10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10- Q/A

(Amendment No. 1)

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 2013

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission File Number: 000-52883

CREATIVE LEARNING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	20-4456503
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

701 Market St., Suite 113

St. Augustine, FL32095

 (Address of principal executive offices, including Zip Code)

(904) 824-3133

 (Issuer’s telephone number, including area code)

_______________________________________________

(Former name or former address if changed since last report) 

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	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 o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 11,809,409 shares of common stock as of February 13, 2014.

CREATIVE LEARNING CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

December 31, 2013

2

CREATIVE LEARNING CORPORATION

Consolidated Financial Statements

(Unaudited)

TABLE OF CONTENTS

	Page
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheets		4
Consolidated statements of operation		5
Consolidated statements of cash flows		6
Notes to consolidated financial statements		7

3

CREATIVE LEARNING CORPORATION

Consolidated Balance Sheets

	(Unaudited)
	December 31,		September 30,
	2013		2013
Assets
Current Assets:
Cash	$	2,589,105		2,004,947
Accounts receivable, less allowance for doubtful
accounts of $7,244 and $10,000, respectively		256,007		310,150
Prepaid expenses		10,571		826
Other receivables - current portion		76,590		94,301
Deferred tax asset		1,058		1,058
Total Current Assets		2,933,331		2,411,282
Note receivable from related party		70,000		70,000
Other receivables - net of current portion		53,688		37,491
Property and equipment, net of accumulated depreciation
of $67,863 and $60,073, respectively		292,284		294,863
Intangible assets		162,744		95,270
Deposits		19,000		15,000
Total Assets	$	3,531,047		2,923,906
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable:
Related parties	$	2,195		5,690
Other		249,837		171,889
Payroll accruals		21,578		13,105
Unearned revenue		35,900		35,900
Accrued marketing fund		109,316		100,754
Customer deposits		62,500		120,001
Income tax payable		190,460		13,131
Notes payable:
Related parties		20,000		20,000
Other		92,867		3,560
Total Current Liabilities		784,653		484,030
Other payables - net of current portion		15,000		5,297
Total Liabilities		799,653		489,327
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;
11,809,409 and 11,809,409 shares issued and outstanding, respectively		1,181		1,181
Additional paid-in capital		2,157,673		2,157,673
Retained earnings		572,540		275,725
Total Stockholders’ Equity		2,731,394		2,434,579
Total Liabilities and Stockholders’ Equity	$	3,531,047		2,923,906

The accompanying notes are an integral part of the consolidated financial statements

4

CREATIVE LEARNING CORPORATION

Consolidated Statements of Operations

	(Unaudited)
	For The Three
	Months Ended
	December 31,		December 31,
	2013		2012
Revenues:
Initial franchise fees	$	1,558,454	$	633,268
Royalty fees		300,652		149,534
Corporate Creativity Center sales		14,640		30,201
		1,873,746		813,003
Operating expenses:
Franchise consulting and commissions:
Related parties		248,844		136,265
Other		315,391		196,169
Franchise training and expenses		97,519		58,568
Salaries and payroll taxes		193,384		127,361
Advertising		191,942		60,450
Professional fees		49,193		27,738
Office expense		91,582		39,623
Depreciation		9,540		6,724
Other general and administrative expenses		202,330		161,507
Total operating expenses		1,399,725		814,405
Income (loss) from operations		474,021		(1,402	)
Other income (expense):
Interest (expense)		—		(134	)
Other income (expense)		1,873		—
Total other income (expense)		1,873		(134	)
Income (loss) before provision for
income taxes		475,894		(1,536	)
Provision for income taxes (Note 1)		179,079		—
Net Income (loss)	$	296,815	$	(1,536	)
Net Income (loss) per share
Basic	$	0.03	$	(0.00	)
Basic Weighted average number of common
shares outstanding		11,809,409		11,558,575
Diluted	$	0.03	$	—
Diluted Weighted average number of common
shares outstanding		11,842,711		—

The accompanying notes are an integral part of the consolidated financial statements

