eert_10k.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended March 31, 2012

Commission file number: 000-53678

ENTERTAINMENT ART, INC.

(Exact name of registrant as specified in its charter)

Nevada		26-0370478
(State of incorporation)		(I.R.S. Employer Identification No.)

c/o Jeff Lamson

Entertainment Art, Inc.

2679 Aberdeen Lane

El Dorado Hills, CA 95762

(Address of principal executive offices)

408-605-1572

(Registrant’s telephone number, including area code)

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

None

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

Common Stock, $0.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently computed second fiscal quarter. There is no public bid or ask price of the common equity.

The number of shares of the issuer’s common stock issued and outstanding as of June 5, 2012 was 59,730,000 shares.

Documents Incorporated By Reference: None

TABLE OF CONTENTS

		Page
PART I

Item 1	Business		3
Item 1A	Risk Factors		5
Item 1B	Unresolved Staff Comments		5
Item 2	Properties		5
Item 3	Legal Proceedings		5
Item 4	Removed and Reserved		5

PART II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		6
Item 6	Selected Financial Data		7
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operation		7
Item 7A	Quantitative and Qualitative Disclosures About Market Risk		13
Item 8	Financial Statements		F-1
Item 9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		14
Item 9A(T)	Controls and Procedures		14
Item 9B	Other Information		15

PART III

Item 10	Directors, Executive Officers and Corporate Governance		16
Item 11	Executive Compensation		17
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		18
Item 13	Certain Relationships and Related Transactions, and Director Independence		19
Item 14	Principal Accountant Fees and Services		20

PART IV

Item 15	Exhibits, Financial Statement Schedules		21
SIGNATURES			23

PART I

Item 1. Business.

As used in this Annual Report on Form 10-K (this “Report”), references to the “Company,” the “Registrant,” “we,” “our” or “us” refer to Entertainment Art, Inc., unless the context otherwise indicates.

Forward-Looking Statements

This Report contains forward-looking statements. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other matters. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” or the negative of these similar terms. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash, which are explained below under “Liquidity and Capital Resources”. We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.

Corporate Background

Entertainment Art, Inc. was incorporated on June 15, 2007 in the State of Nevada. We were initially focused on the business of designing, marketing and selling a line of fashionable zipper bags. In October 2007 we sold 20,130,000 shares of common stock to private investors at $.003 per share for gross proceeds of $61,000. The Company registered these shares, which represents 33.70% of the issued and outstanding shares of common stock, for resale. On June 30, 2009, the board of directors approved the implementation of a 33:1 forward stock split without correspondingly increasing the authorized shares of common stock. The effective date of the forward split was July 21, 2009 and as a result of the forward split, the Company has 59,730,000 shares of common stock issued and outstanding.

Collectible Sales, Inc., an affiliate of the Company, shipped us goods on consignment. In September 2008, the Company received a purchase order from a not for profit organization for the purchase of 500 units of zipper bags. The merchandise was delivered to the organization on consignment. We have not received any further orders and have effectively ceased operations in this business. In May 2009 the merchandise that was originally shipped to the organization on consignment was sold and we received $1,500 as proceeds.

On June 30, 2009, the board of directors approved the implementation of a 33:1 forward stock split without correspondingly increasing the authorized shares of common stock. The effective date of the forward split was July 21, 2009 and as a result of the forward split, the Company has 59,730,000 shares of common stock issued and outstanding.

On August 7, 2009 and October 31, 2009, the Company issued promissory notes for $16,000 and $9,000, respectively, to a third party memorializing the debts. The promissory notes are payable on demand and bear interest at 9% per annum. In addition, on April 19, 2010 and July 20, 2010 we issued promissory notes for $5,500 and $10,000, respectively, to such third party. The notes are payable on demand and bear interest at 9% per annum. On August 3, 2011, the Company issued a promissory note for $5,000 to a third party, which bear interest at 5% per annum. On October 10, 2011, the Company issued a promissory note for $15,400 to the same third party and on March 30, 2012, the Company issued a promissory note for $5,000 to the same party, both bear interest at 5% per annum.

Advances made by the officers of the Company, currently aggregating $6,500, accrue interest at the rate of 5% per annum and are payable on demand.

The address of our principal executive office is c/o Mr. Jeff Lamson, Entertainment Art, Inc. 2679 Aberdeen Lane, El Dorado Hills, CA 95762. Our telephone number is 408-605-1572. We do not have a functioning website at this time.

The Company has conducted virtually no business other than organizational matters, filing its Registration Statement and filings of periodic reports with the SEC. The Company has since abandoned its business plan and is now seeking an operating company with which to merge or to acquire.

We are considered a blank check company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the “Securities Act”), we also qualify as a “shell company,” because we have no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.

Our current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into the Company. In certain instances, a target company may wish to become a subsidiary of ours or may wish to contribute or sell assets to us rather than to merge. No assurances can be given that we will be successful in identifying or negotiating with any target company, or, if we do enter into such a business combination, no assurances can be given as to the terms of a business combination, or as to the nature of the target company. We seek to provide a method for a foreign or domestic private company to become a reporting or public company whose securities are qualified for trading in the United States secondary markets.

Item 1A Risk Factors

Smaller reporting companies are not required to provide the information required by this Item 1A.

Item 1B. Unresolved Staff Comments

None

Item 2. Properties

We currently maintain our corporate offices at 2679 Aberdeen Lane, El Dorado Hills, CA 95762. Our telephone number is 408-605-1572. Our offices are provided by an entity owned by our Chief Executive Officer and a director, at no cost to us. We believe that its current office space is adequate for the foreseeable future.

Item 3. Legal Proceedings

There are no pending legal proceedings to which we are a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to the Company or has a material interest adverse to us. Our property is not the subject of any pending legal proceedings.

Item 4. Removed and Reserved

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock is eligible to be traded on the Over-The-Counter Bulletin Board under the ticker symbol EERT. There has been no active trading in the Company’s securities, and there has been no bid or ask prices quoted.

Holders

As of June 5, 2012, there were 59,730,000 common shares issued and outstanding, which were held by 26 stockholders of record.

Dividends

We have never declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any future earnings to finance our operations and expansion. The payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.

Equity Compensation Plans

We do not have any equity compensation plans.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

On June 15, 2007, we issued an aggregate of 39,600,000 shares of our common stock to our officers and directors for the total consideration of $5,100. These issuances were made pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) of the Securities Act.

In October 2007, the Company sold 20,130,000 shares of common stock to private investors at $.003 per share for gross proceeds of $61,000. The sale of the shares represents 33.7% of the Company’s issued and outstanding shares of common stock.

Purchases of Equity Securities by the Small Business Issuer and Affiliated Purchasers

We have not repurchased any shares of our common stock during the fiscal year ended March 31, 2011.

Item 6. Selected Financial Data

Smaller reporting companies are not required to provide the information required by this Item 6.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements contained in this prospectus, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of Entertainment Art, Inc. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

Plan of Operation

During the next 12 months, we intend to seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, we have no plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation. No member of management or promoter of the Company has had any material discussions with any other company with respect to any acquisition of that company.

The Company will not restrict its search to any specific business, industry or geographical location, and we may participate in a business venture of virtually any kind or nature. The discussion of the proposed plan of operation under this caption and throughout this Annual Report is purposefully general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities.

