Anoteros, Inc. - FORM 10-K - February 2, 2011

Attached files

file	filename
EX-31 - EX 31.1 SECTION 302 CERTIFICATIONS - Anoteros, Inc.	anoteros10k123110ex311.htm
EX-32 - EX 32.1 SECTION 906 CERTIFICATIONS - Anoteros, Inc.	anoteros10k123110ex321.htm
EX-31 - EX 31.2 SECTION 302 CERTIFICATIONS - Anoteros, Inc.	anoteros10k123110ex312.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________

FORM 10-K

___________

X . ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

Commission File Number: 0-52561

___________________________________

ANOTEROS, INC.

(Exact name of Registrant as specified in its charter)


NEVADA		88-0368849
(State or other Jurisdiction of		(IRS Employer
of Incorporation or Organization)		Identification No.)


2445 Fifth Avenue, Suite 440, San Diego, California		92101
(Address of principal executive offices)		(Zip Code)

(619) 239-2900

(Issuer’s telephone number, including area code)

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

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 Par Value

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

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

Indicate by check mark 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 .

Indicate by check mark if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K or any amendment to this Form 10-K. .

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


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

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

Issuer’s revenues for its most recent fiscal year: None.

The aggregate market value of the voting and non-voting common equity on June 30, 2010 held by non-affiliates of the registrant based on the average bid and asked price of such stock on such date was approximately $176,726. Shares of common stock held by each officer and director and by each person who owns 10% or more of the outstanding common stock of the registrant have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. Without acknowledging that any individual director of registrant is an affiliate, all directors have been included as affiliates with respect to shares owned by them.

As of January 31, 2011, there were 3,294,056 shares of the registrant’s Common Stock outstanding.

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ANOTEROS INC.

Report on Form 10-K


PART I.
Item 1.	Description of Business	4
Item 1A.	Risk Factors	10
Item 2.	Description of Property	13
Item 3.	Legal Proceedings	13
Item 4.	[Removed and Reserved]	14
PART II.
Item 5.	Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	15
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 8.	Financial Statements	18
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	35
Item 9A(T)	Controls and Procedures	35
Item 9B.	Other Information	36
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	36
Item 11.	Executive Compensation	38
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	40
Item 13.	Certain Relationships and Related Transactions	41
Item 14.	Principal Accountant Fees and Services	41
Item 15.	Exhibits	42

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PART I.

FORWARD LOOKING STATEMENTS

This annual report contains certain forward-looking statements and for this purpose any statements contained in this annual report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the markets in which Anoteros may participate, competition within Anoteros’ chosen industry, technological advances and failure by us to successfully develop business relationships.

ITEM 1.

DESCRIPTION OF BUSINESS.

Business Development

Anoteros Inc. (referred to as “Anoteros”, the “Company”, “we”, “us”, or “our”) through its wholly-owned subsidiary, Doolittle EduTainment, which holds all of our intellectual property, is engaged and in the children’s education and entertainment market. Our mission is to entertain and educate children through various avenues focused around our main character “Doolittle” and further development of additional books and the exploitation of our intellectual property rights.

The Company was incorporated on September 25, 1996 under the laws of the State of Nevada, as Out of Bounds Sports Co. and initially entered the sports wear market, manufacturing and marketing tee shirts, golf shorts and hats with the “OB Golf” and “OB Sports” logo. The Company turned its focus to the children’s education and entertainment arena utilizing the gorilla charter “Doolittle” depicted in various sporting activities and worked on various story lines and character treatments. We completed the final story line and draft of Book 1 – The Story of Doolittle, an Exceptional Young Gorilla in May 2000. The story line and preliminary draft of Book 2 – The Adventures of Dynamic Doolittle – Episode 1 “The Problem with Paulie Python” was completed in October 2000 and, the story line and preliminary draft of Book 3 - Doolittle’s Very, Very Bad Day was completed in May 2001

On February 19, 2002 the Company formed Doolittle Edutainment Corp., a Nevada corporation (“Doolittle Edutainment”) as a wholly-owned subsidiary, for the purpose of holding the intellectual property and other assets relating to the Doolittle books and product line.

On September 22, 2004, the Company changed our name from Out of Bounds Sports Co. to Anoteros, Inc

In 2006 and 2007, we completed layout, compilation and assembly of Books 1, 2 and 3 and in 2007 we completed our first three book titles which depict our main character named “Doolittle”:

Book 1 - titled “Doolittle – An Exceptional Young Gorilla” addresses the issue of cheating on a very elementary children’s level.

Book 2 - titled “The Adventures of Dynamic Doolittle Episode I – “The Problem with Paulie Python.” This book introduces additional characters and has Doolittle taking on “super powers” (i.e. speed and strength). This book addresses the concept of sharing.

Book 3 - titled “Doolittle’s Very, Very Bad Day” addresses Doolittle’s negative attitude regarding doing home-work.

We have self published the initial three books with an initial run of 250 copies which are being utilized in exploring various distribution avenues. In 2008, as a result of input from the various parties that have reviewed the initial run, we undertook and made various corrections and revisions to Books 1 through 3 which are in a completed state and ready for printing and distribution.

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Business of Issuer

The focal point and main character of our books is “Doolittle” which was created to target toddlers and young children. The character of Doolittle is portrayed as a charismatic, rough ‘n tough little Gorilla who is a bit mischievous, has more than a little “attitude,” but is also cool and cuddly. Doolittle has been developed to be an all-round good guy, roll model and inspiration that will befriend, teach and capture the imagination of kids by excelling at sports, seeking adventure and enjoying things that are popular with children.

While there is no requirement for Doolittle to be a “family values” character, good citizenship, decency and manners are an underpinning we have instilled in the stories and assets developed to date. Our vision is to position Doolittle, along with his sidekicks, “Ajax” and “R-Dub” in various situations that evoke a need for children to make positive decisions. The story lines are designed to promote tolerant messages while keeping children engaged and entertained. Our goal is to teach and entertain kids with Doolittle as a positive role model. We believe that our books, three of which have been completed, along with additional education and entertainment products, which we may choose to produce, such as workbooks, coloring books and puzzles, have and will be developed in such a way that will complement and compete with the existing industry. With the success of competitor company characters and products, we believe that we can create a successful niche for Doolittle along with subsequent characters.

We will endeavor to make Doolittle (and subsequent characters) a household name for children and families. To obtain this goal we have various options to expand its presence by licensing the character to one or more companies to produce, distribute, market and retail the books and products to the mass market through highly visible and available channels including retailing, the internet, software games, publishing and all visual media markets. Although no significant relationships exist and no substantial relationships have been formed at this time we intend to pursue such opportunities as they present themselves.

Principal Products or Services and Their Markets.

We have completed and self published our initial three children’s books as well as various articles of clothing and toys, such as T-shirts, sweat shirts, super balls and stickers to develop and raise consumer awareness for the Doolittle character. We have also completed character treatments (i.e an outline summary) and themes for books 4 and 5 and at such time as we deem appropriate, based on the interest in, and feedback for, our initial books, we will continue the further development of these books. The goal will be to continually develop and produce quality books geared towards children with the lessons conveyed through a recognizable and respected character. Future products for character and name branding could include plush toys (stuff animals), coloring books, puzzles, playground balls, games and interactive software.

Market Analysis - Doolittle’s Niche

Doolittle is focused on the young children’s market specifically ages 3-10 years. We believe we can develop a specialty niche with Doolittle in this market. As we develop our brand name, we envision aligning our Doolittle character with schools and pee-wee and junior league sport clubs to promote and support sports activities. This will allow us to expand our brand name (i.e. character) loyalty directly to the family and social infrastructure of society.

Distribution Methods of the Products or Services.

Publishing

During 2007 we self published through Book Masters, Inc., the first printing of the initial three book titles. In 2009, after minor revisions and correction of typographical errors, we self published through Book Masters, the second printing of Books 1, 2 and 3. We continue to explore the possibility of traditional publishing for our books which is often difficult and time consuming to find a publisher willing to take on a new book line. In furtherance of this goal, on September 25, 2009, the Company through its wholly-owned subsidiary, Doolittle Edutainment Corp. entered into a Literary Agent Agreement with Geraldine Blecker to represent Doolittle Edutainment, on a non-exclusive basis, in connection with negotiations with potential publishers and book distributors in Europe. We continue to seek a publisher within the United States. If we are unsuccessful in finding a traditional publishing company to publish and distribute our books, we will continue to self-publish and self distribute our books while seeking a distribution agreement with one or more book distribution sources. While having a publisher to promote and market the Company’s books would be the preferred method to achieve quicker market penetration, we believe that self publication and distribution through the various available distribution sources would be a viable alternative to traditional publishing and would allow us to retain total control of the product from inception through distribution.

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Distributors

In May 2010 we engaged AtlasBooks and BookMasters as a distributor of our initial three children’s books. AtlasBooks Distribution Service, a division of BookMasters, Inc., provides distribution to the book trade for publishers. AtlasBooks markets and sells books to wholesalers, chains, independents, online retailers, and other retail markets on a global basis. AtlasBooks represented and featured the Doolittle series at the 2010 BookExpo America (www.bookexpoamerica.com) held in New York on May 25 through May 27 which is the largest publishing event in North America. AtlasBooks continues to represent the Doolittle series on its website, at book shows and its catalog of represented companies. For more information on AtlasBooks visit www.atlasbooks.com.