5

CREATIVE LEARNING CORPORATION

Consolidated Statements of Cash Flows

	(Unaudited)
	For the three months ended
	December 31,			December 31,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	296,815		$	(1,536	)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation		9,540			6,724
Loss on disposal of assets		1,475			—
Materials purchased with notes payables		26,300			—
Compensatory equity issuances		—			20,000
Changes in operating assets and liabilities:
Accounts receivable		54,143			5,623
Accounts payable		74,453			(27,509	)
Accrued liabilities		8,474			(4,638	)
Accrued marketing funds		8,562			18,460
Customer deposits		(57,501	)		20,000
Deposits		(4,000	)		(7,000	)
Income tax payable		177,329			—
Other receivables		1,514			28,513
Prepaid expenses		(9,745	)		2,636
Net cash provided by operating activites		587,359			61,273
Cash flows from investing activities:
Property and equipment purchases		(2,437	)		(9,183	)
Intangible asset purchases		-			—
Net cash used by investing activities		(2,437	)		(9,183	)
Cash flows from financing activities:
Notes payable		(764	)		(20,000	)
Net cash provided (used) by financing activities		(764	)		(20,000	)
Net change in cash		584,158			32,090
Cash, beginning of period		2,004,947			1,041,786
Cash, end of period	$	2,589,105			1,073,876
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	1,750			—
Interest	$	—			—
Supplemental non-cash investing and financing activities:
Common stock issued for services	$	—			20,000
Intangible assets acquired with notes payables	$	66,774			—
Equipment acquired with notes payables	$	6,000			—
Materials purchased with notes payables	$	26,300			—

The accompanying notes are an integral part of the consolidated financial statements

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CREATIVE LEARNING CORPORATION

(formerly B2 Health, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Organization

Creative Learning Corporation (“CLC”), formerly B2 Health, Inc., was incorporated March 8, 2006 in the State of Delaware. BFK Franchise Company LLC (“BFK”) was formed in the State of Nevada on May 19, 2009. Effective July 2, 2010, CLC was acquired by BFK in a transaction classified as a reverse acquisition.CLC concurrently changed its name from B2 Health, Inc. to Creative Learning Corporation. The financial statements represent the activity of BFK from May 19, 2009 forward, and the consolidated activity of BFKF and CLC from July 2, 2010 forward. BFK and CLC are hereinafter referred to collectively as the "Company".

In addition to the accounts of CLC and BFK, the accompanying consolidated financial statements include the accounts of CLC’s subsidiaries, BFK Development Company LLC (“BFKD”) from November 25, 2009 (BFKD’s inception) forward, CI Franchise Company LLC (“CI”) from September 14, 2012 (CI’s inception) forward, and Sew Fun Franchise Company LLC (SF) from January 8, 2013 (SF’s inception) forward.

Creative Learning Corporation operates through its wholly owned subsidiaries BFK FRANCHISE COMPANY, LLC, CI FRANCHISE COMPANY, LLC AND SEW FUN FRANCHISE COMPANY, LLC under the trade names Bricks 4 Kidz®, Challenge Island®, and Sew Fun Studios™ respectively, that offer children's enrichment and education franchises.

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 financial statements 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.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year presentation. The reclassifications did not have any effect on the prior year net loss.

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CREATIVE LEARNING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued):

Cash and cash equivalents

The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. The Company had no cash equivalents at December 31, 2013 or September 30, 2013.

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 December 31, 2013 and September 30, 2013 the Company had $7,244 and $10,000, respectively, in its allowance for doubtful accounts.

Property and equipment

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, currently set at five years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.

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.

Since the Company’s franchises are primarily a mobile concept and do not require finding locations or construction, the franchisees can begin operations as soon as they leave training. The franchise fees are fully collectible as of the date of the signing of the franchise agreement, but the franchise fees are not recognized as revenue until the last day they complete training when substantially all of the services required by the franchise agreement have been provided by the Company. Royalty fees are recognized as earned.

As of December 31, 2013 and September 30, 2013, the Company had $35,900 and $35,900, respectively, in unearned revenue for franchise fees collected but not having completed training per the Revenue Recognition policy.

8

CREATIVE LEARNING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued):

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.

