UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012



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

Commission file number: 000-53519

GMS CAPITAL CORP.

(Exact name of Registrant as specified in its charter)

Florida		7372		26-1094541
(State or jurisdiction of Incorporation or organization)		(Primary Std. Industrial Classification Code Number)		(IRS Employer ID Number)

Florida

~~5925 Monkland Ave., Montreal, Quebec H4A 1G7 Canada~~7372

26-1094541

(State or jurisdiction of

(Primary Std.

(IRS Employer ID #)

Incorporation or

Industrial Classification

Organization)

Code #)

3055 L’Assomption Blvd., Montreal, Quebec H1N 2H1 Canada

(Address of principal executive offices) (Zip Code)

~~Registrant’s~~5925 ~~telephone~~Monkland ~~number~~Ave, ~~including~~suite ~~area~~202, ~~code:~~Montreal, ~~514-287-0103~~Quebec H4A 1G7 Canada

(Former address of principal executive offices) (Zip Code)

514-254-9473

Registrant’s telephone number, including area code

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value per share

(Title of Class)

Indicate by check mark whether the issuer (1) has 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. xYes oNo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated file, 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 ~~o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company x~~

Accelerated filer

Non-accelerated filer

Smaller reporting company

(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). oYes xNo

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practical date. As of ~~November~~May 1721, ~~2011~~2012 there were 5,365,400 shares of the issuer's $.001 par value common stock issued and outstanding.

TABLE OF CONTENTS

			Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements:	1
	Balance Sheets as of September 30, 2011 (unaudited) and December 31, 2010	1
	Statements of Operations and Comprehensive Income (Loss) for the Nine and Three Months Ended September 30, 2011 and 2010 (unaudited)	2
	Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010 (unaudited)	3
	Notes to Financial Statements (unaudited)	4
Item 2.	Management Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3	Quantitative and Qualitative Disclosures about Market Risk	32
Item 4.	Control and Procedures	32
PART II - OTHER INFORMATION		32
Item 1.	Legal Proceedings	32

Item 1A	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults its Upon Senior Securities	33
Item 4.	Submission of Matters to a Vote of Security Holders	33
Item 5	Other Information	33
Item 6.	Exhibits	33
Signatures		34

GMS CAPITAL CORP.
BALANCE SHEETS
SEPTEMBER 30, 2011 (UNAUDITED) AND DECEMBER 31,2010
ASSETS
	(IN US$)
	September 30,	December 31,
	2011	2010
	(unaudited)
Current Assets:
Cash and cash equivalents	$ 491	$ 4,086
Accounts receivable, net	5,348	7,784
Total Current Assets	5,839	11,870
Fixed assets, net of depreciation	218	548
TOTAL ASSETS	$ 6,057	$ 12,418
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current Liabilities:
Advances - Shareholders	$ 74,827	$ 65,941
Line of credit	10,362	3,712
Due to related companies	7,466	3,362
Accounts payable and accrued expenses	4,796	826
Total Current Liabilities	97,451	73,841
Total Liabilities	97,451	73,841
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 Par Value; 100,000,000 shares authorized
and 5,365,400 shares issued and outstanding, respectively	5,365	5,365
Additional paid-in capital	509,805	509,805
Accumulated deficit	(584,334)	(550,614)
Accumulated other comprehensive income (loss)	(22,232)	(25,979)
Total Stockholders' Equity (Deficit)	(91,396)	(61,423)
TOTAL LIALITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 6,056	$ 12,418

GMS CAPITAL CORP.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
	IN US$		IN US$
	NINE MONTHS ENDED		THREE MONTHS ENDED
	2011	2010	2011	2010
OPERATING REVENUES
Sales	$ 31,675	$ 24,157	$ 7,235	$ 14,825
COST OF SALES
Purchases	-	63,150	-	30,858
Total Cost of Sales	-	63,150	-	30,858
GROSS PROFIT (LOSS)	31,675	(38,993)	7,235	(16,033)
OPERATING EXPENSES
Selling, general and administrative	64,526	18,212	8,663	9,370
Depreciation	330	3,059	110	110
Total Operating Expenses	64,856	21,271	8,773	9,480
LOSS BEFORE OTHER INCOME (EXPENSE)	(33,181)	(60,264)	(1,538)	(25,513)
OTHER INCOME (EXPENSE)
Interest expense	(539)	(305)	(213)
Total Other Income (Expense)	(539)	(305)	(213)	-
NET LOSS BEFORE PROVISION
FOR INCOME TAXES	(33,720)	(60,569)	(1,751)	(25,513)
Provision for Income Taxes	-	-	-	-
NET LOSS APPLICABLE
TO COMMON SHARES	$ (33,720)	$ (60,569)	$ (1,751)	$ (25,513)
NET LOSS PER BASIC AND DILUTED SHARES
BASIC AND DILUTED	$ (0.01)	$ (0.01)	$ (0.00)	$ (0.00)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC AND DILUTED	5,365,400	5,129,150	5,365,400	5,156,161
COMPREHENSIVE INCOME (LOSS)
Net loss	$ (33,720)	$ (60,569)	$ (1,751)	$ (25,513)
Other comprehensive income (loss)
Currency translation adjustments	3,747	1,565	8,038	(1,074)
Comprehensive income (loss)	$ (29,973)	$ (59,004)	$ 6,287	$ (26,587)

GMS CAPITAL CORP.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
	IN US$
	2011	2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (33,720)	$ (60,569)
Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation	330	3,059
Changes in assets and liabilities
(Increase) decrease in accounts receivable	2,105	(4,658)
Increase (decrease) in accounts payable and and accrued expenses	3,971	7,257
Total adjustments	6,406	5,658
Net cash (used in) operating activities	(27,314)	(54,911)
CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from line of credit, net of repayments	6,808	(5,983)
Proceeds received from the sale of common stock	-	48,630
Increase (decrease) in due to/from related parties	15,940	10,317
Net cash provided by financing activities	22,748	52,964
Effect of foreign currency	971	2,924
NET (DECREASE) IN CASH AND CASH EQUIVALENTS	(3,595)	977
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	4,086	354
CASH AND CASH EQUIVALENTS - END OF PERIOD	$ 491	$ 1,331
CASH PAID DURING THE PERIOD FOR:
Interest expense	$ 539	$ 305

Table of Contents

3Page

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements:

Balance Sheet as of March 31, 2012 (unaudited) and December 31, 2011

Statement of Operations and Comprehensive Income (Loss) for the Three Months

Ended March 31, 2012 and 2011 (unaudited)

Statement of Cash Flows for the Three Months Ended March 31, 2012 and 2011

(unaudited)

Notes to Financial Statements (unaudited)

Item 2.

Management Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults upon Senior Securities

Item 4.

Submission of Matters to a Vote of Security Holders

Item 5.

Other Information

Item 6.

Exhibits

Signatures


GMS CAPITAL CORP.
BALANCE SHEETS
MARCH 31, 2012 (UNAUDITED) AND DECEMBER 31,2011

ASSETS
	(IN US$)
	March 31,	December 31,
	2012	2011
	(unaudited)
Current Assets:
Cash and cash equivalents	$1,449	$611
Accounts receivable, net	1,635	6,388

Total Current Assets	3,084	6,999


TOTAL ASSETS	$3,084	$6,999

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

LIABILITIES
Current Liabilities:
Advances	$5,387	$75,922
Secured Note Payable	105,000	-
Line of credit	-	11,241
Due to related companies	75,909	17,460
Accounts payable and accrued expenses	15	4,000

Total Current Liabilities	186,311	108,623

Total Liabilities	186,311	108,623

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 Par Value; 100,000,000 shares authorized
and 5,365,400 shares issued and outstanding, respectively	5,365	5,365
Additional paid-in capital	509,805	509,805
Accumulated deficit	(675,735)	(592,089)
Accumulated other comprehensive income (loss)	(22,663)	(24,706)

Total Stockholders' Equity (Deficit)	(183,228)	(101,625)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$3,084	$6,999


GMS CAPITAL CORP.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
	IN US$
	2012	2011
OPERATING REVENUES
Sales	$2,997	$10,539

COST OF SALES
Purchases	3,310	-
Total Cost of Sales	3,310	-

GROSS PROFIT (LOSS)	(313)	10,539

OPERATING EXPENSES
Selling, general and administrative	83,334	33,287
Depreciation	-	110
Total Operating Expenses	83,334	33,397

LOSS BEFORE OTHER INCOME (EXPENSE)	(83,646)	(22,858)

OTHER INCOME (EXPENSE)
Interest expense	-	(118)
Total Other Income (Expense)	-	(118)

NET LOSS BEFORE PROVISION
FOR INCOME TAXES	(83,646)	(22,976)
Provision for Income Taxes	-	-

NET LOSS APPLICABLE
TO COMMON SHARES	$(83,646)	$(22,976)

NET LOSS PER BASIC AND DILUTED SHARES
BASIC AND DILUTED	$(0.02)	$(0.00)

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC AND DILUTED	5,365,400	5,365,400

COMPREHENSIVE INCOME (LOSS)
Net loss	$(83,646)	$(22,976)
Other comprehensive income (loss)
Currency translation adjustments	2,043	(2,020)
Comprehensive income (loss)	$(84,600)	$(24,996)


GMS CAPITAL CORP.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011

	IN US$
	2012	2011

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$(83,646)	$(22,976)

Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation	-	110

Changes in assets and liabilities
Decrease in accounts receivable	8,958	1,512
Increase (decrease) in accounts payable and
and accrued expenses	(3,272)	6,581
Total adjustments	5,686	8,203

Net cash (used in) operating activities	(77,960)	(14,773)

CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from line of credit, net of repayments	472	6,292
Increase (decrease) in due to/from related parties	78,906	(2,058)
Proceeds from officers, net of repayments	(693)	7,414

Net cash provided by financing activities	78,685	11,648

Effect of foreign currency	113	(488)

NET (DECREASE) IN CASH AND CASH EQUIVALENTS	838	(3,613)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	611	4,086

CASH AND CASH EQUIVALENTS - END OF PERIOD	$1,449	$473

CASH PAID DURING THE PERIOD FOR:
Interest expense	$-	$118


SUPPLEMENTAL NONCASH INFORMATION:

Conversion of related party payables and officers payables to Secured Note Payable	$105,000	$-

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION

~~ORGANIZATION~~The ~~AND~~unaudited ~~BASIS~~financial OFstatements ~~PRESENTATION~~included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes.

~~The~~Certain ~~unaudited~~information and footnote disclosure normally included in financial statements ~~included~~prepared ~~herein~~in accordance with accounting principles generally accepted in the United States of America have been ~~prepared,~~condensed ~~without~~or ~~audit,~~omitted pursuant to ~~the~~such rules and regulations, ofalthough the ~~Securities~~Company ~~and~~believes ~~Exchange~~that ~~Commission~~the ~~(“SEC”). The~~disclosures ~~financial~~are ~~statements~~adequate ~~and~~to ~~notes~~make ~~are~~the information presented asnot ~~permitted~~misleading. It onis ~~Form~~suggested ~~10-Q~~that ~~and~~these dofinancial ~~not~~statements ~~contain~~be ~~information~~read ~~included~~ in conjunction with the ~~Company’s~~December ~~annual~~31, ~~statements~~2011 10-K and ~~notes. Certain~~audited ~~information~~financial statements and ~~footnote~~the ~~disclosure~~accompanying ~~normally~~notes ~~included~~thereto. While inmanagement ~~financial~~believes ~~statements~~the ~~prepared~~procedures followed in ~~accordance~~preparing ~~with~~these ~~accounting~~financial ~~principles~~statements ~~generally~~are ~~accepted~~reasonable, in the ~~United~~accuracy ~~States~~ of ~~America~~the ~~have~~amounts ~~been~~are ~~condensed~~in orsome ~~omitted~~respects ~~pursuant~~dependent toupon ~~such~~the ~~rules~~facts ~~and~~that ~~regulations~~will exist, ~~although~~and ~~the~~procedures ~~Company~~that ~~believes~~will ~~that~~be ~~the~~accomplished ~~disclosures~~by ~~are~~the ~~adequate~~Company tolater ~~make~~in the ~~information~~ year.

presented not misleading. It is suggested that these financial statements be read in conjunction with the December 31, 2010 10-K and audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

These unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

GMS Capital Corp. (the “Company” or “GMS”), a Florida Corporation, was founded on March 9, 2000. ~~originally~~Originally our Company was doing business as Metratech Retail Systems Inc., a Canadian Corporation up until the reincorporation as GMS Capital Corp. in the State of Florida on September 18, 2007,. inThe ~~order~~purpose of our Company was to develop and market inventory management software for suppliers to major retailers, ~~which~~to enable suppliers to forecast consumer demand for their products and to optimize their production and inventory accordingly. The Company's objective in the reincorporation in the state of Florida is to raise capital through the issuance of stock on the public markets in the US once achieving regulatory approval. Thus far, the Company has grown primarily in the Province of Quebec, Canada through the installation of its software via direct sales to customers.

The Company's objective in the reincorporation in the state of Florida is to raise capital through the issuance of stock on the public markets in the US once achieving regulatory approval. This capital raised will be utilized to further the promotion of The Company's flagship software product, ManageThePipe, a specialized inventory management software for small to medium sized businesses who sell their products via large chain Retail sales outlets known as “big box chains”.7

The Company has grown primarily in the Province of Quebec, Canada through the installation of its software via direct sales to customers. While sales to date of the software have occurred via a direct sales channel, the Company will look to add further distribution channels to other sectors in the United States and Canada in the coming year.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION (CONT’D)

~~ORGANIZATION~~Recently, ~~AND~~following ~~BASIS~~a OFreview ~~PRESENTATION~~of our software operations, we have decided to abandon our software business effective April 1, 2012 and to engage in the distribution, marketing and sale of cosmetics and cosmetics-related products primarily in Canada, France and the French Caribbean. To that effect, On March 16, 2012, our Company entered into and closed a License and Distribution Agreement (~~CONTINUED~~the “License Agreement”) with 8012415 Canada Inc. (“Canada”) pursuant to which Canada granted the Company an exclusive worldwide license to distribute, market and sell the Nacara brand cosmetic products (the “Products”), excluding the territories of Finland, Russia and Sweden, in exchange for a royalty of 5% of the gross revenues of the Products sold by our Company. The Products include a full line of cosmetic products aimed at women with darker complexions and is currently available in Canada at drugstores including Pharmacie Jean-Coutu and Shoppers Drug Mart and in France at retailers including Galeries Lafayette, Marionnaud, Nocibé and Beauty Success.

Effective July 1, 2009, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Positions or Emerging Issue Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the Codification.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION (CONT’D)

ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

Going Concern

As shown in the accompanying financial statements the Company has incurred a net loss of ($3383,~~720~~646) and ($6022,~~569~~976) for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011 and has an accumulated deficit of ($~~584~~675,~~334~~735) as of ~~September~~March 3031, ~~2011~~2012. The Company’s limited customer base exposes them to significant risk of future revenues. The Company ~~has~~had been searching for new distribution channels to sell their software and services to provide additional revenues to support their operations. ~~There~~The Company has elected to pursue opportunities in the international Cosmetics Industry and is in the process of discontinuing its software business. Regardless of this transition, there is no guarantee that the Company will be able to raise additional capital, under terms satisfactory to the Company, or generate the increase in revenues sought.

~~There~~Management ~~can~~believes bethat nothe ~~assurance~~Company’s ~~that~~capital ~~management~~requirements will bedepend ~~able~~on tomany ~~raise~~factors. ~~sufficient~~These ~~capital,~~factors ~~under~~include ~~terms~~the ~~satisfactory~~increase toin sales in its new line of Cosmetics products as well as the Company,’s ifability atto ~~all~~continue to expand its distribution channels.

Management believes that the Company’s capital requirements will depend on many factors. These factors include the increase in sales through its existing channel as well as the Company’s ability to continue to expand its distribution channels.

The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~SUMMARY~~Management ~~OF SIGNIFICANT ACCOUNTING POLICIES~~Estimates

~~Use~~Management makes assumptions and estimates to prepare financial statements in conformity with accounting principles generally accepted in the United States of ~~Estimates~~America. Those assumptions and estimates directly affect the amounts reported and disclosures included in the consolidated financial statements. Actual results could differ from those assumptions and estimates. Significant estimates for which changes in the near term are considered reasonably possible and that may have a material impact on the financial statements are disclosed in these notes to the consolidated financial statements.

~~The~~Foreign ~~preparation~~Currency of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the 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. On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to investment tax credits, bad debts, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.Translation

The Company’s functional currency is the Canadian dollar, while the Company reports its currency in the US dollar. The Company records these translation adjustments as accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions are included in other income (expense) in the results of operations.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

MARCH 31, 2012 AND 2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Cash and Cash Equivalents

~~The~~All ~~Company considers all~~ highly liquid ~~debt instruments and other short-term~~ investments purchased with ana ~~initial~~ maturity of three months or less are considered to be cash ~~equivalent~~equivalents.

6Short-Term Investments

From time to time, the Company may have short-term investments which may consist of certificates of deposit with maturities greater than three months. The Company monitors concentrations of credit risk associated with financial institutions with which the Company conducts significant business. The Company believes our credit risk is minimal, as the Company primarily conducts business with large, well-established financial institutions.

Accounts Receivable

Accounts receivable represent payments due to the Company for previously recognized net sales, reduced by allowances for sales returns and doubtful accounts or balances which are estimated to be uncollectible. Accounts receivable balances are written-off against the allowance for doubtful accounts when they become uncollectible. Recoveries of accounts receivable previously recorded against the allowance are recorded in the consolidated statement of income when received. We generally grant credit based upon our analysis of the customer’s financial position as well as previously established buying patterns.

Inventories

Inventories, including promotional merchandise, only include inventory considered saleable or usable in future periods, and is stated at the lower of cost or market, with cost being determined on the first-in, first-out method. Cost components include raw materials, components, direct labor and overhead (e.g., indirect labor, utilities, depreciation, purchasing, receiving, inspection and warehousing) as well as inbound freight. Promotional merchandise is charged to cost of sales at the time the merchandise is shipped to the Company’s customers.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~Derivatives

All derivative instruments are recorded as either assets or liabilities and measured at fair value. The Company uses derivative instruments to principally manage a variety of market risks. For derivatives designated as hedges of the exposure to changes in fair value of the recognized asset or liability or a firm commitment (~~CONTINUED~~referred to as fair value hedges), the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. The effect of that accounting is to include in earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value. For our cash flow hedges, the effective portion of the derivative’s gain or loss is initially reported in equity (as a component of accumulated other comprehensive income) and is subsequently reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. The ineffective portion of the gain or loss of a cash flow hedge is reported in earnings immediately. The Company also holds certain instruments for economic purposes that are not designated for hedge accounting treatment. For these derivative instruments, the changes in their fair value are recorded in earnings immediately.

~~Comprehensive~~Goodwill ~~Income~~and Other Long-Lived Assets

~~The~~Goodwill ~~Company~~is ~~adopted~~calculated ~~ASC~~as ~~220-10,~~the ~~“Reporting~~excess ~~Comprehensive~~of ~~Income,”~~the ~~(formerly~~cost ~~SFAS~~of ~~No.~~purchased ~~130).~~businesses ~~ASC~~over ~~220~~the fair value of their underlying net assets. Other indefinite-10lived ~~requires~~intangible ~~the~~assets ~~reporting~~principally consist of ~~comprehensive~~trademarks. Goodwill ~~income~~and inother ~~addition~~indefinite-lived tointangible ~~net~~assets ~~income~~are ~~from~~not ~~operations~~amortized.

~~Comprehensive~~The ~~income~~Company isevaluates agoodwill and indefinite-lived intangible assets for impairment at least annually during the fourth quarter, or more ~~inclusive~~frequently ~~financial~~when ~~reporting~~events ~~methodology~~occur or circumstances change, such as an unexpected decline in sales, that ~~includes~~would ~~disclosure~~more likely than not (i) reduce the fair value of ~~information~~the reporting unit below its fair value or (ii) indicate that ~~historically~~the ~~has~~carrying value of an indefinite-lived intangible asset may not ~~been~~be ~~recognized~~recoverable. inImpairment of goodwill is evaluated using a two step process. The first step involves a comparison of the ~~calculation~~estimated fair value of ~~net~~the ~~income~~reporting unit to the carrying value of that unit. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, the second step of the process involves comparison of the implied fair value of goodwill (based on industry purchase and sale transaction data) with its carrying value. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized as an amount equal to the excess.

~~Fair Value of Financial Instruments (other than Derivative Financial Instruments)~~11

The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. For the notes payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to the Company for similar borrowings.

Currency Translation

Research and Development

The Company occasionally incurs costs on activities that relate to research and development of new products. Research and development costs are expensed as incurred. Certain of these costs are reduced by government grants and investment tax credits where applicable.

Revenue Recognition

The Company generates revenue from the following primary sources: (1) licensing software products; (2) providing customer technical support (referred to as maintenance); and (3) providing professional services, such as consulting and education.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

~~SUMMARY~~Goodwill OFand ~~SIGNIFICANT~~Other ~~ACCOUNTING~~Long-Lived ~~POLICIES~~Assets (~~CONTINUED~~Cont’d)

~~Revenue~~Testing ~~Recognition~~goodwill ~~(Continued)~~for impairment requires us to estimate the fair value of the reporting unit using significant estimates and assumptions. The assumptions the Company makes will impact the outcome and ultimate results of the testing. In making our assumptions and estimates, the Company uses industry accepted valuation models and set criteria that are reviewed and approved by management and, in certain instances, the Company engages third party valuation specialists to advise us.

