- Amended Annual Report (10-K/A)

U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K (A-1)

(Mark One)

[ X ]

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

For the fiscal year ended March 31, 2009

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission File Number: 000-52413

ACTION FASHIONS, LTD.

(Name of small business issuer as specified in its charter)

Nevada	20-4092640
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1805 N. Carson Street, #150, Carson City, NV 89701 ________________________________________________________________________ (Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: ( 858) 229-8116

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: common stock, no par value

___________________

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange Act.

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if 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 ]

The aggregate market value of the voting and non-voting common equity held by non-affiliates on September 30, 2008, based upon the $0.00 per shares closing price for our common stock on the OTC Bulletin Board was $0.00.

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of March 31, 2009, There were 136,505,000 shares of our common stock were issued and outstanding.

DOCUMENTS INCORPORATE BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to securities holders for fiscal year ended December 24, 1980).

PART I

Item 1. Business

Cautionary Statement Concerning Forward-Looking Statements

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and related notes included in this report. This report contains “forward-looking statements.” The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.

Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from expectations include, but are not limited to, those set forth under the section “Risk Factors” set forth in this report.

The forward-looking events discussed in this report, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

The Company

Action Fashions, Ltd. is in the business of retail sports apparel sales. Our executive offices are located at, P.O. Box 235472, Encinitas, California, 92024. Our telephone number is (858) 229-8116. Our retail location is located at 2026 Lowe Street, Fort Collins, CO 80525.

We were originally incorporated under the laws of the State of Colorado on June 22, 1990, as U.S.A. Connection, Inc. On June 1, 2005, we entered into an arms length asset purchase agreement with G.K. Gymnastics, Inc. to purchase the retail inventory of G.K. Gymnastics, Inc. for a total purchase price of $19,000 which was wholesale value of the goods purchased. The $19,000 purchase price was paid for with a five year, zero interest, $19,000 promissory note. October 28, 2005, we filed Articles of Amendment with the Colorado Secretary of State changing our name to Action Fashions, Ltd. to better reflect our business operations. Our fiscal year end is March 31 st .

The Business

We are an apparel company specializing in the retail sales of exercise, gymnastics, and dance apparel including clothing, outfits, shoes and related accessories. Our sole retail outlet is presently located within the facilities of G.K. Gymnastics, Inc., a dance and gymnastics school/studio located in Fort Collins, Colorado. By embedding our retail facility internally at the school/studio we have been able to market to a captive audience of dance and gymnastics students with minimal outside competition. Our goal is to expand our retail outlet from the current location to multiple dance and gymnastics schools throughout the country beginning with the State of Colorado. Our auditors have expressed concern about our ability to continue as a going concern.

Merchandise/Product

We focus on dance and gymnastics clothing and accessories. These items are distinguished from normal women’s apparel in that dance and gymnastics apparel must be comfortable and provide freedom of movement. Dancers and gymnasts need clothes made from fabrics that breathe, are quick drying and transport moisture away from the skin, to keep them dry and comfortable during intense workouts and performances.

We currently maintain distribution, consignment or similar wholesale supply relationships with the following manufacturers of dance and gymnastics apparel. These relationships allow us to buy products at wholesale, team and quantity discount prices.

Capezio (Ballet Makers, Inc.) - Ballet Makers Incorporated is one of the leading manufactures of clothing for the performer in dance, theater and recreation. For over 100 years, they have been committed to providing exceptional service to customers with innovative, quality products and services, while continuously advancing market research and technologies (Source: www.Capeziodance.com ).

Elite Sportswear GK - Elite Sportswear GK is a well recognized manufacturer of gymnastics apparel around the world. Elite Sportswear is recognized around the globe for superior quality, styling, and fit, and friendly, knowledgeable customer service. With the release of ten catalogs a year and Custom Design Services, Elite Sportswear offers more Workout and Team apparel choices than anyone else. Since 2000, Elite Sportswear in affiliation with Addidas America has been manufacturing the United States National, World, and Olympic Team Apparel (Source: www.gk-elitesportswear.com).

Tighe Industries - Tighe designs, manufactures, and markets garments designed for dance recitals, gymnastics schools, cheerleaders, and drill teams. Tighe Industries, located in York, Pennsylvania, is a company with a global focus. With sales representatives in Japan, the United Kingdom, Ireland, Iceland and Germany, Tighe has become a world leader in producing dance costumes and gymnastics apparel. Olympic teams from around the world continue to compete in garments designed and produced by Tighe associates. Specialized lines like Curtain Call Spirit have made tremendous inroads into the world of professional sports, outfitting cheerleading squads for teams like the NBA’s Dallas Mavericks and Cleveland Cavaliers and the NFL’s Philadelphia Eagles and Buffalo Bills. Tighe Industries has also provided the costumes for the extravagant Orange and Sugar Bowl halftime shows (Source: www.tighe.com).

Gibson, Inc. - For over 30 years Gibson has provided Gymnastics, Fitness, Dance and Stretch Apparel to individuals and public and private institutions concerned about quality when purchasing athletic equipment and supplies. Gibson is one of the largest manufacturers of innovative dance and stretch clothing in the United States and a leading provider of AAI American competitive gymnastics equipment. Gibson markets products to Schools, Universities, private gym clubs, dance studios, Parks and Recreation departments, YMCAs and individuals. Gibson manufactures and sources equipment from around the world and throughout the U. S. in order to provide customers with the best equipment and supplies available (Source: www.gibsongymnastics.com ).

Foxy’s Fitness Fashions – Foxy's Fitness Fashions is a manufacturer and retailer of gymnastic apparel which has been in the business for almost two decades. The company specializes in design, specialty fabrics, quality and fit. The company’s leotards are made in the USA and are sized true to actual clothing sizes which makes for a better fit. The company offers six different sizes for children and five different sizes for adults. Foxy’s Fitness Fashions offers a consignment program to us and other retailers (Source: www.foxysfitnessfashions.com ).

We purchase our entire inventory from the above suppliers and manufacturers. We do not own or operate any manufacturing facilities. We believe that we have established sufficient relationships with these suppliers and manufactures to meet our ongoing and future inventory needs. We do not have long-term contracts with the suppliers and manufactures and we transact business principally on account on an order-by-order basis.

Business Strategy

Our retail location is presently located within the 30,000 square foot building of the G.K. Gymnastics, Inc. dance and gymnastics school/studio in Fort Collins, Colorado. The G.K. Gymnastics, Inc. facility has over 700 students, not including their other family members. These students and their families serve as our customer base.

