Catizone was President and a director of Creative Beauty Supply, Inc., now Global Digital Solutions, Inc., a SEC reporting company. Mr. Catizone is not currently involved with T.O.P.S. Medical Corp. From June 1980 to December 1985, Mr. Catizone had been district sales manager (engaged in sales of cosmetics) for Chattem Labs. Mr. Catizone received his Bachelor of Science degree from Fairleigh Dickerson University in 1972. Daniel Generelli. Mr. Generelli has been Secretary-Treasurer and a director of Creative NJ since its incorporation on October 1, 2003. From August 1995 to March 19, 2004, Mr. Generelli was Secretary- Treasurer and a director of Creative Beauty Supply, Inc., now Global Digital Solutions, Inc., a SEC reporting company. From December 1989 to July 1995, Mr. Generelli was Secretary/Treasurer and a director of J&E Beauty Supply, Inc., a retail and wholesale beauty supply distributor. From December 1984 to December 1989, Mr. Generelli was employed as a distribution supervisor with Tags Beauty Supply, a retail and wholesale beauty supply distributor in Fairfield, NJ. Mr. Generelli graduated from Ramapo College of New Jersey with a Bachelor of Science degree in June of 1984. Section 16(a) Beneficial Ownership Reporting Compliance To Creative NJ's knowledge, no director, officer or beneficial owner of more than ten percent of any class of equity securities of the Company failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during 2008. Code of Ethics Creative NJ has not yet adopted a code of ethics. The board of directors anticipates that it will adopt a code of ethics upon identifying and negotiating with a business target for the merger of that entity with and into Creative NJ, although there is no guarantee that Creative NJ will be able to enter into such a transaction. 13 Corporate Governance We have no change in any state law or other procedures by which security holders may recommend nominees to our board of directors. In addition to having no nominating committee for this purpose, we currently have no specific audit committee and no audit committee financial expert. Based on the fact that our current business affairs are simple, any such committees are excessive and beyond the scope of our business and needs. ITEM 11. EXECUTIVE COMPENSATION To date, Creative NJ has not entered into employment agreements nor are any contemplated. Annual Compensation Awards Payouts ------------------- ---------------------- -------- Other Restricted Securities Annual Stock Underlying LTIP All Other Name and Compen- Compen- Position Year Salary($) Bonus($) sation($) Awards(#) Options/SARs(#) Payouts($) sation($) Carmine Catizone 2009 --- --- --- --- --- --- --- President 2008 --- --- --- --- --- --- --- 2007 $30,000 --- --- --- --- --- --- Daniel Generelli 2009 --- --- --- --- --- --- --- Sec/Treas 2008 --- --- --- --- --- --- --- 2007 $ 2,030 --- --- --- --- --- ---

Board of Directors Compensation Members of the Board of Directors may receive an amount yet to be determined annually for their participation and will be required to attend a minimum of four meetings per fiscal year. To date, Creative NJ has not paid any directors' fees or expenses. Other than Mr. Catizone and Mr. Generelli, Creative NJ did not have any significant employees as of the date of this report. There were no family relationships between any of the officers or directors of the Creative NJ. During the fiscal year covered by this report, there were no changes to the procedures by which security holders could recommend nominees to Creative NJ's board of directors. At this time, Creative NJ's board of directors acts as Creative NJ's audit committee. Similarly, Creative NJ's board of directors has determined that Creative NJ does not have an audit committee financial expert as defined under Securities and Exchange Commission rules. Current Blank Check Companies Daniel Generelli is currently an officer and director of Baynon International Corp. Baynon is considered a blank check company. Other than disclosed above, no directors or officers of Creative NJ are presently officers, directors or shareholders in any blank check companies except for Creative NJ. However, one or both of the officers/directors may, in the future, become involved with additional blank check companies. 