Delaware | 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 | x |
Page | ||||
CONSOLIDATED FINANCIAL STATEMENTS | ||||
Consolidated balance sheets | 4 | |||
Consolidated statements of operation | 5 | |||
Consolidated statements of cash flows | 6 | |||
Consolidated statement of stockholder’s equity (Deficit)
|
7 | |||
Notes to consolidated financial statements | 8 |
December 31,
|
September 30,
|
|||||||
2012
|
2012
|
|||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash
|
$ | 1,073,876 | $ | 1,041,786 | ||||
Accounts receivable, less allowance for doubtful
|
||||||||
accounts of $12,000 and $12,000, respectively
|
189,870 | 195,493 | ||||||
Prepaid expenses
|
23,698 | 26,334 | ||||||
Other receivables
|
74,500 | 103,013 | ||||||
Total Current Assets
|
1,361,944 | 1,366,626 | ||||||
Note receivable from related party
|
— | — | ||||||
Property and equipment, net of accumulated depreciation
|
||||||||
of $36,529 and $29,805, respectively
|
285,981 | 283,522 | ||||||
Intangible Assets
|
25,250 | 25,250 | ||||||
Deposits
|
39,619 | 32,619 | ||||||
Total Assets
|
$ | 1,712,794 | $ | 1,708,017 | ||||
Liabilities and Stockholders’ Equity (Deficit)
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable:
|
||||||||
Related parties
|
$ | 4,121 | $ | 16,771 | ||||
Other
|
148,312 | 163,171 | ||||||
Payroll accruals
|
7,239 | 11,877 | ||||||
Accrued marketing fund
|
108,615 | 90,155 | ||||||
Customer deposits
|
67,500 | 47,500 | ||||||
Notes Payable:
|
||||||||
Related parties
|
20,000 | 40,000 | ||||||
Other
|
3,500 | 3,500 | ||||||
Total Current Liabilities
|
359,287 | 372,975 | ||||||
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;
|
||||||||
11,556,075 and 10,288,575 shares issued and outstanding, respectively
|
1,157 | 1,155 | ||||||
Additional paid-in capital
|
2,026,116 | 2,006,118 | ||||||
Retained earnings (deficit)
|
(673,767 | ) | (672,231 | ) |
(Unaudited)
|
||||||||
For The Three
|
||||||||
Months Ended
|
||||||||
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Revenues:
|
||||||||
Initial franchise fee
|
$ | 633,268 | $ | 443,035 | ||||
Royalties and marketing fees
|
149,534 | 88,385 | ||||||
Corporate Creativity Center Sales
|
30,201 | 44,038 | ||||||
813,003 | 575,458 | |||||||
Operating expenses:
|
||||||||
Franchise consulting and commissions:
|
||||||||
Related parties
|
136,265 | 66,031 | ||||||
Other
|
196,169 | 153,596 | ||||||
Franchise training and expenses:
|
||||||||
Related parties
|
— | 7,750 | ||||||
Other
|
58,568 | 17,782 | ||||||
Salaries and payroll taxes
|
127,361 | 94,888 | ||||||
Advertising
|
60,450 | 64,289 | ||||||
Professional fees
|
27,738 | 54,378 | ||||||
Office expense
|
39,623 | 33,362 | ||||||
Depreciation
|
6,724 | 3,865 | ||||||
Stock-based compensation
|
— | 8,800 | ||||||
Other general and administrative expenses
|
161,507
|
59,875 | ||||||
Total operating expenses
|
814,405 | 564,616 | ||||||
Income (loss) from operations
|
(1,402 | ) | 10,842 | |||||
Other income (expense):
|
||||||||
Interest expense:
|
||||||||
Beneficial conversion feature
|
— | — | ||||||
Other
|
134 | — | ||||||
Other income
|
0 | 240 | ||||||
Total other income (expense)
|
(134 | ) | 240 | |||||
Income (loss) before provision for income taxes
|
(1,536 | ) | 11,082 | |||||
Provision for income taxes (Note 11)
|
— | — | ||||||
Net Income (loss)
|
$ | (1,536 | ) | $ | 11,082 | |||
Net income (loss) per share (Creative Learning Corporation):
|
||||||||
Basic and diluted
|
$ | (0.00 | ) | $ | 0.00 | |||
Weighted average number of common shares outstanding
|
11,558,575 | 11,340,409 |
(Unaudited)
|
||||||||
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | (1,536 | ) | $ | 11,082 | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Depreciation
|
6,724 | 3,865 | ||||||
Compensatory equity issuances
|
20,000 | 8,800 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
5,623 | (93,623 | ) | |||||
Accounts payable
|
(27,509 | ) | 9,743 | |||||
Accrued liabilities
|
(4,638 | ) | 5,448 | |||||
Accrued marketing funds
|
18,460 | 21,465 | ||||||
Customer deposits
|
20,000 | 5,000 | ||||||
Notes Payable
|
(20,000 | ) | — | |||||
Deposits
|
(7,000 | ) | — | |||||
Other receivables
|
28,513 | — | ||||||
Prepaid expenses
|
2,636 | 5,000 | ||||||
Net cash provided by (used in) operating activities | 41,273 | (23,220 | ) | |||||
Cash flows from investing activities:
|
||||||||
Property and equipment purchases
|
(9,183 | ) | (594 | ) | ||||
Intangible asset purchases
|
— | |||||||
Repayment of loan
|
— | (4,000 | ) | |||||
Net cash used in investing activities
|
(9,183 | ) | (4,594 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from sale of common stock
|
— | — | ||||||
Net cash provided by financing activities
|
— | — | ||||||
Net change in cash
|
32,090 | (27,814 | ) | |||||
Cash, beginning of period
|
1,041,786 | 517,830 | ||||||
Cash, end of period
|
$ | 1,073,876 | $ | 490,016 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Income taxes