Our retail location is situated near the main entrance of the G. K. Gymnastics, Inc. facility and has its own separate entrance. By embedding the retail facility internally at the school/studio we are able to market to a captive audience of dance and gymnastics students with minimal outside competition. We have found that the relationship between our retail store and the school/studio has both increased store sales and satisfied a consumer need for the studio/school and its members. In addition, we believe that our relationship with the school/studio gives us an advantage over our competitors because most sales outlets for dance and gymnastics apparel exist in larger sporting goods stores, department stores and a limited number of specialty athletic clothing stores. By focusing our sales inside the school/studio we can target our market when the customer enters and exits the school/facility and we believe we will be able to compete more efficiently with larger retail competitors. By placing our store front locations in areas of high target customer traffic with highly visible product placement and creative store displays, we hope to attract an increased customer sales base. Our staff are typically experienced dance and gymnastics instructors that are usually familiar with the customer and understand the customer’s needs.

We conduct limited marketing and advertising utilizing the local Yellow Pages, various mailings and fliers. We primarily rely upon our individual store displays, embedded location and word-of-mouth to attract customers. Our product lines are supported by visual merchandising, which consists of window displays, table layouts and various promotions. This type of marketing is an important component of our marketing and promotion strategies since our embedded location provides significant target customer foot traffic.

We have found that many schools and studios throughout the country already maintain in-store retail sales departments. However, these “stores” are usually poorly run, unorganized and not properly inventoried. Our goal is to offer school/studio owners a profit center without the headache and hassle of merchandizing, inventorying and returning products.

In addition to our existing location in Fort Collins, Colorado, within the next 12 months, we plan to expand our business into 2 to 4 new locations in existing gymnastics and dance schools and studios in the state of Colorado.

Our goal is to offer other gymnastic and dance schools a “pre-packaged” retail store whereby we will design and construct small retail outlets within the school/studio, supply the inventory on an ongoing basis and train the school/studio’s existing staff to sell the products. We will split the profits from the sales with the school/studios on a negotiated basis pursuant to contractual agreements. The pre-packaged program that will allow the studios and schools to offer their captive customers dance and gymnastics apparel from within their existing facility without the cost and burden of establishing the store, seeking vendors and/or purchasing large amounts of inventory. We estimate the cost for each location to be approximately $25,000 - $40,000 depending on the location, and plan on raising the funds by a private placement of our securities.

Competitive Business Conditions

The retail gymnastics and dance apparel industry is competitive and highly fragmented with no standout industry leaders. This type of apparel is usually sold though sporting goods stores, department stores and a limited number of specialty athletic clothing stores. We believe our target customers choose to purchase apparel based on the following factors: style and fashion, fit and comfort, customer service, shopping convenience and environment and value and we believe that we have advantages over our competitors in meeting these needs. Specifically, by locating our store within dance and gymnastics studios, we are able to make the sale immediately before or after the customer participates in the activity in which the apparel is used.

We experience the normal seasonal pattern of the retail apparel industry with our peak sales occurring during the Christmas, back-to-school and spring periods. In addition, we also experience additional sales and interest increases in cyclical periods surrounding the Summer Olympics. To keep merchandise fresh and fashionable, slow-moving merchandise is marked down throughout the year.

Distribution Methods of the Products

We currently market our products to a limited captive market based on our current location. Products are sold on site with little distribution and shipping costs. We project revenue increase from future expansion by adding additional retail outlets in various target market areas throughout the country. There is no assurance of the revenue increase from future expansion or that expansion will occur at all.

General Market

The gymnastics and dance markets continue to grow each year in the United States. According to the website ( www.usa-gymnastics.org ) of USA Gymnastics, the sole national governing body for the sport of artistic and rhythmic gymnastics in the United States, USA Gymnastics currently maintains a grass roots membership base of approximately 3,000,000 recreational gymnasts, 85,000 competitive gymnasts, 15,000 professional members and 4,000 gymnastic clubs in throughout the United States. General public interest for gymnastics has continued to maintain record highs over the last few years and Gymnastics continues to be the most popularly viewed Olympic sport. Over 40 million households tuned into USA gymnastics telecasts on NBC Sports during the 2000 Olympic season. (Source: www.usa-gymnastics.org ). Dance studios and schools as well continue to maintain a significant presence. The US Census Bureau’s 2002 Economic Census reported approximately 6,504 dance schools in the United States.

Our founder and majority shareholder, Phillip E. Koehnke holds 98% of the outstanding shares and exercises control of the company.

Our founder and majority shareholder, Phillip E. Koehnke, holds 98% of the outstanding shares and exercises control of the company. Accordingly, our other shareholders will have little or no control of the company.

Dependence on One or a Few Major Customers

We are highly dependent on our customer base derived from the location of our facility. By its nature, our competitive advantage of our internal store location places us at the mercy of the studios/schools where our facility is or will be located. In the event the studio/school ceases operations or loses its facility, we may lose a key retailer and major customer supplier.

Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration;

We do not have any designs which are copyrighted, trademarked or patented.

Effect of existing or probable governmental regulations on the business

The effects of existing or probable government regulations on our business are minimal.

Research and Development

We do not foresee any immediate future research and development costs.

Costs and effects of compliance with environmental laws

The expense of complying with environmental regulations is of minimal consequence.

Number of total employees and number of full time employees.

We have two part-time staff workers. We do not have any full time employees and do not expect to hire any new employees within the next 12 months. Ms. Susie Johnson is our sole officer and director.

Item 1A. Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information in this registration statement before investing in our common stock. Our business and results of operations could be seriously harmed by any of the following risks.

We have a limited operating history and may not succeed.

We have a limited operating history and may not succeed. Our plans and businesses are “proposed” and “intended” but we may not be able to successfully implement them. Our primary business purpose is the expansion of our retail sports apparel sales business. We expect that unanticipated expenses, problems, and technical difficulties will occur and that they will result in material delays in the operation of our business. We may not obtain sufficient capital or achieve a significant level of operations and, even if we do, we may not be able to conduct such operations on a profitable basis.

Our majority shareholder, Phillip E. Koehnke, holds 98% of the outstanding shares and exercises control of the company.

Our majority shareholder, Phillip E. Koehnke, holds 98% of the outstanding shares and exercises control of the company. Accordingly, our other shareholders will have little or no control of the company.

We may have insufficient funds to implement our expansion strategy.

Our expansion strategy will require additional capital for, among other purposes, opening new and relocated stores, renovating existing stores and entering new markets, including researching existing and new real estate and consumer markets, lease costs, inventory, property and equipment, integration of new stores and markets into company-wide systems and programs and other costs associated with new store, renovated and relocated store and market entry expenses and growth. If cash generated internally is insufficient to fund capital requirements, or if funds are not available, we will require additional debt or equity financing. Adequate financing may not be available or, if available, may not be available on terms satisfactory to us. If we fail to obtain sufficient additional capital in the future, we could be forced to curtail our expansion, renovation and relocation strategies by reducing or delaying capital expenditures relating to new stores, renovated and relocated stores and new market entry, selling assets or restructuring or refinancing our indebtedness. As a result, there can be no assurance that we will be able to fund our current plans for the opening of new stores, the expansion, renovation and relocation of existing stores or entry into new markets .