Internet

In October 2009 we launched our website www.doolittleedutainment.com to promote, market and sell our initial three book titles. Due to the popularity of the internet, businesses today must utilize the World Wide Web to promote market and sell products and services to consumers. We see great opportunities to build our brand name through our website and intend to further develop and expand our website as a dynamic and interactive website designed for kids but also informative for parents, consumers and retailers. When completed intend that the website will consist of information about the Company, the stories of “Doolittle” and will include games and a sports and adventures section that will be interactive, informative and entertaining for kids. Pending sufficient funding and capital resources, we will seek to establish and develop “Club Doolittle” as part of our website. Our intent is to utilize Club Doolittle to build a customer data base by allowing customers to sign-up for free drawings to win books and other products.

The web site will showcase our products to consumers and will provide an online catalogue allowing the consumer to purchase our books, and other products via the internet. Customers will be able to access our product brochure online which will feature all designs, colors, options, sizing charts, inventory availability and closeout specials. We envision that the website will be continually upgraded and modified by adding content that will make the visitor’s experience as user friendly, informative and entertaining as possible.

We view our website as an important tool for building and marketing our brand name. While we have made minimal sales through our website, we intend to revamp our website and implement and engage search engine optimization tools to reach and attract a wider market.

Licensing

We plan to focus on the potential for licensing of our intellectual property, namely the Doolittle character and illustrations depicting Doolittle in various sporting activities. This direction, if successful, would allow us to realize quicker market penetration, growth and revenue. We believe that our main character Doolittle and his two friends Ajax and R-Dub along with our books, apparel line and other accessory items have been developed to the point that we have viable marketable properties for licensing.

Status of any Publicly Announced New Product or Services.

As of the date of this report there are no new products or services for which the company has publicly announced the release date. As set forth herein, we have completed and published Books 1, 2 and 3, and have completed the character treatment for two potential future books.

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Competitive Business Conditions.

Our products are in direct competition with many different companies in this highly competitive industry. Many of these companies have substantial current assets and cash reserves and include companies such as Disney, Warner Brothers, and Nickelodeon among numerous others. This industry is highly competitive and it takes time and capital to develop the concept of a character and bring it to the marketplace. Since diverse distribution channels are available, we believe that we can be successful in bringing our character representation to the marketplace.

Sources and Availability of Raw Materials.

We do not utilize any specialized raw materials. All necessary required materials, if any, are readily available. The Company is not aware of any existing or future problem that will materially affect the source and availability of any materials which would be required by the Company.

Dependence on One or a Few Major Customers.

We do not currently have any identifiable customers. We believe that the diversity of the various avenues for the sale and distribution of our books and products offered will alleviate the dependence on any customer. Through the widespread use of our books and products in multimedia, electronic commerce, publishing, Internet and other developing industries, we will seek to develop a wide base of customers.

Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts.

We own intellectual property rights including copyright and trademarks which are encompassed in our books and proposed product line. Through our wholly-owned subsidiary Doolittle Edutainment Corp. we received trademark and copyright registration for the following:

Copyrights:


TITLE	REG. NO.	DATE OF REGISTRATION
Doolittle Classics: Vol. 1	VAU-419-090	December 12, 1997
Doolittle Classics: Vol. 2	VAU-476-300	October 28, 1999
The Story of Doolittle: An Exceptional Young Gorilla	TXU-950-710	May 3, 2000
The Adventures of Dynamic Doolittle: Episode 1, The Problem with Paulie Python	TXU-980-865	October 30, 2000
Doolittle’s Very, Very Bad Day	TXU-1-036-883	May 22, 2001
Illustrations for Book 1 The Story of Doolittle, an Exceptional Young Gorilla	VAU-730-773	January 22, 2007
Illustrations for Book 2 The Adventures of Dynamic Doolittle - Episode 1 “The Problem with Paulie Python”	VAU-730-772	January 22, 2007
Illustrations for Book 3 Doolittle’s Very, Very Bad Day	VAU-730-774	January 22, 2007
Completed Book 1 - The Story of Doolittle, an Exceptional Young Gorilla	TX 7-015-574	Filed January 26, 2008
Completed Book 2 - The Adventures of Dynamic Doolittle - Episode 1 “The Problem with Paulie Python”	TX 7-015-529	Filed January 26, 2008
Completed Book 3 – Doolittle’s Very, Very Bad Day	TX 7-015-514	Filed January 26, 2008

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Trademarks:


MARK	REG. NO	CLASS	REG. DATE	OWNER OF RECORD	JURISDICTION
Doolittle	2,545,806	25	March 12, 2002	Doolittle Edutainment Corp.	United States
Doolittle	3,323,801	16 and 28	October 30, 2007	Doolittle Edutainment Corp.	United States

We previous held the trademark for Doolittle Duds registered in the International class 25 which consists of clothing, shirts, T-shirts, sweat shirts and hats, which was granted and approved on July 4, 2000. In 2007 we ceased using the trademark “Doolittle Duds” and therefore chose not to file an affidavit of continued use under Section 8, whereupon the Doolittle Duds trademark was deemed abandon.

Licenses and Royalty Agreements.

Under the terms of that certain Restated Independent Contractor Agreement between our subsidiary, Doolittle Edutainment Corp. and James Wojtak dated February 18, 2000 (the ‘Wojtak Agreement”), we have agreed to pay the following royalties to Mr. Wojtak:

(i)

Level 1 Royalties. With regard to each Form of Work as defined in that Wojtak Agreement, upon our recovery of (x) certain advances, (y) our costs of illustration and layout and (z) our cost of printing, Mr. Wojtak shall be paid a royalty percentage equal to fifteen percent (15.0%) of the total gross revenue received by us from the sale of the Forms of Work, (excluding shipping costs and sales tax), on each unit sold up to ten thousand units (10,000) of any and all Forms of Work as defined in that Wojtak Agreement, through any and all trade channels both foreign and domestic.

(ii)

Level 2 Royalties. After we have recovered (x) certain advances, (y) our costs of illustration and layout and (z) our cost of printing, and upon unit sales reaching 10,000, Mr. Wojtak shall be paid a royalty equal to eighteen percent (18.0%) of the total gross revenue received by us from the sale of the Forms of Work, (excluding shipping costs and sales tax), on each unit sold in excess of ten thousand units (10,000) of any and all Forms of Work as defined in that Wojtak Agreement, through any and all trade channels both foreign and domestic.

(iii)

Level 3 Royalties. After we have recovered (x) certain advances, (y) our costs of illustration and layout and (z) our cost of printing, and upon unit sales reaching 15,000, Mr. Wojtak shall be paid a royalty equal to twenty percent (20.0%) of the total gross revenue received by us from the sale of the Forms of Work, (excluding shipping costs and sales tax), on each unit sold in excess of fifteen thousand units (15,000) of any and all Forms of Work as defined in that Wojtak Agreement, through any and all trade channels both foreign and domestic.

(iv)

Licensing Agreements: If we enter into any licensing agreement with any or all of the Forms of Work as defined in that Wojtak Agreement, Mr. Wojtak shall be paid ten percent (10%) of the total gross revenue received by us from the licensee. Units of Forms of Work as defined in that Wojtak Agreement sold through any licensing agreement are valid toward fulfillment of each Royalty Level set forth above.

WebSite

Doolittle Edutainment Corp., owns the domain names www.doolittleedutainment.com, www.doolittleduds.com and www.dynamicdoolittle.com and may obtain and utilize additional websites to market the Company’s books and products.

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Need for any Government Approval of Principal Products or Services.

At this time we do not require the approval of any federal, state or local agency with regard to any of our products or services.

Effect of Existing or Probable Governmental Regulations on the Business;

We are subject to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “1934 Act”), which regulates proxy solicitations. Section 14(a) requires all companies with securities registered pursuant to Section 12(g) thereof to comply with the rules and regulations of the Commission regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to stockholders at a special or annual meeting thereof or pursuant to a written consent will require us to provide its stockholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must be submitted to the Commission at least 10 days prior to the date that definitive copies of this information are forwarded to stockholders.

We are also required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the Commission on a regular basis, and will be required to timely disclose certain events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on Form 8-K.

We believe that these reporting obligations will increase our annual legal and accounting costs.

We not aware of any other governmental regulations now in existence or that may arise in the future that would have an effect on the business of the Company.

Research and Development Costs.

We did not make any expenditure on research and development activities during the last two fiscal years, 2010 and 2009.

Cost of Compliance with Environmental Laws.

At this time our business activities are not subject to any environmental laws or governmental regulation nor do we anticipate that our future business activities will subject us to any environmental compliance regulations.

Employees.

As of the date of this Annual Report other than George G, Chachas, a director and the sole executive officer, we have no other employees. We do not expect significant changes in the number of people we employ over the next twelve months. We plan to hire additional staff, on an as needed basis,

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ITEM 1A.

RISK FACTORS.

Investment in our common stock involves a high degree of risk. You should carefully consider the risks described below together with all of the other information included in this herein before making an investment decision. If any of the following risks actually occur, our business, financial condition or results of operations could suffer. In that case, the market price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business

There may be conflicts of interest between our management and the company.