~~The~~For ~~Company~~indefinite-lived ~~recognizes~~intangible ~~revenue~~assets, ~~pursuant~~the toevaluation requires a comparison of the ~~requirements~~estimated fair value of ~~ASC~~the ~~450-10~~asset ~~and~~to ~~ASC~~the ~~985-605,~~carrying ~~“Software~~value ~~Revenue~~of ~~Recognition~~the asset.” InTo ~~accordance~~determine ~~with~~fair ~~the~~value ~~ASC’s~~of indefinite-lived intangible assets, the Company ~~begins~~uses toan ~~recognize~~income ~~revenue~~approach, ~~from~~including ~~licensing~~the ~~and~~relief-from-royalty ~~supporting~~method. ~~its~~This ~~software~~method ~~products~~assumes ~~when~~that, ~~all~~in lieu of ~~the~~ownership, ~~following~~a ~~criteria~~third ~~are~~party ~~met:~~would ~~(1) the~~be ~~Company~~willing ~~has~~to ~~evidence~~pay ofa anroyalty ~~arrangement~~in ~~with~~order ato ~~customer;~~obtain ~~(2)~~ the ~~Company~~rights ~~delivers~~to use the ~~products;~~comparable ~~(3)~~asset. ~~license~~The ~~agreement~~relief-from-royalty ~~terms~~calculations ~~are~~require ~~deemed~~us ~~fixed~~to ormake ~~determinable~~a number of assumptions and ~~free~~estimates ofconcerning ~~contingencies~~future orsales ~~uncertainties~~levels, ~~that~~market ~~may~~royalty ~~alter~~rates, future tax rates and discount rates. If the ~~agreement~~carrying ~~such~~value ~~that~~of itan ~~may~~indefinite-lived ~~not~~intangible beasset ~~complete~~exceeds ~~and~~its ~~final;~~fair ~~and~~value, ~~(4) collection~~impairment is ~~probable~~recorded.

~~The~~Intangible ~~Company’s~~assets ~~software~~subject ~~licenses~~to ~~generally~~amortization doare ~~not~~evaluated ~~include~~for ~~acceptance~~impairment ~~provisions.~~testing Anwhenever ~~acceptance~~events ~~provision~~or ~~allows~~changes ain ~~customer~~circumstances toindicate ~~test~~that the ~~software~~carrying amount of an amortizable intangible asset may not be recoverable. If impairment indicators exist for aan ~~defined~~amortizable ~~period~~intangible ofasset, ~~time~~the ~~before~~undiscounted ~~committing~~future tocash ~~license~~flows associated with the ~~software.~~expected Ifservice apotential ~~license~~of ~~agreement~~the ~~were~~asset are compared to ~~include~~the ancarrying ~~acceptance~~value ~~provision,~~of the ~~Company~~asset. ~~would~~If ~~not~~our ~~record~~projection ~~deferred~~of ~~subscription~~undiscounted ~~value~~future orcash ~~recognize~~flows ~~revenue~~is ~~until~~in excess of the ~~earlier~~carrying value of the ~~receipt~~intangible ofasset, ano ~~written~~impairment ~~customer~~charge ~~acceptance~~is ~~or,~~recorded. ifIf ~~not~~our ~~notified~~projection byof undiscounted future cash flows is less than the ~~customer~~carrying tovalue ~~cancel~~of the ~~license~~intangible ~~agreement~~asset, ~~the~~an ~~expiration~~impairment ofcharge would be recorded to reduce the ~~acceptance~~intangible ~~period~~asset to its fair value.

~~Under~~Concentration the Company’s business model, software license agreements frequently include flexible contractual provisions that, among other things, allow customers to receive unspecified future software products for no additional fee. These agreements combine the right to use the software products with maintenance for the term of ~~the~~Credit ~~agreement. Under these agreements, once all four of the above noted revenue recognition criteria are met, the Company is required to recognize revenue ratably over the term of the license agreement.~~Risk

~~Under~~The ~~the~~ Company’s ~~business~~is ~~model,~~ a ~~relatively~~worldwide ~~small~~marketer ~~percentage~~and distributor of ~~the~~fragrance ~~Company’s~~and ~~revenue~~fragrance related ~~to certain~~ products ~~is recognized on an up-front or perpetual basis once all revenue recognition criteria are met in accordance with the ASC’s as described above~~, and issells ~~reported~~its ~~in the “Software fees and other” line of the statements of operations. License agreements pertaining to such~~ products ~~do not include the right~~ to ~~receive~~department ~~unspecified~~stores, ~~future~~specialty ~~software products~~retailers, ~~and~~mass-market ~~maintenance~~retailers, issupermarkets ~~deferred~~ and ~~subsequently~~domestic ~~recognized~~and ~~over~~international ~~the~~wholesalers ~~term~~and ~~of the maintenance period~~distributors. InThe ~~the~~Company ~~event~~grants ~~such~~credit ~~license~~to ~~agreements~~all ~~are~~qualified ~~executed~~customers within close proximity or in contemplation of other license agreements with the same customer which are recognized on a subscription basis, the contracts may be considered a single multi-element agreement, and asdoes ~~such~~not ~~all~~believe ~~revenue~~it is ~~deferred~~exposed ~~and~~significantly ~~recognized~~to asany ~~“Subscription~~undue ~~revenue”~~concentration ~~in the statements~~ of ~~operations~~credit risk.

~~Maintenance revenue is derived from two primary sources: (1) combined license and maintenance agreements recorded under the prior business model; and (2) stand-alone maintenance agreements.~~12

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

~~SUMMARY~~Revenue ~~OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)~~Recognition

~~Revenue~~Prior ~~Recognition~~to March 31, 2012, the Company generated revenue from the following primary sources: (~~Continued~~1) licensing software products; (2) providing customer technical support (referred to as maintenance); and (3) providing professional services, such as consulting and education. The Company began the process of abandoning its software business on April 1, 2012 and in turn began to sell specialty cosmetics products.

~~Under~~The ~~the~~Company ~~prior~~sells ~~business~~its ~~model,~~products ~~maintenance~~to ~~and~~department ~~license~~stores, ~~fees~~specialty ~~were~~retailers, ~~generally~~mass-market ~~combined~~retailers, ~~into~~supermarkets aand ~~single~~domestic ~~license~~and ~~agreement.~~international ~~The~~wholesalers ~~maintenance portion was deferred~~ and ~~amortized into revenue over the initial license agreement term~~distributors. ~~Certain~~The ofCompany ~~these~~recognizes ~~license~~revenues ~~agreements~~when ~~have~~merchandise ~~not~~is ~~reached~~shipped ~~the end of their initial terms~~ and, ~~therefore, continue to amortize. This amortization is recorded to~~ the ~~“Maintenance”~~risk ~~line item in the Statements~~ of ~~Operations.~~loss ~~The~~passes ~~deferred maintenance portion, which was optional~~ to the customer,. ~~was~~Net ~~determined~~sales ~~using~~are ~~its~~comprised ~~fair~~of ~~value~~gross ~~based~~revenues onless ~~annual~~returns, ~~fixed~~trade ~~maintenance~~discounts ~~renewal~~and ~~rates stated in the agreement~~allowances. ~~For~~The ~~license~~Company ~~agreements~~does ~~entered~~not ~~into~~bill ~~under~~its ~~the Company~~customer’s ~~current~~freight ~~business model, maintenance~~ and ~~license~~handling ~~fees continue to be combined; however, the maintenance is inclusive for the entire term of the arrangement~~charges. ~~The~~All ~~Company~~shipping ~~reports~~and ~~such~~handling ~~combined~~costs ~~fees~~are onincluded ~~the~~in ~~“Subscription~~selling, ~~revenue”~~general ~~line~~and ~~item~~administrative expenses in the consolidated statements of operations.

~~The~~Sales Company also records stand-alone maintenance revenue earned from customers who elect optional maintenance. Revenue from such renewals is recognized on the “Maintenance” line item in the statements of operations over the term of the renewal agreement.Returns

Generally, the Company does not permit customers to return their unsold products. The ~~“Deferred~~Company ~~maintenance~~regularly ~~revenue”~~reviews ~~line~~and ~~item~~revises, onas deemed necessary, its estimate of reserves for future sales returns based primarily upon historic trends and relevant current data including information provided by retailers regarding their inventory levels. In addition, as necessary, specific accruals may be established for significant future known or anticipated events. The types of known or anticipated events that we have considered, and will continue to consider, include, but are not limited to, the financial condition of our customers, store closings by retailers, changes in the retail environment and our decision to continue to support new and existing products. The Company’s ~~balance~~records ~~sheets~~estimated ~~principally~~reserves ~~represents~~for ~~payments~~sales ~~received~~returns as a reduction of sales, cost of sales and accounts receivable. Returned products are recorded as inventories and are valued based upon estimated realizable value. The physical condition and marketability of returned products are the major factors we consider in ~~advance~~estimating realizable value. Actual returns, as well as estimated realizable values of ~~maintenance~~returned ~~services~~products, tomay bediffer ~~rendered~~significantly, either favorably or unfavorably, from our estimates, if factors such as economic conditions, inventory levels or competitive conditions differ from our expectations.

Revenue from professional service arrangements is generally recognized as the services are performed. Revenue from committed professional services arrangements that are sold as part of a software transaction is deferred and recognized on a ratable basis over the life of the related software transaction. If it is not probable that a project will be completed or the payment will be received, revenue is deferred until the uncertainty is removed.13

Revenue from sales to distributors, resellers, and value-added resellers (VARs) commences when all four of the ASC revenue recognition criteria noted above are met and when these entities sell the software product to their customers. This is commonly referred to as the sell-through method. Revenue from the sale of products to distributors, resellers and VARs under licenses that include the right for the end-users to receive certain unspecified future software products is recognized on a ratable basis.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

~~SUMMARY~~Advertising OFand ~~SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)~~Promotion

~~Accounts~~Advertising ~~Receivable~~and promotional costs are expensed as incurred and recorded as a component of cost of goods sold (in the case of free goods given to customers) or selling, general and administrative expenses.

~~The~~Package ~~Company~~Development ~~conducts business and extends credit based on an evaluation of the customers’ financial condition, generally without requiring collateral.~~ Costs

~~Exposure~~Package todevelopment ~~losses~~costs onassociated ~~receivables~~with isnew ~~expected~~products toand ~~vary~~redesigns ~~by customer due to the financial condition~~ of ~~each~~existing ~~customer.~~product ~~The~~packaging ~~Company~~are ~~monitors~~expensed ~~exposure~~as ~~to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances~~incurred. ~~The Company has an allowance for doubtful accounts of $0 at September 30, 2011.~~

~~Accounts~~Operating ~~receivable are generally due within 30 days and collateral is not required.~~ Leases

~~Unbilled~~The ~~accounts~~Company ~~receivable~~recognizes ~~represents~~rent ~~amounts~~expense ~~due~~from operating lease with various step rent provisions, rent concessions and escalation clauses on a straight-line basis over the applicable lease term. The Company considers lease renewals in the useful life of its leasehold improvements when such renewals are reasonably assured. In the event the Company receives capital improvement funding from ~~customers~~its ~~for~~landlord, ~~which~~these ~~billing~~amounts ~~statements~~are ~~have~~recorded ~~not~~as ~~been~~deferred ~~generated~~liabilities and ~~sent~~amortized toover the ~~customers~~remaining lease term as a reduction of rent expense.

License Agreements

The Company’s current License Agreement provides the Company with worldwide rights to market and sell cosmetics and cosmetics related products under the Nacara brand of cosmetic products, excluding the territories of Finland, Russia and Sweden, in exchange for a royalty of 5% of the gross revenues of the Products sold by our Company. The Company’s License Agreement has a term of five years and will automatically renew for an additional five years provided that our Company Product sales of at least US$6 million in the first year, US$15 million in the second year and US$25 million in the third year following the date of the License Agreement.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

MARCH 31, 2012 AND 2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

License Agreements (Cont’d)

Such licenses and rights to market and sell cosmetics and cosmetics related products typically have an initial term of approximately 5 years to 15 years, and are potentially renewable subject to compliance with the license agreement provisions. The remaining terms, including the potential renewal periods, typically range from approximately 2 years to 15 years. Under each license, the Company is usually required to pay royalties in the range of 5% to 10% to the licensor, at least annually, based on net sales to third parties.

The Company’s licenses are entered into to create additional sales. In some cases, the Company may pay an entry fee to acquire, or enter into, a license where the licensor or another licensee was operating a pre-existing cosmetic business. In those cases, the entry fee is capitalized as an intangible asset and amortized over its useful life.

Certain license agreements may require minimum royalty payments, incremental royalties based on net sales levels and minimum spending on advertising and promotional activities. Royalty expenses are accrued in the period in which net sales are recognized while advertising and promotional expenses are accrued at the time these costs are incurred.

In addition, the Company may be exposed to certain concentration risks. Currently our sole license to market and sell cosmetics and cosmetics related products is licensed from a related party, 8012415 Canada Inc, a company controlled by Nacara Montreal Inc. which is itself controlled by Mrs. Caroline Coulombe, our principal officer. Mrs. Coulombe is also in control of 7776446 Canada Inc. doing business as Cosmera Inc., a Canadian corporation which on March 9, 2012 became the controlling shareholder of our Company with the purchase of an aggregate of 3,574,920 shares of our common stock representing approximately 66.63% of the Company’s issued and outstanding common stock.

Income Taxes

The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method, deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

~~Advertising Costs~~15

~~The~~GMS ~~Company~~CAPITAL ~~expenses the costs associated with advertising as incurred~~CORP. ~~Advertising expenses for the nine months ended September 30, 2011 and 2010 are included in general and administrative expenses in the statements of operations.~~

FINANCIAL STATEMENTS

MARCH 31, 2012 AND 2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Fixed Assets

Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets; automobiles – 3 years, computer equipment – 3 years, furniture and fixtures – 5 years and leasehold improvements- 5 years.

When assets are retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized. Deduction is made for retirements resulting from renewals or betterments.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010 (UNAUDITED)

NOTE 2-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of Long-Lived Assets

Long-lived assets, primarily fixed assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. The Company does perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and estimated fair value.

(Loss) Per Share of Common Stock

Basic net (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) ~~includes~~include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share when the Company reported a loss because to do so would be ~~antidilutive~~anti dilutive for periods presented.

1116

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

~~SUMMARY~~(Loss) OFPer ~~SIGNIFICANT~~Share ~~ACCOUNTING~~of ~~POLICIES~~Common Stock (~~CONTINUED~~Cont’d)

(Loss) Per Share of Common Stock (Continued)

The following is a reconciliation of the computation for basic and diluted EPS:

September 30,


	March 31, 2012	March 31, 2011

Net Income (Loss)	($83,646)	($22,976)

Weighted average common shares Outstanding (Basic)	5,365,400	5,365,400

Weighted average common stock Equivalents Stock Options	729,729

Warrants

Weighted average common shares Outstanding (Diluted)	6,095,129	5,365,400

~~September~~The 30Company issued 729,729 options to purchase stock during the period ended March 31, 2012. These options have not been vested and are tied to the purchase of 10,000,000 shares of common stock of 8012415 Canada Inc. by the Company. The option expires on March 16, 2017. If there were options or warrants outstanding they would not be included in the computation of diluted EPS because inclusion would have been anti dilutive.

~~2011~~17

2010

Net Income (Loss)

$ (33,720)

$ (60,569)

Weighted average common shares

Outstanding (Basic)

5,365,400

5,129,150

Weighted average common stock

Equivalents

Stock Options

Warrants

Weighted average common shares

Outstanding (Diluted)

5,465,400

5,129,150

The Company has not issued options or warrants to purchase stock in these periods. If there were options or warrants outstanding they would not be included in the computation of diluted EPS because inclusion would have been antidilutive.

Stock-Based Compensation

In 2006, the Company adopted the provisions of ASC 718-10 “Share Based Payments” for its year ended December 31, 2008. The adoption of this principle had no effect on the Company’s operations.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

~~SUMMARY~~Stock-Based ~~OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)~~Compensation

~~Stock~~In 2006, the Company adopted the provisions of ASC 718-10 “Share Based ~~Compensation~~Payments” ~~(Continued)~~for its year ended December 31, 2008. The adoption of this principle had no effect on the Company’s operations.

The Company has elected to use the modified–prospective approach method. Under that transition method, the calculated expense in 2006 is equivalent to compensation expense for all awards granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair values. Stock-based compensation expense for all awards granted after January 1, 2006 is based on the grant-date fair values. The Company recognizes these compensation costs, net of an estimated forfeiture rate, on a pro rata basis over the requisite service period of each vesting tranche of each award. The Company considers voluntary termination behavior as well as trends of actual option forfeitures when estimating the forfeiture rate.

The Company measures compensation expense for its non-employee stock-based compensation under ASC 505-50, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital.

Segment Information

The Company follows the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”. This standard requires that companies disclose operating segments based on the manner in which management disaggregates the Company in making internal operating decisions.

1318

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

In ~~September~~May ~~2006~~2011, ~~ASC~~FASB issued ~~820~~Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value ~~Measurements~~Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. FASB ASU 2011-04 amends and clarifies the measurement and disclosure requirements of FASB ASC 820 ~~defines~~resulting in common requirements for measuring fair value and for disclosing information about fair value measurements, ~~establishes~~clarification aof ~~framework~~how ~~for~~to ~~measuring~~apply existing fair value inmeasurement ~~generally~~and ~~accepted~~disclosure ~~accounting~~requirements, and changes to certain principles, and ~~expands~~requirements ~~disclosure~~for measuring fair value and disclosing information about fair value measurements. ~~This~~The ~~statement~~new isrequirements are effective for ~~financial statements issued for~~ fiscal years beginning after ~~November~~December 15, ~~2007~~2011. ~~Early~~The ~~adoption~~Company isplans ~~encouraged.~~to ~~The~~adopt ~~adoption~~this ofamended ~~ASC~~guidance ~~820~~on ~~did~~October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial ~~statements~~position.

In ~~February~~June ~~2007~~2011, ~~ASC~~FASB issued ~~825~~ASU No. 2011-1005, ~~The~~Presentation ~~Fair~~of ~~Value~~Comprehensive ~~Option~~Income, ~~for~~which ~~Financial~~amends ~~Assets~~the disclosure and ~~Financial~~presentation ~~Liabilities~~requirements –of ~~Including~~Comprehensive anIncome. ~~amendment~~Specifically, ofFASB ~~ASC~~ASU ~~320~~No. 2011-~~10,~~05 ~~(“ASC~~requires ~~825-10”~~that all nonowner changes in stockholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which ~~permits~~the ~~entities~~first tostatement ~~choose~~presents tototal ~~measure~~net ~~many~~income ~~financial~~and ~~instruments~~its components, and ~~certain~~the ~~other~~second ~~items~~statement atpresents ~~fair~~total ~~value~~other atcomprehensive ~~specified~~income ~~election~~and ~~dates~~its components. AThese ~~business~~new ~~entity~~presentation isrequirements, ~~required~~as currently set forth, are effective for the Company beginning October 1, 2012, with early adoption permitted. The Company plans to ~~report~~adopt ~~unrealized~~this ~~gains~~amended guidance on October 1, 2012 and ~~losses~~at onthis ~~items~~time ~~for~~does ~~which~~not ~~the~~anticipate ~~fair~~that ~~value~~it ~~option~~will ~~has~~have ~~been~~a ~~elected~~material inimpact ~~earnings~~on atthe Company’s results of operations, cash flows or financial position.

~~each~~In ~~subsequent~~September ~~reporting~~2011, ~~date.~~FASB ~~This~~issued ~~statement~~ASU is2011-08, ~~expected~~Testing Goodwill for Impairment, which amended goodwill impairment guidance to ~~expand~~provide an option for entities to first assess qualitative factors to determine whether the ~~use~~existence of events or circumstances leads to a determination that it is more likely than not that the fair value ~~measurement~~of a reporting unit is less than its carrying amount. ~~ASC~~After ~~825~~assessing the totality of events and circumstances, if an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, performance of the two-10step impairment test is no longer required. This guidance is effective for ~~financial~~annual ~~statements~~and ~~issued~~interim goodwill impairment tests performed for fiscal years beginning after ~~November~~December 15, ~~2007~~2011, ~~and~~with ~~interim~~early ~~periods~~adoption ~~within~~permitted. ~~those~~Adoption ~~fiscal~~of ~~years~~this guidance is not expected to have any impact on the Company’s results of operations, cash flows or financial position.

In December 2007, the ASC issued ASC 810-10-65, Noncontrolling Interests in Consolidated Financial Statements. ASC 810-10-65 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, changes in a parent’s ownership of a noncontrolling interest, calculation and disclosure of the consolidated net income attributable to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent retains its controlling financial interest and fair value measurement of any retained noncontrolling equity investment. 19

ASC 810-10-65 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The adoption of ASC 810-10-65 did not have a material impact on the Company’s financial position, results of operations or cash flows.