For the three months ended December 31, 2013 and 2012, the Company recorded a tax provision of $179,079 and $-0- respectively on its pretax income of $475,894 and $(1,536) respectively. The tax provision does not include any tax provision or benefit for certain foreign currency remeasurement gains and losses that are not recognized in any tax jurisdiction

The tax provision for the first three month period December 31, 2013 is based on an estimated annual effective rate, which requires management to make its best estimate of annual pretax income or loss. During the year, management regularly updates forecasted annual pretax results. To the extent that actual fiscal year ended September 30, 2014 pretax results for income or loss vary from estimate, the actual tax provision or benefit recognized for the fiscal year ended September 30, 2014 could be materially different from the forecasted amount used to estimate the tax provision for the three months ended December 31, 2013.

Advertising costs

Advertising costs are expensed as incurred. Advertising costs for the three month period ended December 31, 2013 and 2012 were $191,942 and $60,450, respectively.

Net earnings (loss) per share

ASC 260-10-45, “Earnings Per Share”, requires presentation of "basic" and "diluted" earnings per share on the face of the statements of operations for all entities with complex capital structures. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. When the Company is in loss position, no dilutive effect is considered.

9

CREATIVE LEARNING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued):

Fair Value of Financial Instruments

The Accounting Standards Codification (“820-10”) defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for an asset or liability. These include: quoted prices for similar assets or liabilities in active market; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying amounts of cash, accounts receivable and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments.

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.

10

CREATIVE LEARNING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued):

Notes and Other Receivables

In July of 2013, the Company issued a $70,000 loan to a related party company, personally guaranteed by the related party, at 6% interest, monthly interest payments only and fully due and payable by July 1, 2015. The Note is convertible up to the maturity date to unrestricted shares in the related party company for any unpaid balance at $0.35 per share.

At December 31, 2013 and September 30, 2013, the Company had notes receivables from related parties of $70,000 and $70,000, respectively.

At December 31, 2013 the Company held certain notes and other receivables totaling $130,278, of which $126,818 was for extended payment terms of Franchise Fees, generally non-interest bearing notes with monthly payments, payable within one to two years, and Foreign Tax Credits of $3,460. These receivables are reported in the accompanying financial statements as current and long term other receivables in the accompanying financial statements.

At September 30, 2013, the Company had notes and other receivables of $131,792.

Notes Payables

In September of 2012 the Company issued a non-interest bearing promissory note of $40,000 to a related party for consulting services payable by issuance of 40,000 shares of the Company’s common stock. As of December 31, 2013 and September 30, 2013 the remaining balance on this promissory note was $20,000 and $20,000 respectively. This liability is reported in the accompanying financial statements as notes payable, related party, and will be paid with the issuance of the remaining 20,000 shares in FY 2014.

In December of 2013, the Company entered into a settlement agreement to purchase three territories from a Nevada franchisee. As part of this settlement, the Company agreed to two non-interest bearing notes, payable in monthly installments over the next eighteen months. As of December 31, 2013 the remaining balance for these notes was $99,092 and is reported in the accompanying financial statements as current and long term other notes payables.

On December 31, 2013 and September 30, 2013 the Company owed $8,775 and $8,857, respectively, in deferred commission payments, non-interest bearing, payable in monthly payments, on deferred payment schedules related to extended payment terms of Franchise Fees.

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.

Subsequent Events

Between January 1, 2014 and February 13, 2014 BFK Franchise Company, sold 14 new US franchises and 6 new international franchises and a Master Franchise in Bolivia. During this period CI Franchise Company sold 2 new US franchises and one Master Franchise in the Philippines.

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Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operation

The following discussion and analysis should be read in conjunction with the unaudited financial statements and notes thereto contained in this report.

Results of Operations

BFK, which conducts business under the trade name BRICKS 4 KIDS®, offers programs designed to teach principles of engineering, architecture and physics to children ages 3-12+ using LEGO® bricks. The Company provides classes (both in school and after school), special events programs and day camps that are designed to enhance and enrich the traditional school curriculum, trigger young children’s lively imaginations and build self-confidence. BFK’s programs foster creativity and provide a unique atmosphere for students to develop problem solving and critical thinking skills by designing and building machines, catapults, pyramids, race cars, buildings and numerous other systems and devices using LEGO® bricks.

BFK franchises are primarily mobile models, with activities scheduled in the schools or other venues, but also can be operated through a store-front location called a Creativity Center.

BFK sells franchises both domestically and internationally.  International sales can be individual, international franchises, or where warranted, they can be sold as  Master License agreement where the Master Licensee can operate a franchise, but also develops, sells and manages sub-franchisees.