Customer tastes and fashion trends are volatile and may prove difficult to respond to.

Our success depends in part on our ability to effectively predict and respond to changing fashion tastes and consumer demands, and to translate market trends into appropriate, saleable product offerings far in advance. If we are unable to successfully predict or respond to changing styles or trends and misjudge the market for our products or any new product lines, our sales will be lower and we may be faced with a substantial amount of unsold inventory or missed opportunities. In response, we may be forced to rely on additional markdowns or promotional sales to dispose of excess, slow-moving inventory, which may have a material adverse effect on our business, financial condition and results of operations.

Existing and increased competition in the specialty retail apparel business may reduce our net revenues, profits and market share.

The specialty retail apparel business is highly competitive. Our retail segment competes against a wide variety of small, independent specialty stores as well as department stores, national specialty chains and catalog and Internet-based retailers. In addition, some of our suppliers offer products directly to consumers. Many of our competitors are considerably larger and have substantially greater financial, marketing and other resources than we have. We cannot assure you that we will continue to be able to compete successfully against existing or future competitors. Our expansion into markets served by our competitors and entry of new competitors or expansion of existing competitors into our markets could have a material adverse effect on our business, financial condition and results of operations.

A downturn in the economy may affect consumer purchases of discretionary items and could harm our operating results.

In general, our sales represent discretionary spending by our customers. Discretionary spending on our products is affected by many factors, including, among others:

§	general business conditions;

§	interest rates;

§	inflation;

§	consumer debt levels;

§	the availability of consumer credit;

§	the number of new and second home purchases;

taxation;

§	energy prices;

§	unemployment trends; and

§	other matters that influence consumer confidence and spending.

Purchases of discretionary items, including the products we sell, could decline during periods when disposable income is lower or during periods of actual or perceived unfavorable economic conditions. If this occurs, our operating results could suffer.

If we are unable to maintain the profitability of our existing store and profitably open and operate new stores, we may not be able to adequately implement our growth strategy, which may adversely affect our overall operating results.

Our planned growth depends, in part, on our ability to maintain the profitability of our existing store and to open new stores. There can be no assurance, however, that we will be able to identify and obtain favorable store sites, arrange favorable leases for stores, obtain governmental and other third-party consents, permits and licenses needed to expand or operate stores, construct or refurbish stores, open stores in a timely manner, or hire, train and integrate qualified sales associates in those stores. If we are unable to profitably open and operate stores and maintain the profitability of our existing stores, we may not be able to adequately implement our growth strategy, which may adversely affect our overall operating results.

Requirements associated with being a public company will require significant company resources and management attention.

We have limited experience complying with the reporting requirements of the Securities Exchange Act of 1934, or the other rules and regulations of the SEC or any securities exchange relating to public companies. We are working with independent legal, accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance, corporate control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas, including our internal controls over financial reporting. However, we cannot assure you that these and other measures we may take will be sufficient to allow us to satisfy our obligations as a public company on a timely basis.

In addition, compliance with reporting and other requirements applicable to public companies such as Sarbanes Oxley will create additional costs for us, will require the time and attention of management and will require the hiring of additional personnel and outside consultants. We cannot predict or estimate the amount of the additional costs we may incur, the timing of such costs or the degree of impact on our management's attention to these matters will have on our business.

Our planned growth, if any, together with our added obligations of being a public company may strain our business infrastructure, which could adversely affect our operations and financial condition.

If we grow, we will face the risk that our existing resources and systems may be inadequate to support our growth. We may also face new challenges, including an increase in information to be processed by our management information systems and diversion of management attention and resources away from existing operations and towards the opening of new and relocated stores and new markets. Our current growth strategy will require us to increase our management and other resources over the next few years. In particular, heightened new standards with respect to internal accounting and other controls, as well as other resource-intensive requirements of being a public company, may further strain our business infrastructure. If we are unable to manage our planned growth and maintain effective controls, systems and procedures, we would be unable to efficiently operate and manage our business and may experience errors or information lapses affecting our public reporting, either of which could adversely effect our operations and financial condition.

We depend on a number of suppliers and any failure by any of them to supply us with products may impair our inventory and adversely affect our ability to meet customer demands, which could result in a decrease in net sales.

We typically do not maintain long-term purchase contracts with suppliers, but instead operate principally on a purchase order basis. Our current suppliers may not continue to sell products to us on current terms or at all, and we may not be able to establish relationships with new suppliers to ensure delivery of products in a timely manner or on terms acceptable to us. We may not be able to acquire desired merchandise in sufficient quantities on terms acceptable to us in the future. Our business could also be adversely affected if there were delays in product shipments to us due to freight difficulties, financial difficulties with our major suppliers, delays due to the difficulties of our suppliers involving strikes or other difficulties at their principal transport providers or otherwise. We are also dependent on suppliers for assuring the quality of merchandise supplied to us. Our inability to acquire suitable merchandise in the future or the loss of one or more of our suppliers and our failure to replace them may harm our relationship with our customers and our ability to attract new customers, resulting in a decrease in net sales.

Costs of legal matters and regulation could exceed estimates and adversely affect our business.

We may become parties to a number of legal and administrative proceedings involving matters pending in various courts or agencies. These include proceedings associated with facilities currently or previously owned, operated or leased by us and include claims for personal injuries and property damages. It is not possible for us to estimate reliably the amount and timing of all future expenditures related to legal matters and other contingencies.

Any projections used in this registration statement may not be accurate and our actual performance may not match or approximate the projections.

Any and all projections and estimates contained in this registration statement or otherwise prepared by us are based on information and assumptions which management believes to be accurate; however, they are mere projections and no assurance can be given that actual performance will match or approximate the projections.

Our estimates may prove to be inaccurate and future net cash flows are uncertain. Any significant variance from these assumptions could greatly affect our estimates.

Our estimates of both future sales and the timing of development expenditures are uncertain and may prove to be inaccurate. We also make certain assumptions regarding net cash flows and operating costs that may prove incorrect when judged against our actual experience. Any significant variance from these assumptions could greatly affect our estimates of future net cash flows and our ability to borrow under our credit facility.

We require substantial capital requirements to finance our operations. Our inability to obtain financing will adversely impact our business.