In December 2007, the Company adopted ASC 805, Business Combinations (“ASC 805”). ASC 805 retains the fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. ASC 805 defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. ASC 805 will require an entity to record separately from the business combination the direct costs, where previously these costs were included in the total allocated cost of the acquisition. ASC 805 will require an entity to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, at their fair values as of that date.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

~~SUMMARY~~Recent OFAccounting ~~SIGNIFICANT~~Pronouncements ~~ACCOUNTING POLICIES~~ (~~CONTINUED~~Cont’d)

~~Recent~~There ~~Accounting~~were ~~Pronouncements~~other ~~(Continued)~~updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

~~ASC~~NOTE ~~805 will require an entity to recognize as an asset or liability at fair value for certain contingencies, either contractual or non~~3-~~contractual,~~ ifFIXED certain criteria are met. Finally, ASC 805 will require an entity to recognize contingent consideration at the date of acquisition, based on the fair value at that date. This will be effective for business combinations completed on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption is not permitted and the ASC is to be applied prospectively only. Upon adoption of this ASC, there would be no impact to the Company’s results of operations and financial condition for acquisitions previously completed. The adoption of ASC 805 did not have a material effect on the Company’s financial position, results of operations or cash flows.ASSETS

InFixed ~~March~~assets ~~2008,~~as ~~ASC~~of ~~issued~~March ~~ASC 815~~31, ~~Disclosures~~2012 ~~about Derivative Instruments~~ and ~~Hedging~~December ~~Activities”~~31, ~~(“ASC~~2011 ~~815”).~~were ~~ASC~~as ~~815 requires enhanced disclosures about an entity’s derivative and hedging activities. These enhanced disclosures will discuss~~follows: how and why an entity uses derivative instruments; how derivative instruments and related hedged items are accounted for and its related interpretations; and how derivative instruments and related hedged items affect an entity’s financial position, financial

performance, and cash flows. ASC 815 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. ASC 815 did not have a material impact on the Company’s results of operations or financial position.


	Estimated Useful Lives (Years)	March 31, 2012	December 31, 2011

Computer equipment	3	$ 1,318	1,318
Office equipment	5	1,422	1,422
Leasehold improvements	5	13,994	13,994
	TOTAL:	16,734	16,734

Less: accum depreciation		16,734	16,734
Property and equipment, net		$0	$0

~~Effective~~NOTE ~~April~~4- 1,OPERATING ~~2009,~~LINE ~~the~~OF Company adopted ASC 855, Subsequent Events (“ASC 855”). ASC 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date – that is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. Adoption of ASC 855 did not have a material impact on the Company’s results of operations or financial condition. CREDIT

Prior to March 9, 2012, The Company had established an operating line of credit of CDN$15,000 with a bank through a credit card, with the full outstanding amount guaranteed by a Director. On March 9, 2012, the outstanding balance of $11,780 was converted as part of a secured loan by the former shareholders of the Company. See NOTE – 5 RELATED PARTY LOAN CONVERSION.

The Company does not have an operating line of credit as of March 31, 2012.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 25- RELATED PARTY LOAN CONVERSION

~~SUMMARY~~Prior OFto ~~SIGNIFICANT~~March ~~ACCOUNTING~~9, ~~POLICIES~~2012, the Company had entered into related party loan agreements with an officer and various shareholders of the Company. On March 9, 2012, the $105,000 outstanding (~~CONTINUED~~collectively the Operating line of Credit (see NOTE 4) and the related party loans from the Officer and Shareholders) were converted into a secure, non-interest bearing Promissory Note of equivalent value, payable on July 1, 2012. The loan amount is backed by a General Security Agreement which provides for a general, first ranked lien on all of the assets of the Company.

~~Recent~~NOTE ~~Accounting~~6- ~~Pronouncements~~STOCKHOLDERS’ EQUITY (~~Continued~~DEFICIT)

~~Effective~~Common July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurement and Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments to ASC 820-10, Fair Value Measurements and Disclosures – Overall, for the fair value measurement of liabilities. ASU 2009-05 provides clarification that in circumstances in which a quoted market price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using certain techniques. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required for Level 1 fair value measurements. Adoption of ASU 2009-05 did not have a material impact on the Company’s results of operations or financial condition.Stock

InAs ~~January~~of ~~2010,~~March ~~the Company adopted FASB ASU No. 2010-06~~31, ~~Fair~~2012 ~~Value Measurement~~ and ~~Disclosures~~December ~~(Topic~~31, ~~820)-~~2011, ~~Improving Disclosures about Fair Value Measurements (“ASU 2010-06”). These standards require new disclosures on~~ the ~~amount~~Company ~~and~~had ~~reason for transfers in and out of Level 1 and 2 fair value measurements. The standards also require new disclosures of activities~~5, ~~including purchases~~365,400 ~~sales,~~shares ~~issuances, and settlements within the Level 3 fair value measurements. The standard also clarifies existing disclosure requirements on levels~~ of ~~disaggregation~~common ~~and~~stock ~~disclosures~~issued ~~about inputs~~ and ~~valuation~~outstanding ~~techniques~~respectively. These new disclosures are effective beginning with the first interim filing in 2010. The disclosures about the rollforward of information in Level 3 are required for the Company with its first interim filing in 2011. ASU 2010-06 did not have a material impact on the Company’s financial statements.

InThe ~~February~~Company ~~2010,~~has ~~the~~not ~~FASB~~ issued ~~ASU~~any ~~2010-09,~~shares ~~“Subsequent~~for ~~Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements”. This update addresses both~~ the ~~interaction~~three ofmonths ~~the~~ended ~~requirements~~March ~~of Topic 855~~31, ~~“Subsequent Events”, with the SEC’s reporting requirements and the intended breadth of the reissuance disclosures provision related to subsequent events (paragraph 855-10-50-4)~~2012. The amendments in this update have the potential to change reporting by both private and public entities, however, the nature of the change may vary depending on facts and circumstances. Adoption of ASU 2010-09 did not have a material impact on the Company’s results of operations or financial condition.

~~Other~~On ~~ASU~~March 16, 2012, as part of the License Agreement to obtain the exclusive worldwide rights to distribute, market and sell cosmetic products under the Nacara brand, excluding the territories of Finland, Russia and Sweden, we granted to Nacara Montreal Inc., a Canadian corporation controlled Mrs Caroline Coulombe, our principal officer, an option to purchase 729,729 shares of the Company’s ~~that~~common ~~have~~stock. ~~been~~The ~~issued~~option orexpires ~~proposed~~on March 16, 2017 and can only be exercised by Nacara Montreal Inc if the ~~FASB~~Company ~~ASC~~exercises ~~that~~its doown ~~not~~option ~~require~~to ~~adoption~~purchase ~~until~~from aNacara ~~future~~Montreal ~~date~~Inc. ~~and~~10,000,000 ~~are~~shares of Class D common stock of 8012415 Canada Inc. The option granted to Nacara Montreal Inc to purchase 729,729 shares of the Company's common stock has not ~~expected~~yet been. The option granted to ~~have~~Nacara aMontreal ~~material~~Inc ~~impact~~to onpurchase 729,729 shares of the ~~financial~~Company's ~~statements~~common ~~upon~~stock ~~adoption~~will become vested only if and when the Company exercises its option to purchase from Nacara Montreal Inc. 10,000,000 shares of Class D common stock of 8012415 Canada Inc.

16On March 9, 2012, 7776446 Canada Inc. doing business as Cosmera Inc., a Canadian corporation controlled by Mrs. Caroline Coulombe, our principal officer, purchased from Metratech Business Solutions Inc. and Marcel Côté an aggregate of 3,574,920 shares of common stock of the Company representing approximately 66.63% of the Company’s issued and outstanding common stock.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 36- STOCKHOLDERS’ EQUITY (DEFICIT) (CONT’D)

~~FIXED~~Common ~~ASSETS~~Stock (Cont’d)

~~Fixed~~On ~~assets~~March as20, 2012, in consideration of ~~September~~Nacara ~~30,~~Montreal ~~2011~~Inc and ~~December~~8012415 31Canada Inc willingness to enter into the transactions above and in order to provide an appropriate capital structure for the Company, ~~2010~~the ~~were~~Company entered into a Stock Cancellation Agreement with 7776446 Canada Inc. doing business as ~~follows:~~Cosmera Inc. pursuant to which Cosmera Inc. agreed to proceed to the cancellation of all of the shares it owns in the Company within 30 days after the Company obtains approval by shareholders to change the name of the Company to ‘’Nacara World Corp.’’ and the effectiveness of a 12 to 1 forward split of the Company’s common stock.

	Estimated Useful	September 30,	December 31,
	Lives (Years)	2011	2010
Computer equipment	3	$ 1,318	1,318
Office equipment	5	1,422	1,422
Leasehold improvements	5	13,994	13,994
	TOTAL:	16,734	16,734
Less: accumulated depreciation		16,516	15,826
Property and equipment, net		$ 218	$ 548

As of March 20, 2012, the Company had 5,365,400 shares of its common stock issued and outstanding. Upon the effectiveness of the cancellation of an 3,574,920 shares of common stock of the Company representing approximately 66.63% of the Company’s issued and outstanding common stock which are currently owned by 7776446 Canada Inc. doing business as Cosmera Inc, and the exercise of the Option by the Company to acquire all Class D Shares of 8012415 Canada Inc. to give Nacara Montreal Inc. 729,729 shares of the common stock of the Company, the Company will have a total of 2,520,409 shares of common stock issued and outstanding on a fully diluted basis. Upon the effectiveness of a 12 to 1 forward split of our common stock, the Company will have a total of 30,244,908 shares of common stock issued and outstanding on a fully diluted basis.

~~There~~The ~~was~~Company ~~$330~~issued ~~and $3~~250,~~059~~000 ~~charged~~shares toof ~~operations~~common ~~for~~stock ~~depreciation~~in ~~expense~~2010 for ~~the~~cash ~~nine~~in ~~months~~the ~~ended~~amount ~~September~~of 30$48, ~~2011 and 2010, respectively~~630.

~~NOTE~~The 4-Company has not issued any shares of common stock in 2009 or 2008.

~~OPERATING~~The ~~LINE~~Company OFissued ~~CREDIT~~2,537,400 shares of common stock for services during 2007 valued at $253,740.

The Company ~~has~~issued ~~established~~2,578,000 anshares ~~operating line~~ of ~~credit~~common ofstock ~~CDN$15,000~~in ~~with~~2007 aas ~~bank~~replacement ~~through~~shares afor ~~credit card, with~~ the ~~full~~original ~~outstanding~~shares ~~amount~~issued ~~guaranteed~~in byMetratech aRetail ~~Director. The interest rate charged is a floating rate~~Systems, ~~bank prime rate + 2%~~Inc. As ofThese ~~September~~shares ~~30,~~were ~~2011,~~valued ~~the~~at ~~interest rate was 8.0% with an outstanding balance of~~ $10212,~~362~~800. ~~The Company recorded interest expense of $539 and $305 for the nine months ended September, 2011 and 2010, respectively.~~

~~NOTE 5-~~22

RELATED PARTY LOANS

The Company has entered into related party loans with an officer of the Company. This loan is non-interest bearing and payable on demand. The amounts owed as of September 30, 2011 and December 31, 2010 is $40,646 and $30,240, respectively.

The Company has entered into related party loans with a company owned and controlled by an officer of the Company. This loan is non-interest bearing and payable on demand. The amounts owed as of September 30, 2011 and December 31, 2010 is $7,466 and $3,362, respectively.

The Company has entered into related party loans with shareholders of the Company. These loans are non-interest bearing and payable on demand. The amounts owed as of September 30, 2011 and December 31, 2010 is $34,427 and $35,701, respectively.

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 67- PROVISION FOR INCOME TAXES

STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock

As of September 30, 2011 and December 31, 2010, the Company has 5,365,400 shares of common stock issued and outstanding respectively.

The Company has not issued any shares for the nine months ended September 30, 2011.

As of December 31, 2010 and 2009, the Company has 125,000,000 shares of common stock authorized with a par value of $0.01

The Company issued 250,000 shares in 2010 for cash in the amount of $48,630.

The Company has not issued any shares in 2009 or 2008.

The Company issued 2,537,400 shares for services during 2007 valued at $253,740.

The Company issued 2,578,000 shares in 2007 as replacement shares for the original shares issued in Metratech Retail Systems, Inc. These shares were valued at $212,800.

NOTE 7-

PROVISION FOR INCOME TAXES

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

18At March 31, 2012, deferred tax assets consist of the following:

At March 31, 2012, the Company had a net operating loss carryforward in the amount of $675,735, available to offset future taxable income through 2032. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and federal statutory rate for the periods ended March 31, 2012 and 2011 is summarized as follows:




	2012	2011
Federal statutory rate	(34.0)%	(34.0)%
State income taxes, net of federal benefits	3.3	3.3
Valuation allowance	30.7	30.7
	0%	0%

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011 (UNAUDITED)

NOTE 78- FAIR VALUE MEASUREMENTS

PROVISION FOR INCOME TAXES (CONTINUED)

At September 30, 2011, deferred tax assets consist of the following:

Net operating losses

$198,674

Valuation allowance

(198,674)

At September 30, 2011, the Company had a net operating loss carryforward in the amount of $584,334, available to offset future taxable income through 2031. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and federal statutory rate for the nine month periods ended September 30, 2011 and 2010 is summarized as follows:

	2011	2010
Federal statutory rate	(34.0)%	(34.0)%
State income taxes, net of federal benefits	3.3	3.3
Valuation allowance	30.7	30.7
	0%	0%

GMS CAPITAL CORP.

FINANCIAL STATEMENTS

SEPTEMBER 30, 2011 AND 2010 (UNAUDITED)

NOTE 8-

FAIR VALUE MEASUREMENTS

The Company adopted certain provisions of ASC Topic 820. ASC 820 defines fair value, provides a consistent framework for measuring fair value under generally accepted accounting principles and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

Level 1 inputs: Quoted prices for identical instruments in active markets.

Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 inputs: Instruments with primarily unobservable value drivers.

NOTE 9- CONCENTRATION OF CREDIT RISK

~~CONCENTRATION~~On OFMarch ~~CREDIT~~31, ~~RISK~~2012, the Company no longer had any customer receivables. For the three months ended March 31, 2011, two and one customers represented 100% of the revenue for the Company. Each of these customers was considered a major customer.

OnNOTE ~~September~~10- ~~30,~~SUBSEQUENT 2011, 100% of the Company’s accounts receivables were with two customers. For the nine months ended September 30, 2011 and 2010, two and one customers represented 100% of the revenue for the Company. Each of these customers was considered a major customer. EVENT

Since April 1, 2012, the Company began to realize revenues from the sales of cosmetics products to customers acquired from its License and Distribution Agreement with 8012415 Canada Inc. entered into on March 16, 2012. The Company is now restructuring its operations in order to transfer its resources from supporting the Software Business to that of the Cosmetics Business. On April 1, 2012, as part of this transition, the Company sold its contractual rights to supply Software and Services to its existing Software customers for a consideration of $5,246.

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

You should read the following discussion of our financial condition and operations in conjunction with the consolidated financial statements and the related notes included elsewhere in this quarterly report. This quarterly report contains forward–looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “our company believes,” “management believes” and similar language. The forward–looking statements are based on our current expectations and are subject to certain risks, uncertainties and assumptions, including our ability to (1) obtain sufficient capital or a strategic business arrangement to fund our expansion plans; (2) build the management and human resources infrastructure necessary to support the growth of our business; (3) competitive factors and developments beyond our control; and (4) those other risk factors, uncertainties and assumptions that are set forth in the discussion under the headings captioned “Business,” “Risk Factors,” and “Management’s Discussion and Analysis”. Our actual results may differ materially from results anticipated in these forward–looking statements. We base the forward–looking statements on information currently available to us, and we assume no obligation to update or revise them, whether as a result of new information, future events or otherwise. In addition, our historical financial performance is not necessarily indicative of the results that may be expected in the future and we believe that such comparisons cannot be relied upon as indicators of future performance.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information contained elsewhere in this Form 10–Q.

~~GENERAL~~Item ~~OVERVIEW~~1. Business

~~BACKGROUND~~Introduction

Subject to shareholders approval, we intend to change the name of our Company ~~Overview~~to Nacara World Inc to better reflect our current business which consist in the distribution, marketing and sale of cosmetics and cosmetics-related products primarily in Canada, France and the French Caribbean. Following a review of our operations in the software business, we have decided to cease our software business effective April 1, 2012. Our Board of Directors and Majority Shareholders have approved an amendment to our Articles of Incorporation to change our name from “GMS Capital Corp.” to “Nacara World Corp.”

GMS Capital Corp. was incorporated in Canada on March 9, 2000 under the name "Metratech Retail Systems Inc." for the development and sales of specialized inventory management software. The Company re-incorporated itself in the State of Florida on ~~September 18, 2007 and was subsequently renamed "GMS Capital Corp." in order to raise capital on the US public markets to realize its objectives of investing in its development and marketing plans.~~

2025

~~The~~September ~~details~~18, of2007 and was subsequently renamed "GMS Capital Corp." in order to raise capital on the ~~merger~~US ~~and~~public ~~re-incorporation~~markets ~~are~~to asrealize ~~follows:~~its objectives of investing in its development and marketing plans.

The details of the merger and re-incorporation are as follows: The 2,578,000 issued and outstanding shares of Metratech Retail Systems Inc. were converted to 2,578,000 shares of GMS Capital Corp. Each shareholder of the Company received one share of GMS Capital Corp. for every share of Metratech Retail Systems Inc. The three directors of Metratech Retail Systems Inc., George Metrakos, Marcel Côté and Spiro Krallis were replaced by George Metrakos on the board of directors of the newly incorporated company.

On ~~October~~April 120, ~~2007~~2010, the Company’s ~~issued~~Initial anPublic ~~additional~~Offering 2Prospectus was deemed effective by the Securities and Exchange Commission. The Company successfully completed its minimum offering on September 17,~~537~~ 2010 with the issuance of 250,~~400~~000 shares atof acommon ~~price~~stock ofsold at $0.1020 per share. inIn ~~order~~October, to2010 ~~compensate~~our ~~shareholders~~Company ~~and~~began ~~external~~the ~~consultants~~process with the Financial Industry Regulatory Authority (FINRA) to ~~perform~~have its common stock traded over-the-counter ~~consulting~~on ~~work~~the ~~necessary~~OTCBB toexchange. Our ~~complete~~Company was successful and the ~~company's~~Company ~~prospectus~~now trades under the symbol “GMCP”.

~~GMS~~Our ~~decided~~executive tooffices ~~reincorporate~~are ~~itself~~located ~~under~~at ~~the~~3055 ~~laws~~L’Assomption ofBlvd., ~~the~~Montreal, ~~State~~Quebec, ofCanada. ~~Florida~~Our telephone number in ~~order~~Montreal tois ~~take~~514-254-9473. ~~advantage~~We ofmaintain ~~opportunities~~our ~~available~~internet towebsite ~~public~~at ~~entities~~www.nacara.com inYou ~~the~~can ~~US. The~~obtain ~~reincorporation~~through ~~saw~~our ~~existing~~website, ~~shareholders~~free ~~receive~~of ~~the~~charge, ~~equivalent~~our ~~number~~annual ofreports ~~shares~~on inForm ~~the~~10-K, ~~Florida~~quarterly ~~corporation~~reports ason ~~they~~Form ~~held~~10-Q, incurrent ~~the~~reports ~~company~~on ~~prior~~Form 8-K, and amendments to ~~reincorporation. The~~those ~~reincorporation~~reports infiled noor ~~way~~furnished ~~has~~pursuant ~~changed~~to Section 13(a) of the ~~capital~~Securities ~~structure~~Exchange Act of 1934 as soon as reasonably practicable after we have electronically filed them with or furnished them to the ~~Company~~SEC.

OnHistory April 20, 2010, the Company’s Initial Public Offering Prospectus was deemed effective by the Securities and Exchange Commission. The Company successfully completed its minimum offering on September 17, 2010 with the issuance of ~~250,000~~Key sold at $0.20 per share and as of October 25, 2010 has commenced the process to request the services of a Market Maker to apply to the Financial Industry Regulatory Authority (FINRA) to have its common stock traded over-the-counter on the OTCBB exchange. The Company was successful and the Company now trades under the symbol “GMCP”.Agreements

~~History~~GMS Capital Corp., a Florida Corporation, was founded on March 9, 2000. Originally our Company was doing business as Metratech Retail Systems Inc., a Canadian Corporation up until the reincorporation as GMS Capital Corp. in the State of ~~Key~~Florida ~~Agreements~~on September 18, 2007. The purpose of our Company was to develop and market inventory management software for suppliers to major retailers to enable suppliers to forecast consumer demand for their products and to optimize their production and inventory accordingly.

~~On July 10~~Recently, ~~2000,~~following ~~founding shareholders entered into~~ a ~~term~~review ~~sheet for the partnership agreement representing the ownership structure~~ of ~~Metratech~~our ~~Retail~~software ~~Systems Inc. While a final partnership agreement was never executed~~operations, ~~the~~we ~~Term~~have ~~sheet~~decided isto ~~enforceable~~abandon ~~against~~our ~~the~~software ~~parties. The~~business ~~agreement~~effective ~~outlined~~April ~~the~~1, ~~share~~2012 ~~structure~~and to ~~represent~~engage ~~initial~~in ~~investments made by~~ the ~~founding shareholders~~distribution, ~~along~~marketing ~~with~~and ~~roles~~sale of cosmetics and ~~responsibilities~~cosmetics-related ofproducts ~~the~~primarily ~~President~~in Canada, ~~Secretary~~France and ~~CEO of~~ the ~~Corporation~~French Caribbean.

OnAs ~~April 1, 2000, the Company entered into~~ a ~~Non-Disclosure~~result ~~Agreement with MGA Concept, a software development firm in Montreal, Canada which outlined the roles and responsibilities~~ of ~~MGA~~our ~~Concept~~decision ~~as it relates~~ to ~~their~~abandon ~~provision~~our of software ~~programming~~operations, ~~services to~~ the Company~~. MGA~~ ~~Concept~~sold ~~went~~its onexisting tocustomer ~~provide~~contracts ~~all~~for ~~the~~a ~~consulting~~total ~~services~~consideration ~~required~~of by$5,246 ~~the~~on ~~Company~~April ~~to develop~~1, ~~test and deploy its software~~2012.

