20-4456503 | ||
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | þ |
CONSOLIDATED FINANCIAL STATEMENTS | Page |
Consolidated balance sheets
|
4
|
Consolidated statements of operation
|
5
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Consolidated statements of cash flows
|
6
|
Notes to consolidated financial statements
|
7-10
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March 31, |
September 30,
|
|||||||
2012 | 2011 | |||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash
|
$ | 487,294 | $ | 517,830 | ||||
Accounts receivable, less allowance for doubtful accounts of $11,000 and $28,660, respectively | 283,172 | 89,005 | ||||||
Prepaid expenses
|
24,276 | |||||||
Other receivables
|
34,118 | 2,118 | ||||||
Total Current Assets
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828,860 | 608,953 | ||||||
Note receivable from related party
|
11,806 | 10,000 | ||||||
Property and equipment, net of accumulated depreciation of $19,010 and $11,280, respectively
|
186,333 | 157,619 | ||||||
Deposits
|
7,619 | 7,619 | ||||||
Total Assets
|
$ | 1,034,618 | $ | 784,191 | ||||
Liabilities and Stockholders’ Equity (Deficit)
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable:
|
||||||||
Related party
|
$ | — | $ | 11,100 | ||||
Other
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46,643 | 69,534 | ||||||
Payroll accruals
|
5,280 | 4,123 | ||||||
Accrued marketing fund
|
39,171 | — | ||||||
Customer deposits
|
2,000 | — | ||||||
Total Current Liabilities
|
93,094 | 84,757 | ||||||
Stockholders’ Equity (Deficit) :
|
||||||||
Creative Learning Corporation stockholders' equity:
|
||||||||
Preferred stock, $.0001 par value; 10,000,000 shares authorized; -0- and -0- shares issued and outstanding, respectively
|
— | — | ||||||
Common stock, $.0001 par value; 50,000,000 shares authorized; 11,451,075 and 10,288,575 shares issued and outstanding, respectively | 1,145 | 1,029 | ||||||
Additional paid-in capital
|
1,984,129 | 1,975,445 | ||||||
Retained earnings (deficit)
|
(1,043,750 | ) | (1,277,040 | ) | ||||
Total Stockholders’ Equity
|
941,524 | 699,434 | ||||||
Total Liabilities and Stockholders’ Equity
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$ | 1,034,618 | $ | 784,191 |
(Unaudited)
|
(Unaudited)
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|||||||||||||||
For The Three
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For The Six
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|||||||||||||||
Months Ended
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Months Ended
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|||||||||||||||
March 31,
|
March 31,
|
March 31,
|
March 31,
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|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Revenues:
|
||||||||||||||||
Initial franchise fees
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$ | 718,949 | $ | 358,450 | $ | 1,206,022 | $ | 646,387 | ||||||||
Royalties and marketing fees
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83,278 | — | 171,663 | — | ||||||||||||
802,227 | 358,450 | 1,377,685 | 646,387 | |||||||||||||
Operating expenses:
|
||||||||||||||||
Franchise consulting and commissions:
|
||||||||||||||||
Related parties
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96,626 | — | 162,657 | — | ||||||||||||
Other
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188,074 | 171,658 | 341,670 | 307,651 | ||||||||||||
Franchise training and expenses:
|
||||||||||||||||
Related parties
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3,149 | — | 10,899 | — | ||||||||||||
Other
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12,782 | — | 30,564 | 15,678 | ||||||||||||
Salaries and payroll taxes
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86,833 | 69,876 | 181,721 | 133,285 | ||||||||||||
Advertising
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42,094 | 29,024 | 106,383 | 57,869 | ||||||||||||
Professional fees
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72,022 | 20,386 | 126,400 | 29,480 | ||||||||||||
Office expense
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12,424 | 28,784 | 45,788 | 54,328 | ||||||||||||
Depreciation
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3,865 | 2,399 | 7,730 | 4,691 | ||||||||||||
Stock-based compensation
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— | — | 8,800 | — | ||||||||||||
Other general and administrative expenses
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62,896 | 204,092 | 122,771 | 273,479 | ||||||||||||
Total operating expenses
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580,765 | 526,219 | 1,145,383 | 876,461 | ||||||||||||
Income (loss) from operations
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221,462 | (167,769 | ) | 232,302 | (230,074 | ) | ||||||||||
Other income (expense):
|
||||||||||||||||
Interest expense:
|
||||||||||||||||
Beneficial conversion feature
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— | — | — | (19,630 | ) | |||||||||||
Other
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— | (7,716 | ) | — | (14,189 | ) | ||||||||||