We will require additional capital for future operations. We plan to finance anticipated ongoing expenses and capital requirements with funds generated from the following sources:

§	cash provided by operating activities;

§	available cash and cash investments; and

§	capital raised through debt and equity offerings.

The uncertainties and risks associated with future performance and revenues will ultimately determine our liquidity and our ability to meet anticipated capital requirements. If declining prices cause our anticipated revenues to decrease, we may be limited in our ability to replace our inventory. As a result, our production and revenues would decrease over time and may not be sufficient to satisfy our projected capital expenditures. We may not be able to obtain additional financing in such a circumstance.

Our stock price could be extremely volatile and, as a result, you may not be able to resell your shares at or above the price you paid for them.

Only recently has our stock been trading in the public market. An active public market for our common stock may not develop or be sustained. Further, the market price of our common stock may decline below the price you paid for your shares.

Among the factors that could affect our stock price are:

§	industry trends and the business success of our vendors;

§	actual or anticipated fluctuations in our quarterly financial and operating results, including our comparable store sales;

§	our failure to meet the expectations of the investment community and changes in investment community recommendations or estimates of our future operating results;

§	strategic moves by our competitors, such as product announcements or acquisitions;

§	regulatory developments;

§	litigation;

§	general market conditions;

§	other domestic and international macroeconomic factors unrelated to our performance; and

§	additions or departures of key personnel.

The stock market has from time to time experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These kinds of broad market fluctuations may adversely affect the market price of our common stock.

In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been instituted. If a securities class action suit is filed against us, we would incur substantial legal fees and our management's attention and resources would be diverted from operating our business in order to respond to the litigation.

Issuing preferred stock with rights senior to those of our common stock could adversely affect holders of common stock.

Our charter documents give our board of directors the authority to issue series of preferred stock without a vote or action by our stockholders. The board also has the authority to determine the terms of preferred stock, including price, preferences and voting rights. The rights granted to holders of preferred stock may adversely affect the rights of holders of our common stock. For example, a series of preferred stock may be granted the right to receive a liquidation preference – a pre-set distribution in the event of a liquidation – that would reduce the amount available for distribution to holders of common stock. In addition, the issuance of preferred stock could make it more difficult for a third party to acquire a majority of our outstanding voting stock. As a result, common stockholders could be prevented from participating in transactions that would offer an optimal price for their shares.

We do not anticipate paying dividends on our capital stock in the foreseeable future.

We do not anticipate paying any dividends in the foreseeable future. We currently intend to retain our future earnings, if any, to fund the growth of our business. In addition, the terms of the instruments governing our existing debt and any future debt or credit facility may preclude us from paying any dividends.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties

Real Property

At present, we do not own any property. Our retail operation is located in a leased facility. We have local access to all commercial freight systems. The current retail facility is approximately 300 square feet. This facility contains both the administrative/sales offices and retail floor sections. The current lease runs until May 31, 2010. The retail facility is located at 2026 Lowe St, Fort Collins, CO 80525. We lease this facility on a monthly basis for $200 per month.

Item 3. Legal Proceedings

Currently, we are not a party to any pending legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

None.

PART II

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

Market information

Our common stock only recently became quoted on the Over The Counter Bulletin Board (OTC.BB AFSN). As of the date of this report we are unable to provide any high and low bid information for our common stock for any quarter subject to this report. Currently, there are 47,500,000 shares of our common stock issuable upon conversion of outstanding convertible securities held in the name of an affiliate and 1,456,000 shares of our common stock which can be sold by non-affiliates pursuant to Rule 144 of the Securities Act.

Holders

We have approximately 37 holders of record of our common stock.

Dividends

We have not declared any cash dividends on any class of our securities and we do not have any restrictions that currently limit, or are likely to limit, our ability to pay dividends now or in the future.

Securities authorized for issuance under equity compensation plans

We do not have any securities authorized for issuance under equity compensation plans.

Item 6. Selected Financial Data.

As a smaller reporting company, we are not required to provide the information required by this item.

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

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and related notes included in this registration statement. This registration statement contains “forward-looking statements.” The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.

The forward-looking events discussed in this registration statement, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

Critical Accounting Policies

Our policy is to use the accrual method of accounting to prepare and present financial statements, which conform to generally accepted accounting principles. The company has elected a March 31, year-end.

We consider all highly liquid investments with maturities of three months or less when purchased, to be cash equivalents.

Inventories are valued at the lower of average cost (which approximates computation on a first-in, first-out basis) or market (net realizable value or replacement cost).

Revenue is recognized at the time of sale.

We account for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes”. SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Results of Operations

For the year ended March 31, 2009, we had revenues of $22,065 compared to $20,367 for the year ended March 31, 2008. We attribute this slight increase in sales due to increased enrolment in the gymnastics facility and the recent 2008 summer Olympics which sparked greater interest in gymnastics in young children.

For the year ended March 31, 2009, we had total operating expenses of $43,039 and an operating loss of ($20,974) compared to total operating expenses of $114,820 and an operating loss of ($94,453) for the year ended March 31, 2008. The substantial decrease in operating expenses for the year ended March 31, 2009, is attributable to the expiration of the employment agreement with Mr. Koehnke, thus reducing our quarterly operating expenses by $30,000. In addition, we saw increased sales for the year.

Generally, our cost of goods, wholesale prices and inventory have remained stable over the past 12 months.

As expected, our sales increase this year primarily due to the 2008 summer Olympics in Beijing, China and the increased enrolment in gymnastics students at the facility in which we are located. Historically, national interest in the summer Olympics has significantly increased enrolment in gymnastics schools throughout the United States and we experienced this trend this summer. While summer enrolment in the gymnastics school is generally down due to competing summer activities available to children, this year, due to the summer Olympics, enrolment in the gymnastics school remained stable which helped our sales. We anticipate that our sales will increase through 2009 and then level off or even drop slightly to the pre-Olympic levels.

Liquidity and Capital Resources

At March 31, 2009, we had cash of $3,478 compared to $2,327 at March 31, 2008.

Future Goals

Since our inception, our goal has been to expand our business into new locations. Our goal was to be a fully reporting company with our shares of common stock trading in the public market prior to the beginning of the 2008 summer Olympics. With the increased interest in gymnastics following the summer Olympics, we believed that this would be a catalyst to begin our expansion plan. However, although we were successful in becoming a reporting company in a timely fashion, we had continuing difficulties in filing our 211 application with FINRA and only completed this process during the last month of our fiscal year. As of March 2009, our common stock will be trading on the Over the Counter Bulletin Board (OTC.BB AFSN)

Now that our common stock will be trading in the public market, management is considering whether it remains a valid business goal to continue with our original business plan and to seek financing for our expansion goals whether it be through bank loans or a private placement of our securities. Management is concerned that the “window of opportunity” may have passed in regard to expanding in conjunction with the summer Olympics and that the “window” will not occur for another four years. Alternatively, management is not opposed to changing directions with the business if suitable ideas or business partners present themselves.