OnChanges ~~October 16, 2000, George Metrakos, acting on behalf of the Company, entered into an agreement with Junior Active Designs Inc., a supplier to Retailer Wal-Mart Stores,~~ in ~~order~~Control to learn and record all of the requirements set forth by Wal-Mart Stores with respect to the management of inventory within their Retail Stores. The Agreement outlined that all of the rights, title and interest in any inventions, improvements, discoveries, processes, know-how and trade secrets discovered by Mr. Metrakos as it pertained to any software development at Junior Active Designs Inc. would be the property of George Metrakos in order to utilize and transfer to Metratech Retail Systems Inc. for its use in the development and marketing of its software.

~~Description of Business~~26

~~Principal~~On ~~products~~March or9, ~~services~~2012, Metratech Business Solutions Inc. and ~~their~~Marcel ~~markets~~Coté entered into and closed a Stock Purchase Agreement with 7776446 Canada Inc. doing business as Cosmera Inc., a Canadian corporation, pursuant to which the Cosmera Inc purchased an aggregate of 3,574,920 shares of common stock from the Metratech Business Solutions Inc. and Marcel Coté. The shares purchased by Cosmera Inc from Metratech Business Solutions Inc. and Marcel Coté represented approximately 66.63% of the Company’s issued and outstanding common stock. Since then, on March 13, 2012, Mr. George Metrakos resigned as our President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer of the Registrant, effective March 26, 2012 and appointed Mrs Caroline Coulombe to serve as the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and a director of the Company.

~~The~~License Company's software, known as "ManageThePipe", permits suppliers to major retailers such as Wal-Mart to predict the amount of inventory required in the near future in order to meet the sales demands for its products on retail store shelves. The software collects data such as production schedules, shipping schedules, historic sales and current retail store inventories in order to calculate an estimate of future inventory requirements for each item that a supplier sells through major retailers such as Wal-Mart Stores.Agreement

21On March 16, 2012, our Company entered into and closed a License and Distribution Agreement with 8012415 Canada Inc. granting the Company an exclusive worldwide license to distribute, market and sell cosmetics and cosmetics related under the Nacara brand, excluding the territories of Finland, Russia and Sweden, in exchange for a royalty of 5% of the gross revenues of the Products sold by our Company. The Products include a full line of cosmetic products aimed at women with darker complexions and is currently available in Canada at drugstores including Pharmacie Jean-Coutu and Shoppers Drug Mart and in France at retailers including Galeries Lafayette, Marionnaud, Nocibé and Beauty Success.

~~Our~~The ~~Company~~License Agreement has ~~invested~~a interm ~~the~~of ~~research~~five years and ~~development~~will ofautomatically ~~our~~renew ~~inventory~~for ~~management~~an ~~software~~additional ~~which~~five ~~collects~~years ~~data~~provided ~~and~~that ~~performs~~the ~~forecast~~Registrant ~~calculations.~~has ~~Our~~Product ~~technology~~sales ~~consists~~ of ~~proprietary~~at ~~software~~least ~~programming~~US$6 ~~however,~~million wein ~~have~~the nofirst ~~specific~~year, ~~legal~~US$15 ~~entitlement~~million ~~that~~in ~~does~~the ~~not~~second ~~permit~~year ~~someone~~and ~~else~~US$25 ~~from~~million ~~utilizing~~in the ~~same~~third ~~base~~year ~~software~~following ~~languages~~the indate ~~order~~of tothe ~~produce~~License ~~similar inventory management software offerings~~Agreement.

~~Base~~Stock ~~software~~Purchase languages are the language building blocks used by programmers to translate the desired logic sequences into a message that the computer can understand and execute. An example of a logic sequence is “if the user wishes to predict the future sales of their product based on historical sales”, the software should calculate a forecast based on mathematical models provided in its logic tables to calculate the forecasted values. The combination and use of these building blocks is known as ‘software code”, and hence this combination, created by the Company’s programmers, along with “off-the-shelf” computer hardware (ie. Equipment that is readily available by computer companies such as servers) is collectively referred to as “our technology and trade secrets”.Agreement

WeOn ~~therefore~~March ~~cannot~~16, be2012, ~~certain~~our ~~that~~Company ~~others~~also ~~will~~entered ~~not~~into ~~gain~~and ~~access~~closed toa ~~our~~Stock ~~technology~~Purchase Agreement with Nacara Montreal Inc., Ina ~~order~~Canadian corporation, pursuant to ~~protect~~which ~~this~~our ~~proprietary~~Company ~~technology,~~purchased wean ~~hold~~aggregate ~~non-disclosure~~of ~~and~~100 ~~confidentiality~~shares ~~agreements~~of Class A common stock of 8012415 Canada Inc. from Nacara Montreal Inc in exchange for $100 and ~~understandings~~an ~~with~~Option ~~our~~to ~~employees,~~purchase ~~consultants~~10, ~~re-sellers~~000,000 ~~distributors,~~shares ~~wholesalers~~of ~~and~~Class ~~technology~~D ~~partners~~common stock of 8012415 Canada Inc. Wefrom ~~cannot~~Nacara ~~guarantee~~Montreal ~~that~~Inc in exchange for the issuance of 729,929 shares of the Company’s common stock upon exercise of the Option by our ~~technology~~Company. The Option expires on March 16, 2017 and ~~trade~~our ~~secrets~~Company ~~will~~must ~~not~~exercise bethe ~~stolen,~~Option ~~challenged,~~by ~~invalidated~~written ornotice ~~circumvented~~to Nacara Montreal Inc. IfThe ~~any~~shares of ~~these~~our ~~were~~common stock to ~~occur,~~be weissued ~~would~~to ~~suffer~~Nacara ~~from~~Montreal aInc ~~decreased~~upon ~~competitive~~exercise ~~advantage,~~of ~~resulting~~the inOption ~~lower~~are ~~profitability~~subject ~~due~~ to ~~decreased~~a ~~sales~~Lock-Up Agreement as described below.

~~The~~Lock-Up ~~Company offers the following products and services to customers utilizing its ManageThePipe inventory management software:~~Agreement

·In ~~Installation~~connection ~~and~~with ~~configuration of~~ the ~~software~~Stock ~~within~~Purchase ~~the~~Agreement ~~customer's~~referred ~~computer~~above, ~~network~~our ·Company ~~Professional~~entered and consulting services to assist the customer to optimize their inventory to meet sales demands · Maintenance services in order to assist the customer in ensuring daily importation of data from various sources into ~~the~~and ~~ManageThePipe~~closed ~~software~~a ·Lock-Up ~~Software~~Agreement ~~subscription~~with ~~fees for~~ the ~~use~~Nacara ofMontreal ~~the~~Inc, ~~software~~pursuant onto ~~the~~which ~~premises of the customer.~~

~~Distribution methods of the products or services~~27

ToNacara ~~date~~Montreal Inc has agreed that the issuance of the 729,729 shares of our ~~Sales~~common &stock ~~Marketing~~to ~~expenses~~be ~~have~~issued ~~been~~to ~~limited~~Nacara Montreal Inc upon our Company exercising an option to ~~commission-based~~purchase ~~sales~~from ~~costs~~Nacara ~~and~~Montreal ~~minimal~~Inc. ~~marketing~~10,000,000 ~~expenses~~shares of Class D common stock of 8012415 Canada Inc. Aswill be subject to lock up provisions and be held in escrow and only remitted to Nacara Montreal Inc on occurrence of the following events: (i) 50% of the optioned shares of our common stock will be remitted to Nacara Montreal Inc following a ~~result,~~period ~~there~~of isthree ~~very~~months ~~little~~when ~~brand~~the ~~awareness~~average ~~for~~market price of our ~~products~~traded ~~and~~shares ~~services~~of the Company is at least $3.50 Weper ~~believe~~share based on a ~~strategic~~12 ~~marketing~~to ~~campaign~~1 isforward ~~necessary~~split to ~~achieve~~be effectuated by the ~~customer~~Company ~~base~~within ~~growth~~ninety ~~that~~days weof ~~anticipate~~the ~~due~~closing of the Stock Purchase Agreement, subject to ~~significant~~shareholder ~~investments~~approval, in(ii) ~~customer~~100% ~~acquisition.~~of ~~The~~the ~~bulk~~optioned shares of ~~this~~our ~~investment~~common stock will be remitted to Nacara Montreal Inc following a period of three months when the average market price of our traded shares is ~~due~~at least $5.00 upon giving effect to ~~costs~~the ~~related~~Forward Split, (iii) on termination of the Lock-Up Agreement, 100% of the optioned shares to ~~promoting~~be ~~our~~remitted ~~brand~~to ~~through~~Nacara ~~advertising~~Montreal inInc, ~~different~~or ~~media~~(iv) on the day the Company’s stock gets registered on NASDAQ or any major exchange, ~~along~~100% ~~with~~of ~~analysis~~the optioned shares of ~~new~~our ~~market~~common ~~segments~~stock ~~and~~will ~~product~~be ~~placement~~remitted ~~strategies~~to Nacara Montreal Inc.

~~The~~Cancellation main market segment where we will invest in Sales & Marketing is that of the Canadian small to medium sized manufacturer or importer of goods that are sold through retail stores to the general public. These investments include travel, participation in industry trade shows and print/on-line media within industry publications and web sites.Agreement

22In consideration for Nacara Montreal Inc and 8012415 Canada Inc. willingness to enter into the transactions contemplated by the Stock Purchase Agreement, the Lock-Up Agreement and the License Agreement and in order to provide an appropriate capital structure for our Company after the effectiveness of the 12 to 1 forward split of our common stock and our name change to Nacara World Corp we intend to proceed with., our Company also entered into a Stock Cancellation Agreement with 7776446 Canada Inc. doing business as Cosmera Inc. pursuant to which Cosmera agreed to cancel all 3,574,920 shares of our common stock it currently owns within 30 days of the effectiveness of the forward split of our common stock and our name change to Nacara World Corp.

~~Direct~~Certain ~~Sales.~~Relationships and Related Transactions

WeCaroline ~~solicit~~Coulombe, ~~customers~~our ~~directly~~chief inexecutive ~~order~~officer, tois ~~purchase~~the ~~our~~president, ~~products~~director and ~~services~~controlling shareholder of 7776446 Canada Inc. ~~Upon~~ ~~acceptance~~doing business as Cosmera Inc., which is the controlling shareholder of ~~our~~the ~~offer~~Registrant, ~~our~~and ~~customers~~Ms. ~~sign~~Coulombe is also the president, director and a ~~Service~~principal ~~Agreement~~shareholder of Nacara Montreal Inc. Therefore, the transactions contemplated by the Stock Purchase Agreement, the Lock-Up Agreement and the License Agreement are related party transactions

~~Sales~~Security ~~Through~~Ownership aof ~~Value-Added~~Certain ~~Reseller.~~Beneficial Owners and Management and Related Stockholder Matters

AThe ~~Value-Added~~following ~~Reseller~~table ~~typically~~sets ~~re-sells~~forth ~~our~~certain ~~software~~information inregarding ~~combination~~the ~~with~~beneficial ~~other~~ownership ~~software~~of ~~also~~our ~~offered~~common bystock ~~the~~as ~~Value-Added~~of ~~Reseller~~March 31, ~~providing~~2012, aby ~~customized~~each ~~and~~person ~~complete~~or ~~solution~~entity ~~for~~known by us to be the ~~customer. Other~~beneficial ~~software~~owner ~~which~~of ismore ~~compatible~~than ~~with~~5% of the ~~ManageThePipe~~outstanding ~~software~~shares ~~includes~~of ~~production~~common ~~planning~~stock, ~~software~~each of our directors and named executive officers, ~~enterprise~~and ~~resource~~all ~~planning~~of ~~software~~our directors and ~~sales~~executive ~~analysis~~officers ~~software~~as a group.

~~In the case of any sale, the Company enters into a services agreement with the customer.~~28

~~Status~~Unless ofotherwise ~~any~~indicated, ~~publicly~~the ~~announced~~persons ~~new~~named ~~product~~in orthe ~~service~~table have sole voting and sole investment power with respect to the shares set forth opposite the stockholder’s name, subject to community property laws, where applicable.

ManageThePipe software was in a pre-commercialization phase with the deployment of the first version of the software at a garment manufacturing facility in July of 2002. The software has since been deployed in numerous customer facilities and is available for sale in its current state.


Title of Class	Name of Beneficial Owner	Amount and Nature Of Beneficial Owner	Percentage of Class (1)
Common Stock	Caroline Coulombe 3055 L’Assomption Blvd. Montreal, Quebec H1N 2H1 Canada	3,574,920 Shares(2) Chief Executive Officer, President, Chief Financial Officer, Secretary, Treasurer and a director	66.63%
Common Stock	7776446 Canada Inc. doing business as Cosmera Inc. 5670 Sherbrooke Street East Montreal, Quebec H1N 1A1 Canada	3,574,920 Shares(2)	66.63%
Common Stock	All Executive Officers and Directors as a Group	3,574,920 Shares(2)	66.63%

The software installation, use and maintenance represent a first year investment of $25,000 followed by yearly subscription fees of $12,000.


(1)	Percentage of beneficial ownership of our common stock is based on 5,365,400 shares of common stock outstanding as of the date of the table.
(2)	Caroline Coulombe, our officer and director, has sole and dispositive power over the shares held by 7776446 Canada Inc. doing business as Cosmera Inc.
(3)	Resigned as a director effective as of the date that is ten days after the date on which we file with the SEC and mail to our shareholders our information statement in accordance with Rule 14f-1 of the Exchange Act (the “Information Statement Date”).

~~Competitive~~Beneficial ~~Business~~ownership ~~Conditions~~is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. In accordance with Securities and Exchange Commission rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees. Subject to community property laws, where applicable, the persons or entities named in the table above have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.

~~There~~Executive ~~are~~Officers ~~numerous~~and ~~software products existing on the market which provide solutions to the challenges of inventory management on retailer store shelves on a daily basis~~Directors. ~~They can be classified by the following categories:~~

~~Larger,~~Our ~~established~~directors ~~software~~and ~~companies~~principal ~~for~~executive ~~larger~~officers ~~multinational~~are ~~companies~~as specified on the following table:

The following corporations involved in inventory managementand are not a direct competitors to The Company's software product, ManageThePipe: Demantra, Viewlocity, Riverone, Verticalnet, Steelwedge and Evant. These companies, present in a wide range of industry sectors, produce completely integrated software involved from sourcing of raw materials, delivery, manufacturing, packaging and all other elements of production (known as "end-to-end" software) of goods sold to consumers. These complete end-to-end softwares sell at a very high cost (+1M$), which require a high level of integration. ManageThePipe is focused solely on smaller to medium sized companies who are Suppliers of Major Retailers.


Name	Age	Position
Caroline Coulombe	44	Chief Executive Officer, President, Chief Financial Officer, Secretary, Treasurer and a director
George Metrakos	40	Director(1)

~~Enterprise~~(1) ~~Resource~~Resigned ~~Planning~~as ~~Software~~a ~~(ERP)~~director effective as of the Information Statement Date of March 26, 2012.

~~ERP~~The ~~systems~~following ~~(ex. SAP, JD Edwards, Manugistics, Navision, etc.) are primarily internally focused back-office systems, that~~ is ~~that they are involved in monitoring the daily transactions of~~ a ~~business,~~brief ~~from~~summary ~~invoicing, to production~~ of ~~packing~~the ~~slips~~background ~~and delivery confirmations. The result~~ of ~~such~~the aexecutive ~~complex~~officer ~~software is that it is cumbersome~~ and ~~has~~director ~~a long implementation cycle inside the business. A long implementation cycle means that the business implementing an ERP solution have to consider at least six months~~ of ~~time to integrate~~ the software, transfer the company's existing operations into the new software and provide sufficient training to employees. Due to this longer implementation time, these softwares are not competition to ManageThePipe.Company:

23Caroline Coulombe, is the President, Chief Executive Officer Chief Financial Officer, Secretary, Treasurer and a Director of GMS Capital Corp. From March 2012 to August 2007, Mrs. Coulombe was founder and CEO of Nacara Montreal Inc. and from August 2007 to December 1999, Mrs. Coulombe was founder and CEO of Nacara Cosmetics Inc. Mrs. Coulombe has over 19 years in the cosmetics industry, having served in managerial and executive capacities for a number of cosmetics companies. Over the years, Mrs. Coulombe has concluded several partnerships with cosmetic companies including many of France's most prestigious companies such as Galeries Lafayette, Marionnaud, Nocibé, Beauty Success. Since 1995, Mrs. Coulombe has served as a Director of Caisse De Mercier Rosemont, a Montreal-based financial institution. From April 2006 to February 2007, Mrs. Coulombe was also a member of a working group on the participation of Black communities in Quebec established by the Minister of Immigration and Cultural Communities of the Quebec Government. Mrs. Coulombe has also been a founder and member of the Entrepreneurship Committee of the Young Chamber of Commerce of Montreal. Mrs. Coulombe has a diploma in business administration from l'Université du Québec à Montréal.

~~Direct~~The ~~Competition~~Company anticipates entering into an employment agreement with Mrs. Coulombe, the terms of which will be disclosed when available, pursuant to ~~ManageThePipe:~~which Mrs. Coulombe is expected to receive a salary and/or stock based compensation. Mrs. Coulombe does not currently own any shares of the Company’s common stock.

~~The~~Family ~~following competitors sell to mid to large Suppliers of Major Retailers:~~Relationships

~~Demand~~There ~~Management~~are ~~Inc.~~no ~~(MO,~~family ~~USA)~~relationships ~~(www.demandsolutions.com)~~among ~~founded~~any inof ~~1985~~the officers and directors.

~~Thrive~~Board ~~Technologies (GA, USA) (www.thrivetech.com), founded in 2001.~~Committees

~~Vendor~~Our ~~Managed~~Board ~~Technologies~~of ~~(MI~~Directors has no committees. Because our Board of Directors will consist of only one member as of the Information Statement Date, ~~USA)~~we ~~(www~~do not have a standing nominating, compensation or audit committee.~~vmtsoftware~~ Rather, our full Board of Directors performs the functions of these committees.~~com~~ Also, we do not have an audit committee financial expert on our board of directors as that term is defined by Item 407(d)(5) ~~Founded~~of inRegulation ~~1998~~S-K promulgated by the SEC. Caroline Coulombe, our current director, is also an executive officer of the Company and is therefore not independent.

The inventory management software industry is highly competitive, rapidly evolving and subject to constant technological change and to intense marketing by different providers of functionally similar services. Since there are few, if any, substantial barriers to entry, we expect that new competitors are likely to enter our markets. Most, if not all, of our competitors are significantly larger and have substantially greater market presence and longer operating history as well as greater financial, technical, operational, marketing, personnel and other resources than we do.30

~~Competitive Advantages~~Summary

~~Today,~~The ~~Major~~following ~~Retailers~~summary ~~such~~is asqualified ~~Wal-Mart~~in ~~are~~its ~~relying~~entirety onby ~~their~~and ~~suppliers~~should tobe ~~make~~read ~~inventory~~together ~~replenishment~~with ~~decisions,~~the ~~that~~more isdetailed ~~deciding~~information ~~which stores should get which products~~ and atfinancial ~~what quantity~~statements, inincluding ~~order to ensure that~~ the ~~retail~~related ~~shelves remain adequately stocked to meet consumer demand. As a result~~notes, ~~Suppliers~~contained ~~utilize inventory management software and forecasting software in order to assist them to make a decision about how much product to manufacture~~ or ~~import,~~incorporated ~~how~~by ~~much~~reference ~~to stock~~ in ~~their~~this ~~warehouse and how much to ship to each store~~report.

~~We believe that we have the following competitive advantages:~~General

(As of April 1~~) Competitive~~, ~~Pricing~~2012, we abandoned our software operations and we began distribute, market and sell cosmetics and cosmetics related products under the Nacara brand. We intend to manage our business in four segments, our Canadian based operations, our European based operations, our United States based operations and Asian based operations. We plan to gradually deploy our operations globally. Currently, as result of the License Agreement we entered on March 16, 2012 with 8012415 Canada Inc., our cosmetic products are primarily marketed and sold in Canada, France and the French Caribbean.

Our ~~use~~License ~~our~~Agreement ~~proprietary~~grants ~~software~~us ~~enables~~an usexclusive, worldwide license to ~~provide~~distribute, ~~customers~~market ~~with~~and ~~competitive~~sell ~~pricing~~the ~~for~~Nacara ~~their~~brand ~~inventory~~cosmetic ~~management~~products, ~~needs.~~excluding ~~Nonetheless~~the territories of Finland, ~~there~~Russia ~~can~~and beSweden, noin ~~assurance~~exchange ~~that~~for wea ~~will~~royalty beof ~~able~~5% toof ~~successfully~~the ~~compete~~gross ~~with~~revenues ~~major~~of ~~software~~the ~~suppliers~~products sold by us. We currently have a distribution network of retail outlets in ~~present~~Canada, France and ~~prospective~~the ~~markets~~French Caribbean. ~~While~~In ~~there~~Canada, our products can be nopurchased ~~assurances,~~at wedrugstores ~~believe~~including ~~that~~Pharmacie byJean-Coutu ~~offering~~and ~~competitive~~Shoppers ~~pricing~~Drug weMart, ~~will~~and bein ~~able~~France, toat ~~compete~~retailers insuch ~~our~~as ~~present~~Galeries Lafayette, Marionnaud, Nocibé and ~~prospective~~Beauty ~~markets~~Success.