We might obtain funds in one or more private placements to finance the operation of any acquired business. Persons purchasing securities in these placements and other shareholders will likely not have the opportunity to participate in the decision relating to any acquisition. The Company's proposed business is sometimes referred to as a "blind pool" because any investors will entrust their investment monies to our management before they have a chance to analyze any ultimate use to which their money may be put. Consequently, the Company's potential success is heavily dependent on the Company's management, which will have virtually unlimited discretion in searching for and entering into a business opportunity. There can be no assurance that we will be able to raise any funds in private placements. In any private placement, management may purchase shares on the same terms as offered in the private placement.

Management anticipates that it will only participate in one potential business venture. This lack of diversification should be considered a substantial risk in investing in the Company because it will not permit us to offset potential losses from one venture against gains from another. We may seek a business opportunity with a firm which only recently commenced operations, or a developing company in need of additional funds for expansion into new products or markets, or seeking to develop a new product or service, or an established business which may be experiencing financial or operating difficulties and is in the need for additional capital which is perceived to be easier to raise by a public company. In some instances, a business opportunity may involve the acquisition or merger with a corporation which does not need substantial additional cash but which desires to establish a public trading market for its common stock. We may purchase assets and establish wholly owned subsidiaries in various businesses or purchase existing businesses as subsidiaries.

We anticipate that the selection of a business opportunity in which to participate will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries, and shortages of available capital, management believes that there are numerous firms seeking the benefits of a publicly traded corporation. Such perceived benefits of a publicly traded corporation may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for the principals of a business, creating a means for providing incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes) for all shareholders, and other factors. Potentially available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

As part of any transaction, the acquired company may require that management or other stockholders of the Company sell all or a portion of their shares to the acquired company, or to the principals of the acquired company. It is anticipated that the sales price of such shares will be lower than the current market price or anticipated market price of our common stock. Our funds are not expected to be used for purposes of any stock purchase from insiders. Our shareholders will not be provided the opportunity to approve or consent to such sale. The opportunity to sell all or a portion of their shares in connection with an acquisition may influence management's decision to enter into a specific transaction. However, management believes that since the anticipated sales price will be less than market value, that the potential of a stock sale by management will be a material factor in their decision to enter a specific transaction.

The above description of potential sales of management stock is not based upon any corporate bylaw, shareholder or board resolution, or contract or agreement. No other payments of cash or property are expected to be received by management in connection with any acquisition.

We have not formulated any policy regarding the use of consultants or outside advisors, but do not anticipate that it will use the services of such persons.

We have, and will continue to have, insufficient capital with which to provide the owners of business opportunities with any significant cash or other assets. However, management believes the Company will offer owners of business opportunities the opportunity to acquire a controlling ownership interest in a public company at substantially less cost than is required to conduct an initial public offering. The owners of the business opportunities will, however, incur significant post-merger or acquisition registration costs in the event they wish to register a portion of their shares for subsequent sale. The Company will also incur significant legal and accounting costs in connection with the acquisition of a business opportunity including the costs of preparing post-effective amendments, Forms 8-K, agreements and related reports and documents. The officers and directors of the Company have not conducted market research and are not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity.

We do not intend to make any loans to any prospective merger or acquisition candidates or to unaffiliated third parties.

Sources of Opportunities

We anticipate that business opportunities for possible acquisition will be referred by various sources, including its officers and directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.

We will seek a potential business opportunity from all known sources, but will rely principally on personal contacts of our officers and directors as well as indirect associations between them and other business and professional people. It is not presently anticipated that we will engage professional firms specializing in business acquisitions or reorganizations.

The officers and directors of the Company are currently employed in other positions and will devote only a portion of their time (not more than an hour per week if necessary) to the business affairs of the Company, until such time as an acquisition has been determined to be highly favorable, at which time they expect to spend full time in investigating and closing any acquisition for a period of two weeks. In addition, in the face of competing demands for their time, the officers and directors may grant priority to their full-time positions rather than to the Company.

Evaluation of Opportunities

The analysis of new business opportunities will be undertaken by or under the supervision of the officers and directors of the Company. Management intends to concentrate on identifying prospective business opportunities, which may be brought to its attention through present associations with management. In analyzing prospective business opportunities, management will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operation, if any; prospects for the future; present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services or trades; name identification; and other relevant factors. Officers and directors of each company will meet personally with management and key personnel of the firm sponsoring the business opportunity as part of their investigation. To the extent possible, the Company intends to utilize written reports and personal investigation to evaluate the above factors. The Company will not acquire or merge with any company for which audited financial statements cannot be obtained.

It may be anticipated that any opportunity in which the Company participates will present certain risks. Many of these risks cannot be adequately identified prior to selection of the specific opportunity, and the Company's shareholders must, therefore, depend on the ability of management to identify and evaluate such risk. In the case of some of the opportunities available to the Company, it may be anticipated that the promoters thereof have been unable to develop a going concern or that such business is in its development stage in that it has not generated significant revenues from its principal business activities prior to the Company's participation. There is a risk, even after the Company's participation in the activity and the related expenditure of the Company's funds, that the combined enterprises will still be unable to become a going concern or advance beyond the development stage. Many of the opportunities may involve new and untested products, processes, or market strategies, which may not succeed. Such risks will be assumed by the Company and, therefore, its shareholders.

We will not restrict our search for any specific kind of business, but may acquire a venture, which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its corporate life. It is currently impossible to predict the status of any business in which we may become engaged, in that such business may need additional capital, may merely desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.

Acquisition of Opportunities

In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. It may also purchase stock or assets of an existing business. On the consummation of a transaction, it is possible that our present management and shareholders will not be in control of the Company. In addition, a majority or all of the Company’s officers and directors may, as part of the terms of the acquisition transaction, resign and be replaced by new officers and directors without a vote of the Company's shareholders.

It is anticipated that any securities issued in any such reorganization would be issued in reliance on exemptions from registration under applicable Federal and state securities laws. In some circumstances, however, as a negotiated element of this transaction, the Company may agree to register such securities either at the time the transaction is consummated, under certain conditions, or at specified times thereafter.

The issuance of substantial additional securities and their potential sale into any trading market, which may develop in the Company's common stock may have a depressive effect on such market. While the actual terms of a transaction to which the Company may be a party cannot be predicted, it may be expected that the parties to the business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so called "tax free" reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the "Code"). In order to obtain tax free treatment under the Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, the shareholders of the Company, including investors in this offering, would retain less than 20% of the issued and outstanding shares of the surviving entity, which could result in significant dilution in the equity of such shareholders.

As part of the Company's investigation, officers and directors of the Company will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of the Company's limited financial resources and management expertise.

The manner in which each Company participates in an opportunity will depend on the nature of the opportunity, the respective needs and desires of the Company and other parties, the management of the opportunity, and the relative negotiating strength of the Company and such other management.

With respect to any mergers or acquisitions, negotiations with target company management will be expected to focus on the percentage of the Company, which target company shareholders would acquire in exchange for their shareholdings in the target company. Depending upon, among other things, the target company's assets and liabilities, the Company's shareholders will in all likelihood hold a lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires a target company with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company's then shareholders, including purchasers in this offering.

We will not have sufficient funds (unless we are able to raise funds in a private placement) to undertake any significant development, marketing and manufacturing of any product which may be acquired.

Accordingly, following the acquisition of any such product, the Company will, in all likelihood, be required to either seek debt or equity financing or obtain funding from third parties, in exchange for which we would probably be required to give up a substantial portion of our interest in any acquired product. There is no assurance that the Company will be able either to obtain additional financing or interest third parties in providing funding for the further development, marketing and manufacturing of any products acquired.

