10-K 1 g3445.txt ANNUAL REPORT FOR THE YEAR ENDED 6-30-09 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2009 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to __________________ Commission file number: 000-52278 SHADOW MARKETING INC. (Exact name of registrant as specified in its charter) Nevada 26-1281852 (State or other jurisdiction of I.R.S. Employer Identification No.) incorporation or organization) 17365 S.W. 13th Street Pembroke Pines, Florida, 33029 (Address of principal executive offices) Registrant's telephone number, including area code: (954) 562-3017 Securities to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered ------------------- ----------------------------------------- None None Securities to be registered pursuant to Section 12(g) of the Act: Common Stock (Title of Class) Indicated by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes [ ] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the 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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B (ss. 229.405 of this chapter) 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. [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ] 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 the last business day of the registrant's most recently completed second fiscal quarter $1,584,700 based on the last sale price of our common stock State the number of shares outstanding of each of the registrant's classes of common equity, as of the latest practicable date. 7,445,000 shares of common stock as at September 9, 2009 TABLE OF CONTENTS Page ---- ITEM 1: BUSINESS .......................................................... 3 ITEM 1A: RISK FACTORS ...................................................... 3 ITEM 2: PROPERTIES ........................................................ 5 ITEM 3: LEGAL PROCEEDINGS ................................................. 5 ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ............... 5 ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS .......... 5 ITEM 6: SELECTED FINANCIAL DATA ........................................... 5 ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION ......... 5 ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ........ 6 ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ....................... 7 ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES ............................................. 16 ITEM 9A: CONTROLS AND PROCEDURES ........................................... 16 ITEM 9B: OTHER INFORMATION ................................................. 17 ITEM 9: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ............ 17 ITEM 11: EXECUTIVE COMPENSATION ............................................ 18 ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ................................... 19 ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE ...................................................... 19 ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES ............................ 19 ITEM 15: EXHIBITS AND REPORTS ............................................. 20 2 PART I ITEM 1: BUSINESS We were incorporated pursuant to the laws of Nevada on September 19, 2003. We commenced business operations in 2005 when we published the first issue of Up & Over Magazine. Up & Over Magazine contained articles focusing on the purchase, training and care of sports horses. It included training tips, riding techniques, health concerns and horses for sale. While we intended to publish three or four issues of Up & Over Magazine each year, we were unable to publish any additional issues due to our inability to raise additional funds to cover design, printing and publication costs. Following publication of the first issue of our magazine, all administrative costs and expenses incurred in connection with complying with our obligations as a reporting issuer were covered by one of our directors. Due to our difficulties in raising additional funds to cover our planned operations in the publishing industry, we are currently reviewing other potential asset acquisitions in various sectors. Currently, we are in the process of completing a due diligence investigation of an opportunity in the technology sector. However, there is no guarantee that we will be able to reach any agreement to acquire such assets or any others. EMPLOYEES We currently have no employees. RESEARCH AND DEVELOPMENT EXPENDITURES We have not incurred any research or development expenditures since our incorporation. SUBSIDIARIES We do not have any subsidiaries. PATENTS AND TRADEMARKS We do not own, either legally or beneficially, any patents or trademarks. ITEM 1A: RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this annual report before investing in our common stock. These constitute all of the material risks relating to our offering. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. BECAUSE WE DO NOT HAVE ANY BUSINESS OPERATIONS, WE FACE A HIGH RISK OF BUSINESS FAILURE We were incorporated on September 19, 2003 and did not commence active business operations until 2005 when we published our first and only issue of Up & Over Magazine. We were unsuccessful in this initial business plan and are now seeking to acquire an interest in alternative assets. We may not be able to identify and acquire any interest in suitable business assets. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will fail. 3 BECAUSE OUR CONTINUATION AS A GOING CONCERN IS IN DOUBT, WE WILL BE FORCED TO CEASE BUSINESS OPERATIONS UNLESS WE CAN GENERATE PROFITABLE OPERATIONS IN THE FUTURE. We have incurred losses since our inception resulting in an accumulated deficit of $80,387 at June 30, 2009. Further losses are anticipated in the acquisition and development of a business. As a result, there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. If we cannot raise financing to meet our obligations, we will be insolvent and will cease business operations. OUR BUSINESS WILL FAIL UNLESS WE ARE ABLE TO RAISE ADDITIONAL FUNDS FOR AN ASSET ACQUISITION AND FOR OPERATIONS. Our current operating funds are less than necessary to complete any acquisition of a business interest and fund its future development. As of June 30, 2009, we had cash in the amount of $122. We currently do not have any operations and we have no income. We will require additional funds to review, acquire and develop business assets. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. UNLESS A PUBLIC MARKET DEVELOPS FOR OUR COMMON STOCK, OUR SHAREHOLDERS MAY NOT BE ABLE TO SELL THEIR SHARES. Although our shares of common stock are quoted for trading on the OTC Bulletin Board, there is no established market for our common stock and we cannot assure you that an active trading market will develop and be sustained. Without a public market, it may be difficult for an investor to find a buyer for our common stock. BECAUSE OUR DIRECTORS AND OFFICERS OWN 53.73% OF OUR OUTSTANDING COMMON STOCK, THEY COULD MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO OTHER SHAREHOLDERS. Greg Fedun and Christopher Paterson, our directors and officers, collectively own 53.73% of the outstanding shares of our common stock. Accordingly, they will have a significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations, and the sale of all or substantially all of our assets. They will also have the power to prevent or cause a change in control. The interests of our directors may differ from the interests of the other stockholders and thus result in corporate decisions that are disadvantageous to other shareholders. OUR COMMON SHARES ARE CONSIDERED PENNY STOCK, WHICH LIMITS AN INVESTOR'S ABILITY TO SELL THE STOCK. Our shares of common stock constitute penny stock under the Securities and Exchange Act. The shares will remain penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in our company will be subject to rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock. FORWARD-LOOKING STATEMENTS This annual report contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, 4 intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are most likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the "Risk Factors" section and elsewhere in this annual report. ITEM 2: PROPERTIES We do not own an interest in any real property. Our secretary and treasurer, Christopher Paterson, provides office space to us at 17365 S.W. 13th Street, Pembroke Pines, Florida, 33029. ITEM 3: LEGAL PROCEEDINGS There are no legal proceedings pending or threatened against us. Our address for service of process in Nevada is 1802 N Carson Street, Suite 212, Carson City, Nevada, 89701. ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted during the fourth quarter of our fiscal year to a vote of security holders, through the solicitation of proxies or otherwise. PART II ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Our shares of common stock are quoted for trading on the OTC Bulletin Board under the symbol SDWM. However, no trades of our shares of common stock occurred through the facilities of the OTC Bulletin Board during the fiscal year ended June 30, 2009. We have 17 shareholders of record as at the date of this annual report. DIVIDENDS There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend: 1. we would not be able to pay our debts as they become due in the usual course of business; or 2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution. We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future. ITEM 6: SELECTED FINANCIAL DATA Not applicable. ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION OVERVIEW AND CASH REQUIREMENTS Our plan of operation for the twelve months following the date of this annual report is to continue to review potential asset acquisitions in various sectors. Currently, we are in the process of completing a due diligence investigation of 5 an opportunity in the technology sector. However, there is no guarantee that we will be able to reach any agreement to acquire such assets or any others. As well, in the next 12 months we anticipate spending an additional $15,000 on administrative fees, including fees we will incur in complying with reporting obligations. SOURCES AND USES OF CASH At June 30, 2009, our current assets consisted of $12 in cash. Accordingly, we will have to raise additional funds in the next twelve months in order to cover our anticipated administrative costs and any costs we incur in conducting due diligence reviews of potential asset acquisitions. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangements for additional loans have been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing. RESULTS OF OPERATIONS We did not earn any revenues from operations in the fiscal year ended June 30, 2009. We incurred operating expenses in the amount of $13,856 during the fiscal year. These operating expenses were comprised entirely of general and administrative costs. We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons, there is substantial doubt that we will be able to continue as a going concern. ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 6 ITEM 8: FINANCIAL STATEMENTS REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Shadow Marketing Inc. I have audited the accompanying balance sheets of Shadow Marketing Inc. (the Company), a development stage company, as of June 30, 2009 and 2008, and the related statements of operations, stockholders' equity (deficiency), and cash flows for the years ended June 30, 2009 and 2008 and for the period September 19, 2003 (date of inception) to June 30, 2009. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that I 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. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Shadow Marketing Inc., a development stage company, as of June 30, 2009 and 2008, and the results of its operations and its cash flows for the years ended June 30, 2009 and 2008 and for the period September 19, 2003 (date of inception) to June 30, 2009 in conformity with accounting principles generally accepted in the United States. The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company's present financial situation raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Michael T. Studer CPA P.C. --------------------------------- Michael T. Studer CPA P.C. Freeport, New York September __, 2009 7 Shadow Marketing Inc. (A Development Stage Company) Balance Sheets (Expressed in US Dollars) --------------------------------------------------------------------------------

See notes to financial statements. 8 Shadow Marketing Inc. (A Development Stage Company) Statements of Operations (Expressed in US Dollars) --------------------------------------------------------------------------------

See notes to financial statements. 9 Shadow Marketing Inc. (A Development Stage Company) Statements of Stockholders' Equity (Deficiency) For the period September 19, 2003 (inception) to June 30, 2009 (Expressed in US Dollars) --------------------------------------------------------------------------------

See notes to financial statements. 10 SHADOW MARKETING INC. (A Development Stage Company) Statements of Cash Flows (Expressed in US Dollars) --------------------------------------------------------------------------------

See notes to financial statements. 11 SHADOW MARKETING INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS June 30, 2009 -------------------------------------------------------------------------------- 1. ORGANIZATION AND BUSINESS OPERATIONS Shadow Marketing, Inc. (the "Company") was incorporated in the State of Nevada on September 19, 2003. The Company is a Development Stage Company as defined by Statement of Financial Accounting Standards ("SFAS") No. 7. During the year ended June 30, 2005, the Company started to publish "Up & Over", a magazine planned to contain articles focusing on the purchase, training, and care of sports horses. In the year ended June 30, 2006, the first issue was published and distributed to outlets without charge. Although the Company plans to publish three to four issues per year, it has not published and distributed a second issue due to a lack of working capital. On March 6, 2007, in connection with a then potential acquisition, the Company changed its name to D2Fusion Corp. and increased its authorized common stock, $0.001 par value, from 75,000,000 shares to 200,000,000 shares. Shortly thereafter, the Company decided not to pursue this acquisition. On September 11, 2007, the name was changed back to Shadow Marketing Inc. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A) BASIS OF PRESENTATION These financial statements have been prepared on a "going concern" basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as of June 30, 2009, the Company had cash of $122 and a stockholders' deficiency of $55,887. Further, since inception, the Company has had revenues of $576 and has incurred a net loss of $80,387. These factors raise substantial doubt as to the Company's ability to continue as a going concern. The Company plans to improve its financial condition by obtaining new financing. However, there is no assurance that the Company will be successful in accomplishing this objective. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. B) CASH AND CASH EQUIVALENTS The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. C) REVENUE RECOGNITION Advertising revenue is recognized over the period which the related magazine issue(s) are expected to be distributed. Magazine publication costs are expensed as incurred. D) USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 12 SHADOW MARKETING INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS June 30, 2009 -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E) FOREIGN CURRENCY TRANSLATION The Company's functional currency and its reporting currency is the United States dollar. F) FINANCIAL INSTRUMENTS The carrying value of the Company's financial instruments, consisting of cash, accounts payable and accrued liabilities, and due to related party, approximates their fair value because of the short maturity of these instruments. G) STOCK-BASED COMPENSATION Stock-based compensation is accounted for at fair value in accordance with SFAS Nos. 123 and 123 (R). To date, the company has not adopted a stock option plan and has not granted any stock options. H) INCOME TAXES Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. I) BASIC AND DILUTED NET LOSS PER SHARE The Company computes net loss per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method for options and warrants and the if-converted method for convertible debt and convertible preferred stock. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti dilutive. 3. DUE TO RELATED PARTY The due to related party is due a Company officer and director, does not bear interest, and is due on demand. 4. STOCKHOLDER'S EQUITY At June 30, 2009, the Company had no stock option plan, warrants or other dilutive securities outstanding. 13 SHADOW MARKETING INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS June 30, 2009 -------------------------------------------------------------------------------- 5. INCOME TAXES The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate of 35% to income (loss) before income taxes. The sources of the difference follow: Period from September 19, 2003 (Date of Year Ended Year Ended Inception) to June 30, June 30, June 30, 2009 2008 2009 -------- -------- -------- Expected tax at 35% $ (4,850) $ (7,278) $(28,135) Increase in valuation allowance 4,850 7,278 28,135 -------- -------- -------- Income tax provision $ -- $ -- $ -- ======== ======== ======== Significant components of the Company's deferred income tax assets are as follows: June 30, June 30, 2009 2008 -------- -------- Net operating loss carryforwords $ 28,135 $ 23,286 Valuation allowance (28,135) (23,286) -------- -------- Net deferred tax assets $ -- $ -- ======== ======== Based on management's present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $28,135 at June 30, 2009 attributable to the future utilization of the net operating loss carryforwards of $80,387 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements. The Company will continue to review this valuation allowance and make adjustments as appropriate. The $80,387 net operating loss carryforward expires $12 in year 2024, $16,967 in year 2025, $20,385 in year 2026, $8,372 in year 2027, $20,795 in year 2028, and $13,856 in year 2029. Current United States income tax laws limit the amount of loss available to offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. 6. COMMITMENTS AND CONTINGENCIES Rental agreement - The Company has been using office space provided by an officer and director at no cost to the Company. 14 SHADOW MARKETING INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS June 30, 2009 -------------------------------------------------------------------------------- 6. COMMITMENTS AND CONTINGENCIES (CONTINUED) Conflicts of interest - Officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, they may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts. 7. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the filing date of this Form 10-K and has determined that there were no subsequent events to recognize or disclose in these financial statements. 15 ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A: CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS We evaluated the effectiveness of our disclosure controls and procedures as of the end of the 2009 fiscal year. This evaluation was conducted with the participation of our chief executive officer and our principal accounting officer. Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to be disclosed in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported. LIMITATIONS ON THE EFFECTIVE OF CONTROLS Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. ASSESSMENT OF EFFECTIVENESS OF CONTROLS As of our fiscal year ended June 30, 2009, our management has concluded that our internal control over financial reporting is effective. Our management is not aware of any material weakness in our internal control over financial reporting. LIMITATIONS OF REPORT This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report. CONCLUSIONS Based on his evaluation of our controls, our chief executive officer and chief accounting officer has concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared. There were no 16 changes in our internal controls that occurred during the period covered by this report that have been materially affected, or are reasonably likely to affect our internal controls. ITEM 9B: OTHER INFORMATION Not applicable. PART III ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Our executive officers and directors and their respective ages as of the date of this annual report are as follows: DIRECTORS: Name of Director Age ---------------- --- Greg Fedun 41 Christopher Paterson 43 EXECUTIVE OFFICERS: Name of Officer Age Office --------------- --- ------ Greg Fedun 41 President and C.E.O. Christopher Paterson 43 Secretary and Treasurer BIOGRAPHICAL INFORMATION Set forth below is a brief description of the background and business experience of each of our executive officers and directors for the past five years. GREG FEDUN has acted as our president and as a director since our inception. He acted as a director of Iciena Ventures Inc., a British Columbia and Alberta reporting issuer involved in diamond property exploration from March 2002 to March 2006. From August 2002 to September 2003, Mr. Fedun acted as a director of Candorado Operating Company