Assuming management goes forward with our original business plan and we are successful in obtaining financing, we plan on expanding into the Loveland, Colorado location during the second half of our fiscal year and opening additional locations in Colorado thereafter. The opening of additional locations is dependent upon sufficient financing and the identification of suitable gymnastic/dance school facilities. We anticipate that each new location will require approximately $25,000 - $40,000 to open depending upon the location.

Off-balance Sheet Arrangements

We maintain no significant off-balance sheet arrangements

Foreign Currency Transactions

None.

I tem 7A. Quantitative and Qualitative Disclosures About Market Risk

We currently do not utilize sensitive instruments subject market risk in our operations.

Item 8. Financial Statements and Supplementary Data.

Our financial statements and related explanatory notes can be found on the “F” Pages at the end of this Report.

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

None.

Item 9A. Controls and Procedures.

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934,as of the end of the period covered by this Report on Form 10-K, our management evaluated, with the participation of our principal executive and financial officer, the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act). Disclosure controls and procedures are defined as those controls and other procedures of an issuer that are designed to ensure that the information required to be disclosed by the issuer in the reports it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation of these disclosure controls and procedures, our chairman of the board and chief executive and financial officer has concluded that the disclosure controls and procedures were effective as of the date of such evaluation to ensure that material information relating to the company, was made known to them by others within those entities, particularly during the period in which this Annual Report on Form 10-K was being prepared.

Item 9A(T). Controls and Procedures.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting has been designed 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 generally accepted in the United States of America. The Company's internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorization of management and directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the Company's financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. 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 assessed the effectiveness of the Company's internal control over financial reporting at March 31, 2009. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control--Integrated Framework. Based on that assessment under those criteria, management has determined that, at March 31, 2009, the Company's internal control over financial reporting was effective.

This Annual Report on Form 10-K 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 SEC that permit the Company to provide only management's report in this annual report.

Inherent Limitations of Internal Controls

Our internal control over financial reporting is designed 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. Our internal control over financial reporting includes those policies and procedures that:

●		pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
●		provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
●		provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Our management does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has not identified any change in the our internal control over financial reporting indentified in connection with the its evaluation of our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

The following table sets forth, as of the date of this registration statement, the name, age and position of our sole director/executive officer.

NAME	AGE	POSITION

Susie L.G. Johnson	42	President, Chief Executive Officer, Chief Financial Officer, Secretary, and Director

The background of our sole director/executive officer is as follows:

Susie L.G. Johnson

Ms. Johnson is our President, Chief Executive Officer and Secretary. Ms. Johnson’s career has been focused on management. She served as a Production Control Analyst for US Air in Reno and San Diego California for 9 years and thereafter managed a cellular retail outlet in Kingsville, Texas. She is a licensed cosmetologist and has owned and operated a sole proprietor hair salon business since 2001.

Information about our Board and its Committees.

Audit Committee

We currently do not have an audit committee although we intend to create one as the need arises. Currently, our Board of Directors serves as our audit committee.

Compensation Committee

We currently do not have a compensation committee although we intend to create one as the need arises. Currently, our Board of Directors serves as our Compensation Committee.

Advisory Board

We currently do not have an advisory board although we intend to create one as the need arises.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers, and stockholders holding more than 10% of our outstanding common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in beneficial ownership of our common stock. Executive officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on review of the copies of such reports furnished to us for the period ended March 31, 2009, the Section 16(a) reports required to be filed by our executive officers, directors and greater-than-10% stockholders were filed on a timely basis.

Code of Ethics

Effective February 22, 2006, our board of directors adopted the Action Fashions, Ltd. Code of Business Conduct and Ethics. The board of directors believes that our Code of Business Conduct and Ethics provides standards that are reasonably designed to deter wrongdoing and to promote the following: (1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (2) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submits to, the Securities and Exchange Commission ; (3) compliance with applicable governmental laws, rules and regulations; the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons; and (4) accountability for adherence to the Code of Business Conduct and Ethics. We will provide a copy of our Code of Business Conduct and Ethics by mail to any person without charge upon written request to us at: P.O. Box 235472, Encinitas, CA 92024.

Item 11. Executive Compensation

The following table sets forth the compensation paid to Ms. Susie L.G. Johnson, who is our sole executive officer, for services rendered, and to be rendered. No restricted stock awards, long-term incentive plan payouts or other types of compensation, other than the compensation identified in the chart below, were paid to Ms. Johnson during the fiscal years presented.

Summary Compensation Table

						Non-Equity	Nonqualified	All
Name and						Incentive	Deferred	Other
Principal				Stock	Option	Plan	Compensation	Compen
Position	Year	Salary	Bonus	Awards	Awards	Compensation	Earnings	-sation	Total

Susie L.G. Johnson	2009	0	0	24,000 (1)	0	0	0	0	$24 (2)
President, Chief Executive Officer, Chief Financial Officer, Secretary, and Director	2008	0	0	6,000 (1)	0	0	0	0	$6 (2)

(1) Ms. Johnson receives 2,000 restricted shares of our common stock for each month she serves as an officer of the company.

(2) Based upon restricted shares of our common stock issued annually at $.001 per share.

Employment Agreements

We currently do not have an employment agreement with Ms. Johnson, our sole officer and director. Our board of directors has authorized Ms. Johnson to be compensated for her services at a rate of 2,000 restricted shares of our common stock for each month she serves as an officer of the corporation.

Compensation of Director

We currently do not compensate our director. In the future, we may compensate our current director or any additional directors for reasonable out-of-pocket expenses in attending board of directors meetings and for promoting our business. From time to time we may request certain members of the board of directors to perform services on our behalf. In such cases, we will compensate the directors for their services at rates no more favorable than could be obtained from unaffiliated parties.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth certain information regarding the beneficial ownership of the 136,481,000 issued and outstanding shares of our common stock as of March 31, 2009, by the following persons:

·	each person who is known to be the beneficial owner of more than five percent (5%) of our issued and outstanding shares of common stock;

·	each of our directors and executive officers; and

·	All of our Directors and Officers as a group

Name And Address	Number Of Shares Beneficially Owned	Percentage Owned
Phillip E. Koehnke (1)	135,025,000	98%
Susie L.G. Johnson (1)	30,000	*

All Officers and Directors as Group	30,000	*
Total	135,055,000	98%

* Less than 1%

(1) The address is PO Box 235472, Encinitas, California 92024.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. The number of shares and the percentage beneficially owned by each individual listed above include shares that are subject to options held by that individual that are immediately exercisable or exercisable within 60 days from the date of this registration statement and the number of shares and the percentage beneficially owned by all officers and directors as a group includes shares subject to options held by all officers and directors as a group that are immediately exercisable or exercisable within 60 days from the date of this registration statement.