It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity the costs therefore incurred in the related investigation would not be recoverable.

Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Company of the related costs incurred.

Management believes that the Company may be able to benefit from the use of "leverage" in the acquisition of a business opportunity. Leveraging a transaction involves the acquisition of a business through incurring significant indebtedness for a large percentage of the purchase price for that business.

Through a leveraged transaction, the Company would be required to use less of its available funds for acquiring the business opportunity and, therefore, could commit those funds to the operations of the business opportunity, to acquisition of other business opportunities or to other activities. The borrowing involved in a leveraged transaction will ordinarily be secured by the assets of the business opportunity to be acquired. If the business opportunity acquired is not able to generate sufficient revenues to make payments on the debt incurred by the Company to acquire that business opportunity, the lender would be able to exercise the remedies provided by law or by contract. These leveraging techniques, while reducing the amount of funds that the Company must commit to acquiring a business opportunity, may correspondingly increase the risk of loss to the Company. No assurance can be given as to the terms or the availability of financing for any acquisition by the Company. During periods when interest rates are relatively high, the benefits of leveraging are not as great as during periods of lower interest rates because the investment in the business opportunity held on a leveraged basis will only be profitable if it generates sufficient revenues to cover the related debt and other costs of the financing. Lenders from which the Company may obtain funds for purposes of a leveraged buy-out may impose restrictions on the future borrowing, distribution, and operating policies of the Company. It is not possible at this time to predict the restrictions, if any, which lenders may impose or the impact thereof on the Company.

Results of Operations

As of March 31, 2012, the Company had assets of $2,944.

Revenues

The Company did not generate any revenues during the years ended March 31, 2012, and March 31, 2011.

Total operating expenses

During fiscal years ended March 31, 2012, and 2011, total operating expenses were $25,716 and $25,127, respectively. The general and administrative expenses were primarily the result of fees for legal and professional accounting associated with fulfilling the Company’s SEC reporting requirements. The Company had a cumulative operating loss of $151,047 from June 15, 2007 (inception) to March 31, 2012.

Net loss

During the fiscal years ended March 31, 2012, and 2011, the net income was $1,377 and a net loss of $29,848, respectively. The Company had cumulative net loss of $151,047 from June 15, 2007 (inception) to March 31, 2012.

Liquidity and Capital Resources

Our balance sheet as of March 31, 2012 reflects only $2,944 in cash. We have sustained our corporate existence solely as a result of borrowings from our officers and directors and an unaffiliated third party. We had a working capital deficiency of $84,947 at March 31 2012.

As of March 31, 2012, we owed $40,500 to an unaffiliated party, plus accrued interest. Said principal sum accrues interest at the rate of 9% and is due and payable on demand. We also owe $25,400 to another unaffiliated party, plus accrued interest. Said principal sum accrues interest at the rate of 5% and is due and payable on December 31, 2015.

As of March 31, 2012, we owed $6,500 to Jeff Lamson, our principal executive officer and a director. Said principal sums accrue interest at the rate of 5% and are due and payable on demand.

The focus of our efforts is to acquire an operating business. Despite no active operations at this time, management has no intention to liquidate. We have considered various business alternatives including the possible acquisition of an existing business, but to date have found possible opportunities unsuitable or excessively priced. We do not contemplate limiting the scope of our search to any particular industry. Management has considered the risk of possible opportunities as well as their potential rewards. Management has invested time evaluating several proposals for possible acquisition or combination; however, none of these opportunities were pursued. We presently own no real property and at this time have no intention of acquiring any such property. Our major expected expenses are comprised of professional fees primarily incident to our reporting requirements.

The accompanying financial statements have been prepared assuming we will continue as a going concern. Our recurring losses from operations, stockholders' deficiency and working capital deficiency and lack of revenue generating operations, raise substantial doubt about our ability to continue as a going concern.

Management believes we will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional equity or debt financing to sustain its operations until it can achieve profitability and positive cash flows, if ever. Management plans to seek additional debt and/or equity financing, but cannot assure that such financing will be available on acceptable terms.

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that management will be successful in implementing its business plan or that the successful implementation of such business plan will actually improve our operating results.

Going Concern Consideration

We are a development stage company and have not commenced planned principal operations. We had no revenues and have incurred a cumulative loss of $151,047 for the period June 15, 2007 (inception) to March 31, 2012. In addition, the Company had a stockholders' deficiency of $84,947 at March 31, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.

We are attempting to address our lack of liquidity by borrowing from its officers and directors or by raising additional funds, either in the form of debt or equity or some combination thereof. There can be no assurances that we will be able to raise the additional funds it requires.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations or liquidity.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this item.

Item 8. Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Entertainment Art, Inc.

We have audited the accompanying balance sheet Entertainment Art, Inc. (a development stage company) as of March 31, 2012 and the related statement of operations, stockholders’ deficit and cash flows for the period from June 15, 2007 (date of inception) through March 31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. . The financial statements of Entertainment Art, Inc. as of March 31, 2011, were audited by other auditors whose report, dated June 29, 2011, expressed an unqualified opinion on those statements.

We conducted our audits in accordance with the standards of the Public Company Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Entertainment Art, Inc. for the year ended March 31, 2012 and for the period June 15, 2007 (date of inception) through March 31, 2012, in conformance with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company is in development stage with limited operations and resources, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ZS Consulting Group LLP

Melville, New York

June 1, 2012

F-1

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET

ASSETS

	March 31,			March, 31
	2012			2011

CURRENT ASSETS
Cash	$	2,944		$	13
Total current assets		2,944		$	13


TOTAL ASSETS	$	2,944		$	13

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES
Note Payable	$	65,900		$	40,500
Accrued liabilities		15,491		$	18,337
Loan Payable-Related parties		6,500		$	27,500
Total current liabilities		87,891			86,337

STOCKHOLDERS' DEFICIENCY
Preferred Stock, $.001 par value; 10,000,000 shares authorized, none issued and outstanding
	$	0		$	0
Common Stock, $.001 par value; 100,000,000
shares authorized,

59,730,000 shares issued and outstanding at
March 31, 2012 and March 31, 2011.		59,730			59,730
Additional paid-in capital		6,370			6,370

Deficit accumulated during the development stage		(151,047	)		(152,424	)
Total Stockholders' Equity (Deficiency)		(84,947	)		(86,324	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,944		$	13

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

F-2

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF OPERATIONS

							For the Period
							from Inception
	For the year			For the year			June 15,
	Ending			Ending			2007 to
	March 31,			March 31,			March 31,
	2012			2011			2012

REVENUES Sales Net	$	-		$	-		$	1500

COST AND EXPENSES
Cost of sales		0		$	0		$	1,500
Rent		0		$	0		$	13,000
Consulting Fees		0		$	0		$	9,000
Professional Fees		18,418		$	19,400		$	95,253
Other Selling, General and Administrative		7,298		$	5,727		$	59,530
Total Cost and Expenses		25,716			25,127			178,283


Loss From Operations		(25,716	)	$	(25,127	)	$	(176,739	)

Other Income(Expense)
Extinguishment of Debt		32,249			0			38,342
Interest Expense		(5,156	)		(4,721	)		(12,606	)
Total Other Income (Expense)		27,093			(4,721	)		25,736

Net Loss	$	1,377		$	(29,848	)	$	(151,047	)