~~(2) Advantages~~Our ofbusiness ~~Equipment~~is not capital intensive, and ~~Technology~~it is important to note that we do not own any manufacturing facilities. We receive finished products from manufacturers to our distribution center in Montreal and we ship products to our customers.

WeAs ~~rely~~with onany ~~our~~business, ~~own~~many ~~internally-developed~~aspects ~~software to meet the needs~~ of our ~~customers.~~operations Weare ~~will~~subject ~~need~~ to ~~continue~~influences tooutside ~~select,~~our ~~invest~~control. inWe ~~and~~discuss ~~develop~~in ~~new~~greater ~~and~~detail ~~enhanced~~risk ~~technology~~factors relating to ~~remain~~our ~~competitive.~~business ~~Our~~in ~~future~~Item 1A ~~success~~of ~~will~~this ~~also~~Quarterly ~~depend~~ on ~~our~~Form ~~operational~~10-Q ~~and~~for ~~financial~~the ~~ability~~period toended ~~develop~~March ~~information~~31, ~~technology~~2012, ~~solutions that keep pace with evolving industry standards~~ and ~~changing~~the ~~client~~reports ~~demands.~~that ~~Our~~we ~~business~~file isfrom ~~highly~~time ~~dependent~~to ontime ~~our~~with ~~software systems,~~ the ~~temporary~~Securities ~~or permanent loss of which could materially~~ and ~~adversely~~Exchange ~~affect our business~~Commission.

~~Existing~~Our ~~and~~Products ~~Probable Governmental Regulation~~

~~The~~Our ~~software~~Company ~~industry~~offer isa ~~not~~complete arange ~~regulated~~of ~~industry~~derma-cosmetics and cosmetic related products to care for sensitive darker skin. Our products are sold under the Nacara brand name and are primarily designed for women with darker complexions. Our product line includes lipsticks, lip gloss, corrector sticks, pencils, cream powders, foundations, correcting powders, pressed powders, blushes, custom correctors and eye shadow.

~~Research~~Our products are based on formulations combining natural ingredients to soothe and ~~Development~~soften skins. Our avant-garde makeup line is made to provide an instant sensation of well-being and amazing freshness for women of color. Our moisturizing creams are particularly recommended for sensitive skin prone to dryness. Our products are hypoallergenic, non-cosmedogenic, alcohol free and with no preservatives.

24Our current line of cosmetics is primarily made for women of color. Cosmetics for women of color must be different than those offered to Caucasians. Historically, the cosmetic industry has not catered to the needs of darker skinned women and it remains difficult to find products that offer an appropriate range of selection for the darker shades of skin that our Company caters to.

~~Compliance~~Women ~~with~~of ~~Environmental~~color ~~Laws~~bring a number of challenges for cosmetics companies, including:

~~We did not incur any costs in connection with the compliance with any federal, state, or local environmental laws.~~·

~~CORPORATE~~Dark ~~OFFICES~~skin is dryer than white skin – Most cosmetics are alcohol based which has for effect to dry up the skin by stripping the natural oils it produced. Cosmetics for darker skins must use some form of lotion cream to avoid dryness - most cosmetics currently available are not made for darker skin.

~~The Company's executive offices are currently located at 5925 Monkland Ave. Montreal, Quebec H4A 1G7 Canada.~~·

~~EMPLOYEES~~Dark skin tends to be uneven and has undertones of browns, oranges, reds and gold, and even purple, but never pink, which is the most common undertone of white skin. Makeup designed for white women is generally unflattering when applied to darker shades; it tends to make darker-toned skin look greyish.

~~The Company has no full time employees and has three part time employees.~~·

~~Critical~~The ~~Accounting~~lips ~~Policies~~of ~~and~~darker ~~Estimates~~skinned women are not necessarily of the same shade, the lower lip being often more pink than the upper. Many black women find it necessary to use two shades of lipstick to equalize their lip color.

~~Management'~~Nacara’s ~~Discussion~~formulations ~~and Analysis of Financial Conditions and Results of Operations~~ are based ~~upon~~on ~~our consolidated financial statements~~beeswax, ~~which~~a ~~have~~completely ~~been~~non-greasy ~~prepared~~and inoptimal ~~accordance~~moisturizer ~~with~~for ~~accounting~~a ~~principles~~flawless ~~generally accepted in the United States~~complexion. ~~When~~Our ~~preparing~~cosmetics ~~our~~are ~~financial~~easy ~~statements,~~to ~~we make estimates and judgments that affect the reported amounts on our balance sheets and income statements~~apply, ~~and~~offering ~~our~~a ~~related~~healthy ~~disclosure~~long ~~about~~lasting ~~contingent assets and liabilities~~matte-finish. WeOur ~~continually~~lipsticks ~~evaluate~~are ~~our~~packed ~~estimates,~~with ~~including~~intense ~~those~~pigments ~~related~~ to ~~revenue,~~provide ~~allowance~~extremely ~~for doubtful accounts~~long-lasting, ~~reserves~~richest-ever ~~for income taxes, and litigation~~colors. Our Weproducts ~~base~~offer ~~our~~excellent ~~estimates~~texture onquality ~~historical~~for ~~experience~~dryer ~~and~~darker ~~on various other assumptions~~skins, ~~which~~all ~~we believe to be reasonable in order to form the basis~~ for ~~making~~an ~~judgments~~exceptional ~~about~~value ~~the~~at ~~carrying~~moderate ~~values~~price ~~of assets and liabilities that are not readily ascertained from other sources~~points. ~~Actual results may deviate from these estimates if alternative assumptions or condition are used.~~

~~Recent~~Our ~~Accounting~~website, ~~Pronouncements~~which is located at www.nacara.com provides information about our products as well as locations where our products are available for purchase.

InBusiness September 2006, ASC issued 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. Early adoption is encouraged. The adoption of ASC 820 did not have a material impact on the financial statements.Strategy

InFocus ~~February~~on ~~2007,~~a ~~ASC~~multiethnic ~~issued~~clientele. ~~825-10,~~ The ~~Fair~~market ~~Value~~for ~~Option~~cosmetics ~~for~~and ~~Financial~~personal ~~Assets~~beauty ~~and~~products ~~Financial~~is ~~Liabilities~~currently –estimated ~~Including~~at an$170 ~~amendment~~billion worldwide. This is a market that has been growing at a rate of ~~ASC~~4% ~~320-10~~to 6% per year since 1995, ~~(“ASC~~a ~~825-10”)~~rate ~~which~~faster ~~permits~~than ~~entities~~the togeneral ~~choose~~economy. toWithin ~~measure~~this ~~many~~market, ~~financial~~annual ~~instruments~~spending ~~and~~by ~~certain~~Non-Whites ~~other~~on ~~items~~beauty atproducts ~~fair~~would ~~value~~account atfor ~~specified~~about ~~election~~$35 ~~dates~~billion worldwide and just over $11 billion in the U.S. Aalone. This ~~business~~market ~~entity~~segment is ~~required~~however growing at a much faster rate (8%-10%) compared to ~~report~~what ~~unrealized~~Caucasians ~~gains~~are ~~and~~spending ~~losses~~(2% - 5%) annually on ~~items~~beauty ~~for~~products. ~~which~~Nearly ~~the~~two-third ~~fair~~of ~~value~~cosmetics ~~option~~and ~~has~~beauty ~~been~~products ~~elected~~currently inpurchased ~~earnings~~by atNon-Whites ~~each~~are ~~subsequent~~products ~~reporting~~designed ~~date~~and made for White. ~~This~~Most ~~statement~~likely, this is ~~expected~~not because Non-Whites prefer to ~~expand~~‘’Buy White’’, it is a simple reflection of the ~~use~~relative unavailability of ~~fair~~beauty ~~value~~products ~~measurement~~made for Non-White. Over ~~ASC~~the ~~825~~last decade, as new beauty products catering more specifically to Non-10White iswere ~~effective~~introduced, ~~for~~annual ~~financial~~spending ~~statements~~by ~~issued~~Non-White ~~for~~on ~~fiscal~~beauty ~~years~~products ~~beginning~~catering ~~after~~to ~~November~~White 15has decreased from nearly 75% to closer to 66%. For obvious reasons, ~~2007~~given a choice, ~~and~~Non-White ~~interim~~will ~~periods~~prefer ~~within~~to ~~those~~purchase ~~fiscal~~beauty ~~years~~products made for them.

2532

InThe ~~December~~cosmetic ~~2007,~~market is expected to be increasingly driven by the ~~ASC~~needs ~~issued~~of ~~ASC~~women ~~810-10-65~~of color, ~~Noncontrolling~~a ~~Interests~~question of relative growth in ~~Consolidated~~population ~~Financial~~and ~~Statements~~disposable income. Non-Whites ~~ASC~~are ~~810-10-65~~the ~~establishes~~fastest ~~accounting~~growing ~~and~~population; ~~reporting~~their ~~standards~~disposable ~~for~~income ~~ownership~~are ~~interests~~growing faster than Whites and, in ~~subsidiaries~~the ~~held~~U.S., byless ~~parties~~than ~~other~~35% of women of color are using makeup products, much lower than the ~~parent~~U.S. national average which is closer to 50%. Still, ~~changes~~it is in athe ~~parent’s~~U.S ~~ownership~~that women of acolor ~~noncontrolling~~are ~~interest,~~purchasing ~~calculation~~cosmetic ~~and~~products ~~disclosure~~the ofmost ~~the~~worldwide. Albeit ~~consolidated~~slowly, ~~net~~with the disposable income ~~attributable~~of Non-Whites expected to ~~the~~increase ~~parent~~faster ~~and~~than ~~the~~Whites ~~noncontrolling~~worldwide ~~interest~~as well as their population, ~~changes~~spending inon abeauty ~~parent’s~~products ~~ownership~~by ~~interest~~Non-Whites ~~while~~should ~~the~~increase ~~parent~~faster ~~retains~~and, ~~its~~in ~~controlling~~particular, ~~financial~~on ~~interest~~products made for and ~~fair~~sold ~~value~~by ~~measurement~~multiethnic companies. With a line of ~~any~~cosmetics ~~retained~~specifically ~~noncontrolling~~designed ~~equity~~for ~~investment~~women of color, we believe our Company has a distinct competitive advantage.

~~ASC~~Build ~~810-10-65~~specialty isretail ~~effective~~and ~~for~~online ~~financial~~business. ~~statements~~We ~~issued~~believe ~~for~~the ~~fiscal~~beauty ~~years~~industry ~~beginning~~has ~~after~~experienced ~~December~~significant 15growth in specialty retail and now increasingly, ~~2008~~from online sales. We have now an agreement in place to distribute, market and ~~interim~~sell ~~periods~~cosmetics ~~within~~and ~~those~~cosmetic ~~fiscal~~related ~~years.~~products ~~Early~~under ~~adoption~~the isNacara ~~prohibited~~brand. ~~The~~We ~~adoption~~currently ofhave ~~ASC~~agreements ~~810~~with specialty retailers, mass merchandisers and drugstores chains, including Pharmacie Jean-10Coutu Pharmacie Jean-65Coutu ~~did~~and ~~not~~Shoppers ~~have~~Drug Mart in Canada, and in France, at retailers such as Galeries Lafayette, Marionnaud, Nocibé and Beauty Success. Our intent is to continue to pursue innovative specialty retailers which offer a ~~material~~variety ~~impact~~of lifestyle to highly defined multiethnic customer niches. We also intend to promote the online purchase of our products on an as needed and when ordered basis to support the ~~Company’s~~distribution ~~financial~~and ~~position,~~selling ~~results~~of our products at physical point of ~~operations~~sales oron ~~cash~~a ~~flows~~commission sharing basis.

In ~~December 2007~~addition, ~~the~~we ~~Company~~intend ~~adopted~~to ~~ASC~~approach ~~805,~~other ~~Business~~manufacturers ~~Combinations~~of ~~(“ASC~~specialty ~~805”).~~products ~~ASC~~aiming ~~805~~a ~~retains~~multiethnic ~~the~~clientele ~~fundamental~~to ~~requirements~~determine ~~that~~if there would be an interest in establishing a relationship whereby we would distribute, market and sell their products under the ~~acquisition~~Nacara ~~method~~brand. ofHowever, ~~accounting~~we cannot assure you that we will be ~~used~~able ~~for~~to ~~all~~enter ~~business~~into ~~combinations~~any ~~and~~similar ~~for~~future arrangements on terms favorable to us, or if we do, that any such arrangements will be successful.

anExpand ~~acquirer~~existing toportfolio beinto ~~identified~~new ~~for each business combination~~categories. ~~ASC~~We ~~805~~intend ~~defines~~to ~~the~~continue ~~acquirer~~to asbroaden ~~the~~our ~~entity~~product ~~that~~offering ~~obtains~~beyond ~~control~~the ofcosmetic ~~one~~category orand ~~more~~offer ~~businesses~~other incosmetic ~~the~~related ~~business~~products ~~combination~~ and ~~establishes~~personal ~~the~~care ~~acquisition~~products ~~date~~such as ~~the date that the acquirer achieves control. ASC 805 will require an entity to record separately from the business combination the direct costs~~fragrance, ~~where~~hair ~~previously~~care ~~these~~and ~~costs~~other ~~were~~fashion ~~included~~accessories inunder the ~~total~~Nacara ~~allocated cost of the acquisition~~brand. ~~ASC~~ ~~805~~We ~~will~~believe ~~require~~such anexpanding ~~entity~~product toofferings ~~recognize~~would ~~the~~meet ~~assets~~customer ~~acquired,~~needs ~~liabilities assumed,~~ and ~~any~~further ~~non-controlling~~strengthen ~~interest~~customer ~~in the acquired at the acquisition date, at their fair values as of that date~~loyalty.

~~ASC~~Build ~~805~~global ~~will~~distribution ~~require~~footprint. anOur ~~entity~~business tois ~~recognize~~a asglobal anbusiness ~~asset~~and orwe ~~liability~~intend atto ~~fair~~continue ~~value~~to ~~for~~build ~~certain~~our ~~contingencies,~~global ~~either~~distribution ~~contractual or non-contractual, if certain criteria are met~~footprint. ~~Finally,~~ ~~ASC~~In ~~805~~order ~~will~~to ~~require~~adapt ~~an entity~~ to ~~recognize~~changes ~~contingent~~in ~~consideration at~~ the ~~date~~environment ofand ~~acquisition,~~our ~~based on the fair value at that date. This will be effective for~~ business ~~combinations completed on or after the first annual reporting period beginning on or after December 15~~, ~~2008. Early~~our ~~adoption~~intent is ~~not~~to ~~permitted~~establish ~~and~~operating ~~the~~joint ~~ASC~~ventures isor todistribution besubsidiaries ~~applied~~in ~~prospectively~~major ~~only. Upon adoption of this ASC~~markets, ~~there~~including ~~would be no impact to~~ the ~~Company’s~~United ~~results~~States, ofEurope ~~operations~~ and ~~financial~~Asia ~~condition~~ for ~~acquisitions~~the ~~previously~~distribution ~~completed. The adoption~~ of ~~ASC~~cosmetics ~~805~~and ~~did~~cosmetic ~~not~~related ~~have~~products aunder ~~material effect on~~ the ~~Company’s~~Nacara ~~financial position, results of operations or cash flows~~brand.

InWe ~~March~~might ~~2008,~~enter ~~ASC~~into ~~issued~~future ~~ASC~~joint ~~815,~~ventures ~~Disclosures~~arrangements ~~about~~or ~~Derivative~~acquire ~~Instruments~~distribution ~~and~~companies ~~Hedging~~within ~~Activities”,~~key ~~(“ASC~~markets ~~815”).~~to ~~ASC~~distribute ~~815~~our ~~requires enhanced disclosures about an entity’s derivative and hedging activities~~products. These enhanced disclosures will discuss: how and why an entity uses derivative instruments; how derivative instruments and related hedged items are accounted for and its related interpretations; and how derivative instruments and related hedged items affect an entity’s financial positionHowever, ~~financial~~we ~~performance,~~cannot ~~and~~assure ~~cash~~you ~~flows.~~that ~~ASC~~we ~~815~~will isbe ~~effective~~able ~~for~~to ~~financial~~enter ~~statements~~into ~~issued~~any ~~for~~future ~~fiscal~~joint ~~years~~venture ~~and~~arrangements ~~interim periods beginning after November 15, 2008. The adoption of ASC 815 did not have a material impact on the Company’s results of operations~~ or ~~financial~~acquire ~~position.~~distribution

Effective April 1, 2009, the Company adopted ASC 855, Subsequent Events (“ASC 855”). ASC 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date – that is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. Adoption of ASC 855 did not have a material impact on the Company’s results of operations or financial condition.33

~~Effective~~companies ~~July~~on 1,terms ~~2009,~~favorable ~~the Company adopted FASB ASU No. 2009-05, Fair Value Measurement and Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments~~ to ~~ASC 820-10~~us, ~~Fair~~or ~~Value~~if ~~Measurements~~we ~~and Disclosures – Overall~~do, ~~for~~that ~~the~~any ~~fair~~such ~~value~~transaction ~~measurement~~will ofbe ~~liabilities~~successful. ~~ASU~~We ~~2009-05~~believe ~~provides clarification~~ that in ~~circumstances in which a quoted market price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using~~ certain ~~techniques.~~markets ~~ASU~~vertical ~~2009-05~~integration ~~also clarifies that when estimating the fair value~~ of aour ~~liability,~~distribution anetwork ~~reporting entity~~ is ~~not~~one ~~required~~of tothe ~~include~~keys ~~a separate input or adjustment~~ to ~~other~~future ~~inputs~~growth ~~relating to the existence~~ of aour ~~restriction~~company, ~~that~~and ~~prevents~~ownership ~~the transfer~~ of asuch ~~liability.~~distribution ~~ASU~~should ~~2009-05~~enable ~~also~~us ~~clarifies~~to ~~that~~better ~~both~~serve aour ~~quoted~~customers’ ~~price~~needs in anlocal ~~active~~markets ~~market for the identical liability at the measurement date~~ and ~~the~~adapt ~~quoted~~more ~~price~~quickly ~~for the identical liability when traded~~ as ansituations ~~asset~~may ~~in an active market when no adjustments to the quoted price of the asset are required for Level 1 fair value measurements~~determine. ~~Adoption of ASU 2009-05 did not have a material impact on the Company’s results of operations or financial condition.~~

26Competition

InThe ~~January~~market ~~2010,~~for ~~the~~cosmetics ~~Company adopted FASB ASU No. 2010-06, Fair Value Measurement~~ and ~~Disclosures~~cosmetic ~~(Topic~~related ~~820)-~~products ~~Improving~~is ~~Disclosures~~highly ~~about~~competitive ~~Fair Value Measurements (“ASU 2010-06”). These standards require new disclosures on the amount~~ and ~~reason~~sensitive ~~for~~to ~~transfers~~changing inpreferences and ~~out of Level 1 and 2 fair value measurements~~demands. The ~~standards~~Company ~~also~~competes ~~require~~primarily ~~new~~by: ~~disclosures of activities, including purchases, sales, issuances, and settlements within the~~

~~Level~~• 3Introducing ~~fair~~quality ~~value~~products ~~measurements.~~with ~~The~~innovative ~~standard~~performance ~~also~~features, ~~clarifies~~shades, ~~existing~~finishes ~~disclosure~~and ~~requirements~~packaging; on• ~~levels~~educating consumers about the benefits of ~~disaggregation~~the ~~and~~Company’s ~~disclosures~~products; ~~about~~• ~~inputs~~anticipating and ~~valuation~~responding ~~techniques.~~to ~~These~~changing ~~new~~consumer ~~disclosures~~demands ~~are~~in ~~effective~~a ~~beginning~~timely ~~with~~manner, including the ~~first~~timing ~~interim~~of ~~filing~~new inproduct ~~2010.~~introductions ~~The~~and ~~disclosures~~line ~~about~~extensions; • offering attractively priced products, relative to the ~~rollforward~~product ofbenefits ~~information~~provided; in• ~~Level~~maintaining 3favorable ~~are~~brand ~~required~~recognition; • generating competitive margins and inventory turns for the Company’s retail customers by providing relevant products and executing effective pricing, incentive and promotion programs; • ensuring product availability through effective planning and replenishment collaboration with ~~its~~retailers; ~~first~~• ~~interim~~providing ~~filing~~strong inand ~~2011.~~effective ~~The~~advertising, ~~adoption~~promotion, ofmarketing ~~this~~and ~~standard~~merchandising ~~did~~support; ~~not~~• ~~materially~~maintaining ~~impact~~an effective sales force; and • obtaining and retaining sufficient retail display space, optimal in-store positioning and effective presentation of the Company’s ~~financial~~products ~~statements~~at retail.

~~Other~~An ~~ASU’s~~increase in or change in the current level of competition that the Company faces could have ~~been~~a ~~issued~~material oradverse ~~proposed~~effect byon ~~the~~our ~~FASB~~business, ~~ASC~~financial ~~that~~condition doand ~~not~~results ~~require~~of ~~adoption~~operations. ~~until~~In addition, the Company competes against a ~~future~~number ~~date~~of ~~and~~multi-national manufacturers, some of which are ~~not~~larger ~~expected~~and tohave substantially greater resources than the Company, and which may therefore have athe ~~material~~ability ~~impact~~to spend more aggressively than the Company on advertising, promotions and marketing and have more flexibility than the ~~financial~~Company ~~statements~~to ~~upon~~respond ~~adoption~~to changing business and economic conditions. In addition to products sold in the mass retail channel, the Company’s products also compete with similar products sold through other channels, including prestige and department stores, television shopping, door-to-door, specialty stores, the internet, perfumeries and other distribution outlets.