BFK sold its first franchise in September 2009 and as of December31, 2013, BFK has sold 438 franchises, operating in 39 states, the District of Columbia, Puerto Rico and 19 foreign countries.

On September 14, 2012, the Company formed CI Franchise Company LLC (“CI”) as a wholly owned subsidiary for purpose of operating a second franchise concept known as Challenge Island®, which provides unique challenge-based programs designed to foster critical and creative thinking skills, problem solving methodology, and core STEM (Science, Technology, Engineering, Mathematics) principles in children ages 3-13+. CI began selling franchises during the 2013 fiscal year.

As of December 31, 2013 CI has sold 8 franchises in the United States.

On January 8, 2013 the Company formed Sew Fun Franchise Company LLC (“SF”) as a wholly owned subsidiary for the purpose of operating a third franchise concept known as Sew Fun. Sew Fun is a brick and mortar business featuring stores/studios located in strip malls and offering after-school classes, camps and birthday parties for children ages 8-13+, as well as adult classes, in fashion design.

12

The Company is in the process registering SF with state franchising regulators, and as of December 31, 2013, no state registrations have been completed.

Unless otherwise indicated, all references to the Company include the operations of BFK, BFKD, CI and SF.

The Company sold 60 domestic and international franchises during the three months ending December 31, 2013 compared to 36 for the same period in 2012.  The average fee the Company received for a franchise during the three months ended December 31, 2013 was approximately $25,970, compared to approximately $17,600 during the three months ended December 31, 2012.  The increase in the average fee was due to nine international franchises sold at an average of $31,146 per franchise and two Master Franchises sold at an average price of $180,000 per franchise.  The increase in the average fee during the current period was partially offset by the sale of 22 multiple BFK franchises at a discount to the typical franchise fee of $25,900 and the sale of one CI franchise at a discounted price of $7,500 to a BFK franchisee.

Although the typical BFK franchise fee is $25,900, if a franchisee buys more than one franchise at the time the initial franchise is purchased, the fee for the other territory is approximately $10,000 to $12,000.

The typical fee for a CI franchise is $17,500 compared to a fee of approximately $25,900 for a BFK franchise.

BFK sells franchises both domestically and internationally.  International franchise sales can be a single franchise or a Master Franchise, where the Master Franchisee operates a franchise, but is also able to develop, sell and manage sub-franchises.  International franchise and Master Franchise fees vary and are set relative to the potential of the franchised territories.

The Company expects that its franchise fee revenue will continue to increase during the fiscal year ending September 30, 2014 as additional franchises are sold.

Royalty Fees increased by $151,118 for the three months ending December 31, 2013 over the same period in 2012, with an increase of $75,899 collected from franchisees that have been in the system one year or longer, and  $75,219 from new franchisees that entered the system within the last 12 months.

Royalty Fees will continue to grow with the increase in the number of franchisees and the increase in the amount of time franchisees have been in the system.

Other material changes of items in the Company’s Statement of Operations for the three months ended December 31, 2013, as compared to the same period in 2012, are discussed below.

13

Item	Increase (I) or Decrease (D)	Reason
Revenues	I	Sale of more franchises and increase in royalties paid by established franchises.
Franchise consulting and commissions	I	Increased sales of franchises.
Franchise training and expenses	I	Increase in size of training classes.
Salaries and payroll taxes	I	Increase in staff to support the growth of the business.
Advertising	I	Increased expenditures to grow the business.
Professional fees	I	Increase in international franchise and trademarking legal fees
Office expense	I	Increased printing, office supplies, lego supplies and office expenses to support the growth of the Company.
Other general and administrative expenses	I	Overhead and administrative increases to support the growth of the Company.
Provision for income taxes	I	Income tax liabilities due to profits depleting prior year net operating loss carryovers.

The Company expects that its revenue will continue to increase during the year ended December 31, 2014 as additional franchises are sold.

The Company does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on the Company’s revenues or expenses.

14

Liquidity and Capital Resources

Sources and (uses) of funds for the three months ended December 31, 2013 and 2012 were as follows:

	Three months ended December 31,
	2013			2012
Cash provided by (used in) operations		587,539			61,273
Purchase of property and equipment		(2,437	)		(9,183	)
Loans (repayment of loans)		(764	)		(20,000	)

As of December 31, 2013 the Company’s operating cash requirements were approximately $430,000 per month.