14 (b) Compliance with Section 16(a) of the Securities Exchange Act of 1934. Section 16(a) of the Securities Exchange Act requires Creative NJ's officers and directors, and persons who beneficially own more than ten (10%) percent of a class of equity securities registered pursuant to Section 12 of the Exchange Act, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the principal exchange upon which such securities are traded or quoted. Reporting Persons are also required to furnish copies of such reports filed pursuant to Section 16(a) of the Exchange Act with Creative NJ. Based solely on review of the copies of such forms furnished to Creative NJ, Creative NJ's two (2) directors did not file their reports on a timely basis. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following tabulates holdings of shares of Creative NJ by each person who, adjusted for completion of the spin-off, will holders of record or is known by management to own beneficially more than 5.0% of the common shares and, in addition, by all directors and officers of Creative NJ individually and as a group. Each named beneficial owner has sole voting and investment power with respect to the shares set forth opposite his name. Shareholdings at February 28, 2010 Percentage of Number & Class(1) Outstanding Name and Address of Shares Common Shares Carmine Catizone(3) Common 3,458,000(direct) 32.83% 10 1/2 Walker Avenue 80,600(2)(indirect) .77% Morristown, NJ 07960 Daniel T. Generelli Common 40,000 .38% 24 Kansas Street Hackensack, NJ 07601 All Directors & Officers Common 3,498,000(direct) 33.21% as a group (2 persons) 80,600(indirect) .77% Pasquale Catizone(3) Common 5,397,500(direct) 51.24% 266 Cedar Street Cedar Grove, NJ 07009 15 Ram Venture Holdings Corp. Common 595,054 5.65% 3040 E. Commercial Blvd. Fort Lauderdale, FL 33308 (1)Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended, beneficial ownership of a security consists of sole or shared voting power (including the power to vote or direct the voting) and/or sole or shared investment power (including the power to dispose or direct the disposition) with respect to a security whether through a contract, arrangement, understanding, relationship or otherwise. Unless otherwise indicated, each person indicated above has sole power to vote, or dispose or direct the disposition of all shares beneficially owned, subject to applicable unity property laws. (2)Carmine Catizone and Phyllis Catizone are husband and wife and are deemed to be the beneficial owners of each other's shares and custodial shares. (3)Carmine Catizone and Pasquale Catizone are brothers. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Certain Relationships and Related Transactions None. Director Independence Creative NJ's board of directors consists of Carmine Catizone and Daniel Generelli. Neither of them is independent as such term is defined by a national securities exchange or an inter-dealer quotation system. During the fiscal year ended December 31, 2009, there were no transactions with related persons. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees. The aggregate fees billed and estimated to be billed for the fiscal years ended December 31, 2009 and 2008 for professional services rendered by Rotenberg, Meril, Solomon, Bertiger & Guttilla, P.C. ("RMSB&G") for the audit of the registrant's annual financial statements and review of the financial statements included in the registrant's Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2009 and 2008, were $15,600 and $17,200 respectively. Audit related fees. The aggregate fees billed for the fiscal years ended December 31, 2009 and 2008 for assurance and related services by RMSB&G that are reasonably related to the performance of the audit or review of the registrant's financial statements for that fiscal year were $6,000 and $7,200. 16 Tax Fees. We did not incur any aggregate tax fees and expenses from RMSB&G for the 2009 and 2008 fiscal years for professional services rendered for tax compliance, tax advice, and tax planning. All Other Fees. We did not incur any other fees from RMSB&G for the 2009 and 2008 fiscal years. The board of directors, acting as the Audit Committee considered whether, and determined that, the auditor's provision of non-audit services was compatible with maintaining the auditor's independence. All of the services described above for fiscal year 2009 were approved by the Board of Directors pursuant to its policies and procedures. We intend to continue using RMSB&G solely for audit and audit-related services, tax consultation and tax compliance services, and, as needed, for due diligence in acquisitions. 