~~Fair~~Additionally, ~~Value~~the ~~Measurements~~Company’s major retail customers periodically assess the allocation of retail display space among competitors and in the course of doing so could elect to reduce the display space allocated to the Company’s products, if, for example, the Company’s marketing strategies for its new and/or existing products are less effective than planned, fail to effectively reach the targeted consumer base or engender the desired consumption; and/or the rate of purchases by the Company’s consumers are not as high as the Company

~~Level~~anticipates. 1Any ~~inputs:~~significant ~~Quoted~~loss ~~prices~~of ~~for~~display ~~identical~~space ~~instruments~~could inhave ~~active~~an ~~markets~~adverse effect on the Company’s business, financial condition and/or results of operations.

~~Level~~We 3purchase ~~inputs:~~finished ~~Instruments~~goods ~~with~~from ~~primarily~~our ~~unobservable~~licensor ~~value~~and ~~drivers~~other component parts from suppliers based on internal estimates of anticipated need for finished goods. Our goal is to deliver product to customers within 72 hours of the receipt of their orders. Our business is not capital intensive, and it is important to note that we do not own manufacturing facilities.

~~Use~~Product ~~of Estimates~~Liability

~~The~~We ~~preparation~~currently ofhave ~~financial~~not ~~statements~~any incoverage ~~conformity~~for ~~with~~product ~~accounting~~liability. ~~principles~~Our ~~generally~~intent ~~accepted~~is ~~in the United States of America requires management~~ to ~~make~~obtain ~~estimates~~product ~~and~~liability ~~assumptions~~coverage ~~that~~in ~~affect~~an ~~the~~amount ~~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. On an on-going basis$5, ~~the Company evaluates its estimates~~000,000. ~~including,~~Based ~~but~~upon ~~not~~industry ~~limited~~standard ~~to, those related to investment tax credits, bad debts, income taxes~~ and ~~contingencies.~~our ~~The Company bases its estimates on historical~~ experience, ~~and~~we onbelieve ~~various other assumptions~~ that ~~are~~such ~~believed~~coverage towill be ~~reasonable~~adequate ~~under~~and ~~the~~will ~~circumstances,~~cover ~~the~~substantially ~~results~~all of ~~which form~~ the ~~basis~~exposure ~~for~~we ~~making~~may ~~judgments~~have ~~about~~with ~~the~~respect ~~carrying~~to ~~value~~our ~~of assets and liabilities that are not readily apparent from other sources~~products. ~~Actual results could differ from those estimates.~~

~~Cash~~Government ~~and Cash Equivalents~~ Regulation

~~The~~In ~~Company~~the ~~considers~~United ~~all~~States, ~~highly~~cosmetics ~~liquid~~and ~~debt~~cosmetic ~~instruments~~related products are regulated under the Federal Food, Drug and ~~other~~Cosmetics ~~short-term~~Act. ~~investments~~A cosmetic must comply with anthe ~~initial~~labelling ~~maturity~~requirements of ~~three~~this ~~months~~FDC orAct ~~less~~as towell as the Fair Packaging and Labelling Act and its regulations. Some of our color cosmetic products may contain menthol and are also classified as a “drug”. Under U.S. law, a product may be ~~cash~~classified ~~equivalents~~as both a cosmetic and a drug. Additional regulatory requirements for products which are “drugs” include additional labelling requirements, registration of the manufacturer and the semi-annual update of a drug list.

~~Comprehensive~~Our ~~Income~~cosmetics that are sold in Europe are subject to certain regulatory requirements of the European Union. We do not expect to have any material difficulties in complying with such requirements.

~~The Company adopted ASC 220-10, “Reporting Comprehensive Income,” (formerly SFAS No. 130). ASC 220-10 requires the reporting of comprehensive income in addition to net income from operations.~~ Trademarks

~~Comprehensive~~The ~~income~~market isfor our products depends to a ~~more~~significant ~~inclusive~~extent ~~financial~~upon ~~reporting~~the ~~methodology~~value ~~that~~associated ~~includes~~with ~~disclosure~~our trademarks and brand name. We have license or other rights to use, the material trademark and brand name rights used in connection with the packaging, marketing and distribution of ~~information~~our ~~that~~products ~~historically~~under ~~has~~the Nacara brand name both in the United States and in other countries where such products are sold or intended to be sold. Therefore, trademark and brand name protection is important to our business. Although most of the brand names we license is registered in the United States and in certain foreign countries in which we operate, we may not ~~been~~be ~~recognized~~successful in asserting trademark or brand name protection. In addition, the ~~calculation~~laws of ~~net~~certain ~~income~~foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States. The costs required to protect our trademarks and brand names may be substantial.

2735

~~Fair~~Product ~~Value of Financial Instruments (other than Derivative Financial Instruments)~~Development

~~The~~We ~~carrying~~are ~~amounts~~not ~~reported~~currently inconducting ~~the~~any ~~balance~~product ~~sheets~~development ~~for~~activities. ~~cash and cash equivalents~~However, ~~accounts~~we ~~receivable~~anticipate ~~and accounts payable approximate fair value because of~~ the ~~immediate~~need orto ~~short-term~~conduct ~~maturity~~product ofdevelopment ~~these~~activities ~~financial~~in ~~instruments. For~~ the ~~notes~~near ~~payable, the carrying amount reported is based upon the incremental borrowing rates otherwise available to the Company for similar borrowings~~future.

~~Currency Translation~~Employees

~~The~~As ~~Company’s~~of ~~functional~~March ~~currency~~31, ~~is the Canadian dollar~~2012, ~~while~~we ~~the~~have ~~Company~~no ~~reports~~employees ~~its~~other ~~currency~~than inour ~~the~~officer, USCaroline ~~dollar~~Coulombe. ~~The~~We ~~Company records these translation adjustments as accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions~~ are ~~included~~not ina ~~other~~party ~~income~~to ~~(expense)~~any inemployment ~~the results of operations~~agreements.

~~Research and Development~~Facilities

~~The~~Our ~~Company~~executive, ~~occasionally~~administrative ~~incurs costs on activities that relate to research~~ and ~~development~~operating ofoffices ~~new~~are ~~products.~~located ~~Research~~at ~~and~~3055 ~~development~~L’Assomption ~~costs are expensed as incurred~~Blvd., ~~Certain~~Montreal, ofQuebec ~~these~~H1N ~~costs~~2H1 ~~are reduced by government grants and investment tax credits where applicable~~Canada.

~~Revenue~~Critical ~~Recognition~~Accounting Policies and Estimates

~~The~~Management's ~~Company~~Discussion ~~generates~~and ~~revenue~~Analysis ~~from~~of Financial Conditions and Results of Operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the ~~following~~United ~~primary~~States. ~~sources:~~When ~~(1) licensing~~preparing ~~software~~our ~~products;~~financial ~~(2) providing~~statements, ~~customer~~we ~~technical~~make ~~support~~estimates ~~(referred~~and judgments that affect the reported amounts on our balance sheets and income statements, and our related disclosure about contingent assets and liabilities. We continually evaluate our estimates, including those related to asrevenue, ~~maintenance);~~allowance for doubtful accounts, reserves for income taxes, and ~~(3) providing~~litigation. ~~professional~~We ~~services~~base our estimates on historical experience and on various other assumptions, ~~such~~which aswe ~~consulting~~believe to be reasonable in order to form the basis for making judgments about the carrying values of assets and ~~education~~liabilities that are not readily ascertained from other sources. Actual results may deviate from these estimates if alternative assumptions or condition are used.

~~The~~Recent ~~Company~~Accounting recognizes revenue pursuant to the requirements of ASC 450-10 and ASC 985-605, “Software Revenue Recognition.” In accordance with the ASC’s, the Company begins to recognize revenue from licensing and supporting its software products when all of the following criteria are met: (1) the Company has evidence of an arrangement with a customer; (2) the Company delivers the products; (3) license agreement terms are deemed fixed or determinable and free of contingencies or uncertainties that may alter the agreement such that it may not be complete and final; and (4) collection is probable.Pronouncements

~~The~~In ~~Company’s~~May ~~software~~2011, ~~licenses~~FASB ~~generally~~issued doAccounting ~~not~~Standards ~~include~~Update ~~acceptance~~(ASU) ~~provisions~~No. An2011-04, ~~acceptance~~Amendments ~~provision~~to ~~allows~~Achieve aCommon ~~customer~~Fair toValue ~~test~~Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. FASB ASU 2011-04 amends and clarifies the ~~software~~measurement and disclosure requirements of FASB ASC 820 resulting in common requirements for ameasuring ~~defined~~fair ~~period~~value ofand ~~time~~for ~~before~~disclosing ~~committing~~information about fair value measurements, clarification of how to ~~license~~apply ~~the~~existing ~~software.~~fair Ifvalue ameasurement ~~license~~and ~~agreement~~disclosure ~~were~~requirements, and changes to ~~include~~certain anprinciples ~~acceptance~~and ~~provision,~~requirements ~~the~~for ~~Company~~measuring ~~would~~fair ~~not~~value ~~record~~and ~~deferred~~disclosing ~~subscription~~information about fair value ormeasurements. ~~recognize~~The ~~revenue~~new ~~until~~requirements ~~the~~are ~~earlier~~effective offor ~~the~~fiscal ~~receipt~~years ofbeginning aafter ~~written~~December ~~customer~~15, ~~acceptance~~2011. orThe Company plans to adopt this amended guidance on October 1, if2012 and at this time does not ~~notified~~anticipate bythat ~~the~~it ~~customer~~will tohave ~~cancel~~a ~~the~~material ~~license~~impact ~~agreement,~~on the ~~expiration~~Company’s results of ~~the~~operations, ~~acceptance~~cash ~~period~~flows or financial position.

~~Under~~In ~~the~~June ~~Company’s business model~~2011, ~~software~~FASB ~~license~~issued ~~agreements~~ASU ~~frequently~~No. ~~include flexible contractual provisions that~~2011-05, ~~among~~Presentation ~~other things, allow customers to receive unspecified future software products for no additional fee. These agreements combine the right to use the software products with maintenance for the term~~ of ~~the~~Comprehensive ~~agreement. Under these agreements~~Income, ~~once~~which ~~all~~amends ~~four of~~ the ~~above~~disclosure ~~noted~~and ~~revenue~~presentation ~~recognition~~requirements ~~criteria are met, the Company is required to recognize revenue ratably over the term~~ of ~~the~~Comprehensive ~~license agreement~~Income.

Under the Company’s business model, a relatively small percentage of the Company’s revenue related to certain products is recognized on an up-front or perpetual basis once all revenue recognition criteria are met in accordance with the ASC’s as described above, and is reported in the “Software fees and other” line of the statements of operations. License agreements pertaining to such products do not include the right to receive unspecified future software products, and maintenance is deferred and subsequently recognized over the term of the maintenance period. In the event such license agreements are executed within close proximity or in contemplation of other license agreements with the same customer which are recognized on a subscription basis, the contracts may be considered a single multi-element agreement, and as such all revenue is deferred and recognized as “Subscription revenue” in the statements of operations.36

28Specifically, FASB ASU No. 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in 1) a single continuous statement of comprehensive income or 2) two separate but consecutive statements, in which the first statement presents total net income and its components, and the second statement presents total other comprehensive income and its components. These new presentation requirements, as currently set forth, are effective for the Company beginning October 1, 2012, with early adoption permitted. The Company plans to adopt this amended guidance on October 1, 2012 and at this time does not anticipate that it will have a material impact on the Company’s results of operations, cash flows or financial position.

~~Maintenance~~In ~~revenue~~September 2011, FASB issued ASU 2011-08, Testing Goodwill for Impairment, which amended goodwill impairment guidance to provide an option for entities to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is ~~derived~~more ~~from~~likely ~~two~~than ~~primary~~not ~~sources:~~that ~~(1) combined~~the ~~license~~fair ~~and~~value ~~maintenance~~of ~~agreements~~a ~~recorded~~reporting ~~under~~unit is less than its carrying amount. After assessing the ~~prior~~totality ~~business~~of ~~model;~~events and ~~(2) stand~~circumstances, if an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, performance of the two-~~alone~~step ~~maintenance~~impairment ~~agreements~~test is no longer required. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. Adoption of this guidance is not expected to have any impact on the Company’s results of operations, cash flows or financial position.

~~Under~~There ~~the prior business model, maintenance and license fees~~ were ~~generally~~other ~~combined~~updates ~~into~~recently aissued, ~~single~~most ~~license agreement. The maintenance portion was deferred and amortized into revenue over the initial license agreement term. Certain~~ of ~~these~~which ~~license~~represented ~~agreements~~technical ~~have~~corrections ~~not~~to ~~reached~~ the ~~end~~accounting ofliterature ~~their~~or ~~initial~~application ~~terms and, therefore, continue~~ to ~~amortize.~~specific ~~This~~industries ~~amortization~~and isare ~~recorded~~not toexpected ~~the “Maintenance” line item in the Statements of Operations. The deferred maintenance portion, which was optional~~ to ~~the~~have ~~customer,~~a ~~was~~material ~~determined~~impact ~~using its fair value based~~ on ~~annual, fixed maintenance renewal rates stated in~~ the ~~agreement. For license agreements entered into under the~~ Company’s ~~current~~financial ~~business model~~position, ~~maintenance~~results ~~and license fees continue to be combined; however, the maintenance is inclusive for the entire term~~ of ~~the~~operations ~~arrangement.~~or ~~The~~cash ~~Company reports such combined fees on the “Subscription revenue” line item in the statements of operations~~flows.

~~The~~Fair ~~Company~~Value also records stand-alone maintenance revenue earned from customers who elect optional maintenance. Revenue from such renewals is recognized on the “Maintenance” line item in the statements of operations over the term of the renewal agreement.Measurements

The ~~“Deferred~~Company ~~maintenance~~adopted ~~revenue”~~certain ~~line~~provisions ~~item~~of onASC ~~the~~Topic ~~Company~~820. ASC 820 defines fair value, provides a consistent framework for measuring fair value under generally accepted accounting principles and expands fair value financial statement disclosure requirements. ASC 820’s ~~balance~~valuation ~~sheets~~techniques ~~principally~~are ~~represents~~based ~~payments~~on ~~received~~observable inand ~~advance~~unobservable ofinputs. ~~maintenance~~Observable ~~services~~inputs toreflect bereadily ~~rendered~~obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

~~Revenue~~Level ~~from~~1 ~~professional~~inputs: ~~service~~Quoted ~~arrangements~~prices isfor ~~generally~~identical ~~recognized~~instruments asin ~~the~~active ~~services are performed~~markets. Revenue from committed professional services arrangements that are sold as part of a software transaction is deferred and recognized on a ratable basis over the life of the related software transaction. If it is not probable that a project will be completed or the payment will be received, revenue is deferred until the uncertainty is removed.

~~Revenue~~Level ~~from~~2 ~~sales~~inputs: toQuoted ~~distributors,~~prices ~~resellers,~~for ~~and~~similar ~~value-added~~instruments ~~resellers~~in ~~(VARs)~~active ~~commences~~markets; ~~when~~quoted ~~all~~prices ~~four~~for ofidentical ~~the~~or ~~ASC~~similar ~~revenue~~instruments ~~recognition~~in ~~criteria~~markets ~~noted~~that ~~above~~ are ~~met~~not ~~and~~active; ~~when these entities sell the software product to their customers. This is commonly referred to as the sell-through method. Revenue from the sale of products to distributors, resellers~~ and ~~VARs under licenses that include the right for the end~~model-~~users~~derived tovaluations ~~receive~~whose ~~certain~~inputs ~~unspecified~~are ~~future~~observable ~~software~~or ~~products~~whose issignificant ~~recognized~~value ondrivers aare ~~ratable basis~~observable.

~~Accounts~~Level ~~Receivable~~3 inputs: Instruments with primarily unobservable value drivers.

~~The~~Management ~~Company conducts business and extends credit based on an evaluation of the customers’ financial condition, generally without requiring collateral.~~Estimates

Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances.37

~~Accounts~~Management ~~receivable~~makes ~~are~~assumptions ~~generally~~and ~~due~~estimates ~~within~~to 30prepare ~~days~~financial ~~and~~statements ~~collateral~~in isconformity ~~not~~with ~~required~~accounting principles generally accepted in the United States of America. ~~Unbilled~~Those ~~accounts~~assumptions ~~receivable~~and ~~represents~~estimates directly affect the amounts ~~due~~reported and disclosures included in the consolidated financial statements. Actual results could differ from ~~customers~~those assumptions and estimates. Significant estimates for which ~~billing~~changes ~~statements~~in ~~have~~the ~~not~~near ~~been~~term ~~generated~~are considered reasonably possible and ~~sent~~that may have a material impact on the financial statements are disclosed in these notes to the ~~customers~~consolidated financial statements.

~~Income~~Foreign ~~Taxes~~Currency Translation

The Company’s ~~accounts~~functional ~~for~~currency ~~income~~is ~~taxes utilizing~~ the ~~liability~~Canadian ~~method~~dollar, ofwhile ~~accounting. Under~~ the ~~liability~~Company ~~method,~~reports ~~deferred~~its ~~taxes~~currency ~~are~~in ~~determined~~the ~~based~~US ondollar. ~~differences~~The ~~between~~Company ~~financial~~records ~~statement~~these ~~and~~translation ~~tax~~adjustments ~~bases~~as ofaccumulated ~~assets~~other ~~and~~comprehensive ~~liabilities~~income at(loss). ~~enacted~~Gains ~~tax~~and ~~rates~~losses infrom ~~effect~~foreign incurrency ~~years~~transactions ~~in which differences~~ are ~~expected~~included toin ~~reverse. Valuation~~other ~~allowances~~income ~~are~~(expense) ~~established,~~in ~~when~~the ~~necessary,~~results toof ~~reduce deferred tax assets to amounts that are expected to be realized~~operations.

~~Advertising~~Cash ~~Costs~~and Cash Equivalents

~~The~~All ~~Company~~highly ~~expenses~~liquid ~~the~~investments ~~costs~~purchased ~~associated~~ with ~~advertising~~a asmaturity ~~incurred~~of three months or less are considered to be cash equivalents.

29Short-Term Investments

~~Fixed~~From ~~Assets~~time to time, the Company has short-term investments which consist of certificates of deposit with maturities greater than three months. The Company monitors concentrations of credit risk associated with financial institutions with which the Company conducts significant business. The Company believes our credit risk is minimal, as the Company primarily conducts business with large, well-established financial institutions.

~~Fixed~~Accounts assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets; automobiles – 3 years, computer equipment – 3 years, furniture and fixtures – 5 years and leasehold improvements- 5 years.Receivable

~~When~~Accounts ~~assets~~receivable ~~are~~represent ~~retired~~payments ordue ~~otherwise~~to ~~disposed~~the ofCompany for previously recognized net sales, ~~the~~reduced ~~costs~~by allowances for sales returns and ~~related~~doubtful ~~accumulated~~accounts ~~depreciation~~or balances which are ~~removed~~estimated ~~from~~to ~~the~~be ~~accounts,~~uncollectible. Accounts ~~and~~receivable ~~any~~balances ~~resulting~~are ~~gain~~written-off oragainst ~~loss~~the isallowance ~~recognized~~for indoubtful ~~income~~accounts ~~for~~when ~~the~~they ~~period~~become uncollectible. ~~The~~ ~~cost~~Recoveries of ~~maintenance~~accounts ~~and~~receivable ~~repairs~~previously isrecorded ~~charged~~against tothe ~~income~~allowance asare ~~incurred;~~recorded ~~significant~~in ~~renewals~~the ~~and~~consolidated ~~betterments~~statement ~~are~~of ~~capitalized~~income when received. ~~Deduction~~ isWe ~~made~~generally ~~for~~grant ~~retirements~~credit ~~resulting~~based ~~from~~upon ~~renewals~~our oranalysis ~~betterments~~of the customer’s financial position as well as previously established buying patterns.

~~Impairment of Long-Lived Assets~~Inventories

~~Long-lived assets~~Inventories, ~~primarily~~including ~~fixed~~promotional ~~assets~~merchandise, ~~are~~only ~~reviewed~~include ~~for~~inventory ~~impairment~~considered ~~whenever~~saleable ~~events~~ or ~~changes~~usable in ~~circumstances~~future ~~indicate~~periods, ~~that~~and ~~the~~is ~~carrying~~stated ~~amount~~at of the ~~assets~~lower ~~might not be recoverable. The Company does perform a periodic assessment~~ of ~~assets~~cost ~~for impairment in the absence of such information~~ or ~~indicators. Conditions that would necessitate an impairment assessment include a significant decline in the observable~~ market ~~value of an asset~~, awith ~~significant~~cost ~~change~~being indetermined on the ~~extent or manner~~ first-in ~~which an asset is used~~, orfirst-out amethod. Cost ~~significant~~components ~~adverse~~include ~~change~~raw ~~that~~materials, ~~would~~components, ~~indicate~~direct ~~that~~labor ~~the~~and ~~carrying~~overhead ~~amount of an asset or group of assets is not recoverable~~(e.g., ~~For~~indirect ~~long-lived~~labor, ~~assets~~utilities, todepreciation, bepurchasing, ~~held and used~~receiving, ~~the~~inspection ~~Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows~~ and ~~measures~~warehousing) ~~the~~as ~~impairment~~well ~~loss~~as ~~based~~inbound ~~on the difference between the carrying amount and estimated fair value~~freight. Promotional

~~(Loss) Per Share of Common Stock~~38

~~Basic~~merchandise ~~net (loss) per common share~~ is ~~computed~~charged ~~using~~to ~~the~~cost ~~weighted average number~~ of ~~common~~sales ~~shares~~at ~~outstanding. Diluted earnings per share (EPS) includes additional dilution from common stock equivalents, such as stock issuable pursuant to~~ the ~~exercise~~time ~~of stock options and warrants. Common stock equivalents were not included in~~ the ~~computation~~merchandise ofis ~~diluted~~shipped ~~earnings~~to ~~per share when~~ the Company’s ~~reported a loss because to do so would be antidilutive for periods presented~~customers.