Other income
|
749 | 16,995 | 988 | 50,887 | ||||||||||||
Total other income (expense)
|
749 | 9,279 | 988 | 17,068 | ||||||||||||
Loss before provision for income taxes
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222,211 | (158,490 | ) | 233,290 | (213,006 | ) | ||||||||||
Provision for income taxes (Note 11)
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— | — | — | — | ||||||||||||
Net income (loss)
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$ | 222,211 | $ | (158,490 | ) | $ | 233,290 | (213,006 | ) | |||||||
Net loss per share (Creative Learning Corporation):
|
||||||||||||||||
Basic and diluted
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$ | 0.02 | $ | (0.06 | ) | 0.02 | $ | (0.08 | ) | |||||||
Weighted average number of common
|
||||||||||||||||
shares outstanding
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11,395,741 | 2,666,039 | 11,395,471 | 2,666,039 |
(Unaudited)
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||||||||
March 31,
|
March 31,
|
|||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | 233,290 | $ | (213,006 | ) | |||
Adjustments to reconcile net loss to net cash
|
||||||||
provided by (used in) operating activities:
|
||||||||
Depreciation
|
7,730 | 4,691 | ||||||
Compensatory equity issuances
|
8,800 | 147,207 | ||||||
Beneficial conversion feature
|
19,630 | |||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
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(194,167 | ) | — | |||||
Other receivables
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(32,000 | ) | — | |||||
Prepaid expenses
|
(24,276 | ) | — | |||||
Accounts payable
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(33,989 | ) | (18,109 | ) | ||||
Accrued liabilities
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1,157 | 10,132 | ||||||
Accrued marketing funds
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39,171 | — | ||||||
Customer deposits
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2,000 | — | ||||||
Net cash provided by (used in) operating activities | 7,716 | (49,455 | ) | |||||
Cash flows from investing activities:
|
||||||||
Property and equipment purchases
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(36,445 | ) | (6,357 | ) | ||||
Loan to a related party
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||||||||
(net of repayments)
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(1,807 | ) | — | |||||
Net cash used in investing activities | (38,252 | ) | (6,357 | ) | ||||
Cash flows from financing activities:
|
||||||||
Notes payable - borrowings
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(10,000 | ) | ||||||
Proceeds from sale of common stock
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— | 151,425 | ||||||
Net cash provided by financing activities
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— | 141,425 | ||||||
Net change in cash | (30,536 | ) | 85,613 | |||||
Cash, beginning of period
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517,830 | 27,271 | ||||||
Cash, end of period
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$ | 487,294 | $ | 112,884 | ||||
Supplemental disclosure of cash flow information:
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||||||||
Cash paid during the period for:
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||||||||
Income taxes
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$ | — | $ | — | ||||
Interest
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$ | — | $ | — | ||||
Non-cash investing and financing activities:
|
||||||||
Common stock issued for services
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$ | 8,800 | $ | — |
●
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opened one Corporate Creativity Center in Florida; and
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●
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sold 150 additional franchises.
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Item |
Increase (I) or
Decrease (D)
|
Reason | ||
Revenues | I | Growth of business resulting in increased sales of franchises and an increase in royalties received from franchisees. | ||
Operating Expenses | I | Growth in business. |
Six Months ended March 31, | ||||||||
2012 | 2011 | |||||||
Cash provided by (used in) operations | $ | 7,716 | $ | (49,455 | ) | |||
Purchase of equipment | (36,445 | ) | (6,357 | ) | ||||
Loan to a shareholder | (1,807 | ) | (10,000 | ) | ||||
Sale of common stock | - | 151,425 | ||||||
Cash on hand at beginning of period | $ | 30,536 | - |
General and administrative expenses | $ | 620,000 | ||
Marketing | $ | 240,000 | ||
Business development | $ | 120,000 | ||
Opening new Corporate Creativity Centers | $ | 80,000 |
2012 | 2013 | 2014 | Total | |||||||||||||
Lease of corporate office | $ | 18,000 | - | - | $ | 18,000 | ||||||||||
Lease of Corporate Creativity Center | $ | 45,000 | 50,928 | 54,526 | $ | 150,454 |
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Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification pursuant to Section 906 of the Sarbanes-Oxley Act.