The Company anticipates that its capital requirements for the twelve-month period ending December 31, 2014 will be as follows:

Franchise consulting, commissions, training and related expenses	$	2,224,000
Salaries and payroll taxes	$	960,000
Advertising	$	828,000
Other operating expenses	$	1,350,000

The Company collects and allocates 2% of the franchisee gross revenues to a marketing fund, managed by the Company, which is used for the national branding of the Company’s concepts to benefit the franchisees. The marketing fund amounts are accounted for as a liability on the balance sheet and the actual collections are deposited into a marketing fund bank account. Expenses pertaining to the marketing fund activities are paid from the marketing fund and reduce the liability account. The Marketing Fund liability is actually offset with the matching amount of cash in the Marketing Fund bank account.

Contractual Obligations

The Company owns its corporate headquarters, but leases an additional office suite. The following table summarizes the Company’s contractual lease obligations as of December 31, 2013:

	2014		2015		2016		2017		Total
Lease of office space	$	10,800	$	10,800	$	10,800	$	--	$	32,400
Notes Payable	$	72,867	$	35,000	$	--	$	--	$	107,867

15

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonable likely to have a current or future material effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity or capital resources.

Outlook

The Company saw another year of significant growth in the sales of franchises in fiscal year 2013 expanding from 210 to 395 franchises sold with its two brands in operation, resulting in increased revenues from franchise fees, including international growth and exposure. That trend continued into the quarter ending December 31, 2013, setting a record in new sales revenues and adding an additional 61 franchises, both domestic and internationally. In addition, with franchisees being in the system longer, there were significant increases in royalty fees.

As a result of this growth, the Company experienced a significant increase in liquidity and expects all of these trends to continue through this fiscal year.

By the end of the 2013 fiscal year, the Company had used all of its startup, tax net loss carryovers, and will be liable for income taxes on reported net income.

Other than as disclosed above, the Company does not know of any significant changes in its expected sources and uses of cash.

Critical Accounting Policies and Recent Accounting Pronouncements

See Note 1 to the Company’s financial statements included as part of this report for a discussion of the Company’s critical accounting policies. The Company does not expect that the adoption of recent accounting pronouncements will have a material effect on its financial statements.

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Item 4. Controls and Procedures.

(a) The Company maintains a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported, within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act, is accumulated and communicated to the Company’s management, including its Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of December 31, 2013, the Company’s Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Principal Executive and Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

(b) Changes in Internal Controls. There were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2013, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

17

PART II

Item 6. Exhibits

Exhibits

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

____________

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

18

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CREATIVE LEARNING CORPORATION
Dated:  June 10, 2014	By:	/s/ Brian Pappas
		Brian Pappas,
		Principal Executive, Financial and Accounting Officer

19

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Brian Pappas, certify that;

1.  I have reviewed this quarterly report on Form 10-Q/A 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.

June 10, 2014	By:	/s/ Brian Pappas
		Brian Pappas
		Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Brian Pappas, certify that;

1.  I have reviewed this quarterly report on Form 10-Q/A 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.

June 10, 2014	By:	/s/ Brian Pappas
		Brian Pappas
		Principal Financial Officer

EX-32

EXHIBIT 32

In connection with the Quarterly Report of Creative Learning Corporation (the “Company”) on Form 10-Q/A for the period ending December 31, 2013 as filed with the Securities and Exchange Commission (the “Report”), Brian Pappas, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

   (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 operation of the Company.

June 10, 2014	By:	/s/ Brian Pappas
		Brian Pappas
		Principal Executive and Financial Officer

XML

Organization, Operations and Summary of Significant Accounting Policies (Details Narrative) (USD $)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Sep. 30, 2013
Organization Operations And Summary Of Significant Accounting Policies Details Narrative
Cash equivalents	$ 0		$ 0
Allowance for doubtful accounts	7,244		10,000
Unearned revenue	35,900		35,900
Tax provision recorded	179,079
Pretax income	475,894	(1,536)
Advertising costs	191,942	60,450
Notes receivables from related parties	70,000		70,000
Notes and other receivables	130,278		131,792
Promissory Note	20,000		20,000
Remaining balance on promissory note	99,092
Deferred commission payments	$ 8,775		$ 8,857