Conflicts of interest create the risk that management may have an incentive to act adversely to the interests of the Company. A conflict of interest may arise between the Company’s management’s personal pecuniary interest and their fiduciary duty to our stockholders.

We have no officer, director, or employee with any formal book publishing or market education or training and will continue to rely on the outside consultants whose interests may not always be aligned with ours.

We have no officer, director, or employee with book publication, licensing or marketing training or experience. This increases our dependence on outside consultants we may engage from time to time. The quality of such outside consultants and the services which they provide may be influenced by the Company’s financial condition and ability in retaining high equality consultants.

We have limited internal controls due to our small size and limited number of people, which may keep us from preventing or detecting waste or fraud.

We currently have only one director and one officer, so we rely on computer and manual systems without independent officers and employees to implement full, formal, internal control systems. Accordingly, we do not have separate personnel that provide dual signatures on checks, separate accounts receivable and cash receipts, accounts payable and check writing, or other functions that frequently are divided among several individuals as a method of reducing the likelihood of improper activity. This reliance on a few individuals and the lack of comprehensive internal control systems may impair our ability to detect and prevent internal waste and fraud.

We will need additional capital, which we may seek through additional financing or the sale of equity securities.

We will need additional funds to cover expenditures in the completion, publications and marketing of our books and products. We will fund any additional amounts required for such expenditures through additional debt financing or the sale of additional equity securities, which would reduce the percentage interest in our Company held by existing stockholders and may dilute the economic interest of existing stockholders. Our board of directors can authorize the sale of additional equity securities without stockholder consent.

We may not be able to obtain additional financing.

There can be no assurance that any proceeds we receive from additional debt or equity financing will satisfy our capital needs. We may require additional capital to address unanticipated expenses. There is no assurance that additional financing will be available when needed on terms favorable to us or at all. The unavailability of adequate financing on acceptable terms could have a material adverse effect on our financial condition and on our continued operation.

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Our officers and directors will continue to control us in the foreseeable future and they may take actions that are not in the best interests of our other stockholders.

George G. Chachas, the President, CEO, CFO, Secretary and a director, beneficially own approximately 60.98% of our common stock. See “Security Ownership of Certain Beneficial Owners and Management.” Accordingly, by virtue of their ownership of shares, the stockholders referred to above acting together may effectively have the ability to influence significant corporate actions. Such actions include the election of our directors and the approval or disapproval of fundamental corporate transactions, including mergers, the sale of all or substantially all of our assets, liquidation, and the adoption or amendment of provisions in our articles of incorporation and bylaws. Such actions could delay or prevent a change in our control. See “Security Ownership of Certain Beneficial Owners and Management” and “Description of Securities.”

If we fail to predict consumer preferences and trends accurately, develop and introduce new books and products rapidly or enhance and extend our existing core products, our sales will suffer.

The introduction of new books and products and the enhancement and extension of existing products, through the introduction of additional content or by other means, are critical to our future sales growth. The successful development of new books, products and the enhancement and extension of our current products will require us to anticipate the needs and preferences of consumers and educators and to forecast market trends accurately. Consumer preferences, and particularly children’s preferences, are continuously changing and are difficult to predict. The development of learning products requires high levels of innovation and this process can be lengthy and costly. To remain competitive, we must continue to develop enhancements of our existing character base successfully. We cannot assure you that future products will be introduced or, if introduced, will be successful. The failure to enhance and extend our existing products or to develop and introduce new books and products that achieve and sustain market acceptance and produce acceptable margins would harm our business and operating results.

Our limited operating history makes it difficult to evaluate our current business and prospects.

We have a limited operating history for you or our management to use in evaluating our business and prospects, particularly with regard to our books and product acceptance by consumers. To date, we have recognized no sales from our books or product and any sales from these operations may not meet our expectations or those of analysts or investors. When making an investment decision regarding our common stock, you must consider our business and prospects in light of the risks and difficulties typically encountered by companies in their early stages of development.

If our products infringe or allege to infringe on the intellectual property rights of others It could lead to costly disputes or disruptions.

In the course of our business, we may periodically receive claims of infringement or otherwise become aware of potentially relevant copyrights, trademarks or other intellectual property rights held by other parties. Upon receipt of this type of communication, we will evaluate the validity and applicability of allegations of infringement of intellectual property rights to determine whether we must negotiate licenses or cross-licenses to incorporate or use the proprietary copyrights or trademarks or other proprietary matters in or on our products. Any dispute or litigation regarding copyrights, trademarks or other intellectual property rights, regardless of its outcome, may be costly and time-consuming, and may divert our management and key personnel from our business operations. If we, our potential distributors or our manufacturers are adjudged to be infringing the intellectual property rights of any third party, we or they may be required to obtain a license to use those rights, which may not be obtainable on reasonable terms, if at all. And, we may incur costs in revising certain books or products so as to not infringe on others rights. We also may be subject to significant damages or injunctions against the development and sale of some or all of our products or against the use of a trademark in the sale of some or all of our products. We do not have insurance to cover any such claim of this type and may not have sufficient resources to defend an infringement action.

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If we are unable to compete effectively with existing or new competitors, our sales and market share could be affected.

We anticipate that we will compete primarily in the preschool and elementary school category of the U.S. book and toy industry and, to some degree, in the overall U.S. and international book and toy industry. Each of these markets is very competitive and we expect competition to increase in the future. We believe that we will compete in the future, with makers of popular cartoons, children’s books and other educational products. Accordingly, many of our direct, indirect and potential competitors have significantly longer operating histories, greater brand recognition and substantially greater financial, technical and marketing resources than we do. These competitors may be able to respond more rapidly than we can to changes in consumer preferences. They may also devote greater resources to the development, promotion and sale of their products than we are able to. We cannot assure you that we will be able to compete effectively in our markets. See “Business – Competitive Business Conditions” for a discussion of the companies with which we believe we compete as well as the principal competitive factors in our markets.

We do not have long-term agreements with manufacturers and suppliers.

As a development stage company we presently order our products on a purchase order basis from manufacturers and suppliers, and we do not have long-term manufacturing agreements with any of them. The absence of long-term agreements means that, with little or no notice, our manufacturers and suppliers could refuse to manufacture some or all of our products, reduce the number of units of a product that they will manufacture or change the terms under which they manufacture our products. If our manufacturers and suppliers stop manufacturing our products, we may be unable to find alternative manufacturers or suppliers on a timely or cost-effective basis, if at all, which would harm our operating results. In addition, if any of our manufacturers or suppliers changes the terms under which they manufacture for us, our costs could increase and our profitability would suffer.

If we cannot attract, retain, motivate and integrate additional skilled personnel, our ability to compete will be impaired.

Many of our current and potential competitors have employees and we do not. Our success depends in large part on our ability to attract, retain and motivate highly qualified management and technical personnel. We face intense competition for qualified personnel. The industry in which we compete has a high level of employee mobility and aggressive recruiting of skilled personnel. If we are unable to continue to employ our key personnel or to attract and retain qualified personnel in the future, our ability to successfully execute our business plan will be jeopardized and our growth will be inhibited.

Because our officers and directors are indemnified against certain losses, we may be exposed to costs associated with litigation.

If our directors or officers become exposed to liabilities invoking the indemnification provisions, we could be exposed to additional un-reimbursable costs, including legal fees. Our Articles of Incorporation, provide that our directors and officers will not be liable to us or to any shareholder and will be indemnified and held harmless for any consequences of any act or omission by the directors and officers unless the act or omission constitutes gross negligence or willful misconduct. Extended or protracted litigation could have a material adverse effect on our cash flow.

Our stock price may be volatile.

The market price of our common stock will likely fluctuate significantly in response to the following factors, some of which are beyond our control: variations in our quarterly operating results; changes in financial estimates of our revenues and operating results by securities analysts; changes in market valuations; announcements by us of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; additions or departures of key personnel; future sales of our common stock; stock market price and volume fluctuations attributable to inconsistent trading volume levels of our stock; commencement of or involvement in litigation.

Page 12

Authorization of Preferred Stock.

Our Articles of Incorporation authorizes the issuance of up to 25,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. The preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of our authorized preferred stock, there can be no assurance that the Company will not do so in the future.

If we are subject to SEC regulations relating to low-priced stocks, the market for our common stock could be adversely affected.

The Securities and Exchange Commission has adopted regulations concerning low-priced (or “penny”) stocks. The regulations generally define “penny stock” to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Our stock will be classified as a penny stock.

The penny stock regulations require that broker-dealers, who recommend penny stocks to persons other than institutional accredited investors make a special suitability determination for the purchaser, receive the purchaser’s written agreement to the transaction prior to the sale and provide the purchaser with risk disclosure documents that identify risks associated with investing in penny stocks. Furthermore, the broker-dealer must obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before effecting a transaction in penny stock. These requirements have historically resulted in reducing the level of trading activity in securities that become subject to the penny stock rules.

The additional burdens imposed upon broker-dealers by these penny stock requirements may discourage broker-dealers from effecting transactions in the common stock, which could severely limit the market liquidity of our common stock and our shareholders’ ability to sell our common stock in the secondary market.