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CREATIVE LEARNING CORPORATION | |||
May 15, 2012
|
By:
|
/s/ Brian Pappas | |
Brian Pappas, | |||
Principal Executive, Financial and Accounting Officer | |||
May 15, 2012
|
By:
|
/s/ Brian Pappas | |
Brian Pappas, | |||
Principal Executive Officer | |||
May 15, 2012
|
By:
|
/s/ Brian Pappas | |
Brian Pappas, | |||
Principal Financial Officer | |||
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects the financial condition and results of the Company.
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May 15, 2012
|
By:
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/s/ Brian Pappas | |
Brian Pappas, | |||
Principal Executive and Financial Officer | |||
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT
|
6 Months Ended |
---|---|
Mar. 31, 2012
|
|
Notes to Financial Statements | |
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | Creative Learning Corporation (formerly B2 Health, Inc.) was incorporated March 8, 2006 in the State of Delaware. BFK Franchise Company LLC was formed in the State of Nevada on May 19, 2009. Effective July 2, 2010 Creative Learning Corporation was acquired by BFK Franchise Company LLC in a transaction classified as a reverse acquisition. Creative Learning Corporation concurrently changed its name from B2 Health, Inc. to Creative Learning Corporation. The financial statements represent the activity of BFK Franchise Company LLC from May 19, 2009 forward, and the consolidated activity of BFK Franchise Company LLC and Creative Learning Corporation from July 2, 2010 forward. BFK Franchise Company LLC and Creative Learning Corporation are hereinafter referred to collectively as the "Company". The Company, primarily through franchises, offers educational programs designed to teach principles of engineering, architecture and physics to children using Lego ® bricks. The Company may also engage in any other business that is permitted by law, as designated by the Board of Directors of the Company.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.
Fiscal year
The Company employs a fiscal year ending September 30. Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.
Cash and cash equivalents
The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.
Accounts receivable
The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At March 31, 2012 and 2011 the Company had $11,000 and $-0- in its allowance for doubtful accounts.
Property and equipment
Property and equipment are recorded at cost and depreciated under straight line or accelerated methods over each item's estimated useful life. Revenue recognition
Revenue is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed or determinable, and collectability is reasonably assured.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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.
Income tax
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the 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 than not 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.
Prior to fiscal year 2010 the Company operated as an LLC, was a pass-through entity for federal income tax purposes and paid no income tax at the company level. At March 31, 2012 and March 31, 2011 the Company had net operating loss carryforwards of approximately $1,043,750 and $984,033 respectively, which begin to expire in 2031. The deferred tax asset of approximately $208,750 and $196,807 respectively created by the net operating loss has been offset by a 100% valuation allowance. The change in the valuation allowance in the six month period ended March 31, 2012 and 2012 was decreased by $46,658 and increased by $42,602 respectively. Advertising costs
Advertising costs are expensed as incurred. The Company had advertising costs for the six month period ended March 31, 2012 and 2011 was $42,094 and $106,383 respectively.
Net income (loss) per share
The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share. Financial Instruments
The carrying value of the Companys financial instruments, as reported in the accompanying balance sheets, approximates fair value. Long-Lived Assets
In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.
Stock based compensation
The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.
At March 31, 2012 the Company issued 11,000 shares of stock in exchange for services valued at $8,800. |
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Consolidated Balance Sheets (Parenthetical) (USD $)
|
Mar. 31, 2012
|
Sep. 30, 2011
|
---|---|---|
Assets | ||
Allowance for doubtful accounts | $ 11,000 | $ 28,660 |
Accumulated depreciation | $ 19,010 | $ 11,280 |
Stockholders' Equity | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized shares | 10,000,000 | 10,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, Authorized | 50,000,000 | 50,000,000 |
Common stock, Issued | 11,451,075 | 10,288,575 |
Common stock, outstanding | 11,451,075 | 10,288,575 |
Document and Entity Information (USD $)
|
6 Months Ended | |
---|---|---|
Mar. 31, 2012
|
Apr. 30, 2012
|
|
Document And Entity Information | ||
Entity Registrant Name | CREATIVE LEARNING Corp | |
Entity Central Index Key | 0001394638 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2012 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 1,145 | |
Entity Common Stock, Shares Outstanding | 11,451,075 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2012 |