PER SHARE DATA:

Basic and diluted loss per common share	$			$			$	-

Weighted Average Common shares outstanding		59,730,000			59,730,000			59,730,000

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

F-3

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

FOR THE PERIOD JUNE 15, 2007 (INCEPTION) TO MARCH 31, 2012

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

Balance, June 15,2007		-	$	-	$	-		$	-		$	-

Common shares issued to Founder
for cash at $0.00013 per share
on June 2007		39,600,000		39,600		(34,500	)		-			5,100

Common shares issued to Private Investors
for cash at $0.003 per share
November 2007 to March 2008		20,130,000		20,130		40,870			-			61,000

Net loss for the period		-		-		-			(39,375	)		(39,375	)
									-
Balance - March 31, 2008		59,730,000		59,730		6,370			(39,375	)		26,725

Net loss for the year ended March 31, 2009									(53,402	)		(53,402	)

Balance - March 31, 2009		59,730,000		59,730		6,370			(92,777	)		(26,677	)

Net loss for the year ended March 31, 2010									(29,799	)		(29,799	)

Balance - March 31, 2010		59,730,000		59,730		6,370			(122,576	)		(56,476	)

Net loss for the year ended March 31, 2011									(29,848	)		(29,848	)

Balance - March 31, 2011		59,730,000		59,730		6,370			(152,424	)		(86,324	)

Net profit for the year ended March 31, 2012									1,377			1,377

Balance - March 31, 2012		59,730,000		59,730		6,370			(151,047	)		(84,947	)

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

F-4

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS

							For the Period
	For the year			For the year			from Inception
	Ended			Ended			June 15,
	March 31,			March 31,			2007 to
	2012			2011			March 31, 2012

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss		33,626			(29,848	)		(118,803	)
Debt Extinguishment	$	(32,249	)		-			(32,249	)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Changes in Assets and Liabilities:
Increase(Decrease) in Accrued Liabilities-Related parties		(7,626	)		-			99
Increase (Decrease) in Accrued Liabilities		(220	)		13,069			15,397
								.
Net cash used in operating activities		(6,469	)		(16,779	)		(135,556	)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds From Loans payable
Proceeds From Loans payable-related parties		(16,000	)					6,500
Proceeds From Notes payable		25,400			13,000			65,900
Proceeds from the Sale Common stock		-			-			66,100
Net cash provided by financing activities		9,400			13,000			138,500

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		2,931			(3,779	)		2,944

CASH AT BEGINNING OF PERIOD		13			3,792			-

CASH AT END OF PERIOD	$	2,944			13			2,944

Supplemental Disclosures of Non-Cash Financing Activities:

Deffered Offering costs recorded in Accounts payable related parties								8,000
Reclassification of Loan payable to Note payable					2,500		$	2,500

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

F-5

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - Summary of Significant Accounting Policies

Organization

Entertainment Art, Inc. (“the Company”) was incorporated on June 15, 2007 under the laws of the State of Nevada.

The Company has not yet generated revenues from planned principal operations and is considered a development stage company. The Company originally intended to focus on designing, providing and selling a line of fashionable zip bags. The Company has since abandoned its business plan and is now seeking an operating company with which to merge or acquire. Accordingly, the Company is now considered a blank check company. There is no assurance, however, that the Company will achieve its objectives or goals.

Cash and Cash Equivalents

The Company considers all highly-liquid investments purchased with a maturity of three months or less to be cash equivalents.

Revenue Recognition

For revenue from product sales, the Company will recognize revenue in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (SAB No. 104), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB No. 101). SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments will be provided for in the same period the related sales are recorded.

Advertising Costs

Advertising costs will be charged to operations when incurred. The Company did not incur any advertising costs during the years ended March 31, 2012 and 2011 or for the period June 15, 2007 (inception) to March 31, 2012.

Income Taxes

The Company accounts for income taxes using the asset and liability method, the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting and the tax bases of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Loss Per Share

The computation of loss per share is based on the weighted average number of common shares outstanding during the period presented. Diluted loss per common share is the same as basic loss per common share as there are no potentially dilutive securities outstanding (options and warrants).

F-6

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - Summary of Significant Accounting Policies (Continued)

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Research and Development

Research and development costs will be charged to expense as incurred. The Company did not incur any research and development costs during the years ended March 31, 2012 and 2011 or for the period June 15, 2007 (inception) to March 31, 2012.

Accounting Standards Codification

In June 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification 105, "Generally Accepted Accounting Principles" ("ASC 105"). On July 1, 2009, the FASB completed ASC 105 as the single source of authoritative U.S. generally accepted accounting principles ("GAAP"), superseding all then-existing authoritative accounting and reporting standards, except for rules and interpretive releases for the SEC under authority of federal securities laws, which are sources of authoritative GAAP for Securities and Exchange Commission registrants. ASC 105 reorganizes the authoritative literature comprising U.S. GAAP into a topical format that eliminates the current GAAP hierarchy. ASC 105 is not intended to change U.S. GAAP and will have no impact on the Company's consolidated financial position, results of operations or cash flows. However, since it completely supersedes existing standards, it will affect the way the Company references authoritative accounting pronouncements in its financial statements and other disclosure documents.

Recently Issued Accounting Standards

In December 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-29, “Business Combinations (ASC Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations.” The amendments in this ASU affect any public entity as defined by ASC Topic 805 that enters into business combinations that are material on an individual or aggregate basis. The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The Company does not expect adoption of ASU 2010-29 to have a material impact on the Company’s results of operations or financial condition.

F-7

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Standards (Continued)

In April 2010, the FASB issued ASU 2010-17, Revenue Recognition — Milestone Method (“ASU 2010-17”). ASU 2010-17 provides guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. The following criteria must be met for a milestone to be considered substantive. The consideration earned by achieving the milestone should (i) be commensurate with either the level of effort required to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone; (ii) be related solely to past performance; and (iii) be reasonable relative to all deliverables and payment terms in the arrangement. No bifurcation of an individual milestone is allowed and there can be more than one milestone in an arrangement. Accordingly, an arrangement may contain both substantive and non-substantive milestones. ASU 2010-17 is effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Management evaluated the potential impact of ASU 2010-17 and does not expect its adoption to have a material effect on the Company’s results of operations or financial condition

NOTE 2 - Going Concern

The Company is a development stage company and has not commenced planned principal operations. The Company had no revenues and has incurred a cumulative loss of $151,047 for the period June 15, 2007 (inception) to March 31, 2012. In addition, the Company had a working capital deficiency and stockholders' deficiency of $84,947 at March 31, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

The Company is attempting to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof. During the year ended March 31, 2012, the Company issued multiple promissory notes totaling $25,400 from an non-affiliated party and $6,500 from a officer and director. There can be no assurances that the Company will be able to raise the additional funds it requires.

F-8

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 3 - Fair Value

Fair Value Measurement

FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

·	Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access.

·	Level 2 inputs are inputs (other than quoted prices included within level 1) that are observable for the assets or liability, either directly or indirectly.

Level 3 are unobservable inputs for the assets or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company's own data.)

The carrying value of cash, accrued liabilities, loans payable and notes payable approximates fair value because of the immediate or short-term maturity of these financial instruments.

The Company's financial instruments include cash, accrued liabilities, loans payable and notes payable. All of these items were determined to be Level 1 fair value measurements.