Recent legislation addressing corporate and auditing scandals may result in increased costs of compliance.

An immediate and specific risk relates to the our ability to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act the failure of which could lead to loss of investor confidence in our reported financial information. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required to furnish a report by our management on our internal control over financial reporting. If we cannot provide reliable financial reports or prevent fraud, then our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our stock could drop significantly. In order to achieve compliance with Section 404 of the Act, we will need to engage in a process to document and evaluate our internal control over financial reporting, which will be both costly and challenging. In this regard, management will need to dedicate internal resources, engage outside consultants and adopt a detailed work plan.

ITEM 2. DESCRIPTION OF PROPERTY.

Our corporate headquarters address at 2445 Fifth Avenue, Suite 440, San Diego, CA 92101is the business office address of our President, George G. Chachas, which office space is provided at no cost. The property is generic office space that meets the Company’s executive and administrative requirements.

ITEM 3. LEGAL PROCEEDINGS.

We are not a party to any pending legal proceeding. No federal, state or local governmental agency is presently contemplating any proceeding against the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

Page 13

ITEM 4. [REMOVED AND RESERVED]

PART II.

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock is traded on OTC Bulletin Board under the symbol “ANOS.” The following table sets forth, in U.S. dollars the high and low bid prices for each of the calendar quarters indicated, as reported by the OTC Bulletin Board. The prices in the table may not represent actual transactions and do not include retail markups, markdowns or commissions.


	Company Common Stock Bid Prices
	High		Low
2010
Quarter ended December 31	$	0.20	$	0.10
Quarter ended September 30	0.20		0.10
Quarter ended June 30	0.25		0.05
Quarter ended March 31	0.49		0.05

2009
Quarter ended December 31	$	0.175	$	0.11
Quarter ended September 30	0.49		0.06
Quarter ended June 30	0.15		0.05
Quarter ended March 31	0.15		0.05

On January 31, 2010, the last bid and ask of our common stock as reported on the OTC Bulletin Board was $0.05 and $0.25, respectively.

Holders of Our Common Stock

As of January 31, 2010, we had 41 stockholders of record based on information provided by our transfer agent.

Dividends

We have not declared or paid cash dividends on our common stock since our inception. We intend to retain all future earnings, if any, to fund the operation of our business, and, therefore, do not anticipate paying dividends in the foreseeable future. Future cash dividends, if any, will be determined by our board of directors.

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

We would not be able to pay our debts as they become due in the usual course of business; or

Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

Page 14

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth information as of December 31, 2010 and 2009, with respect to our equity compensation plans previously approved by stockholders and equity compensation plans not previously approved by stockholders.


	Equity Compensation Plan Information
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by stockholders	33,333⁽¹⁾	$	0.75⁽¹⁾	4,900,000
Equity compensation plans not approved by stockholders	0	0		0
Total	33,333⁽¹⁾	$	0.75⁽¹⁾	4,900,000

⁽¹⁾ Represents post 1-for-3 reverse stock split adjustment.

Issuer Purchases of Equity Securities

There were no stock repurchases during the fourth quarter of 2010.

Recent Sales of Unregistered Securities

The were no sales of unregistered securities during the period covered by this report.

ITEM 6.

SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Page 15

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our consolidated financial statements and the notes presented herein. In addition to historical information, the following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed in this report.

Management’s Plan of Operation

The following discussion of our financial condition, changes in financial condition and results of operations for the year ended December 31, 2010 should be read in conjunction with our audited consolidated financial statements and related notes for the year ended December 31, 2010.

Our Plan of Operations

Our wholly-owned subsidiary, Doolittle Edutainment, which holds all intellectual property for the Company, is engaged in the children’s education and entertainment market. With the completion and initial publication and printing of our first three book titles we will seek to solidify a traditional publishing relationship while at the same time continuing to self-publish our books and seek to negotiate a distribution agreement with one or more book distribution sources. We further plan continue to utilize our intellectual property to entertain and educate children through various avenues focused around our main character, “Doolittle” and further the development of additional books and exploitation of our intellectual property rights through licensing, branding or any other acceptable manner.

We recently have begun to focus on developing the market for this book. As a result, we are a development stage enterprise as defined by SFAS 7. In our most recent operating period ended December 31, 2010, we recorded minimal revenue of $60. For the fiscal year ended December 31, 2009, there were no revenues. Accordingly, we have issued a comment regarding our ability to continue as a going concern (please refer to the footnotes to the financial statements). Until such time that we are able to establish a consistent flow of revenues from our Doolittle products, sufficient to sustain our operations, Management intends to rely primarily upon debt financing as needed to supplement the cash flows generated by the sale of our products.

Our plan of operations for the next twelve months subject to our achieving the necessary financing, is as follows:

We plan to carry out our sales and marketing efforts and seek to negotiate and facilitate a publishing contract for the publication of Book 1, 2 and 3 or pursue self publication through Bookmaster and distribution through one or more online and store-front distribution channels. We anticipate spending approximately $10,000 over the next twelve months for the printing of additional copies of Books 1, 2 and 3.

We anticipate spending approximately $10,000 over the next twelve months on the completion of Book 4 and writing an editing associated with Book 5.

We anticipate spending approximately $25,000 in complying with our obligations as a reporting company under the Securities Exchange Act of 1934. These expenses will consist primarily of professional fees relating to the preparation of our financial statements and completing our annual report, quarterly report, current report and proxy statement filings with the SEC.

During the twelve month period following the date of this annual report, we anticipate that we will not generate revenues to cover our operating costs. We anticipate based on our current cash and working capital and our planned expenses that we will be able to continue our plan of operations for three more months without additional financing. We believe that we will require substantial additional financing in order to print additional copies of our books to effectively commercial market our books in order to earn revenues that exceed our operating expenses. We believe that debt financing from third parties will not be an alternative for funding of our planned activities as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of debt financing from our principal shareholder and executive officer or equity financing from the sale of our common stock or sales of convertible promissory notes that are convertible into shares of our common stock. If we do not obtain the necessary additional financing, we will be forced to scale back our plan of operations and our business activities.

Page 16

Our total operating expenses for the period from September 25, 1996, (inception) to December 31, 2010 were $544,513, of which approximately 47.15% were general and administrative. Our current monthly operating expenses average less than $5,000 exclusive of management’s salaries, which are deferred until we begin selling our books. The following table quantifies the components that comprise our operating expenses for this period:


DESCRIPTION		AMOUNT
Legal and Professional Fees	$	287,775
Other General and Administrative		216,738
Wages and Salaries		40,000
Taxes		0
Total Operating Expenses	$	544,513

As we grow our business and obtain a publishing deal and/or purchase orders for our books and other products, our revenues should grow on a consistent basis. By focusing our efforts on limiting general and administrative expenses as we increase revenue, we expect to increase our net income on a consistent basis as well.

RESULTS OF OPERATIONS

For the year ended December 31, 2010 compared to the year ended December 31, 2009.

As of September 25, 1996, (inception) to December 31, 2010, we have generated only minimal revenue. We earned minimal revenue during the twelve month period ended December 31, 2010 and no revenues for the twelve months ended December 31, 2009. As a development stage company, our revenue is expected to be derived from the sale of our Doolittle products.

Operating expenses for the twelve months ended December 31, 2010 totaled $49,390, resulting in a decrease of approximately 26.99% percent from the comparable period of 2009. This decrease resulted primarily from a 24.18% decrease general and administrative expenses, and a 29.95% decrease in legal and professional fees during the current period.

We incurred a net loss of $61,266 during the twelve month period ended December 31, 2010, resulting in a decreased loss of approximately 20.90% from the comparable period of 2009. Basic net loss per share was $0.02 for the twelve month period ended December 31, 2010, representing a 33.33% decrease from the comparable period of 2009.

Liquidity and Capital Resources

As of December 31, 2010, we had a negative working capital of $248,252 compared to a negative working capital of $186,986 at December 31, 2009. The change in working capital resulted primarily from our operating losses, partially offset by cash received from a related-party note payable.

During the twelve months ended December 31, 2010 we experienced negative cash flow of $24,139 from operating activities. We met our cash requirements during this period through debt financing, realizing a cash inflow from shareholder loans in the amount of $24,076.

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Page 17

ITEM 8.

FINANCIAL STATEMENTS.