Item 13. Certain Relationships and Related Transactions.

We have not entered into any material transactions with related parties in the past two years.

Transactions with Promoters

None.

Item 14. Principal Accountant Fees and Services.

Appointment of Auditors

Our Board of Directors selected Cordovano and Honeck, LLP as our auditors for the year ended March 31, 2009.

Audit Fees

Cordovano and Honeck, LLP billed us $10,274 in audit fees during the year ended March 31, 2009 and $10,523 in audit fees during the year ended March 31, 2008.

Audit-Related Fees

We did not pay any fees to Cordovano and Honeck, LLP for assurance and related services that are not reported under Audit Fees above, during our fiscal years ending March 31, 2009 and March 31, 2008.

Tax and All Other Fees

We did not pay any fees to Cordovano and Honeck, LLP for tax compliance, tax advice, tax planning or other work during our fiscal years ending March 31, 2009 and March 31, 2008.

Pre-Approval Policies and Procedures

We have implemented pre-approval policies and procedures related to the provision of audit and non-audit services. Under these procedures, our board of directors pre-approves all services to be provided by Cordovano and Honeck, LLP, and the estimated fees related to these services.

With respect to the audit of our financial statements as of March 31, 2009, and for the year then ended, none of the hours expended on Cordovano and Honeck, LLP’s engagement to audit those financial statements were attributed to work by persons other than Cordovano and Honeck, LLP’s full-time, permanent employees.

Item 15. Exhibits, Financial Statement Schedules.

Statements

Report of Independent Registered Public Accounting Firm

Balance Sheets at March 31, 2009 and 2008

Statements of Operations for the years ended March 31, 2009 and 2008

Statement of Changes in Shareholders' Deficit for the years ended March 31, 2009 and 2008

Statements of Cash Flows for the years ended March 31, 2009 and 2008

Notes to Financial Statements

Schedules

All schedules are omitted because they are not applicable or the required information is shown in the Financial Statements or notes thereto.

	Exhibit	Form	Filing	Filed with
Exhibits	#	Type	Date	This Report

Articles of Incorporation filed with the Secretary of State of Colorado on June 22, 1990	3.1	10-SB	1/24/2007

Articles of Amendment to the Articles of Incorporation filed with the Secretary of State of Colorado on October 17, 2006	3.2	10-SB	1/24/2007

Articles of Amendment to Articles of Incorporation filed with the Secretary of State of the State of Colorado on January 25, 2007	3.3	10KSB	6/29/2007

Amended and Restated Bylaws dated December 30, 2005	3.3	10-SB	1/24/2007

Code of Ethics	14.1	10-KSB	6/29/2007

Consent of Experts	23.1			X

Certification of Paul Thompson, pursuant to Rule 13a-14(a)	31.1			X

Certification of Paul Thompson pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	32.1			X

SIGNATURES

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

ACTION FASHIONS, LTD.

/s/ Paul D. Thompson

By: Paul D. Thompson

Its: President

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

Signatures	Title	Date

/s/ Paul D. Thompson Paul D. Thompson	Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer	January 6, 2010

ACTION FASHIONS, LTD.

	Page

Report of Independent Registered Public Accounting Firm:	F-2

Balance Sheets for March 31, 2009 and 2008:	F-3

Statements of Operations for the years ended March 31, 2009 and 2008:	F-4

Statement of Changes in Shareholders' Deficit for the years ended March 31, 2009 and 2008:	F-5

Statement of Cash Flows for the years ended March 31, 2009 and 2008:	F-6

Notes to Financial Statements:	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Director and Shareholders

Action Fashions, Ltd.:

We have audited the balance sheets of Action Fashions, Ltd. as of March 31, 2009 and 2008, and the related statements of operations, changes in shareholders’ deficit and cash flows for the years ended March 31, 2009 and 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our 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 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 financial statements referred to above present fairly, in all material respects, the financial position of Action Fashions, Ltd. as of March 31, 2009 and 2008, and the results of its operations and its cash flows for the years ended March 31, 2009 and 2008 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has a limited operating history, limited funds, and a working capital deficit, which raises a substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Cordovano and Honeck LLP

Cordovano and Honeck LLP

Englewood, Colorado

June 22, 2009

ACTION FASHIONS, LTD.
Balance Sheets


				March 31, 2009		March 31, 2008




ASSETS

Current assets:
	Cash		$	3,478	$	2,327
	Due from related party (Note 6)			4,347		2,652
	Inventory			10,230		10,219
		Total current assets		18,055		15,198


TOTAL ASSETS			$	18,055	$	15,198

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
	Accounts payable		$	750	$	—
	Accounts payable to related party (Note 3)			8,400		6,000
	Sales tax payable			288		406
	Loans payable to related party (Note 3)			38,462		17,687
	Note payable to related party (Note 3)			475,000		475,000
		Total current liabilities		522,900		499,093

STOCKHOLDERS' DEFICIT (Note 4)
	Preferred stock, 10,000,000 shares authorized, no par value,					—
		-0- shares issued and outstanding		—
	Common stock, 500,000,000 shares authorized, no par value,
		136,481,000 shares issued and outstanding as at March 31, 2008
		136,505,000 shares issued and outstanding as at March 31, 2009		7,435		7,411
	Retained deficit			(512,280)		(491,306)

TOTAL STOCKHOLDERS' DEFICIT				(504,845)		(483,895)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT			$	18,055	$	15,198

See notes to the accompanying financial statements
F-3

ACTION FASHION, LTD.
STATEMENTS OF OPERATIONS

			For the		For the
			Year Ended		Year Ended
			March 31, 2009		March 31, 2008

Revenues:
	Sales	$	22,065	$	20,367
Total revenues			22,065		20,367

Expenses:
	Cost of Goods Sold		15,131		14,671
	General and administrative		27,884		20,149
	Compensation expense (Notes 3 and 4)		24		80,000
Total operating expenses			43,039		114,820

Loss from operations			(20,974)		(94,453)

Provision for Income Taxes (Note 5)			-		-

NET LOSS		$	(20,974)	$	(94,453)

Basic loss per common share		$	(0.00)	$	(0.00)
Diluted loss per common share		$	(0.00)	$	(0.00)

Weighted average common shares outstanding - Basic			136,488,231		136,475,256
Weighted average common shares outstanding - Diluted			136,488,231		136,475,256