XML

Consolidated Balance Sheets (USD $)	Dec. 31, 2013	Sep. 30, 2013
Current Assets:
Cash	$ 2,589,105	$ 2,004,947
Accounts receivable, less allowance for doubtful accounts of $7,244 and $10,000, respectively	256,007	310,150
Prepaid expenses	10,571	826
Other receivables - current portion	76,590	94,301
Deferred tax asset	1,058	1,058
Total Current Assets	2,933,331	2,411,282
Note receivable from related party	70,000	70,000
Other receivables - net of current portion	53,688	37,491
Property and equipment, net of accumulated depreciation of $67,863 and $60,073, respectively	292,284	294,863
Intangible assets	162,744	95,270
Deposits	19,000	15,000
Total Assets	3,531,047	2,923,906
Current Liabilities:
Accounts payable Related parties	2,195	5,690
Accounts payable - Other	249,837	171,889
Payroll accruals	21,578	13,105
Unearned revenue	35,900	35,900
Accrued marketing fund	109,316	100,754
Customer deposits	62,500	120,001
Income tax payable	190,460	13,131
Notes Payable: Related parties	20,000	20,000
Notes Payable: Other	92,867	3,560
Total Current Liabilities	784,653	484,030
Other payables - net of current portion	15,000	5,297
Total Liabilities	799,653	489,327
Stockholders' Equity (Deficit)
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; 11,809,409 and 11,809,409 shares issued and outstanding, respectively	1,181	1,181
Additional paid in capital	2,157,673	2,157,673
Retained earnings	572,540	275,725
Total Stockholders' Equity	2,731,394	2,434,579
Total Liabilities and Stockholders' Equity	$ 3,531,047	$ 2,923,906

XML

Organization, Operations and Summary of Significant Accounting Policies

3 Months Ended

Dec. 31, 2013

Notes to Financial Statements

1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Organization

Creative Learning Corporation (“CLC”), formerly B2 Health, Inc., was incorporated March 8, 2006 in the State of Delaware. BFK Franchise Company LLC (“BFK”) was formed in the State of Nevada on May 19, 2009. Effective July 2, 2010, CLC was acquired by BFK in a transaction classified as a reverse acquisition.CLC concurrently changed its name from B2 Health, Inc. to Creative Learning Corporation. The financial statements represent the activity of BFK from May 19, 2009 forward, and the consolidated activity of BFKF and CLC from July 2, 2010 forward. BFK and CLC are hereinafter referred to collectively as the "Company".

In addition to the accounts of CLC and BFK, the accompanying consolidated financial statements include the accounts of CLC’s subsidiaries, BFK Development Company LLC (“BFKD”) from November 25, 2009 (BFKD’s inception) forward, CI Franchise Company LLC (“CI”) from September 14, 2012 (CI’s inception) forward, and Sew Fun Franchise Company LLC (SF) from January 8, 2013 (SF’s inception) forward.

Creative Learning Corporation operates through its wholly owned subsidiaries BFK FRANCHISE COMPANY, LLC, CI FRANCHISE COMPANY, LLC AND SEW FUN FRANCHISE COMPANY, LLC under the trade names Bricks 4 Kidz®, Challenge Island®, and Sew Fun Studios™ respectively, that offer children's enrichment and education franchises.

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 financial statements 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.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year presentation. The reclassifications did not have any effect on the prior year net loss.

Cash and cash equivalents

The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. The Company had no cash equivalents at December 31, 2013 or September 30, 2013.

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 December 31, 2013 and September 30, 2013 the Company had $7,244 and $10,000, respectively, in its allowance for doubtful accounts.

Property and equipment

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, currently set at five years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.

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.

Since the Company’s franchises are primarily a mobile concept and do not require finding locations or construction, the franchisees can begin operations as soon as they leave training. The franchise fees are fully collectible as of the date of the signing of the franchise agreement, but the franchise fees are not recognized as revenue until the last day they complete training when substantially all of the services required by the franchise agreement have been provided by the Company. Royalty fees are recognized as earned.

As of December 31, 2013 and September 30, 2013, the Company had $35,900 and $35,900, respectively, in unearned revenue for franchise fees collected but not having completed training per the Revenue Recognition policy.

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.