NOTE 4 - Notes Payable

On August 7, 2009, the Company issued a promissory note for $16,000. The promissory note is payable on demand and bears interest at 9% per annum.

On October 31, 2009, the Company issued a promissory note for $9,000 to the same party. This promissory note is payable on demand and bears interest at 9% per annum.

On April 5, 2010, the Company borrowed $3,000 from the holder of its notes payable. On April 19, 2010, the Company issued a promissory note for $5,500 which memorialized a $2,500 advance during the quarter ended March 31, 2010 and the $3,000 advanced on April 5, 2010. The promissory note is payable on demand and bears interest at 9% per annum.

On July 30, 2010, the Company issued a promissory note for $10,000 to the same party. This promissory note is payable on demand and bear interest at 9% per annum.

On May 10, 2011, the company received $15,400 from a non-related party. This transaction was memorized on October 10, 2011 and the promissory note is due on December 31, 2015 and bears 5% interest per annum.

On August 3, 2011, the Company issued a promissory note for $5,000 from the same party. The note is due December 31, 2015 and bears interest at 5% per annum.

In October 2011, the Company issued a promissory note for $15,400 as consideration to and it order to memorialize a loan made to company in May 2011 by a third party. This loan was originally inadvertently reported as part of a related party loan of $16,000. The loan bears interest at 5% per annum and is due December 31, 2015 (See note 5).

On March 30, 2012, the Company issued a promissory note for $5,000 from the same party. The note is due December 31, 2015 and bears interest at 5% per annum.

F-9

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 5 - Related Party Transactions

During the period June 15, 2007 (inception) to March 31, 2008, the Company paid approximately $35,000 to an entity owned by two of its officers' and directors. Included in such payments were consulting fees and rent in the amount of $9,000 and $10,000, respectively. The Company rented space from this entity on a month to month basis.

During the period June 15, 2007 (inception) to March 31, 2008, the Company paid a law firm owned by an officer and director approximately $1,000 for start-up organization expenses.

During the year ended March 31, 2009, the Company was charged approximately $3,600 by an entity owned by two of its officers' and directors. Included in such payments was rent in the amount of $3,000. The Company previously rented space from this entity on a month to month basis.

During the years ended March 31, 2012 and 2010, the Company paid $0 and $5,300, respectively, in legal fees to a law firm owned by an officer and director of the Company.

During the year ended March 31, 2010, the Company satisfied its accounts payable - related party obligation of $28,593 by the payment of $22,500. The balance of $6,093 was recorded as debt extinguishment income in the current period (see Note 9).

During the year ended March 31, 2010, the Company, in connection with the termination of its originally planned business, purchased goods for $1,500 from an entity owned by two of its officers and directors. These goods were sold at cost, in order to dispose of them.

At March 31, 2012 and 2011, the Company owed $0 and $2,063 respectively, in legal fees to a law firm owned by a former officer and director of the Company.

At March 31, 2012 and 2011 loans payable to related party in the amount of $6,500 and $27,500 respectively, each bears interest at 5% per annum and is payable on demand.

During the quarter ended December 31, 2011, the Company was issued a credit of $963 for legal fees by a law firm owned by a former officer and director of the Company.

At December 31, 2011 the company received a loan from a related party in the amount of $6,500 bearing interest at 5% per annum and is payable on demand.

During the year ended March 31, 2012, the balance of $28,600 loan payable to former related parties and the associated interest of $3,649 was recorded as extinguishment of debt income totaling $32,249.

F-10

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 6 - Common Stock

In June 2007 the Company issued 39,600,000 shares of common stock to its Founders for $5,100.

In October 2007 the Company sold 20,130,000 shares of common stock to private investors at $.003 per share for gross proceeds of $61,000.

On June 30, 2009 the Board of Directors authorized a 33 for 1 forward split of the Company's common stock to stockholders of record on July 8, 2009 and with a payment date of July 21, 2009. All share and per share data have been retroactively restated to reflect this recapitalization.

NOTE 7 - Preferred Stock

The Company’s Board of Directors may, without further action by the Company’s stockholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitations of each series. The holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the common stock. Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of the common stock.

NOTE 8 - Income Taxes

At March 31, 2012, the Company had available a net-operating loss carry-forward for Federal tax purposes of approximately $151,047, which may be applied against future taxable income, if any, at various times through 2031. Certain significant changes in ownership of the Company may restrict the future utilization of these tax loss carry-forwards.

At March 31, 2012, the Company has a deferred tax asset of approximately $151,047 representing the benefit of its net operating loss carry-forward. The Company has not recognized the tax benefit because realization of the tax benefit is uncertain and thus a valuation allowance has been fully provided against the deferred tax asset. The difference between the Federal Statutory Rate of 34% and the Company’s effective tax rate of 0% is due to an increase in the valuation allowance of approximately $59,000 for the year ended March 31, 2012.

NOTE 9 - Extinguishment of Debt

Indebtedness in the amount of $32,249 consisting of accounts payable - related party was forgiven during the year ended March 31, 2012 and was recorded as debt extinguishment income.

F-11

ENTERTAINMENT ART, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 10 - Subsequent Events

The Company has evaluated subsequent events through the date the financial statements were issued and up to the time of the filing of the financial statements with the Securities and Exchange Commission.

In May 2012 the Company issued a promissory note in the amount of $5,000 from an unaffiliated party. The loan bears interest at 5% per annum and is due December 31, 2015.

F-12

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls

Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of the Company’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this annual report, has concluded that our disclosure controls and procedures are effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. We believe our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective.

Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive, principal operating and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management, including the Company’s Chief Executive Officer and Principal Financial Officer assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2012. In making this assessment, management used the framework in “Internal Control - Integrated Framework” promulgated by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the “COSO” criteria. Based on the assessment performed, management believes that as of March 31, 2012, the Company’s internal control over financial reporting was effective based upon the COSO criteria. Additionally, based on management’s assessment, the Company determined that there were no material weaknesses in its internal control over financial reporting as of March 31, 2012.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

Changes in Internal Controls

During the year ended March 31, 2012, there was no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

The Company’s management, including the chief executive officer and principal financial officer, do not expect that its disclosure controls or internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management’s override of the control. The design of any systems of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Individual persons perform multiple tasks which normally would be allocated to separate persons and therefore extra diligence must be exercised during the period these tasks are combined. Management is aware of the risks associated with the lack of segregation of duties at the Company due to the small number of people currently dealing with general administrative and financial matters. Although management will periodically reevaluate this situation, at this point it considers the risks associated with such lack of segregation of duties and the potential benefits of adding employees to segregate such duties do not justify the substantial expense associated with such actions. It is also recognized the Company has not designated an audit committee and no member of the board of directors has been designated or qualifies as a financial expert. The Company should address these concerns at the earliest possible opportunity.

Item 9B. Other Information

None

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

The following table sets forth certain information regarding the members of our board of directors and our executive officers:

Name and Business Address	Age	Position

Jeff Lamson	47	President, Chief Executive Officer and Director, Treasurer, Chief Financial Officer and Secretary

Jeff Lamson – From September 2009 to October 2011, Mr. Lamson was the controller of Sacramento Cooling Systems, Inc, a heating and air conditioning control systems provider. From October 2007 to September 2009, Mr. Lamson was the Chief Financial Officer of Falcon Technologies, Inc., a telecommunications infrastructure contractor and service provider. From May 2005 to October 2007, Mr. Lamson was the Chief Financial Officer of Davis Electric, Inc., an electrical construction company based in Sacramento.