17 Part IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a)(1) List of financial statements included in Part II hereof: Report of Independent Registered Public Accounting Firm Balance Sheet at December 31, 2009 and 2008 Statements of Operations for the years ended December 31, 2009 and 2008 Statement of Changes in Stockholders' Equity for the years ended December 31, 2009 and 2008 Statements of Cash Flows for the years ended December 31, 2009 and 2008 Notes to Financial Statements (a)(2) List of financial statement schedules included in Part IV hereof: None. (a)(3) Exhibits (3.1) Articles of Incorporation(1) (3.2) Bylaws(1) (3.3) Form of Common Stock Certificate(1) (10.1) Renewed Lease Agreement(2) (10.2) Agreement and Plan of Reorganization between Global Digital Solutions and Creative Beauty Supply, Inc.(3) (1) Incorporated by reference to Form 10SB, file number 0-50773 filed on May 21, 2004. (2) Incorporated by reference to amendment 3 to Form 10SB, file number 0-50773 filed on June 15, 2005 (3) Incorporated by reference to Form 8-K filed March 8, 2004 by Creative Beauty Supply, Inc. The following exhibits are filed with this report: Exhibit 31 - 302 certification Exhibit 32 - 906 certification 18 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Company has duly caused this Report to be signed on its behalf by the undersigned duly authorized person. Date: March 26, 2010 Creative Beauty Supply of New Jersey Corporation /s/ Carmine Catizone ------------------------------- By: Carmine Catizone, President Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated. Creative Beauty Supply of New Jersey Corporation Date: March 26, 2010 /s/ Carmine Catizone --------------------- By: Carmine Catizone President, Chief Executive Officer March 26, 2010 /s/Daniel Generelli ---------------------- By: Daniel Generelli Chief Financial Officer and Controller 19 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION INDEX TO FINANCIAL STATEMENTS Page REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM 20 FINANCIAL STATEMENTS: Balance Sheets as of December 31, 2009 and 2008 21 Statements of Operations and Comprehensive Loss for the years ended December 31, 2009 and 2008 22 Statements of Stockholders' Equity for the years ended December 31, 2009 and 2008 23 Statements of Cash Flows for the years ended December 31, 2009 and 2008 24 Notes to Financial Statements 25 20 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Creative Beauty Supply of New Jersey Corporation We have audited the accompanying balance sheets of Creative Beauty Supply of New Jersey Corporation as of December 31, 2009 and 2008 and the related statements of operations and comprehensive loss, stockholders' equity and cash flows for the years then ended. The financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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 the Company as of December 31, 2009 and 2008 and the results of its operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ Rotenberg Meril Solomon Bertiger & Guttilla, P.C. Saddle Brook, New Jersey March 15, 2010 21 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION BALANCE SHEETS DECEMBER 31, 2009 AND 2008 2009 2008 CURRENT ASSETS: Cash and cash equivalents $ 177,253 $ 200,175 ---------- ---------- TOTAL CURRENT ASSETS 177,253 200,175 ---------- ---------- TOTAL ASSETS $ 177,253 $ 200,175 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 7,278 $ 1,299 Accrued expenses 12,800 11,900 Liabilities of discontinued operations - 3,200 ---------- ---------- TOTAL CURRENT LIABILITIES 20,078 16,399 ---------- ---------- TOTAL LIABILITIES 20,078 16,399 ---------- ---------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' DEFICIENCY: Preferred stock, par value $.001, authorized 10,000,000 shares, issued and outstanding -0- shares - - Common stock, par value $.001, authorized 100,000,000 shares, issued and outstanding 10,532,150 shares 10,532 10,532 Additional paid-in capital 776,109 776,109 Accumulated deficit (629,466) (602,865) ---------- ---------- TOTAL STOCKHOLDERS' EQUITY 157,175 183,776 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 177,253 $ 200,175 ========== ========== The accompanying notes are an integral part of these financial statements 22 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 2009 2008 ---- ---- Revenues $ - $ - --------- --------- Operating Expenses: Professional fees 29,045 28,186 Other general and administrative 710 - --------- --------- Total Operating Expenses 29,755 28,186 --------- --------- Loss From Operations ( 29,755) (28,186) --------- --------- Other Income: Interest income 3,154 6,641 Miscellaneous income - 1,033 --------- --------- Total Other Income 3,154 7,674 --------- --------- Loss from Continuing Operations (26,601) (20,512) Loss from Discontinued Operations - (26,920) --------- --------- Net Loss $ (26,601) $ (47,432) ========= ========= Loss per share: Continuing Operations: basic and diluted net loss per common share $ - $ - ========= ========= Discontinued Operations: basic and diluted net loss per common share $ - $ - ========= ========= Basic and diluted weighted average common shares outstanding 10,532,150 10,532,150 ========== ========== The accompanying notes are an integral part of these financial statements 23 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 Common Stock $ .001 Par Value Additional Number Paid In Accumulated of Shares Amount Capital Deficit Total --------- ------ ---------- ----------- ----- Beginning Balance, January 1, 2008 10,532,150 $ 10,532 $ 776,109 $(555,433) $ 231,208 Net loss for the year - - - (47,432) (47,432) ---------- -------- --------- --------- --------- Ending Balance, December 31, 2008 10,532,150 10,532 776,109 (602,865) 183,776 Net loss for the year - - - (26,601) (26,601) ---------- -------- --------- --------- --------- Ending Balance, December 31, 2009 10,532,150 $ 10,532 $ 776,109 $(629,466) $ 157,175 ========== ======== ========= ========= =========

The accompanying notes are an integral part of these financial statements 24 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 2009 2008 ---- ---- Cash Flow from Operating Activities Net loss $ (26,601) $ (47,432) Adjustments to reconcile net loss to net cash used in operating activities: Increase in accounts payable 5,979 1,299 Increase in accrued expenses 900 850 ---------- ---------- Cash provided by continuing operations 6,879 2,149 Cash (used in) provided by discontinued operations (3,200) 258 ---------- ---------- Net cash used in operating activities (22,922) (45,025) ---------- ---------- Decrease in Cash and Cash Equivalents (22,922) (45,025) Cash and Cash Equivalents - beginning of year 200,175 245,200 ---------- ---------- Cash and Cash Equivalents - end of year $ 177,253 $ 200,175 ========== ========== The accompanying notes are an integral part of these financial statements 25 CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2009 AND 2008 1. THE COMPANY NATURE OF BUSINESS Creative Beauty Supply of New Jersey Corporation (the "Company") was incorporated in the State of New Jersey on October 1, 2003. It was formed pursuant to a resolution of the Board of Directors of Creative Beauty Supply, Inc., ("CBS") as a wholly-owned subsidiary of that company, a publicly traded New Jersey Corporation. On January 1, 2004, the assets and liabilities of CBS were contributed at book value to the company, and this subsidiary was then spun-off by CBS to its shareholders. This spin-off was done in contemplation of a merger which occurred on March 19, 2004 between CBS and Global Digital Solutions, Inc. ("Global"), a Delaware corporation whereby the former shareholders of CBS became the owners of 100 percent of the common stock of the Company. On January 1, 2004, the Company commenced operations in the beauty supply industry. On November 30, 2007, the Company's Board of Directors approved a plan to dispose of its wholesale and retail beauty supply business. See Note 5. As of January 1, 2009, the Company has had no operations and is a shell company. The Company's current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into the Company. In certain instances, a target company may wish to become a subsidiary of the Company or wish to contribute assets to the Company rather than merge. No assurance can be given that the Company will be successful in identifying or negotiating with any target company. The Company provides a means for a foreign or domestic private company to become a reporting (public) company whose securities would be qualified to trading in the United States secondary market. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company's financial statements are prepared in conformity with US generally accepted accounting principles ("GAAP"). Use of Estimates These financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets liabilities, revenues and expenses. The Company continually evaluates the accounting policies and estimates used to prepare the consolidated financial statements. The Company bases its estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. 26 Cash and Cash Equivalents For financial statement purposes, short-term investments with an original maturity of ninety days or less and highly liquid investments are considered cash and cash equivalents. Cash and cash equivalents consist of a money market account. Income Taxes The Company utilizes Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, "Income Taxes" ("ASC 740"). ASC 740 requires the recognition of deferred tax assets and liabilities for the expected future tax consequence of events that have been include in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities using enacting tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Earnings (Loss) Per Share The Company computes earnings or loss per share in accordance with ASC 260,"Earnings Per Share". Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other agreements to issue common stock were exercised or converted into common stock. Diluted earnings per share is computed based upon the weighted average number of common shares and dilutive common equivalent shares outstanding, which includes convertible debentures, stock options and warrants. There were no dilutive common stock equivalents for all periods presented. Fair Value of Financial Instruments The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments Recently Issued Accounting Standards Effective July 1, 2009, the FASB's ASC became the single official source of authoritative, nongovernmental generally accepted accounting principles in the United States ("GAAP"). The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission. Our accounting policies were not affected by the conversion to ASC. However, references to specific accounting standards in the footnotes to our financial statements have been changed to refer to the appropriate section of ASC. Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements. 27 3. CONCENTRATION OF CREDIT RISK The Company maintains its cash balance with a major bank. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor. At December 31, 2009 and 2008 all cash balances were fully insured. 4. INCOME TAXES On January 1, 2009 the Company adopted the provisions of ASC Topic 740- 10-05, "Accounting for Uncertainty of Income Taxes" ("ASC 740"), related to the accounting for the uncertainty of income taxes. The adoption of ASC 740 did not have an effect on the Company's financial position or results of operations on January 1, 2009 as the Company did not have any unrecognized tax benefits. The Company also evaluated its tax positions as of December 31, 2009 and reached the same conclusion. The deferred income tax assets and liabilities at December 31, 2009 and 2008 relate to temporary differences between the financial statement carrying amounts and their tax basis. Assets and liabilities that give rise to significant portions of the net deferred tax assets and liabilities relate to the following: 2009 2008 Net operating loss carry forwards $ 168,760 $ 158,060 Capital loss carry forwards 64,440 64,440 --------- --------- 233,200 222,500 Less: Valuation allowance (233,200) (222,500) --------- --------- Total $ - $ - ========= ========= A 100% valuation allowance was provided at December 31, 2009 and 2008 as it is uncertain if the deferred tax assets would be utilized. The increase in the valuation allowance was a result from the increase in the Company's net operating loss carry forward. At December 31, 2009, the Company has unused federal net operating loss carry forwards of approximately $454,500 expiring between 2023 and 2029 and unused New Jersey net operating loss carry forwards of approximately $450,400 expiring between 2011 and 2016. 5. DISCONTINUED OPERATIONS On November 30, 2007, the Company's Board of Directors approved a plan to dispose of its wholesale and retail beauty supply business. The Board recognized that this operation has never realized a profit and that sales volumes have been declining each year. The Company contacted its suppliers and returned as much of the inventory as possible and sold the remaining balance to its customers. The Company's objective was to cease all operations by December 31, 2007 and vacate the facility it leased by January 31, 2008. The Company completed its plan on January 1, 2009. 28 Assets and liabilities of discontinued operations as of December 31, 2009 and 2008 are summarized as follows: 2009 2008 ---- ---- Total Assets of Discontinued Operations $ - $ - -------- -------- Current Liabilities: Accrued expense - 3,200 -------- -------- Total Liabilities of Discontinued Operations - 3,200 -------- -------- Net Liabilities of Discontinued Operations $ - $ 3,200 ======== ======== Results of discontinued operations for the years ended December 31, 2009 and 2008 are summarized as follows: 2009 2008 ---- ---- Gross Profit $ - $ - ---------- ---------- Operating Expenses: Professional fees - 10,350 Rent - 1,350 Other general and administrative - 15,220 ---------- ---------- Total Operating Expenses - 26,920 ---------- ---------- Loss from Discontinued Operations, net of income taxes of $-0- $ - $ (26,920) ========== ==========

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ITOX 10-K Fiscal year ended Dec. 31, 2009