~~Stock-Based Compensation~~Derivatives

InAll ~~2006,~~derivative ~~the~~instruments are recorded as either assets or liabilities and measured at fair value. The Company ~~adopted~~uses derivative instruments to principally manage a variety of market risks. For derivatives designated as hedges of the ~~provisions~~exposure to changes in fair value of ~~ASC~~the ~~718-10~~recognized ~~“Share~~asset ~~Based~~or ~~Payments”~~liability ~~for~~or ~~its~~a ~~year~~firm ~~ended~~commitment ~~December~~(referred 31to as fair value hedges), ~~2008~~the ~~and~~gain ~~all~~or ~~subsequent~~loss ~~years~~is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. The ~~adoption~~effect of ~~this~~that ~~principle~~accounting ~~had~~is noto ~~effect~~include onin earnings the ~~Company~~extent to which the hedge is not effective in achieving offsetting changes in fair value. For our cash flow hedges, the effective portion of the derivative’s ~~operations~~gain or loss is initially reported in equity (as a component of accumulated other comprehensive income) and is subsequently reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. The ineffective portion of the gain or loss of a cash flow hedge is reported in earnings immediately. The Company also holds certain instruments for economic purposes that are not designated for hedge accounting treatment. For these derivative instruments, the changes in their fair value are recorded in earnings immediately.

~~The~~Goodwill ~~Company~~and ~~has~~Other elected to use the modified–prospective approach method. Under that transition method, the calculated expense in 2006 is equivalent to compensation expense for all awards granted prior to, but not yet vested as of January 1, 2006, based on the grantLong-~~date~~Lived fair values. Stock-based compensation expense for all awards granted after January 1, 2006 is based on the grant-date fair values. The Company recognizes these compensation costs, net of an estimated forfeiture rate, on a pro rata basis over the requisite service period of each vesting tranche of each award. The Company considers voluntary termination behavior as well as trends of actual option forfeitures when estimating the forfeiture rate.Assets

~~The~~Goodwill ~~Company~~is ~~measures~~calculated ~~compensation~~as ~~expense~~the ~~for~~excess its non-employee stock-based compensation under ASC 505-50, “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The fair value of the ~~option~~cost ~~issued~~of ispurchased ~~used~~businesses toover ~~measure~~ the ~~transaction, as this is more reliable than the~~ fair value of ~~the~~their ~~services~~underlying ~~received~~net assets. ~~The~~Other ~~fair~~indefinite-lived ~~value~~intangible isassets ~~measured~~principally atconsist ~~the value~~ of ~~the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete~~trademarks. Goodwill ~~The~~and ~~fair~~other ~~value~~indefinite-lived ofintangible ~~the~~assets ~~equity~~are ~~instrument~~not ~~is charged directly to compensation expense and additional paid-in capital~~amortized.

~~Segment~~The ~~Information~~Company evaluates goodwill and indefinite-lived intangible assets for impairment at least annually during the fourth quarter, or more frequently when events occur or circumstances change, such as an unexpected decline in sales, that would more likely than not (i) reduce the fair value of the reporting unit below its fair value or (ii) indicate that the carrying value of an indefinite-lived intangible asset may not be recoverable. Impairment of goodwill is evaluated using a two step process. The first step involves a comparison of the estimated fair value of the reporting unit to the carrying value of that unit. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, the second step of the process involves comparison of the implied fair value of goodwill (based on industry purchase and sale transaction data) with its carrying value. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized as an amount equal to the excess.

~~The~~Testing ~~Company~~goodwill ~~follows~~for impairment requires us to estimate the ~~provisions~~fair value of ~~ASC~~the ~~280-10,~~reporting ~~“Disclosures~~unit ~~about~~using ~~Segments~~significant ofestimates anand ~~Enterprise~~assumptions. The assumptions the Company makes will impact the outcome and ~~Related~~ultimate ~~Information”~~results of the testing. ~~This~~In ~~standard~~making ~~requires~~our ~~that~~assumptions ~~companies~~and ~~disclose~~estimates, ~~operating~~the ~~segments~~Company ~~based~~uses onindustry ~~the~~accepted ~~manner~~valuation inmodels ~~which~~and set criteria that are reviewed and approved by management ~~disaggregates~~and, in certain instances, the Company inengages ~~making~~third ~~internal~~party ~~operating~~valuation ~~decisions~~specialists to advise us.

3039

~~Results~~For indefinite-lived intangible assets, the evaluation requires a comparison of ~~Operations~~the –estimated ~~Nine~~fair ~~and~~value ~~Three~~of ~~Months~~the ~~Ended~~asset ~~September~~to 30the carrying value of the asset. To determine fair value of indefinite-lived intangible assets, ~~2011~~the ~~Compared~~Company uses an income approach, including the relief-from-royalty method. This method assumes that, in lieu of ownership, a third party would be willing to ~~Nine~~pay a royalty in order to obtain the rights to use the comparable asset. The relief-from-royalty calculations require us to make a number of assumptions and ~~Three~~estimates ~~Months~~concerning ~~Ended~~future ~~September~~sales 30levels, ~~2010~~market royalty rates, future tax rates and discount rates. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, impairment is recorded.

~~The~~Intangible ~~Company~~assets ~~recorded~~subject ~~sales~~to ofamortization ~~$7,235~~are evaluated for impairment testing whenever events or changes in circumstances indicate that the carrying amount of ~~which$6,201~~an ~~was~~amortizable ~~professional~~intangible ~~services~~asset ~~and~~may ~~$1,034~~not ~~was~~be ~~subscription~~recoverable. ~~revenue~~If impairment indicators exist for an amortizable intangible asset, the ~~three~~undiscounted ~~month~~future ~~period~~cash ~~ended~~flows ~~September~~associated ~~30,~~with ~~2011~~the asexpected service potential of the asset are compared to ~~$14~~the carrying value of the asset. If our projection of undiscounted future cash flows is in excess of the carrying value of the intangible asset,~~825~~ no impairment charge is recorded. If our projection of ~~which~~undiscounted ~~all~~future ~~was~~cash ~~professional~~flows ~~services~~is ~~for~~less than the ~~three~~carrying ~~month~~value ~~period~~of ~~ended~~the ~~September~~intangible 30asset, ~~2010~~an impairment charge would be recorded to reduce the intangible asset to its fair value.

~~The~~Concentration ~~Company recorded sales~~ of ~~$31,675~~Credit of which $7,235 was subscription revenue, $23,525was for professional services and $915 was maintenance services for the nine month period ended September 30, 2011 as compared to $24,157 of which $5,284 was subscription revenue, $15,117 was professional services and $3,756 was maintenance services for the nine month period ended September 30, 2010.Risk

The Company's ~~total~~is ~~expenses~~a ~~before~~worldwide ~~interest~~marketer and ~~income~~distributor ~~taxes~~of ~~were~~fragrance ~~$8,773~~and ~~for~~fragrance ~~the~~related ~~three~~products, ~~month~~and ~~period~~sells ~~ended~~its ~~September~~products ~~30,~~to ~~2011~~department ~~compared~~stores, tospecialty ~~$40~~retailers,~~338~~ ~~for~~mass-market ~~the same period in 2010~~retailers, ~~primarily~~supermarkets asand adomestic ~~consequence~~and ofinternational awholesalers ~~decrease in professional services required to maintain the company's reporting compliance with the Securities~~ and ~~Exchange Commission (SEC)~~distributors. ~~There~~ ~~was~~The aCompany ~~decrease~~grants incredit ~~Purchases of professional services required~~ to ~~deliver~~all ~~services~~qualified to customers ~~from $30,858 to $0 as the company was able to deliver its services without the use of external consultants. Within its operating expenses, there was a decrease in selling, general~~ and ~~administrative~~does ~~expenses~~not ~~from~~believe ~~$9,370~~it tois ~~$8,663~~exposed assignificantly ~~the company decreased its expenditures related~~ to ~~administrative~~any ~~costs~~undue toconcentration ~~run its operations at its head office. There was no net increase or decrease in depreciation (~~of ~~$110) related~~credit ~~to previous acquisitions of equipment that are nearing their useful life~~risk.

~~The~~ Revenue Company's total expenses before interest and income taxes were $64,856 for the nine month period ended September 30, 2011 compared to $84,421 for the same period in 2010, primarily as a consequence of a decrease in professional services for reporting compliance with the Securities and Exchange Commission (SEC). There was a decrease in Purchases of professional services required to deliver services to customers from $63,150 to $0 as the Recognition

~~company~~The ~~was~~Company ~~able~~sells ~~to deliver~~ its ~~services~~products ~~without~~to ~~the~~department ~~use~~stores, ofspecialty ~~external~~retailers, ~~consultants. Within~~mass-market ~~its~~retailers, ~~operating~~supermarkets ~~expenses,~~and ~~there~~domestic ~~was~~and aninternational ~~increase~~wholesalers inand ~~selling,~~distributors. ~~general~~The ~~and~~Company ~~administrative~~recognizes ~~expenses~~revenues ~~from~~when ~~$18,212~~merchandise tois ~~$64,526~~shipped asand the ~~company~~risk ~~increased~~of ~~its~~loss ~~expenditures~~passes ~~related~~ to ~~administrative~~the ~~costs~~customer. toNet ~~run~~sales ~~its~~are ~~operations~~comprised atof ~~its~~gross ~~head~~revenues ~~office~~less returns, ~~particularly~~trade indiscounts ~~the~~and ~~first~~allowances. ~~six~~The ~~months~~Company ofdoes ~~Fiscal~~not ~~Year~~bill ~~2011.~~its ~~There~~customer’s ~~was~~freight ~~decrease~~and inhandling ~~depreciation~~charges. ~~from~~All ~~$3,059~~shipping toand ~~$330~~handling ~~related~~costs toare ~~previous~~included ~~acquisitions~~in ofselling, ~~equipment~~general ~~that~~and ~~are~~administrative ~~nearing~~expenses ~~their~~in ~~useful~~the ~~life~~consolidated statements of income.

~~The~~Sales Company had a net income (loss) of ($1,751) for the three month period ended September 30, 2011 compared to a net income (loss) of ($25,513) for the same period in 2010. The principal reasons for company’s net loss for the three month period ended September 30, 2011 as compared to the prior period is because the company was unable to achieve the level of revenues required to sustain its operating costs.Returns

~~As a result~~Generally, the Company ~~had~~does anot ~~net~~permit ~~income~~customers ~~(loss)~~to ofreturn ~~($33,720)~~their ~~for~~unsold ~~the~~products. ~~nine~~The ~~month~~Company ~~period~~regularly ~~ended~~reviews ~~September~~and 30revises, ~~2011~~as ~~compared~~deemed tonecessary, aits ~~net~~estimate ~~income (loss)~~ of ~~($60,569)~~reserves for ~~the~~future ~~same~~sales ~~period~~returns inbased ~~2010.~~primarily ~~The~~upon ~~principal~~historic ~~reasons~~trends ~~for~~and ~~company’s~~relevant ~~net~~current ~~loss~~data ~~for~~including ~~the~~information ~~nine~~provided ~~month~~by ~~period~~retailers ~~ended~~regarding ~~September~~their ~~30,~~inventory ~~2010~~levels. asIn ~~compared~~addition, toas ~~the~~necessary, ~~prior~~specific ~~period~~accruals ismay ~~because~~be ~~the~~established ~~company~~for ~~was~~significant ~~unable~~future toknown ~~achieve~~or ~~the~~anticipated ~~level~~events. ofThe ~~revenues required to sustain its operating costs.~~

~~Plan of Operations and Need for Additional Financing~~40

~~The~~types ~~Company's~~of ~~plan~~known ofor ~~operations~~anticipated ~~for~~events ~~most~~that ofwe ~~2011~~have isconsidered, and will continue to ~~build~~consider, ainclude, ~~subscriber~~but ~~base~~are ofnot ~~suppliers~~limited to, ~~major~~the financial condition of our customers, store closings by retailers, ~~who~~changes ~~purchase~~in ~~software~~the onretail environment and our decision to continue to support new and existing products. The Company records estimated reserves for sales returns as a ~~monthly~~reduction ~~subscription~~of ~~basis~~sales, cost of sales and accounts receivable. ~~Along~~Returned ~~with~~products are recorded as inventories and are valued based upon estimated realizable value. The physical condition and marketability of returned products are the ~~subscription~~major ~~revenues~~factors we consider in estimating realizable value. Actual returns, ~~the~~as ~~Company~~well ~~will~~as ~~also~~estimated ~~sell~~realizable ~~professional~~values ~~services~~of returned products, ~~maintenance~~may ~~and~~differ ~~software~~significantly, ~~fees~~either tofavorably ~~the~~or ~~same~~unfavourably, ~~customers~~from our estimates, if factors such as economic conditions, inventory levels or competitive conditions differ from our expectations.

~~The~~Advertising Company successfully rendered its public offering of stock on Form S-1 on April 20, 2010 which permitted the company to sell common stock at $0.20 per share for a total of $800,000 or 4,000,000 shares. On September 17, 2010, the Company successfully sold its minimum offering of $250,000 shares for a total of $50,000 (CD$). The Company opted to close its offering after having completed the minimum offering so as to apply to the exchange regulators to have the common stock trade over the counter and ~~to explore other avenues of raising capital and being supported by a trading stock. The company is still in the process of achieving this.~~Promotion

~~Liquidity~~Advertising and ~~Capital~~promotional ~~Resources~~costs are expensed as incurred and recorded as a component of cost of goods sold (in the case of free goods given to customers) or selling, general and administrative expenses.

~~For~~Package ~~the~~Development ~~period ended September 30, 2011:~~Costs

OnPackage ~~The~~development ~~Company's~~costs ~~balance~~associated ~~sheet~~with asnew ofproducts ~~September~~and ~~30,~~redesigns ~~2011, the Company had assets consisting~~ of ~~cash~~existing inproduct ~~the~~packaging ~~amount~~are ofexpensed $491, accounts receivable of $5,348. The Company has expended its cash in furtherance of its business plan, including primarily expenditure of funds to pay legal and accounting expenses, and to maintain service delivery to its customers. Consequently, the Company's balance sheet as ~~of September 30, 2011 reflects an accumulated deficit of ($584,334) and a stockholders equity (deficit) of ($91,396)~~incurred.

~~The~~Operating ~~Company used $27,314 of cash in operating activities in 2011 compared to a use of $54,911 for the same period~~ Leases

inThe ~~2010.~~Company ~~This~~recognizes ~~change~~rent ~~was~~expense ~~attributable~~from inoperating ~~large~~lease ~~part~~with tovarious astep ~~decrease~~rent inprovisions, ~~net~~rent ~~loss~~concessions ~~from~~and ~~operations,~~escalation clauses on a ~~decrease~~straight-line basis over the applicable lease term. The Company considers lease renewals in ~~accounts~~the ~~receivable~~useful life of its leasehold improvements when such renewals are reasonably assured. In the event the Company receives capital improvement funding from ~~($4~~its landlord,~~658)~~ tothese ~~$2,105~~amounts are recorded as deferred liabilities and aamortized ~~decrease~~over inthe ~~accounts~~remaining ~~payable~~lease ~~from~~term ~~$7,257~~as toa ~~$3,971~~reduction of rent expense..

~~The~~License Company had net cash provided by financing activities of $22,748 in 2011 compared to being provided $52,964 during 2010. This change was primarily attributable to an increase of proceeds provided from the company line of credit of $6,808 and an increase in related party debt of $15,940 as compared to the prior year where the company had repaid its line of credit ($5,983), received $48,630 in proceeds from the sale of common stock and $10,317 increase in related party debt Agreement

31The Company’s current License Agreement provides the Company with worldwide rights to market and sell cosmetics and cosmetics related products under the Nacara brand of cosmetic products, excluding the territories of Finland, Russia and Sweden, in exchange for a royalty of 5% of the gross revenues of the Products sold by our Company. The Company’s License Agreement has a term of five years and will automatically renew for an additional five years provided that our Company Product sales of at least US$6 million in the first year, US$15 million in the second year and US$25 million in the third year following the date of the License Agreement.

Such licenses and rights to market and sell cosmetics and cosmetics related products typically have an initial term of approximately 5 years to 15 years, and are potentially

renewable subject to compliance with the license agreement provisions. The remaining terms, including the potential renewal periods, typically range from approximately 2 years to 15 years. Under each license, the Company is usually required to pay royalties in the range of 5% to 10% to the licensor, at least annually, based on net sales to third parties.

In addition, the Company may be exposed to certain concentration risk. Currently our sole license to market and sell cosmetics and cosmetics related products is licensed from related party, 8012415 Canada Inc, a company controlled by Nacara Montreal Inc which is itself controlled by Mrs. Caroline Coulombe, our principal officer. Mrs. Coulombe is also in control of 7776446 Canada Inc. doing business as Cosmera Inc., a Canadian corporation which on March 9, 2012 became the controlling shareholder of our Company with the purchase of an aggregate of 3,574,920 shares of our common stock representing approximately 66.63% of the Company’s issued and outstanding common stock.

Income Taxes

Fixed Assets

Impairment of Long-Lived Assets

(Loss) Per Share of Common Stock

Basic net (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share when the Company reported a loss because to do so would be anti dilutive for periods presented.

Stock-Based Compensation

In 2006, the Company adopted the provisions of ASC 718-10 “Share Based Payments” for its year ended December 31, 2008 and all subsequent years. The adoption of this principle had no effect on the Company’s operations.

Segment Information

Results of Operations –Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011

The Company recorded sales of $2,997 of which was entirely subscription revenue for the three month period ended March 31, 2012 as compared to $10,539 of of which $9,728 was professional services and $811 was maintenance revenues for the three month period ended March 31, 2011

The Company’s total Cost of Sales were $3,310 for the three month period ended March 31, 2012, compared to 0$ for the same period in 2011. The Company required the purchase of these professional services directly related to the license revenues deliverable for the period. For the period ended March 31, 2011, all revenues acquired were professional services with no costs associated against them.

The Company's total expenses before interest and income taxes were $83,334 for the three month period ended March 31, 2012 compared to $33,397 for the same period in 2011, primarily as a consequence of an increase in professional services required for the restructuring of the company through the change of control process for it to pursue its new opportunities in the Cosmetics industry. There was an increase in Selling, General and administrative expenses from $33,287 to $83,334 as the company increased its expenditures on legal and accounting professional. There was decrease in depreciation from $110 to $0 related to previous acquisitions of equipment and leasehold improvements that have been fully amortized as of December 31, 2011.

The Company had a net income (loss) of ($83,646) for the three month period ended March 31, 2012 compared to a net income (loss) of ($22,976) for the same period in 2011. The principal reasons for company’s net loss for the three month period ended March 31, 2012 as compared to the prior period is because the Company was unable to achieve the level of revenues required to sustain its operating costs, and is in process of restructuring.

Plan of Operations and Need for Additional Financing

The Company's plan of operations for most of 2012 is to build a retail distribution customer base for the supply of its newly acquired Cosmetics products, as it has abandoned its Software business as of March 31, 2012.

The Company successfully rendered its public offering of stock on Form S-1 on April 20, 2010 which permitted the Company to sell common stock at $0.20 per share for a total of $800,000 or 4,000,000 shares. On September 17, 2010, the Company successfully sold its

minimum offering of $250,000 shares for a total of $50,000 (CD$). The Company opted to close its offering after having completed the minimum offering so as to apply to the exchange regulators to have the common stock trade over the counter and to explore other avenues of raising capital and being supported by a trading stock. The company is still in the process of achieving this.

Liquidity and Capital Resources

For the period ended March 31, 2012:

On The Company's balance sheet as of March 31, 2012, the Company had assets consisting of cash in the amount of $1,449 and accounts receivable of $1,635. The Company has expended its cash in furtherance of its business plan, including primarily expenditure of funds to pay legal and accounting expenses, and to maintain service delivery to its customers. Consequently, the Company's balance sheet as of March 31, 2012 reflects an accumulated deficit of ($675,735) and a stockholders equity (deficit) of ($183,228).

The Company used $77,960 of cash in operating activities in 2012 compared to a use of $14,773 for the same period in 2011. This change was attributable in large part to an increase in net loss from operations.

The Company had net cash provided by financing activities of $78,685 in 2012 compared to being provided $11,648 during 2011. This change was primarily attributable to an increase of proceeds provided related parties of $78,906 as compared to a repayment of related party debt the prior period of $2,058.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4. CONTROL AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives. As required by SEC Rule 13a-15(b), our management carried out an evaluation, with the participation of our Chief Executive and Chief Financial Officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

the controls and procedures would meet their objectives. As required by SEC Rule 13a-15(b), our management carried out an evaluation, with the participation of our Chief Executive and Chief Financial Officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

The Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer and the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting or in other factors that could materially affect, or are reasonably likely to affect, our internal controls over financial reporting during the nine months ended September 30, 2011. There have not been any significant changes in the Company’s critical accounting policies identified since the Company filed its Form 10-K as of December 31, 2010.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

During the past five years, none of the following occurred with respect to a present or former director or executive officer of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the commodities futures trading commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

We are not a party to any pending material legal proceedings and are not aware of any threatened or contemplated proceeding by any governmental authority against the Company. Notwithstanding, from time to time, the Company is subject to legal proceedings and claims in the ordinary course of business, including employment-related and trade related claims.