There are no familial relationships among any of our directors or officers. None of our directors or officers is a director in any other U.S. reporting companies. None of our directors or officers has been affiliated with any company that has filed for bankruptcy within the last ten years. The Company is not aware of any proceedings to which any of the Company’s officers or directors, or any associate of any such officer or director, is a party adverse to the Company or any of the Company’s subsidiaries or has a material interest adverse to it or any of its subsidiaries.

Each director of the Company serves for a term of one year or until the successor is elected at the Company's annual shareholders' meeting and is qualified, subject to removal by the Company's shareholders. Each officer serves, at the pleasure of the board of directors, for a term of one year and until the successor is elected at the annual meeting of the board of directors and is qualified.

Each of the directors are entitled to indemnification from the Company for any threatened, pending or completed action, suit, arbitration or proceeding, or any inquiry or investigation, whether brought against, by or in the right of the Company or any of its subsidiaries, or otherwise. Pursuant to the terms of the indemnification agreements, each director is entitled to all fees and expenses in connection with any such action or proceeding. We do not have to pay all their fees and expenses if it relates to a cause of action in which a final non-appealable judgment or other final adjudication adverse to the director has established: (i) that his acts were committed in bad faith or were the result of active and deliberate dishonesty, or he gained any financial profit or other advantage to which he was not legally entitled; (ii) that the director in fact made profits from the purchase or sale of securities of the Company within the meaning of Section 16 of the Securities Exchange Act of 1934 or similar provisions of any state; or (iii) that payment by the Company is not permitted by applicable law.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires officers and directors of the Company and persons who own more than ten percent of a registered class of the Company's equity securities to file reports of ownership and changes in their ownership with the Securities and Exchange Commission, and forward copies of such filings to the Company. We believe, based solely on our review of the copies of such forms, that during the fiscal year ended March 31, 2011, all reporting persons complied with all applicable Section 16(a) filing requirements.

Auditors

ZS Consulting Group, LLP, an independent registered public accounting firm, is our auditor.

We do not currently have a Code of Ethics applicable to our principal executive, financial and accounting officers. We do not have a “financial expert” on the board or an audit committee or nominating committee.

Potential Conflicts of Interest

Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company has only two directors, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executive officers or directors.

Involvement in Certain Legal Proceedings

There are no legal proceedings that have occurred within the past five years concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one's participation in the securities or banking industries, or a finding of securities or commodities law violations.

Item 11. Executive Compensation

Summary Compensation

SUMMARY COMPENSATION TABLE

Name and principal position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)			Total ($)
(a)	(b)	(c)		(d)		(e)		(f)		(g)		(h)		(i)			(j)

Jeff Lamson(1)	2012		0		0		0		0		0		0		0			0
	2011		0		0		0		0		0		0		0			0

David Lubin(2)	2012		0		0		0		0		0		0		0			0
	2011		0		0		0		0		0		0		5,300	(3)		5,300

(1) Mr. Lamson has been serving as our Director, President and Chief Executive Officer since October 11, 2011.

(2) Mr. Lubin previously served as our Secretary and a Director since our inception on June 15, 2007 and our Treasurer and Chief Financial Officer until October 11, 2011.

(3) Represents fees paid to the law firm of David Lubin & Associates, PLLC.

Since our incorporation on June 15, 2007, no stock options or stock appreciation rights were granted to any of our directors or executive officers, none of our directors or executive officers exercised any stock options or stock appreciation rights, and none of them hold unexercised stock options. We have no long-term incentive plans.

Outstanding Equity Awards

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table lists, as of June 5, 2011, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

The percentages below are calculated based on 59,730,000 shares of our common stock issued and outstanding as of June 5, 2012. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock. Unless otherwise indicated, the address of each person listed is c/o Entertainment Art, Inc., 2679 Aberdeen Lane, El Dorado Hills, CA 95762.

Name of Beneficial Owner	Title Of Class	Amount and Nature of Beneficial Ownership	Percent of Class

Medford Financial Ltd. 35 Barack Road, Belize City, Beliz	Common	39,600,000	66.3%

Jeff Lamson	Common	0	0%

David Lubin	Common	0	0%

Tyrone Lamb	Common	0	0%

Directors and Officers as a Group (2 persons)	Common	0	0%

Item 13. Certain Relationships and Related Transactions, and Director Independence

On June 16, 2007, we issued 13,200,000 shares of our common stock to Mr. Koegel, the former President and a director of the Company. These shares were issued in exchange for $1,700. The shares were issued under Section 4(2) of the Securities Act of 1933, as amended. Mr. Koegel was a former officer and director of the Company.

During the period from June 15, 2007 (inception) to March 31, 2008, our board of directors agreed to compensate Mr. Koegel in the amount of $5,000 in consideration for services rendered to the Company as a consultant.

On June 16, 2007, we issued 13,200,000 shares of our common stock to Mr. David Lubin, our Secretary and a director of the Company. These shares were issued in exchange for $1,700. The shares were issued under Section 4(2) of the Securities Act of 1933, as amended. Mr. Lubin is an officer and director of the Company and had access to all of the information which would be required to be included in a registration statement, and the transaction did not involve a public offering.

On June 16, 2007, we issued 13,200,000 shares of our common stock to Mr. Ian Beiss, who was our treasurer and a director until May 2009. These shares were issued in exchange for $1,700. The shares were issued under Section 4(2) of the Securities Act of 1933, as amended. Mr. Beiss was an officer and director of the Company and had access to all of the information which would be required to be included in a registration statement, and the transaction did not involve a public offering.

Kingswell Trading, an affiliate of Messrs. Koegel and Beiss, was paid an aggregate of $9,000 in consulting fees in consideration for services rendered as a consultant to the Company during the year ended March 31, 2008.

In 2007, we have retained the services of the law firm of David Lubin & Associates, PLLC, where Mr. Lubin is the sole member, in connection with the preparation of the Registration Statement relating the offering described in this prospectus. As of March 31, 2008, the Company owed the law firm of David Lubin & Associates, PLLC, a total of $10,000, of which the Company paid $5,000 on June 20, 2008. The Company also reimbursed the law firm of David Lubin & Associates, PLLC approximately $1,000 for the expenses associated with start up organizational activities. We owed $25,000 in legal fees as of March 31, 2009 to David Lubin & Associates, of which $22,500 were paid in May 2009.

During the year ended March 31, 2010, the Company paid $6,042 in legal fees to David Lubin & Associates, PLLC, a law firm founded by David Lubin, an officer and director of the Company.

During the year ended March 31, 2012, the Company extinguished debt in the amount of $32,249 which consisted of board fees due to Mr. Koegel and legal fees and interest to David Lubin & Associates, PLLC, a law firm founded by David Lubin who was a former director of the Company.

In May 2009, Messrs. Koegel, Beiss and Lubin sold their shares in the company to Medford Financial Ltd., a Belize corporation, for an aggregate of $120,000.

Our directors are entitled to indemnification pursuant to indemnification agreements dated as of March 1, 2012.

As of March 31, 2012, the Company owed $6,500 to Jeff Lamson, our principal executive officer and a director. Said principal sums accrue interest at the rate of 5% and are due and payable on demand.

Director Independence

We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.” We do not believe that any of our directors currently meet the definition of “independent” as promulgated by the rules and regulations of the American Stock Exchange.