ANOTEROS, INC. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

C O N T E N T S


Report of Independent Registered Public Accounting Firm	19

Consolidated Balance Sheets	20

Consolidated Statements of Operations	21

Consolidated Statements of Stockholders’ Equity (Deficit)	22

Consolidated Statements of Cash Flows	27

Notes to the Consolidated Financial Statements	29

Page 18

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Anoteros, Inc. & subsidiary

(A Development Stage Company)

San Diego, California

We have audited the accompanying consolidated balance sheets of Anoteros, Inc. and subsidiary as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Anoteros, Inc. and subsidiary as of December 31, 2010 and 2009, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company does not have significant operations to date, nor does it have an established source of revenues which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ HJ Associates & Consultants, LLP

HJ Associates & Consultants, LLP

Salt Lake City, Utah

February 1, 2011

Page 19


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Balance Sheets


ASSETS
			December 31,		December 31,
			2010		2009

CURRENT ASSETS

	Cash		$	286	$	349
	Inventory			2,085		3,605

		Total Current Assets		2,371		3,954

OTHER ASSETS

	Artwork			31,915		31,915

		Total Other Assets		31,915		31,915

		TOTAL ASSETS	$	34,286	$	35,869

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

	Accounts payable and accrued expenses - related party		$	35,687	$	11,959
	Note payable - related party			157,660		133,584
	Accrued interest payable - related party			57,276		45,397

		Total Current Liabilities		250,623		190,940

		TOTAL LIABILITIES		250,623		190,940

STOCKHOLDERS' EQUITY (DEFICIT)

	Preferred stock: 25,000,000 shares authorized;
	$0.001 par value; -0- shares issued and outstanding			-		-
	Common stock: 100,000,000 shares authorized;
	$0.001 par value; 3,294,056 shares issued
	and outstanding			3,294		3,294
	Additional paid-in capital			362,029		362,029
	Deficit accumulated during the development stage			(581,660)		(520,394)

		Total Stockholders' Equity (Deficit)		(216,337)		(155,071)

		TOTAL LIABILITIES AND STOCKHOLDERS'
		EQUITY (DEFICIT)	$	34,286	$	35,869

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

Page 20


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Operations

							From Inception of
							the Development
							Stage on
							September 25,
			For the Year Ended				1996 through
			December 31,				December 31,
			2010		2009		2010

REVENUES			$	60	$	-	$	927

COST OF GOODS SOLD				963		-		56

	GROSS PROFIT (LOSS)			(903)		-		871

OPERATING EXPENSES

	Legal and professional			23,041		32,890		287,775
	General and administrative			25,442		34,756		255,831

		Total Operating Expenses		48,483		67,646		543,606

LOSS FROM OPERATIONS				(49,386)		(67,646)		(542,735)

OTHER EXPENSES

	Interest expense			(11,880)		(9,803)		(59,535)
	Loss on disposal of fixed assets			-		-		(250)
	Loss on sale of fixed assets			-		-		1,767
	Gain on sale of intellectual property			-		-		20,000

		Total Other Expenses		(11,880)		(9,803)		(38,018)

LOSS BEFORE INCOME TAXES				(61,266)		(77,449)		(580,753)
PROVISION FOR INCOME TAXES				-		-		-

NET LOSS			$	(61,266)	$	(77,449)	$	(580,753)

BASIC AND DILUTED LOSS PER SHARE			$	(0.02)	$	(0.03)

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING				3,294,056		2,620,209

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

Page 21


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)

						Deficit
						Accumulated
				Additional		During the
	Common Stock			Paid-In		Development
	Shares	Amount		Capital		Stage
Balance at inception of the development
stage on September 25, 1996	-	$	-	$	-	$	-

Common stock issued for cash
at $0.001 per share	666,667		667		1,168		-

Net loss from inception of the
development stage on September
25, 1996, through December 31, 1996	-		-		-		(1,109)

Balance, December 31, 1996	666,667		667		1,168		(1,109)

Common stock issued for cash
at $0.003 per share	443,333		443		3,557		-

Common stock issued for artwork
at 0.05 per share	1,667		2		248		-

Net income for the year ended
December 31, 1997	-		-		-		(2,976)

Balance, December 31, 1997	1,111,667		1,112		4,973		(4,085)

Common stock issued on January 19, 1998
for services rendered at $0.05 per share	1,667		2		248		-

Common stock issued for cash on
April 16, 1998 for $0.05 per share	8,000		8		1,192		-

Common stock issued for cash on
June 2, 1998 for $0.05 per share	10,000		10		1,490		-

Common stock issued for cash on
July 21, 1998 for $0.05 per share	3,333		3		497		-

Common stock issued on July 29, 1998
for services rendered at $0.05 per share	8,333		8		2,492		-

Common stock issued for cash on
December 7, 1998 for $0.05 per share	6,667		7		993		-

Common stock issued for cash on
December 21, 1998 for $0.05 per share	5,000		5		745		-

Net loss for the year ended
December 31, 1998	-		-		-		(7,779)

Balance, December 31, 1998	1,154,667	$	1,155	$	12,630	$	(11,864)

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

Page 22


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
						Deficit
						Accumulated
				Additional		During the
	Common Stock			Paid-In		Development
	Shares	Amount		Capital		Stage
Balance, December 31, 1998	1,154,667	$	1,155	$	12,630	$	(11,864)

Common stock issued for cash on February 16, 1999 for $0.05 per share	1,667		2		248		-

Common stock issued for cash on March 30, 1999 for $0.05 per share	5,333		5		795		-

Common stock issued for cash on May 4, 1999 for $0.05 per share	13,333		13		1,987		-

Common stock issued for cash on May 18, 1999 at $0.05 per share	6,667		7		993		-

Common stock issued on May 18, 1999 for services rendered at $0.05 per share	66,667		67		9,933		-

Common stock issued for cash on August 12, 1999 at $0.05 per share	6,667		7		993		-

Common stock issued for cash on September 16, 1999 at $0.05 per share	6,667		7		993		-

Common stock issued on September 16, 1999 for services rendered at $0.05 per share	40,000		40		5,960		-

Common stock issued for cash on September 21, 1999 at $0.05 per share	13,333		13		1,987		-

Common stock issued for cash on October 11, 1999 at $0.05 per share	23,333		23		3,477		-

Common stock issued on October 11, 1999for services rendered at $0.05 per share	156,666		157		23,343		-

Net loss for the year ended December 31, 1999	-		-		-		(58,531)

Balance, December 31, 1999	1,495,000		1,496		63,339		(70,395)

Common stock issued on February 18, 2000for services rendered at $0.05 per share	3,333		3		497		-

Common stock issued on March 10, 2000for services rendered at $0.05 per share	36,667		36		5,464		-

Net loss for the year ended December 31, 2000	-		-		-		(22,150)

Balance, December 31, 2000	1,535,000	$	1,535	$	69,300	$	(92,545)

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

Page 23


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

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

Balance, December 31, 2000	1,535,000	$	1,535	$	69,300	$	(92,545)

Common stock issued on November 15, 2001
for services rendered at $0.10 per share	25,000		25		7,475		-

Net loss for the year ended
December 31, 2001	-		-		-		(14,626)

Balance, December 31, 2001	1,560,000		1,560		76,775		(107,171)

Common stock issued for cash on
May 2, 2002 at $0.10 per share	1,667		2		498		-

Net income for the year ended
December 31, 2002	-		-		-		(4,054)

Balance, December 31, 2002	1,561,667		1,562		77,273		(111,225)

Common stock issued on January 13, 2003
for services rendered at $0.10 per share	1,667		2		498		-

Common stock issued on July 28, 2003
in payment of debts at $0.10 per share	2,233		2		668		-

Net loss for the year ended
December 31, 2003	-		-		-		(8,877)

Balance, December 31, 2003	1,565,567		1,566		78,439		(120,102)

Common shares issued for extinguishment of
debt on March 31, 2004 at $0.10 per share	3,910		4		1,159		-

Common shares issued on March 31, 2004
for services rendered at $0.10 per share	50,000		50		14,950		-

Common shares issued on September 15, 2004
for services rendered at $0.10 per share	116,667		117		34,883		-

Net loss for the year ended
December 31, 2004	-		-		-		(60,127)

Balance, December 31, 2004	1,736,144		1,737		129,431		(180,229)

Common shares issued on February 22, 2005
for services rendered at $0.10 per share	8,333		8		2,492		-

Balance forward	1,744,477	$	1,745	$	131,923	$	(180,229)

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

Page 24


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

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

Balance forward	1,744,477	$	1,745	$	131,923	$	(180,229)

Common shares issued on March 25, 2005
for services rendered at $0.10 per share	191,667		192		57,308		-

Common shares issued on December 22, 2005
for services rendered at $0.10 per share	100,000		100		29,900		-

Net loss for the year ended
December 31, 2005	-		-		-		(101,039)

Balance, December 31, 2005	2,036,144		2,037		219,131		(281,268)

Common shares issued on July 6, 2006 for
services rendered at $0.05 per share	112,947		113		16,827		-

Common shares issued on September 18,
2006 for accrued wages at $0.05 per share	33,333		33		4,967		-

Common shares issued on September 26,
2006 for cash at $0.05 per share	23,333		23		3,477		-

Common stock issued on November 1, 2006
for cash at $0.05 per share	40,000		40		5,960		-

Net loss for the year ended
December 31, 2006	-		-		-		(45,875)

Balance, December 31, 2006	2,245,757		2,246		250,362		(327,143)

Common shares issued on January 15, 2007
for accrued wages at $0.05 per share	16,666		17		4,983		-

Common shares issued on December 11, 2007
for services rendered at $0.05 per share	33,333		33		4,967		-

Common shares issued on December 28,
2007 for debt at $0.05 per share	30,500		30		4,547		-

Net loss for the year ended
December 31, 2007	-		-		-		(56,834)

Balance, December 31, 2007	2,326,256	$	2,326	$	264,859	$	(383,977)

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

Page 25


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)


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

Balance, December 31, 2007	2,326,256	$	2,326	$	264,859	$	(383,977)