ITEM 1A - RISK FACTORS

WeYou ~~have~~should ~~updated~~carefully ~~the~~consider these risk factors ~~previously~~before ~~disclosed~~you indecide ~~Part~~to I,purchase ~~Item 1A~~or sell shares of our ~~Annual~~common ~~Report on Form 10–K for the year ended December 31, 2010, which was filed with the Securities and Exchange Commission on March 22, 2011 (the “Fiscal 2010 10–K”)~~stock. WeThese ~~believe~~factors ~~there~~could ~~are~~cause noour ~~changes~~future ~~that~~results ~~constitute~~to ~~material~~differ ~~changes~~materially from ~~the~~those ~~risk~~expressed ~~factors~~or ~~previously~~implied ~~disclosed~~ in ~~the~~forward-looking ~~Fiscal~~statements ~~2010~~made ~~10–K~~by us. 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.

Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations.

We have a relatively limited operating history. Such limited operating history makes it difficult for investors to evaluate our business and future operating results. An investor in our securities must consider the risks, uncertainties, and difficulties frequently encountered by companies in our industry. The risks and difficulties we face include challenges in accurate financial planning as a result of limited historical data and the uncertainties resulting from having had a relatively limited time period in which to implement and evaluate our business strategies as compared to older companies with longer operating histories.

We will need additional capital to implement our current business strategy, which may not be available to us.

In order to grow our business, we will need to raise capital. Obtaining financing will be subject to a number of factors, including market conditions, our operating performance and investor sentiment. These factors may make the timing, amount, terms and conditions of financing unattractive to us. We cannot assure you that we will be able to obtain any financing. If we are unable to obtain the financing needed to implement our business strategy, we may have to delay, modify or abandon some of our expansion plans. This could slow our growth, negatively affect our ability to compete in the marketplace and adversely affect our financial condition.

Raising additional capital will cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights.

We may seek additional capital through a combination of private and public equity offerings, debt financings and collaborations and strategic and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring debt, making capital expenditures or declaring dividends.

We rely heavily on Caroline Coulombe, our current President and Chief Executive Officer. The loss of her services would have a material adverse effect upon the Company and its business and prospects.

Our success depends, to a significant extent, upon the continued services of Caroline Coulombe, who is the founder of Nacara and our current President and Chief Executive Officer. Mrs. Coulombe is not subject to any agreement that prevents her from soliciting our existing customers or disclosing information deemed confidential to us. If Mrs.

Coulombe resigns to join a competitor or form a competing company, the loss of such personnel, together with the loss of any customers or potential customers due to such executive’s departure, could materially and adversely affect our business and results of operations.

Developing and increasing awareness of our brand is crucial to increasing our customer base and our revenues.

We believe that increasing awareness of our brand will be critical to expanding our customer base and our revenues, especially as we expand our line of product offerings. If we fail to advertise and market our products effectively, we may not succeed in maintaining or increasing awareness of our brands and we may lose customers and our revenues will decline. The delivery of quality products to our customers is also of importance to maintaining and enhancing the reputation of our brand. If our customers do not perceive our products to be of high quality, demand for our products will decline, which could lead to a decline in revenues and an adverse effect on our financial condition.

We may be subject to product liability claims from our products, which could result in costly litigation and a material adverse effect on our business and results of operations.

The sale of our cosmetic products exposes us to the risk of damages from product liability or other consumer claims. Such claims may arise despite quality controls, proper testing and instruction for use of our products. We may still incur substantial costs related to a product liability claim, which could adversely affect our business and results of operations. At this time, our Company does not have coverage against product liability.

The costs to meet our reporting requirements as a public company subject to the Exchange Act of ’34 will be substantial and may result in us having insufficient funds to operate our business.

We will incur ongoing expenses associated with professional fees for accounting and legal expenses associated with being a public company. We estimate that these costs will range up to $100,000 per year for the next few years. Those fees will be higher if our business volume and activity increases. Those obligations will reduce and possibly eliminate our ability and resources to fund our operations and may prevent us from meeting our normal business obligations.

Our business could be adversely affected by a prolonged downturn or recession in the United States, Europe or other countries in which we conduct business.

A prolonged economic downturn or recession in the United States, Europe or any of the other countries in which we do significant business could materially and adversely affect our business, financial condition and results of operations. In particular, such a downturn or recession could adversely impact (i) the level of spending by our ultimate consumers, (ii) our ability to collect accounts receivable on a timely basis from certain customers,

(iii) our ability of certain suppliers to fill our orders for raw materials, packaging or co-packed finished goods on a timely basis, and (iv) the mix of our product sales.

Consumers may reduce discretionary purchases of our products as a result of a general economic downturn.

We believe that the high degree of global economic uncertainty could have a negative effect on consumer confidence, demand and spending. In addition, we believe that consumer spending on beauty products is influenced by general economic conditions and the availability of discretionary income. Accordingly, we may experience sustained periods of declines in sales during periods of economic downturn as it may affect customers’ purchasing patterns. In addition, a general economic downturn may result in reduced traffic in our customers’ stores which may, in turn, result in reduced net sales to our customers. Any resulting material reduction in our sales could have a material adverse effect on our business, financial condition and operating results.

Uncertainties and continued deterioration in global credit markets, as evidenced by reductions in sovereign credit ratings in the United States and Europe, could negatively impact suppliers, customers and consumers, which could have an adverse impact on our business as a whole.

Uncertainties and continued deterioration in the global credit markets as evidenced by reductions in sovereign credit ratings in the United States and Europe, could negatively impact our suppliers, customers and consumers which, in turn, could have an adverse impact on our business. Uncertainties in global credit markets could make future financing difficult or more expensive. Such lack of credit or lack of credit on favorable terms could have a material adverse effect on our business, financial condition and operating results.

If our intangible assets, such as trademarks and goodwill, become impaired we may be required to record a significant non-cash charge to earnings which would negatively impact our results of operations.

Under United States generally accepted accounting principles, we review our intangible assets, including our license and goodwill, for impairment annually in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate the carrying value of our intangible assets may not be fully recoverable. The carrying value of our intangible assets may not be recoverable due to factors such as reduced estimates of future cash flows, or slower growth rates in our industry. Estimates of future cash flows are based on a long-term financial outlook of our operations and the brand to which the intangible assets relate. However, actual performance in the near-term or long-term could be materially different from these forecasts, which could impact future estimates and the recorded value of the intangibles. Any significant impairment to our intangible assets would result in a significant charge to earnings in our financial statements during the period in which the impairment is determined to exist.

If we are unable to protect our intellectual property rights, specifically trademarks and brand names, our ability to compete could be negatively impacted.

The market for our products depends to a significant extent upon the value associated with the trademarks and brand name that we license, use or own. We have a license or other rights to use, the material trademark and brand name rights used in connection with the packaging, marketing and distribution of our products both in the United States and in other countries where such products may be sold. Therefore, trademark and brand name protection is important to our business. Although the brand name we license is registered in countries in which we operate, we may not be successful in asserting trademark or brand name protection. Further, the costs required to protect our trademarks and brand name may be substantial.

The success of our products is dependent on public taste.

Our revenues are substantially dependent on the success of our products, which depends upon, among other matters, pronounced and rapidly changing public tastes, factors which are difficult to predict and over which we have little, if any, control. In addition, we have to develop successful marketing, promotional and sales programs in order to sell our cosmetics and cosmetic related products. If we are not able to develop successful marketing, promotional and sales programs, then such failure will have a material adverse effect on our business, financial condition and operating results.

We are subject to extreme competition in the cosmetic industry.

The market for cosmetics and cosmetics related products is highly competitive and sensitive to changing market preferences and demands. Many of our competitors in this market are larger than we are and have greater financial resources than are available to us, potentially allowing them greater operational flexibility. The Company competes primarily by:


	•		Introducing quality products with innovative performance features, shades, finishes and packaging;
	•		educating consumers about the benefits of the Company’s products;
	•		anticipating and responding to changing consumer demands in a timely manner, including the timing of new product introductions and line extensions;
	•		offering attractively priced products, relative to the product benefits provided;
	•		maintaining favorable brand recognition;
	•		generating competitive margins and inventory turns for the Company’s retail customers by providing relevant products and executing effective pricing, incentive and promotion programs;
	•		ensuring product availability through effective planning and replenishment collaboration with retailers;
	•		providing strong and effective advertising, promotion, marketing and merchandising support;
	•		maintaining an effective sales force; and
	•		obtaining and retaining sufficient retail display space, optimal in-store positioning and effective presentation of the Company’s products at retail.

An increase in or change in the current level of competition that the Company faces could have a material adverse effect on our business, financial condition and results of operations. In addition, the Company competes against a number of multi-national manufacturers, some of which are larger and have substantially greater resources than the Company, and which may therefore have the ability to spend more aggressively than the Company on advertising, promotions and marketing and have more flexibility than the Company to respond to changing business and economic conditions. In addition to products sold in the mass retail channel, the Company’s products also compete with similar products sold through other channels, including prestige and department stores, television shopping, door-to-door, specialty stores, the internet, perfumeries and other distribution outlets.

Additionally, the Company’s major retail customers periodically assess the allocation of retail display space among competitors and in the course of doing so could elect to reduce the display space allocated to the Company’s products, if, for example, the Company’s marketing strategies for its new and/or existing products are less effective than planned, fail to effectively reach the targeted consumer base or engender the desired consumption; and/or the rate of purchases by the Company’s consumers are not as high as the Company anticipates. Any significant loss of display space could have an adverse effect on the Company’s business, financial condition and/or results of operations.

If we are unable to introduce new products or acquire or license additional brands, or obtain the required financing for these agreements and arrangements, then the growth of our business could be impaired.

Our future expansion through the introduction of new products or the acquisition of new product license or distribution arrangements, if any, will depend upon the capital resources and working capital available to us. Further, in view of the global banking crisis, we may be unable to obtain financing or credit that we may require for additional licenses, acquisitions or other transactions. We may be unsuccessful in identifying, negotiating, financing and consummating such acquisitions or arrangements on terms acceptable to us, or at all, which could hinder our ability to increase revenues and build our business.

We may engage in future acquisitions that we may not be able to successfully integrate or manage. These acquisitions may dilute our stockholders and cause us to incur debt and assume contingent liabilities.

We continuously review acquisition prospects that would complement our current product offerings, increase our size and geographic scope of operations or otherwise offer growth and operating efficiency opportunities. The financing, if available, for any of these acquisitions could significantly dilute our stockholders and/or result in an increase in our indebtedness. We may acquire or make investments in businesses or products in the future,

and such acquisitions may entail numerous integration risks and impose costs on us, including:


	·	difficulties in assimilating acquired operations or products, including the loss of key employees from acquired businesses;


	·	diversion of management’s attention from our core business;


	·	adverse effects on existing business relationships with suppliers and customers;


	·	risks of entering markets in which we have no or limited prior experience;


	·	dilutive issuances of equity securities;


	·	incurrence of substantial debt;


	·	assumption of contingent liabilities;


	·	incurrence of significant amortization expenses related to intangible assets and the potential impairment of acquired assets; and


	·	incurrence of significant immediate write-offs.

Our failure to successfully complete the integration of any acquired business could have a material adverse effect on our business, financial condition and operating results.

Our reliance on third party manufacturers could have a material adverse effect on us.

We rely on outside sources to manufacture our cosmetics and cosmetic related products. The failure of such third party manufacturers to deliver either components or finished goods on a timely basis could have a material adverse effect on our business. Although we believe there are alternate manufacturers available to supply our requirements, we cannot assure you that current or alternative sources will be able to supply all of our demands on a timely basis. We do not intend to develop our own manufacturing capacity. As these are third parties over whom we have little or no control, the failure of such third parties to provide components or finished goods on a timely basis could have a material adverse effect on our business, financial condition and operating results.

Our reliance on third party distributors could have a material adverse effect on us.

We will sell a substantial percentage of our cosmetics and cosmetic related products through independent distributors specializing in beauty products. We have little or no control over third party distributors and the failure of such third parties to provide services on a timely basis could have a material adverse effect on our business, financial condition and operating results. In addition, if we replace existing third party distributors with new third party distributors or with our own distribution arrangements, then transition issues could have a material adverse effect on our business, financial condition and operating results.

The loss of or disruption in our distribution facilities could have a material adverse effect on our business, financial condition and operating results.

We currently have one distribution facility in Montreal. The loss of the facility, as well as the inventory stored in that facility, would require us to find a replacement facility and assets. In addition, terrorist attacks, weather conditions, or natural disasters, could disrupt our distribution operations. If we cannot replace our distribution capacity and inventory in a timely, cost-efficient manner, it could have a material adverse effect on our business, financial condition and operating results.

Changes in laws, regulations and policies that affect our business could adversely affect our financial results.

Our business is subject to numerous laws, regulations and policies. Changes in the laws, regulations and policies, including the interpretation or enforcement thereof, that affect, or will affect, our business, including changes in accounting standards, tax laws and regulations, environmental or climate change laws, regulations or accords, trade rules and customs regulations, and the outcome and expense of legal or regulatory proceedings, and any action we may take as a result could adversely affect our financial results.

Our success depends, in part, on the quality and safety of our products.

Our success depends, in part, on the quality and safety of our products. If our products are found to be defective or unsafe, or if they otherwise fail to meet our consumers’ standards, our relationships with customers or consumers could suffer, the appeal of our brand could be diminished, and we could lose sales and/or become subject to liability claims, any of which could result in a material adverse effect on our business, results of operations and financial condition.

The international character of our business renders us subject to fluctuation in foreign currency exchange rates and international trade tariffs, barriers and other restrictions.

The Company’s functional currency is the Canadian dollar, while the Company reports its currency in the U.S. dollar and transact in different currencies, mostly in euro. In an effort to reduce our exposure to foreign currency exchange fluctuations, we may engage in a controlled program of risk management that includes the use of derivative financial instruments. Despite such actions, fluctuations in foreign currency exchange rates for the U.S. dollar, particularly with respect to the euro, could have a material adverse effect on our operating results. Possible import, export, tariff and other trade barriers, which could be imposed by Canada, the United States, other countries or the European Union might also have a material adverse effect on our operating results.

Our business is subject to governmental regulation, which could impact our operations.

Cosmetics and cosmetic related products must comply with the labelling requirements of the Federal Food, Drug and Cosmetics Act as well as the Fair Packaging and Labelling Act and their regulations. Some of our color cosmetic products may also be classified as a

“drug”. Additional regulatory requirements for products which are “drugs” include additional labelling requirements, registration of the manufacturer and the semi-annual update of a drug list.

Some of cosmetics are also subject to the approval of the Bureau of Alcohol, Tobacco and Firearms as a result of the use of specially denatured alcohol. Thus far, our products have not experienced any difficulties in obtaining the required approvals.

Our cosmetics and cosmetic related products that are sold in Europe are subject to certain regulatory requirements of the European Union, but as of the date of this report, our products have not experienced any material difficulties in complying with such requirements.

However, we cannot assure you that, should we develop or market cosmetics and cosmetic related products with different ingredients, or should existing regulations or requirements be revised, we would not in the future experience difficulty in complying with such requirements, which could have a material adverse effect on our results of operations.

Our information systems and websites may be susceptible to outages and other risks.

We have information systems that support our business processes, including product development, marketing, sales, order processing, production, distribution, finance and intra-company communications. These systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, break-ins and similar events. Despite the implementation of network security measures, our systems may be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering. The occurrence of these or other events could disrupt or damage our information systems and adversely affect our business and results of operations.

The trading prices of our securities periodically may rise or fall based on the accuracy of predictions of our earnings or other financial performance.

Our business planning process is designed to maximize our long-term strength, growth and profitability, not to achieve an earnings target in any particular fiscal quarter. We believe that this longer-term focus is in the best interests of our Company and our stockholders. At the same time, however, we recognize that it may be helpful to provide investors with guidance as to our forecast of net sales and earnings per share. While we generally expect to provide guidance and updates to our guidance when we report our results each fiscal quarter, we assume no responsibility to update any of our forward-looking statements at such times or otherwise. In addition, the longer-term guidance we provide is based on goals that we believe, at the time guidance is given, are reasonably attainable for growth and performance over a number of years. Such targets are more difficult to predict than our current quarter and fiscal year expectations.

In all of our public statements when we make, or update, a forward-looking statement about our sales and/or earnings expectations or expectations regarding other initiatives, we

accompany such statements directly, or by reference to a public document, with a list of factors that could cause our actual results to differ materially from those we expect. Such a list is included, among other places, in our earnings press release and in our periodic filings with the Securities and Exchange Commission (e.g., in our reports on Form 10-K and Form 10-Q). These and other factors may make it difficult for outside observers, such as research analysts, to predict what our earnings will be in any given fiscal quarter or year.

Outside analysts and investors have the right to make their own predictions of our financial results for any future period. Outside analysts, however, have access to no more material information about our results or plans than any other public investor, and we do not endorse their predictions as to our future performance. Nor do we assume any responsibility to correct the predictions of outside analysts or others when they differ from our own internal expectations. If and when we announce actual results that differ from those that outside analysts or others have been predicting, the market price of our securities could be affected. Investors who rely on the predictions of outside analysts or others when making investment decisions with respect to our securities do so at their own risk. We take no responsibility for any losses suffered as a result of such changes in the prices of our securities.

We may become subject to possible liability for improper comparative advertising or “Trade Dress”.

Brand name manufacturers and sellers of brand name products may make claims of improper comparative advertising or trade dress (packaging) with respect to the likelihood of confusion between some of our products and those of brand name manufacturers and sellers. They may seek damages for loss of business or injunctive relief to seek to have the use of the improper comparative advertising or trade dress halted. However, we believe that our displays and packaging constitute fair competitive advertising and are not likely to cause confusion between our products and others.

Market Risks Related to our Common Stock

Our stock price may be volatile, which may result in losses to our stockholders.

The stock markets have experienced significant price and trading volume fluctuations, and the market prices of companies quoted on the Over-The-Counter Bulletin Board and OTCQB, where our shares of common stock are quoted, generally have been very volatile and have experienced sharp share price and trading volume changes. The trading price of our common stock is likely to be volatile and could fluctuate widely in response to many of the following factors, some of which are beyond our control:


·	variations in our operating results;
·	changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;
·	changes in operating and stock price performance of other companies in our industry;
·	additions or departures of key personnel; and
·	future sales of our common stock.

Domestic and international stock markets often experience significant price and volume fluctuations. These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock. In particular, the market prices for stocks of companies often reach levels that bear no established relationship to the operating performance of these companies. These market prices are generally not sustainable and could vary widely.

Our common shares may be thinly-traded, and our stockholders may be unable to sell at or near ask prices or at all if they need to sell their shares to raise money or otherwise desire to liquidate such shares.

We cannot predict the extent to which an active public market for our common stock will develop or be sustained due to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors, and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.

The market for our common shares may be characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will be more volatile than a seasoned issuer for the indefinite future. The potential volatility in our share price is attributable to a number of factors.

First, as noted above, our common shares may be sporadically and/or thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our stockholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer that could better absorb those sales without adverse impact on its share price.

Secondly, an investment in us is a speculative or “risky” investment due to our lack of significant revenues or profits to date and uncertainty of future market acceptance for current and potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of

negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

Investors should not look to dividends as a source of income.

In the interest of reinvesting initial profits back into our business, we do not intend to pay cash dividends in the foreseeable future. Consequently, any economic return will initially be derived, if at all, from appreciation in the fair market value of our stock, and not as a result of dividend payments.

Because we may be subject to the “penny stock” rules, the level of trading activity in our stock may be reduced, which may make it difficult for investors to sell their shares.

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks, like shares of our common stock, generally are equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on NASDAQ. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.

We lack a public market for shares of our common stock, which may make it difficult for investors to sell their shares.

There is no public market for shares of our common stock. We cannot guaranty that an active public market will develop or be sustained. Therefore, investors may not be able to find purchasers for their shares of our common stock. Should there develop a significant market for our shares, the market price for those shares may be significantly affected by such factors as our financial results and introduction of new products and services. Factors such as announcements of new services by us or our competitors and quarter-to-quarter variations in our results of operations, as well as market conditions in our sector may have a significant impact on the market price of our shares. Further, the stock market has experienced extreme volatility that has particularly affected the market prices of stock of

many companies and that often has been unrelated or disproportionate to the operating performance of those companies.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITES

There have been no material defaults.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters have been submitted to a vote of security holders during the period covered by this report.

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 -– EXHIBITS

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2	Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2	Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

31.1

101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

3331.2

Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.

32.1

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbans-Oxley Act.

32.2

Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(b) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Montreal, Quebec, Canada.

Dated: ~~November~~May 1721, ~~2011~~2012

GMS CAPITAL CORP. ~~/s/ George Metrakos George Metrakos Chief Executive Officer and President~~

~~GMS CAPITAL CORP.~~ /s/ ~~George~~Caroline ~~Metrakos George Metrakos Principal Financial and Accounting Officer~~Coulombe

34Caroline Coulombe

Chief Executive Offier and President

GMS CAPITAL CORP.

/s/ Caroline Coulombe

Caroline Coulombe

Principal Financial and Accounting Officer

Filing Compare · GMS Capital Corp.