Item 14. Principal Accounting Fees and Services

Our principal independent accountant is ZS Consulting Group, LLP. Their pre-approved fees billed to the Company are set forth below:

	For Fiscal Year Ended March 31, 2012		For Fiscal Year Ended March 31, 2011
Audit Fees	$	3,500	$	11,500
Audit Related Fees	$	0	$	0
Tax Fees	$	0	$	0
All Other Fees	$	0	$	0

As of March 31, 2012, the Company did not have a formal documented pre-approval policy for the fees of the principal accountant. The Company does not have an audit committee. The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.

PART IV

Item 15. Exhibits. Financial Statement Schedules

Exhibit		Description

3.1		Articles of Incorporation of Registrant (filed as Exhibit 3.1 to Registration Statement on Form S-1, filed with the Securities and Exchange Commission on July 18, 2008, file no. 333-152404)

3.2		By-Laws of Registrant (filed as Exhibit 3.2 to Registration Statement on Form S-1, filed with the Securities and Exchange Commission on July 18, 2008, file no. 333-152404)

3.3		Form of Stock Certificate (filed as Exhibit 3.3 to Registration Statement on Form S-1, filed with the Securities and Exchange Commission on July 18, 2008, file no. 333-152404)

4.1		Promissory Note dated August 7, 2009 made by Entertainment Art, Inc. in favor of Camal Group SA.(filed as Exhibit 4.1 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on February 16, 2010)

4.2		Promissory Note dated October 31, 2009 made by Entertainment Art, Inc. in favor of Camal Group SA. (filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on February 16, 2010)

4.3		Promissory Note dated April 19, 2010 made by Entertainment Art, Inc. in favor of Camal Group SA. (filed as Exhibit 4.3 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 18, 2010)

4.4		Promissory Note dated July 30, 2010 made by Entertainment Art, Inc. in favor of Camal Group SA. (filed as Exhibit 4.4 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 13, 2010)

4.5		Promissory Note dated August 3, 2011 made by Entertainment Art, Inc. in favor of MBN Consulting, LLC.

4.6		Promissory Note dated October 10, 2011 made by Entertainment Art, Inc. in favor of MBN Consulting, LLC.

4.7		Promissory Note dated March 30, 2012 made by Entertainment Art, Inc. in favor of MBN Consulting, LLC.

10.1		Indemnification Agreement dated as of March 1, 2012 between Entertainment Art, Inc. and Jeff Lamson.

10.2		Indemnification Agreement dated March, 1 2012 between Entertainment Art, Inc. and Tyrone Lamb.

31.1		Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

31.1		Certification of Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002).

32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley.

32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley.

(* move 4.5 – 4.7 above to put in order *)

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

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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

	ENTERTAINMENT ART, INC.

Date: June __, 2012	By:	/s/ Jeff Lamson
		Jeff Lamson
		President, Chief Executive Officer,
		Chairman, and Director
		(Principal Executive Officer)
		Treasurer, Secretary and Director
		(Principal Financial & Accounting Officer)

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

Date:	Signature:	Name:	Title:

June __, 2012	/s/ Jeff Lamson	Jeff Lamson	President, Chief Executive Officer, Chairman and Director,
			Treasurer, Secretary

Going Concern	12 Months Ended
Mar. 31, 2012
Notes to Financial Statements
Note 2. Going Concern	The Company is a development stage company and has not commenced planned principal operations. The Company had no revenues and has incurred a cumulative loss of $151,047 for the period June 15, 2007 (inception) to March 31, 2012. In addition, the Company had a working capital deficiency and stockholders' deficiency of $84,947 at March 31, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders. The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset -carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company is attempting to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof. During the year ended March 31, 2012, the Company issued multiple promissory notes totaling $25,400 from a non-affiliated party and $6,500 from an officer and director. There can be no assurances that the Company will be able to raise the additional funds it requires.

Going Concern

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 2. Going Concern

The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset -carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

The Company is attempting to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof. During the year ended March 31, 2012, the Company issued multiple promissory notes totaling $25,400 from a non-affiliated party and $6,500 from an officer and director. There can be no assurances that the Company will be able to raise the additional funds it requires.

Balance Sheets (USD $)	Mar. 31, 2012	Mar. 31, 2011
CURRENT ASSETS
Cash	$ 2,944	$ 13
Total current Assets	2,944	13
TOTAL ASSETS	2,944	13
CURRENT LIABILITIES
Notes Payable	65,900	40,500
Accrued liabilities	15,491	18,337
Loan Payable-Related parties	6,500	27,500
Total current liabilities	87,891	86,337
STOCKHOLDERS' DEFICIENCY
Preferred Stock, $.001 par value; 10,000,000 shares authorized, none issued and outstanding	0	0
Common Stock, $.001 par value; 100,000,000 shares authorized, 59,730,000 shares issued and outstanding at March 31, 2012 and March 31, 2011.	59,730	59,730
Additional paid-in capital	6,370	6,370
Deficit accumulated during the development stage	(151,047)	(152,424)
Total Stockholder's Deficiency	(84,947)	(86,324)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$ 2,944	$ 13

Balance Sheets (USD $)

Mar. 31, 2012

Mar. 31, 2011

CURRENT ASSETS

Cash

$ 2,944

$ 13

Total current Assets

2,944

TOTAL ASSETS

2,944

CURRENT LIABILITIES

Notes Payable

65,900

40,500

Accrued liabilities

15,491

18,337

Loan Payable-Related parties

6,500

27,500

Total current liabilities

87,891

86,337

STOCKHOLDERS' DEFICIENCY

Preferred Stock, $.001 par value; 10,000,000 shares authorized, none issued and outstanding

Common Stock, $.001 par value; 100,000,000 shares authorized, 59,730,000 shares issued and outstanding at March 31, 2012 and March 31, 2011.

59,730

Additional paid-in capital

6,370

Deficit accumulated during the development stage

(151,047)

(152,424)

Total Stockholder's Deficiency

(84,947)

(86,324)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY

$ 2,944

$ 13

Statements of Cash Flows (USD $)

12 Months Ended

58 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Mar. 31, 2012

CASH FLOW FROM OPERATING ACTIVITIES

Net Loss

$ 33,626

$ (29,848)

$ (118,803)

Debt Extinguishment

(32,249)

32,249

Changes in Assets and Liabilities:

Increase(Decrease) in Accrued Liabilities-Related parties

(7,626)

Increase (Decrease) in Accrued Liabilities

(220)

13,069

15,397

Net cash used in operating activities

(6,469)

(16,779)

(135,556)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds From Loans Payable-related parties

(16,000)

6,500

Proceeds From Notes Payable

25,400

13,000

65,900

Proceeds from the Sale of Common Stock

66,100

Net cash provided by financing activities

9,400

13,000

138,500

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

2,931

(3,779)

2,944

CASH AT BEGINNING OF PERIOD

3,792

CASH AT END OF PERIOD

2,944

Deffered Offering costs recorded in Accounts payable - Related Party

8,000

Reclassification of Loan payable to Note payable

$ 2,500

Summary of Significant Accounting Policies

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 1. Summary of Significant Accounting Policies

Organization

Entertainment Art, Inc. (“the Company”) was incorporated on June 15, 2007 under the laws of the State of Nevada.

Cash and Cash Equivalents

The Company considers all highly-liquid investments purchased with a maturity of three months or less to be cash equivalents.