See notes to the accompanying financial statements
F-4

ACTION FASHION LTD.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT


							Total
	Common Stock				Retained		Stockholders'
	Shares		Amount		Deficit		Deficit


Balance at March 31, 2007	136,475,000	$	7,405	$	(396,853)	$	(389,448)

Shares issued for services	6,000		6		—		6

Net loss for the period from April 1, 2007
through March 31, 2008	—		—		(94,453)		(94,453)

Balance at March 31, 2008	136,481,000	$	7,411	$	(491,306)	$	(483,895)


Shares issued to existing shareholders in
exchange for existing shares on a one-for-one
basis (Note 4)	136,481,000		—		—		—

Shares returned and cancelled from existing
shareholders due to exchange of common shares
on a one-for-one basis (Note 4)	(136,481,000)		—		—		—

Shares issued for services	24,000		24		—		24

Net loss for the period April 1, 2008
through March 31, 2009	—		—		(20,974)		(20,974)

Balance at March 31, 2009	136,505,000	$	7,435	$	(512,280)	$	(504,845)



See notes to the accompanying financial statements
F-5

ACTION FASHION, LTD.
STATEMENTS OF CASH FLOWS


			For the		For The
			Year Ended		Year Ended
			March 31, 2009		March 31, 2008

CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss	$	(20,974)	$	(94,453)
	Adjustments to reconcile net income to net cash
	provided by (used in) operating activities:
	Stock based compensation		24		6
	Changes in operating assets and liabilities:
	Receivable from GK Gym		0		0
	Prepaid Expenses		-		80,000
	Inventory		(11)		913
	Accounts payable and accrued expenses		3,032		1,100

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			(17,929)		(12,434)

CASH FLOWS FROM FINANCING ACTIVITIES
	Principal payments on notes payable		-		(6,135)
	Proceeds received from notes payable		20,776		17,687
	Due from GK Gym		(1,696)		(2,652)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			19,080		8,900

NET CHANGE IN CASH			1,151		(3,534)

CASH BALANCES
	Beginning of year		2,327		5,861
	End of year	$	3,478	$	2,327

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR:
	Interest	$	-	$	-
	Income taxes	$	-	$	-

See notes to the accompanying financial statements

F-6

ACTION FASHIONS, LTD.

Notes to Financial Statements

NOTE 1. SUMMARY OF ACCOUNTING POLICIES

a. Organization

The Company was originally incorporated under the laws of the State of Colorado on June 22, 1990, as U.S.A. Connection, Inc. On October 28, 2005, the Company filed Articles of Amendment with the Colorado Secretary of State changing its name to Action Fashions, Ltd. The Company’s executive offices are currently located at, P.O. Box 235472, Encinitas, California, 92024. The Telephone number is (858) 229-8116. The Company’s retail location is located at 2026 Lowe Street, Fort Collins, CO 80525.

The Company is an apparel company specializing in the retail sales of exercise, gymnastics, and dance apparel including clothing, outfits, shoes and related accessories. The Company’s sole retail outlet is presently within the facilities of G.K. Gymnastics, Inc., a dance and gymnastics school/studio located in Fort Collins, Colorado. By embedding the Company’s retail facility internally at the school/studio the Company has been able to market to a captive audience of dance and gymnastics students with minimal outside competition. The Company’s goal is to expand its retail outlet from the current location to multiple dance and gymnastics schools throughout the country beginning with the State of Colorado. The Company’s auditors have expressed concern about our ability to continue as a going concern.

b. Accounting Method

The Company’s policy is to use the accrual method of accounting to prepare and present financial statements, which conform to generally accepted accounting principles (“GAAP”). The company has elected a March 31, year-end.

c. Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased, to be cash equivalents.

d. Use of Estimates in Financial Statement Preparation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. The Company's financial statements include amounts that are based on management's best estimates and judgments. Actual results could differ from those estimates.

e. Inventories

Inventories are valued at the lower of average cost (which approximates computation on a first-in, first-out basis) or market (net realizable value or replacement cost).

f. Revenue Recognition

Revenue is recognized at the time of sale.

g. Expenses

Our cost of goods sold line item includes inventory and freight costs. Our General and Administrative line item includes all bank charges, returned check fees, general office, and permits and licensing expenses.

h. Earnings per share

Basic earnings per share is computed by dividing income available to common shareholders (the numerator) by the weighted-average number of common shares (the denominator) for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued.

As of March 31, 2009, there were approximately 47,500,000 potentially dilutive common shares related to the convertible promissory note held by our former CEO, which were excluded from the calculation of net loss per share-diluted because they were anti-dilutive.

i. Income Taxes

The Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes”. SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

j. Recent Accounting Pronouncements

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards 161, “Disclosures about Derivative Instruments and Hedging Activities" , which amends the disclosure requirements of SFAS 133 . SFAS 161 provides an enhanced understanding about how and why derivative instruments are used, how they are accounted for and their effect on an entity’s financial position, performance and cash flows. SFAS 161, which is effective for fiscal years beginning after November 15, 2008, will require additional disclosure in future filings, but will have no financial impact to the Company’s results of operations, cash flows or financial position.

In February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 159, “ The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115 ” (“SFAS 159”). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. This provides entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without being required to apply complex hedge accounting provisions. The provisions of SFAS No. 159 are effective as of the beginning of fiscal years that start after November 15, 2007 (fiscal year March 31, 2009).

Effective March 26, 2007, we adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 (“FIN 48”). FIN 48 requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not (i.e. a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlements. Upon adoption, the Company does not have any material uncertain tax positions.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements , which clarifies the definition of fair value, establishes a framework for measuring fair value within GAAP and expands the disclosures regarding fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FSP 157-2 “Partial Deferral of the Effective Date of Statement 157” (FSP 157-2). FSP 157-2 delays the effective date of SFAS 157, for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008.

The adoption of these pronouncements has not made a material effect on the Company’s financial position or results of operations.

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has a limited operating history and limited funds. These factors, among others, may indicate that the Company will be unable to continue as a going concern.

The Company is dependent upon outside financing to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plans to raise necessary funds via a private placement of its common stock to satisfy the capital requirements of the Company’s business plan. There is no assurance that the Company will be able to raise necessary funds, or that if it is successful in raising the necessary funds, that the Company will successfully operate its business plan.

The financial statements do not include any adjustments relating to the recoverability and classification of assets and/or liabilities that might be necessary should the Company be unable to continue as a going concern. Our continuation as a going concern is dependent upon our ability to meet our obligations on a timely basis, and, ultimately to attain profitability.

NOTE 3.