Net loss for the year ended
December 31, 2008	-		-		-		(58,968)

Balance, December 31, 2008	2,326,256		2,326		264,859		(442,945)

Common shares issued for prepaid services at
$0.30 per share on May 4, 2009	25,000		25		7,475		-

Common shares issued for debt at $0.30 per
share on May 4, 2009	69,172		69		20,682		-

Fractional shares issued pursuant to
reverse stock-split on August 23, 2009	41		-		-		-

Common shares issued for services rendered
at $0.08 per share on September 25, 2009	150,000		150		11,850		-

Common shares issued to officer for cash and
conversion of accrued salary at $0.08 per
share on September 25, 2009	687,500		688		54,312		-

Common shares issued for conversion of
accounts payable at $0.08 per share on
September 25, 2009	36,087		36		2,851		-

Net loss for the year ended
December 31, 2009	-		-		-		(77,449)

Balance, December 31, 2009	3,294,056		3,294		362,029		(520,394)

Net loss for the year ended
December 31, 2010	-		-		-		(61,266)

Balance, December 31, 2010	3,294,056	$	3,294	$	362,029	$	(581,660)

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

Page 26


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Cash Flows
							From Inception
							of the
							Development
							Stage on
							September 25,
			For the Year Ended				1996 through
			December 31,				December 31,
			2010		2009		2010
CASH FLOWS FROM OPERATING ACTIVITIES

	Net loss		$	(61,266)	$	(77,449)	$	(580,753)
	Adjustments to reconcile net loss to
	net cash used by operating activities:
	Depreciation expense			-		-		257
	Loss on disposal of fixed assets			-		-		250
	Loss on sale of equipment			-		-		133
	Gain on sale of fixed assets			-		-		(1,900)
	Common stock issued for services and fees			-		12,000		230,191
	Gain on sale of intellectual property			-		-		(20,000)
	Changes in operating assets and liabilities:
	(Increase) decrease in inventory			1,520		(3,605)		(2,032)
	Decrease in prepaids and deposits			-		7,500		7,500
	Increase in accounts payable and
	accrued expenses			-		2,887		555
	and accrued expenses - related party			35,607		33,124		177,235

		Net Cash Used by Operating Activities		(24,139)		(25,543)		(188,564)

CASH FLOWS FROM INVESTING ACTIVITIES

	Increase in artwork			-		(200)		(31,665)
	Proceeds from sale of intellectual property			-		-		20,000
	Purchase of fixed assets			-		-		(10,541)
	Proceeds from sale of fixed assets			-		-		11,500
	Sale of equipment			-		-		300

		Net Cash Used by Investing Activities		-		(200)		(10,406)

CASH FLOWS FROM FINANCING ACTIVITIES

	Payments on notes payable - related parties			-		-		(13,827)
	Proceeds from notes payable - related parties			24,076		19,866		176,655
	Common stock issued for cash			-		5,000		37,335

		Net Cash Provided by Operating Activities		24,076		24,866		200,163

		NET INCREASE (DECREASE) IN CASH		(63)		(877)		1,193

		CASH AT BEGINNING OF PERIOD		349		1,226		-

		CASH AT END OF PERIOD	$	286	$	349	$	1,193

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

Page 27


ANOTEROS, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)

							From Inception
							of the
							Development
							Stage on
							September 25,
			For the Year Ended				1996 through
			December 31,				December 31,
			2010		2009		2010
	CASH PAID FOR

		Interest	$	-	$	-	$	-
		Taxes	$	-	$	-	$	-

	SCHEDULE OF NON-CASH FINANCING AND
	INVESTING ACTIVITIES

		Common stock issued as payment
		on debt	$	-	$	-	$	85,049
		Common stock issued for artwork	$	-	$	-	$	250

Page 28

ANOTEROS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2010 and 2009

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Anoteros, Inc. and its wholly-owned subsidiary, Doolittle Edutainment Corp., is presented to assist in understanding the Company’s consolidated financial statements. Collectively, these entities are referred to as “the Company”. The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the Unites States of America, as well as standards of the Public Company Accounting Oversight Board (United States) and have been consistently applied in the preparation of the consolidated financial statements.

a. Organization and Business Activities

Anoteros, Inc. (“Anoteros”) was incorporated under the laws of the State of Nevada on September 25, 1996 as Out of Bounds Sports Co. Anoteros has been in the development stage since inception. Anoteros has created certain pieces of artwork, and intends to further develop and market this artwork in conjunction with its wholly-owned subsidiary, Doolittle Edutainment Corp. (“Doolittle”). Out of Bounds Sports Co. changed its name to Anoteros, Inc. on September 21, 2004.

Doolittle was incorporated under the laws of the State of Nevada on February 19, 2002 as a wholly-owned subsidiary of Anoteros. Doolittle is working toward creating and marketing a series of children’s books and has completed the first three initial titles and is exploring distribution avenues.

The Company will seek to further develop and market its artwork in additional children’s book titles, as well as other related accessories such as puzzles, coloring books, T-shirts, sweatshirts, super balls, etc., through the Doolittle entity. Additional external financing may be required to proceed with this and any supplemental business plans which may be developed by the Company.

b. Revenue Recognition Policy

Revenues from the sale of books are recognized upon delivery and acceptance by the customer, and when collectability is reasonably assured.

c. Basic Loss per Share

The computations of basic loss per share of common stock are based on the weighted-average number of shares outstanding during the period of the financial statements.

The computations of diluted earnings per common share are based on the weighted-average number of shares outstanding during the financial statement periods, plus the dilutive common stock equivalents that would rise from the exercise of stock options, warrants and restricted stock units outstanding during the year, using the treasury stock method and the average market price per share during the year. Options to purchase 33,333 shares of common stock at $0.75 per share were outstanding at December 31, 2010 and December 31 2009, respectively.

Page 29

ANOTEROS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements (Continued)

December 31, 2010 and 2009

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

c. Basic Loss per Share (Continued)

As the Company experienced a net loss for the years ended December 31, 2010 and 2009, no common stock equivalents have been included in the diluted earnings per common share calculation as the effect of such common stock equivalents would be anti-dilutive.


		Loss	Shares		Per Share
		(Numerator)	(Denominator)		Amount
For the year ended
December 31, 2010	$	(61,266)	3,294,056	$	(0.02)

For the year ended
December 31, 2009	$	(77,449)	2,620,209	$	(0.03)

d. Estimates

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

e. Income Taxes

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are differences between reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax liabilities consist of the following components as of December 31, 2010 and 2009:


		2010		2009
Deferred tax assets:
NOL carryover	$	66,148	$	56,492
Accrued expenses-related party		36,253		22,369

Deferred tax liabilities:		-

Valuation allowance		(102,401)		(78,861)
Net deferred tax asset	$	-	$	-

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the years ended December 31, 2010 and 2009 due to the following:


		2010		2009

Book income (loss)	$	(23,540)	$	(30,205)
Stock for services		-		36,324
Valuation allowance		23,540		(6,119)
	$	-	$	-

Page 30

ANOTEROS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements (Continued)

December 31, 2010 and 2009

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

e. Income Taxes (Continued)

At December 31, 2010, the Company had net operating loss carry forwards of approximately $169,610 that may be offset against future taxable income from the year 2011 through 2031. No tax benefit has been reported in the December 31, 2010 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

The Financial Accounting Standards Board ("FASB") has issued ASC 740-10, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No.109 (FIN 48). ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with ASC 740-10 and ASC 740-30, Accounting for Income Taxes. ASC 740-10 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-like1y-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of FIN 48, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740-10.

At the adoption date of January 1, 2007, the Company had no unrecognized tax benefit which would affect the effective tax rate if recognized.

The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of December 31, 2010, the Company had no accrued interest or penalties related to uncertain tax positions.

The Company files income tax returns in the U.S. federal jurisdiction and in the state of California. With few exceptions, the Company is still subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years after 2006.

f. Newly Issued Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first period that an entity adopted FAS 160.

In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis.

Page 31

ANOTEROS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements (Continued)

December 31, 2010 and 2009

NOTE 1 -

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Preferred Stock

The company has authorized 25,000,000 shares of preferred stock with the following features such that the shares 1) may have voting powers (full or limited) or may be without voting powers; 2) may be made convertible into, or exchangeable for, shares of any other class of stock; and 3) may have rights upon distribution of assets of the Company. The Company will determine preferences upon issuance.

Artwork

During the year ended December 31, 2006 the Company determined its Artwork had reached a point near enough to completion so as to necessitate capitalization of all related expenses. During the years ended December 31, 2010 and 2009 the Company capitalized $-0- and $200, respectively.

Inventory

Inventory consists of various proprietary illustrations to be used included in the Company’s children’s book series. The inventory is stated at the lower of cost or market using the first-in, first-out (FIFO) cost method of accounting. Inventories are adjusted for estimated obsolescence and written-down to net realizable value based upon estimates of future demand and market conditions. At December 31, 2010 all the Company’s $2,085 in inventory was in finished goods form. During the year ended December 31, 2010 the Company wrote-down its inventory to market value, resulting in an aggregate loss of $907.