Revenue Recognition

Advertising Costs

Income Taxes

Loss Per Share

Accounting Estimates

Research and Development

Accounting Standards Codification

Recently Issued Accounting Standards

In April 2010, the FASB issued ASU 2010-17, Revenue Recognition — Milestone Method (“ASU 2010-17”). ASU 2010-17 provides guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. The following criteria must be met for a milestone to be considered substantive. The consideration earned by achieving the milestone should (i) be commensurate with either the level of effort required to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone; (ii) be related solely to past performance; and (iii) be reasonable relative to all deliverables and payment terms in the arrangement. No bifurcation of an individual milestone is allowed and there can be more than one milestone in an arrangement. Accordingly, an arrangement may contain both substantive and non-substantive milestones. ASU 2010-17 is effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Management evaluated the potential impact of ASU 2010-17 and does not expect its adoption to have a material effect on the Company’s results of operations or financial condition

Balance Sheets (Parenthetical) (USD $)

Mar. 31, 2012

Mar. 31, 2011

Statement of Financial Position [Abstract]

Preferred stock, par value

$ 0.001

Preferred stock, authorized shares

10,000,000

Preferred stock, issued shares

Preferred stock, outstanding shares

Common stock, par value

$ 0.001

Common stock, Authorized

100,000,000

Common stock, Issued

59,730,000

Common stock, outstanding

59,730,000

Document and Entity Information (USD $)

12 Months Ended

Mar. 31, 2012

May 05, 2012

Document And Entity Information

Entity Registrant Name

ENTERTAINMENT ART, INC.

Entity Central Index Key

0001438576

Document Type

10-K

Document Period End Date

Mar. 31, 2012

Amendment Flag

false

Current Fiscal Year End Date

--03-31

Is Entity a Well-known Seasoned Issuer?

Is Entity a Voluntary Filer?

Is Entity's Reporting Status Current?

Yes

Entity Filer Category

Smaller Reporting Company

Entity Public Float

$ 59,730,000

Entity Common Stock, Shares Outstanding

59,730,000

Document Fiscal Period Focus

Document Fiscal Year Focus

2011

Statements of Operations (USD $)

12 Months Ended

58 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Mar. 31, 2012

Income Statement [Abstract]

REVENUES Sales Net

$ 1,500

COSTS AND EXPENSES

1,500

13,000

9,000

18,418

19,400

95,253

Other Selling, General and Administrative Expenses

7,298

5,727

59,530

Total Costs and Expenses

25,716

25,127

178,283

Loss From Operations

(25,716)

(25,127)

(176,783)

Other Income(Expense)

Extinguishment of Debt

32,249

38,342

Interest Expense

(5,156)

(4,721)

(12,606)

Total Other Income (Expense)

27,093

(4,721)

25,736

Net Loss

$ 1,377

$ (29,848)

$ (151,047)

Basic and diluted loss per common share

Weighted Average Common shares outstanding

59,730,000

Common Stock

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 6. Common Stock

In June 2007 the Company issued 39,600,000 shares of common stock to its Founders for $5,100.

In October 2007 the Company sold 20,130,000 shares of common stock to private investors at $.003 per share for gross proceeds of $61,000.

Related Party Transactions

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 5. Related Party Transactions

During the period June 15, 2007 (inception) to March 31, 2008, the Company paid a law firm owned by an officer and director approximately $1,000 for start-up organization expenses.

During the years ended March 31, 2012 and 2010, the Company paid $0 and $5,300, respectively, in legal fees to a law firm owned by an officer and director of the Company.

At March 31, 2012 and 2011, the Company owed $0 and $2,063 respectively, in legal fees to a law firm owned by a former officer and director of the Company.

At March 31, 2012 and 2011 loans payable to related party in the amount of $6,500 and $27,500 respectively, each bears interest at 5% per annum and is payable on demand.

During the quarter ended December 31, 2011, the Company was issued a credit of $963 for legal fees by a law firm owned by a former officer and director of the Company.

At December 31, 2011 the company received a loan from a related party in the amount of $6,500 bearing interest at 5% per annum and is payable on demand.

Extinguishment of Debt

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 9. Extinguishment of Debt

Indebtedness in the amount of $32,249 consisting of accounts payable - related party was forgiven during the year ended March 31, 2012 and was recorded as debt extinguishment income.

Preferred Stock

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 7. Preferred Stock

Income Taxes

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 8. Income Taxes

Subsequent Events

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 10. Subsequent Events

In May 2012 the Company issued a promissory note in the amount of $5,000 from an unaffiliated party. The loan bears interest at 5% per annum and is due December 31, 2015.

Shareholders Equity (USD $)

Common Stock

Additional Paid-In Capital

Deficit Accumulated During the Development Stage

Total

Beginning balance, Amount at Jun. 14, 2007

Common shares issued to Founder for cash at $0.00013 on June 2007, Amount

$ 39,600

$ (34,500)

$ 5,100

Common shares issued to Founder for cash at $0.00013 on June 2007, Shares

39,600,000

Common shares issued to Private Investors for cash at $0.003 November 2007 to March 2008, Amount

20,130

40,870

61,000

Common shares issued to Private Investors for cash at $0.003 November 2007 to March 2008, Shares

20,130,000

Net loss

(39,375)

Ending balance, Amount at Mar. 31, 2008

59,730

6,370

(39,375)

26,725

Ending balance, Shares at Mar. 31, 2008

59,730,000

Net loss

(53,402)

Ending balance, Amount at Mar. 31, 2009

59,730

6,370

(92,777)

(26,677)

Ending balance, Shares at Mar. 31, 2009

59,730,000

Net loss

(29,799)

Ending balance, Amount at Mar. 31, 2010

59,730

6,370

(122,576)

(56,476)

Ending balance, Shares at Mar. 31, 2010

59,730,000

Net loss

(29,848)

Ending balance, Amount at Mar. 31, 2011

59,730

6,370

(152,424)

(86,324)

Ending balance, Shares at Mar. 31, 2011

59,730,000

Net loss

1,377

Ending balance, Amount at Mar. 31, 2012

$ 59,730

$ 6,370

$ (151,047)

$ (84,947)

Ending balance, Shares at Mar. 31, 2012

59,730,000

Notes Payable

12 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 4. Notes Payable

On August 7, 2009, the Company issued a promissory note for $16,000. The promissory note is payable on demand and bears interest at 9% per annum.

On October 31, 2009, the Company issued a promissory note for $9,000 to the same party. This promissory note is payable on demand and bears interest at 9% per annum.

On July 30, 2010, the Company issued a promissory note for $10,000 to the same party. This promissory note is payable on demand and bear interest at 9% per annum.

On August 3, 2011, the Company issued a promissory note for $5,000 from the same party. The note is due December 31, 2015 and bears interest at 5% per annum.

On March 30, 2012, the Company issued a promissory note for $5,000 from the same party. The note is due December 31, 2015 and bears interest at 5% per annum.

Accepted by:

By:
Name:	MBN Consulting, LLC
Partner:	Partner: Steve Sanders

Accepted by: By:

By:
Name:	MBN Consulting, LLC
Partner:	Steve Sanders

	ENTERTAINMENT ART, INC.

	By:	/s/ Tyrone Lamb
		Name: Tyrone Lamb
		Title: Secretary


		/s/ Jeff Lamson
		Jeff Lamson

	ENTERTAINMENT ART, INC.

	By:	/s/ Jeff Lamson
		Name: Jeff Lamson
		Title: President, CEO, CFO


		/s/ Tyrone Lamb
		Tyrone Lamb