RELATED PARTY TRANSACTIONS

Employment Agreement

On December 6, 2003, the Company entered into a 48 month employment agreement with Phillip E. Koehnke, our former sole officer and Director. The Company charged the compensation expense ratably over the term of the 48 month employment agreement. Payment under the terms of the employment agreement was secured by a $480,000, 48 month, zero interest convertible promissory note. The Company issued Mr. Koehnke 125,000,000 post split shares of its restricted common stock during March 2006 in exchange for payment of $5,000 of the convertible note, which reduced the balance owed on the note to $475,000. The note is due on demand and is thus classified as a current liability at March 31, 2009.

Loans Payable to Related Party

On March 31, 2008, the Company made a two year zero interest promissory note payable to Phillip E. Koehnke, APC, our majority shareholder, in the amount of $17,687.

On June 30, 2008 the Company made a two year zero interest promissory note payable to Phillip E. Koehnke, APC, our majority shareholder, in the amount of $4,271.

On September 30, 2008, the Company made a two year zero interest promissory note payable to Phillip E. Koehnke, APC, our majority shareholder, in the amount of $4,722.

On December 31, 2008 the company made a two year zero interest promissory note payable to Phillip E. Koehnke, APC, our majority shareholder in the amount of $3,135.

On March 31, 2009 the company made a two year zero interest promissory note payable to Phillip E. Koehnke, APC, our majority shareholder in the amount $8,647.

Line of Credit

Effective, April 1, 2007, the Company entered into a line of credit agreement with G.K.’s Gym, Inc. establishing a $15,000 line of credit for purchasing of inventory. The line of credit agreement bears an interest rate of 6% on outstanding principle, expires on March 31, 2009 and has a balance of $0 as of March 31, 2009.

Accounts Payable

The company had a payable balance due to G.K.’s Gym, Inc., a related party owned by the parents of Phillip E. Koehnke, as of March 31, 2009 and 2008. At March 31, 2009 and 2008 the company owed $8,400 and $6,000 to G.K.’s Gym, Inc. respectively for rent and other operating expenses.

Office Lease

On June 1, 2005, the Company entered into a lease with G.K.’s Gym, Inc. for its retail space. The lease ends on May 31, 2010. Monthly rent is $200 per month commencing on June 1, 2007.

Future minimum lease payments required under the arrangement are as follows:

Date		Amount

2010 minimum lease payments:	$	2,400

2011 minimum lease payments:	$	400

Total future minimum lease payments:	$	2,800

Legal Services

Legal counsel to the Company is a firm controlled by our majority shareholder.

NOTE 4.

STOCKHOLDERS’ DEFICIT

The stockholders’ equity section of the Company contains the following classes of capital stock as of March 31, 2009:

Preferred stock, no par value; 10,000,000 shares authorized, no shares issued and outstanding.

Common stock, no par value; 500,000,000 shares authorized: 136,505,000 shares issued and outstanding.

Common Stock Transactions

On or about March 31, 2008 the Company issued 6,000 shares of its restricted common stock to Susie Johnson, the Company’s President, as payment for services rendered during the three months ended March 31, 2008. The transaction was recorded at fair value, or $6.

On or about June 30, 2008 the Company issued 6,000 shares of its restricted common stock to Susie Johnson, the Company’s President, as payment for services rendered during the three months ended June 30, 2008. The transaction was recorded at fair value, or $6.

On or about September 30, 2008 the Company issued 6,000 shares of its restricted common stock to Susie Johnson, the Company’s President, as payment for services rendered during the three months ended September 30, 2008. The transaction was recorded at fair value, or $6.

On or about December 31, 2008 the Company issued 6,000 shares of its restricted common stock to Susie Johnson, the Company’s President, as payment for services rendered during the three months ended December 31, 2008. The transaction was recorded at fair value, or $6.

On or about March 31, 2009 the Company issued 6,000 shares of its restricted common stock to Susie Johnson, the Company’s President, as payment for services rendered during the three months ended March 31, 2009. The transaction was recorded at fair value, or $6.

Exchange of Shares with Existing Shareholders

On April 1, 2008 the Company issued 136,481,000 shares to its existing shareholders in exchange for their existing (old) shares on a 1 for 1 basis. No value was assigned to the exchange of shares. The old shares were returned to treasury and cancelled. The purpose of the exchange was to replace the previously issued shares of common stock which FINRA had deemed were not subject to the exemptions provided by Rule 144 of the Securities Act of 1933.

NOTE 5.

INCOME TAXES

The Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Deferred tax assets and liabilities at the end of each period are determined using the currently effective tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. The reconciliation of enacted rates the years ended March 31, 2009 and March 31, 2008 is as follows:

	March 31, 2009	March 31, 2008

U.S. statutory federal rate, graduated………………………………..	15.00%	20.35%
State income tax rate, net of federal…………………………………….	7.51%	7.04%
Net operating loss (NOL) for which
no tax benefit is currently available……………............................	-22.51%	-27.39%
	0.00%	0.00%

At March 31, 2009 and March 31, 2008, the Company had a net operating loss carry forwards of $329,874 and $308,900 respectively that may be offset against future taxable income subject to limitations imposed by the Internal Revenue Service. This carryforward is subject to review by the Internal Revenue Service and, if allowed, may be offset against taxable income through 2029. A portion of the net operating loss carryovers begin expiring in 2026.

Deferred tax assets are as follows:

	March 31, 2009	March 31, 2008

Deferred tax asset due to net operating loss…….……………………..	$ 92,500	$ 87,798
Valuation Allowance……..…………….	(92,500)	(87,798)
	-	-

The deferred tax asset relates principally to the net operating loss carryforward. A valuation allowance was established at March 31, 2009 and March 31, 2008 to eliminate the deferred tax benefit that existed at that time since it is uncertain if the tax benefit will be realized. The deferred tax asset (and the related valuation allowance) increased by $4,722 and $25,872 for the years ended March 31, 2009 and March 31, 2008, respectively.

The valuation allowance will be evaluated at the end of each year, considering positive and negative evidence about whether the deferred tax asset will be realized. At that time, the allowance will either be increased or reduced; reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no longer required.

NOTE 6.

CONCENTRATION OF CREDIT RISK

The Company’s sole retail outlet is presently within the facilities of G.K. Gymnastics, Inc. (“GK”), a dance and gymnastics school/studio located in Fort Collins, Colorado. The Company is dependent upon the clientele generated by the gymnastics and dance studio. If the business of the school/studio declines or ceases to exist, the Company’s sales could also decline or cease to exist.

GK is a related party to the Company. The owners of GK are the parents of Phillip E. Koehnke, the Company’s majority shareholder. As of March 31, 2009 and 2008, G.K.’s Gym, Inc. owed to the Company $4,347 and $2,652 respectively.

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