NOTE 2 -

NOTE PAYABLE – RELATED PARTY

In October 1999, a shareholder loaned $10,000 to the Company. From that date through December 31, 2010, the shareholder has made many additional advances on the loan, and the Company has made some partial payments. As of December 31, 2010, the total principal balance outstanding totaled $157,660. The loan accrues interest at 8.0% per annum. Accrued interest at December 31, 2010 was $57,277. The loan is due on demand.

NOTE 3 -

GOING CONCERN

The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant operations to date, nor does it have an established source of revenues sufficient to allow it to continue as a going concern. External financing, which is necessary for the Company to continue and proceed with operations, will either a) be loaned to the Company by its founder and principal shareholder, or b) will be generated by means of a private placement being contemplated by management in which the Company would attempt to raise between $20,000 and $35,000. The Company is currently seeking to negotiate a publishing contract for its children’s books and implement an appropriate marketing strategy so as to begin generating sales revenues. Management can make no assurances that these steps will be effectively completed, or that after having done so, the Company will become profitable. Until such time these steps are effectively implemented and the Company generates profits, the Company will be reliant upon external financing in order to continue as a going concern.

Page 32

ANOTEROS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements (Continued)

December 31, 2010 and 2009

NOTE 4 -

EQUITY ACTIVITY

On May 4, 2009, the Company issued 25,000 shares of common stock in conjunction with Jennifer Karlovsky’s appointment as a new director of the Company at $0.30 per share, for a total payment of $7,500. This amount was recorded by the Company as a prepayment of Ms. Karlovsky’s services through December 31, 2009. As of December 31, 2009, the Company had amortized this entire amount.

On May 4, 2009, the Company issued 69,172 shares of common stock at $0.30 per share as payment on legal debts to Chachas Law Group, P.C., totaling $20,752. Chachas Law Group is a law firm of which the Company’s president, George Chachas, is the primary partner. Of these shares issued, 51,187 were issued to Mr. Chachas, and the remaining 17,985 shares were issued to a different, unrelated attorney of Chachas Law Group, P.C.

On July 23, 2009 the Company’s Board of Directors resolved to perform a 1-for-3 reverse stock-split of the issued and outstanding shares of the Company’s common stock. The 7,261,285 shares existing immediately prior to the reverse-split were exchanged for 2,395,464 post-split shares. All references to common stock activity taking place prior to July 23, 2009 have been retroactively restated to as to include the effects of the reverse stock-split.

On September 25, 2009, the Company issued 687,500 shares of common stock to a Company officer in exchange for $5,000 in cash and the conversion of $50,000 in accrued salaries. This issuance was made at $0.08 per share. Additionally, the Company issued 36,087 shares of common stock to a related-party vendor as payment in full on $2,887 in outstanding legal fees payable. The Company also issued 150,000 shares to unrelated third parties as payment for $12,000 of services rendered at $0.08 per share.

NOTE 5 -

STOCK OPTION PLAN AND STOCK BASED COMPENSATION

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation – Stock Compensation. Under the fair value recognition provisions of this standard, stock-based compensation cost is measured at the grant date based on the value of the award granted using the Black-Scholes option pricing model, and recognized over the period in which the award vests. No new options were issued in for the years ended December 31, 2010 and 2009 and no stock-based compensation expense was incurred for the years then ended.

There was no stock compensation expense capitalized during the years ended December 31, 2010 and 2009.

As of December 31, 2010 there is no future compensation cost related to non-vested stock-options.

Page 33

ANOTEROS, INC. AND SUBSIDIARY

(A Development Stage Company)

Notes to the Consolidated Financial Statements (Continued)

December 31, 2010 and 2009

NOTE 5 -

STOCK OPTION PLAN AND STOCK BASED COMPENSATION (continued)

During the year ended December 31, 2010 and 2009, no new stock options were issued. The following table summarizes the stock option activity during the year ended December 31, 2010:


	Options and Warrants	Weighted Average Exercise Price	Weighted Average Remaining Contract Term	Aggregate Intrinsic Value

Outstanding at December 31, 2009	33,333	$ 0.75
Granted	-	-
Exercised	-	-
Cancelled	-	-
Expired	-	-

Outstanding at December 31, 2010	33,333	0.75	1.0	$ 0

Options vested and exercisable at December 31, 2010	33,333	0.75	1.0	$ 0

Under the Company’s 2007 Long-Term Incentive Plan (Plan), there are 4.9 million shares remaining that are authorized for stock options. The Company may issue both non-qualifying stock options and qualifying incentive stock options. Qualifying incentive stock options are granted only to employees, while non-qualifying options may be granted to employees, directors, and non-employees.

Options granted under the Plan can only be exercised for restricted common stock as defined under the Securities and Exchange Commission Rule 144. Options granted under the Plan after registration can be exercised for unrestricted and free trading common stock.

The Company’s Board of Directors may also authorize the issuance of other stock options and warrants outside of the Plan.

NOTE 6 -

SUBSEQUENT EVENTS

In accordance with ASC Topic 855 Company management reviewed all material events through the date of this report and there are no material subsequent events to report.

Page 34

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A(T). CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Based on an evaluation as of the date of the end of the period covered by report, our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). 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.

Management conducted an evaluation of the effectiveness of the internal control over financial reporting as of December 31, 2010, using the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting were effective as of the end of the period covered by this report.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As a result of management’s assessment, management has determined that there is no material weakness

This Annual Report does not include an attestation report of the company's 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 Securities and Exchange Commission that permit the company to provide only management's report in this annual report.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter (our fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Page 35

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’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 generally accepted accounting principles and includes those policies and procedures that:

(a)

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

(b)

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 registrant are being made only in accordance with authorizations of management and directors of the registrant; and

(c)

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.

ITEM 9B. OTHER INFORMATION.

None. Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.

Identify of directors and executive officers

Our current directors and executive officers are as follows:


Name	Age	Position with the Company	Director Since
George G. Chachas	48	President, Chief Executive Officer, Chief Financial Officer, Secretary and a director	December 27, 2006

Jennifer Karlovsky	35	Director	May 4, 2009

Term of Office

All of our directors hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified. Our officers are appointed by our board of directors and hold office until their earlier death, retirement, resignation or removal.

Background and Business Experience

The business experience during the past five years of each of the persons presently listed above as an Officer or Director of the Company is as follows:

George G. Chachas is the founder of the Company served as the President, Treasurer, Secretary and Director from inception through October 22, 2004, at which time he resigned due to time constraints with his ongoing law practice. George was appointed and assumed the role of CEO, President, Chief Financial Officer, Secretary and Chairman of the Board on December 27, 2006. George is the founder and managing partner of Chachas Law Group P.C. serving businesses and individuals in a variety of transactional matters with extensive experience in mergers and acquisitions, corporate and securities law, and financing transactions. He has represented businesses and owners from entity formation and business structuring through private and public financing transactions, in a variety of corporate partnering, joint ventures, acquisition, merger and sales transactions. Prior to forming Chachas Law Group in April 2006, George was the Managing Partner of Wenthur & Chachas, LLP from 1987 through March 2006 which had an emphasis in corporate and securities transactions (including private held and publicly traded companies, and SEC compliance), taxation (including taxpayer disputes with government agencies and state sales and use tax laws), real estate transactions, estate planning matters and related issues, and copyright and trademark registrations. George is admitted to practice in California (1987); District of Columbia (1989) and Colorado (1994). George graduated from San Diego State University (B.A. 1985) and California Western School of Law (J.D. 1987).

Page 36

Jennifer Karlovsky is a director of the Company appointed on May 4, 2009. Ms. Karlovsky served as a member of the board of directors of Endeavor Power Corp. a publically traded company. Additionally, Ms. Karlovsky served as the interim President, Treasurer and Secretary of Endeavor Power Corp. During her time with Endeavor Power Corp., Ms. Karlovsky guided the Company through its annual meeting and assisted in the acquisition of a working interest in an operational oil and gas lease located in Oklahoma. Prior to this, Ms. Karlovsky was engaged as a Financial Administrator overseeing the project accounting, contracting and revenue assurance for a company in the health care services industry. Ms. Karlovsky services include assisting companies with complex financial analysis and accounting matters, the review and analysis of various facets of contracting procedures, financial planning and seamless integration, of both eternal and external corporate operations. She has also had significant direct engagement with service providers on multi-million dollar projects in the health care industry. Prior to this, Ms. Karlovsky served as the vice president of operations for a privately held company. She received her liberal arts degree from Northern Illinois University in 2000.

Identify Significant Employees

We have no significant employees other than George G. Chachas, our President, Chief Executive Officer, Secretary and a director.

Family Relationships

We currently do not have any officers or directors of our company who are related to each other.

Involvement in Certain Legal Proceedings

During the last five years no director, executive officer, promoter or control person of the Company has had or has been subject to:

(1)

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(2)

any conviction in a criminal proceeding or being subject to a pending criminal proceeding;

(3)

any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

(4)

being found by a court of competent jurisdiction, the Commission or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Page 37

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers, directors and persons who own more than ten percent of the Company's Common Stock, to file initial reports of beneficial ownership on Form 3, changes in beneficial ownership on Form 4 and an annual statement of beneficial ownership on Form 5, with the SEC. Such executive officers, directors and greater than ten percent shareholders are required by SEC rules to furnish the Company with copies of all such forms that they have filed.