|
$ | — | $ | — | ||||
Interest
|
$ | — | $ | — | ||||
Non-cash investing and financing activities:
|
||||||||
Common stock issued for services
|
$ | 20,000 | $ | 8,800 |
Additional
|
Retained
|
|||||||||||||||||||||||
Common Stock
|
Paid-in
|
Earnings
|
Noncontrolling
|
|||||||||||||||||||||
Shares
|
Par Value
|
Capital
|
(Deficit)
|
Interest
|
Total
|
|||||||||||||||||||
Balance, September 30, 2010
|
2,581,268 | 258 | 670,427 | (771,026 | ) | (54,734 | ) | (155,075 | ) | |||||||||||||||
Acquisition of non-controlling interest (Note 1)
|
— | — | (54,734 | ) | — | 54,734 | — | |||||||||||||||||
Common stock sales (Note 6)
|
1,156,734 | 116 | 951,061 | — | — | 951,177 | ||||||||||||||||||
Compensatory stock issuances (Note 6)
|
1,310,573 | 131 | 409,215 | — | — | 409,346 | ||||||||||||||||||
Stock issued under exchange agreement (Note 2)
|
5,240,000 | 524 | (524 | ) | — | — | — | |||||||||||||||||
Net income for the year ended September 30, 2011
|
— | — | — | (506,014 | ) | — | (506,014 | ) | ||||||||||||||||
Balance, September 30, 2011
|
10,288,575 | $ | 1,029 | $ | 1,975,445 | $ | (1,277,040 | ) | $ | — | $ | 699,434 | ||||||||||||
Stock issued under exchange agreement (Note 2)
|
1,260,000 | 126 | (126 | ) | — | — | 0 | |||||||||||||||||
Compensatory stock issuances (Note 6)
|
11,000 | 1 | 8,799 | — | — | 8,800 | ||||||||||||||||||
Cancellation of prior shares issued erroneously (Note 7)
|
(33,500 | ) | (3 | ) | 3 | — | ||||||||||||||||||
Stock issued as payment for liabilities (Note 7)
|
5,000 | 0 | 3,750 | 3,750 | ||||||||||||||||||||
Stock issued for business acquisition (Note 7)
|
25,000 | 2 | 18,248 | 18,250 | ||||||||||||||||||||
Net income for the year ended September 30, 2012
|
— | — | — | 604,810 | — | 604,810 | ||||||||||||||||||
Balance, September 30, 2012
|
11,556,075 | $ | 1,155 | $ | 2,006,118 | $ | (672,230 | ) | $ | — | $ | 1,335,044 | ||||||||||||
Stock issued as payment for liabilities (Note 7)
|
20,000 | 2 | 19,998 | 20,000 | ||||||||||||||||||||
Net income for the quarter ended December 21, 2012
|
(1,536 | ) | (1,536 | ) | ||||||||||||||||||||
Balance, December 31, 2012
|
11,576,075 | $ | 1,157 | $ | 2,026,116 | $ | (673,766 | ) | $ | — | $ | 1,353,507 |
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. |
|
Level 2:
|
Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.
|
|
Level 3:
|
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
·
|
opened two Corporate Creativity Center in Florida; and
|
·
|
sold 253 additional franchises.
|
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. |
Three months ended December 31, | ||||||||
2012 | 2011 | |||||||
Cash provided by (used in) operations | 41,273 | (23,220 | ) | |||||
Purchase of equipment | (9,183 | ) | (594 | ) | ||||
Loans (Repayment of loans) | - | (4,000 | ) |
General and administrative expenses | $ | 1,000,000 | ||
Marketing | $ | 365,000 | ||
Business development | $ | 275,000 |
2013 | 2014 | 2015 | Total | |||||||||||||
Lease of Corporate Creativity Center | $ | 38,625 | 53,500 | 23,000 | $ | 115,125 |
31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act. |
101.INS **
|
XBRL Instance Document
|
|
101.SCH **
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL **
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF **
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB **
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE **
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
CREATIVE LEARNING CORPORATION | |||
February 14, 2013
|
By:
|
/s/ Brian Pappas | |
Brian Pappas, | |||
Principal Executive, Financial and Accounting Officer |
1.
|
I have reviewed this quarterly report on Form 10-Q of Creative Learning Corporation;
|
2.
|
Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
February 14, 2013
|
By:
|
/s/ Brian Pappas | |
Brian Pappas, | |||
Principal Executive Officer |
1.
|
I have reviewed this quarterly report on Form 10-Q of Creative Learning Corporation;
|
2.
|
Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
February 14, 2013
|
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
|
(2)
|
The information contained in the Report fairly presents, in all material respects the financial condition and results of the Company.
|
February 14, 2013
|
By:
|
/s/ Brian Pappas | |
Brian Pappas, | |||
Principal Executive and Financial Officer |
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1. Nature of Organization and Summary of Significant Accounting Policies (Details Narrative) (USD $)
|
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Sep. 30, 2012
|
|
Nature Of Organization And Summary Of Significant Accounting Policies Details Narrative | |||
Cash equivalents | $ 0 | $ 0 | |
Allowance for doubtful accounts | 12,000 | 11,000 | |
Advertising costs | 60,450 | 64,289 | |
Non-interest bearing promissory note to a related party for Consulting Services | $ 40,000 | ||
Common stock issued during period | 20,000 | ||
Common stock per share value | $ 1.00 |