Ltd., a British Columbia and Alberta reporting issuer involved in mineral property exploration. Mr. Fedun intends to devote 20% of his business time to our affairs. CHRISTOPHER PATERSON has acted as our Secretary, Treasurer and Director since October 28, 2004. After receiving his degree in Marketing in 1987, Mr. Paterson went on to work for John Tann Ltd. (UK), a security equipment manufacturer, where he held various positions in sales and marketing until 1994. He then worked for Honeywell Ltd., where he was responsible for the financial and large commercial portfolios for the company until 1998. Since then, Mr. Paterson has provided marketing, consulting services to private and public companies. Mr. Paterson intends to devote 20% of his business time to our affairs. TERM OF OFFICE Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in 17 accordance with our bylaws. Our officers are appointed by the board of directors and will hold office until removed by the board. SIGNIFICANT EMPLOYEES We have no significant employees other than the officers and directors described above. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms we received, we believe that during the fiscal year ended June 30, 2008 all such filing requirements applicable to our officers and directors were complied with exception that reports were filed late by the following persons: Number Transactions Known Failures Of late Not Timely To File a Name and principal position Reports Reported Required Form --------------------------- ------- -------- ------------- Greg Fedun 0 0 0 (President CEO and director) Christopher Paterson 0 0 0 (Secretary, treasurer and director) ITEM 11: EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the fiscal years ended June 30, 2009, 2008 and 2007: ANNUAL COMPENSATION

STOCK OPTION GRANTS We have not granted any stock options to the executive officer since our inception. CONSULTING AGREEMENTS We do not have any employment or consulting agreement with Mr. Fedun or Mr. Paterson. We do not pay them any amount for acting as directors. 18 ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding common stock as of the date of this annual report, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly. Amount of Title of Name and address beneficial Percent Class of beneficial owner ownership of class ----- ------------------- --------- -------- Common Greg Fedun 2,000,000 26.86% President and Director Common Christopher Paterson 2,000,000 26.86% Stock Director, Secretary And Treasurer Common All Officers and Directors 4,000,000 53.72% Stock as a Group that consists of shares two people The percent of class is based on 7,445,000 shares of common stock issued and outstanding as of the date of this annual report. There are no arrangements that may result in our change in control of the company. ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE None of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us: * Any of our directors or officers; * Any person proposed as a nominee for election as a director; * Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; * Either of our promoters, Greg Fedun and Christopher Paterson; * Any relative or spouse of any of the foregoing persons who has the same house as such person. ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES Our principal accountant, Michael T. Studer, C.P.A., P.C., rendered invoices to us during the fiscal periods indicated for the following fees and services: Fiscal year ended Fiscal year ended June 30, 2009 June 30, 2008 ------------- ------------- Audit fees $10,500 $10,500 Audit-related fees 0 0 Tax fees 0 0 All other fees 0 0 19 Audit fees consist of fees related to professional services rendered in connection with the audit of our annual financial statements and the review of the financial statements included in each of our quarterly reports on Form 10-Q. Our policy is to pre-approve all audit and permissible non-audit services performed by the independent accountants. These services may include audit services, audit-related services, tax services and other services. Under our audit committee's policy, pre-approval is generally provided for particular services or categories of services, including planned services, project based services and routine consultations. In addition, we may also pre-approve particular services on a case-by-case basis. We approved all services that our independent accountants provided to us in the past two fiscal years. ITEM 15: EXHIBITS, FINANCIAL STATEMENTS SCHEDULES Exhibits Exhibit Number Description ------ ----------- 3.1* Articles of Incorporation 3.2* Bylaws 31.1 Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 31.2 Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ---------- * filed as an exhibit to our SB-2 dated December 16, 2005 20 SIGNATURES Pursuant to the requirements of Section 13 and 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Shadow Marketing, Inc. By /s/ Greg Fedun ----------------------------------- Greg Fedun President, CEO & Director Date: September 9, 2009 In accordance with the Securities Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Greg Fedun ----------------------------------- Greg Fedun President, CEO & Director Date: September 9, 2009 By /s/ Christopher Paterson ----------------------------------- Christopher Paterson Secretary, Treasurer and Director Date: September 9, 2009 21

Shadow Marketing Inc. 10-K