Based solely on its review of the copies of such forms filed with the SEC electronically, received by the Company and representations from certain reporting persons, the Company believes that for the fiscal year ended December 31, 2010, all the officers, directors and more than 10% beneficial owners complied with the above described filing requirements.

Code of Ethics

Our board of directors has not adopted a code of ethics due to the fact that we presently only have two directors and we are in the development stage of our operations. We anticipate that we will adopt a code of ethics when we increase either the number of our directors and officers or the number of our employees.

Audit Committee and Audit Committee Financial Expert

Our board of directors is comprised of two directors, one of which is an outside independent director, and as of the date hereof we have not established an audit committee. Accordingly, our board of directors presently performs the functions that would customarily be undertaken by an audit committee.

Our board of directors has determined that neither George G. Chachas, a director and officer, or Jennifer Karlovksy, qualify as an “audit committee financial expert”, as defined by the rules of the SEC. Mr. Chachas is not “independent”, as he is our sole executive officer in addition to being a member of the board of Directors. Mrs. Karlovsky is an “independent” director.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the compensation paid to our Chief Executive Officer and those executive officers that earned in excess of $100,000 during the twelve month periods ended December 31, 2010 and 2009 (collectively, the “Named Executive Officers”):


Name and Principal Position	Year	Salary ($)		Bonus ($)	Awards ($)	Awards ($)	Total ($)
George G. Chachas, President ¹⁾	2010	20,000	⁽¹⁾	-	-	-	20,000
Chief Executive Officer, Chief Financial Officer and Secretary⁽	2009	20,000	⁽¹⁾	-	-	-	20,000

(1)

During 2010 and 2009 George G. Chachas was compensated for his services rendered as an officer of the Company at the rate of $5,000 per quarter which amount is being deferred until such time as we have sufficient funds for payment.

Page 38

Narrative Disclosure to Summary Compensation Table

We do not have any written employment agreements. In 2007, the Company agreed to pay George G. Chachas $5,000 per quarter payable in cash or shares of our Common Stock based on the closing price of our Common Stock as reported on the last day of each calendar quarter, at the option of Mr. Chachas. On September 25, 2009 Mr. Chachas converted $50,000 of unpaid accrued salary balance into 625,000 shares of Common Stock. Mr. Chachas has agreed to defer the payment of the balance and as of December 31, 2010, there is accrued deferred salary due and owing to Mr. Chachas in the amount of $30,000.

There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.

Outstanding Equity Awards at Fiscal Year-End

No Named Executive Officer received any equity awards, or holds exercisable or unexercisbale options, as of the years ended December 31, 2010 and 2009.

Additional Narrative Disclosure

On December 27, 2006, the Company adopted the 2007 Long Term Incentive Plan (the “Plan”) to reward and provide incentives to our employees, who may include our directors who are also employees and our officers, as well as consultants and affiliates. The Company has set aside 5,000,000 shares of our common stock for issuance under the Plan.

There are no agreements or understandings for any executive officer to resign at the request of another person. None of our executive officers acts or will act on behalf of or at the direction of any other person.

Compensation of Directors

The following table sets forth information relating to compensation paid to our directors in 2010 and 2009:


			Fees Earned
			or Paid		Stock			Option
Name	Stock		in Cash ($)		Awards ($)			Awards ($)		Total ($)
George G. Chachas	2010	$	-	$	-		$	-	$	-
	2009	$	-	$	-		$		$	-

Jennifer Karlovsky	2010	$	-	$	-		$		$	-
	2009	$	-	$	7,500	⁽¹⁾	$		$	7,500

(1)

No director fees were paid in 2010. On May 4, 2009, in conjunction with the appointment of Jennifer Karlovsky as a director, the Company authorized the issuance of 25,000 post-reverse split adjusted restricted shares of common stock to Ms. Karlovsky.

There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any Director that would result in payments to such person because of his or her resignation with the Company, or its subsidiaries, any change in control of the Company. There are no agreements or understandings for any Director to resign at the request of another person. None of our Directors or executive officers acts or will act on behalf of or at the direction of any other person.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Security Ownership of Certain Beneficial Owners

The following table sets forth the amount and nature of beneficial ownership of any class of the Company’s voting securities of any person known to the Company to be the beneficial owner of more than five percent, as of the close of business on December 31, 2010.


Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner⁽¹⁾	Percent of Class

Common Stock	George G. Chachas 2445 Fifth Avenue Suite 440 San Diego, CA 92101	2,008,675⁽²⁾	60.98%

Represents post 1-for-3 reverse split adjusted shares.

Includes 1,978,097 shares of which Mr. Chachas has direct beneficial ownership of, 13,334 shares which are held by TUVA Co., LLC, of which Mr. Chachas is a member and a Manager, and 17,244 shares held by Chachas Land Co., Inc., a corporation of which Mr. Chachas owns a 33.33% interest and is an officer and director. Does not include 81,668 shares owned by Mr. Chachas’ wife which shares Mr. Chachas disclaims any beneficial or other interest in.

Security Ownership of Management

The following table sets forth the amount and nature of beneficial ownership of any class of the Company’s voting securities of all of the Company’s directors and nominees and “named executive officers” as such term is defined in Item 402(a)(3) of Regulation S-K, as of the close of business on December 31, 2010.


Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership⁽¹⁾	Percent of Class
Common Stock	George G. Chachas	2,008,675⁽²⁾	60.98%

Common Stock	Jennifer Karlovsky	25,000	0.76%

Common Stock	Directors and Officers as a Group	2,033,675	61.74%

(1)

Represents post 1-for-3 reverse split adjusted shares.

(2)

Changes in Control.

There are no present arrangements or pledges of the Company’s securities which may result in a change in control of the Company.

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ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The Company receives rent-free office space in San Diego, California from its president. The value of the space is not considered materially significant for financial reporting purposes.

Other than the transactions stated above, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

During the fiscal year ended December 31, 2010, we incurred approximately $14,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2010.

During the fiscal year ended December 31, 2009, we incurred approximately $12,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2009.

Audit-Related Fee

The aggregate fees billed during the fiscal years ended December 31, 2010 and 2009 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $0 and $0, respectively.

Tax Fees

The aggregate fees billed during the fiscal years ended December 31, 2010 and 2009 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning was $0 and $880, respectively.

All Other Fees

The aggregate fees billed during the fiscal years ended December 31, 2010 and 2009 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0 and $0, respectively.

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ITEM 15.

EXHIBITS.

(a)

Documents filed as part of this Report.

Financial Statements. The Consolidated Balance Sheet of Anoteros, Inc., and subsidiaries as of December 31, 2010 and 2009, the Consolidated Statements of Operations for the years ended December 31, 2010 and 2009, the Consolidated Statements Stockholders’ Equity (Deficit) from inception of development stage on September 25, 1996 to December 31, 2010, and Statements of Cash Flows for the years ended December 31, 2010 and 2009, and together with the notes thereto and the report of HJ Associates & Consultants LLP thereon appearing in Item 8 are included in this 2009 Annual Report on Form 10-K.

Exhibits. The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K. Exhibits 10.1 through 10.20 relate to compensatory plans incorporated by reference as exhibits hereto pursuant to Item 15(b) of Form 10-K.


Exhibit
Number	Description of Exhibit
3.01	Articles of Incorporation⁽¹⁾
3.02	Restated Articles of Incorporation⁽¹⁾
3.03	Bylaws⁽¹⁾
3.04	Certificate of Change Pursuant to NRS 78.209⁽³⁾
10.01	Independent Contractor Agreement with James Wojtak dated October 11, 1999⁽¹⁾
10.02	Restated Independent Contractor Agreement with James Wojtak dated February 18, 2000⁽¹⁾
10.03	Independent Contractor Agreement with Ben De Soto dated December 5, 2002⁽¹⁾
10.04	First Amendment to Independent Contractor Agreement with Ben De Soto dated February 11, 2003⁽¹⁾
10.05	Independent Contractor Agreement with Gerry De Soto dated November 21, 2006⁽¹⁾
10.06	2007 Long Term Incentive Plan⁽²⁾
10.07	Literary Agent Agreement dated September 25, 2009⁽⁴⁾
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14⁽⁵⁾
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14⁽⁵⁾
32.01	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act⁽⁵⁾

(1)

Incorporated by reference to our Registration Statement on Form 10SB filed on April 12, 2007.

(2)

Incorporated by reference to our Form 10-KSB filed with the SEC on March 27, 2008.

(3)

Incorporated by reference to our Definitive Information Statement on Schedule 14C filed with the SEC on August 3, 2009.

(4)

Incorporated by reference to our Form 8-K filed with the SEC on September 28, 2008.

(5)

Filed herewith.

All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ANOTEROS INC.

Dated: February 1, 2011

/s/ George G. Chachas

By: George G. Chachas

Its: President and Principal Executive Officer

Dated: February 1, 2011

/s/ George G. Chachas

By: George G. Chachas

Its: Chief Financial Officer and Principal Accounting Officer

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Dated: February 1, 2011

/s/ George G. Chachas

George G. Chachas, Director

Dated: February 1, 2011

/s/ Jennifer Karlovsky

Jennifer Karlovsky, Director

Page 43

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