For the three months ended December 31, 2013 and 2012, the Company recorded a tax provision of $179,079 and $-0- respectively on its pretax income of $475,894 and $(1,536) respectively. The tax provision does not include any tax provision or benefit for certain foreign currency remeasurement gains and losses that are not recognized in any tax jurisdiction

The tax provision for the first three month period December 31, 2013 is based on an estimated annual effective rate, which requires management to make its best estimate of annual pretax income or loss. During the year, management regularly updates forecasted annual pretax results. To the extent that actual fiscal year ended September 30, 2014 pretax results for income or loss vary from estimate, the actual tax provision or benefit recognized for the fiscal year ended September 30, 2014 could be materially different from the forecasted amount used to estimate the tax provision for the three months ended December 31, 2013.

Advertising costs

Advertising costs are expensed as incurred. Advertising costs for the three month period ended December 31, 2013 and 2012 were $191,942 and $60,450, respectively.

Net earnings (loss) per share

ASC 260-10-45, “Earnings Per Share”, requires presentation of "basic" and "diluted" earnings per share on the face of the statements of operations for all entities with complex capital structures. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. When the Company is in loss position, no dilutive effect is considered.

Fair Value of Financial Instruments

The Accounting Standards Codification (“820-10”) defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for an asset or liability. These include: quoted prices for similar assets or liabilities in active market; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying amounts of cash, accounts receivable and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments.

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.

Notes and Other Receivables

In July of 2013, the Company issued a $70,000 loan to a related party company, personally guaranteed by the related party, at 6% interest, monthly interest payments only and fully due and payable by July 1, 2015. The Note is convertible up to the maturity date to unrestricted shares in the related party company for any unpaid balance at $0.35 per share.

At December 31, 2013 and September 30, 2013, the Company had notes receivables from related parties of $70,000 and $70,000, respectively.

At December 31, 2013 the Company held certain notes and other receivables totaling $130,278, of which $126,818 was for extended payment terms of Franchise Fees, generally non-interest bearing notes with monthly payments, payable within one to two years, and Foreign Tax Credits of $3,460. These receivables are reported in the accompanying financial statements as current and long term other receivables in the accompanying financial statements.

At September 30, 2013, the Company had notes and other receivables of $131,792.

Notes Payables

In September of 2012 the Company issued a non-interest bearing promissory note of $40,000 to a related party for consulting services payable by issuance of 40,000 shares of the Company’s common stock. As of December 31, 2013 and September 30, 2013 the remaining balance on this promissory note was $20,000 and $20,000 respectively. This liability is reported in the accompanying financial statements as notes payable, related party, and will be paid with the issuance of the remaining 20,000 shares in FY 2014.

In December of 2013, the Company entered into a settlement agreement to purchase three territories from a Nevada franchisee. As part of this settlement, the Company agreed to two non-interest bearing notes, payable in monthly installments over the next eighteen months. As of December 31, 2013 the remaining balance for these notes was $99,092 and is reported in the accompanying financial statements as current and long term other notes payables.

On December 31,2013 and September 30, 2013 the Company owed $8,775 and $8,857, respectively, in deferred commission payments, non-interest bearing, payable in monthly payments, on deferred payment schedules related to extended payment terms of Franchise Fees.

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.

Subsequent Events

Between January 1, 2014 and February 13, 2014 BFK Franchise Company, sold 14 new US franchises and 6 new international franchises and a Master Franchise in Bolivia. During this period CI Franchise Company sold 2 new US franchises and one Master Franchise in the Philippines.

XML

Organization, Operations and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Dec. 31, 2013

Organization Operations And Summary Of Significant Accounting Policies Policies

Nature of Organization

Creative Learning Corporation (“CLC”), formerly B2 Health, Inc., was incorporated March 8, 2006 in the State of Delaware. BFK Franchise Company LLC (“BFK”) was formed in the State of Nevada on May 19, 2009. Effective July 2, 2010, CLC was acquired by BFK in a transaction classified as a reverse acquisition. CLC concurrently changed its name from B2 Health, Inc. to Creative Learning Corporation. The financial statements represent the activity of BFK from May 19, 2009 forward, and the consolidated activity of BFKF and CLC from July 2, 2010 forward. BFK and CLC are hereinafter referred to collectively as the "Company".

In addition to the accounts of CLC and BFK, the accompanying consolidated financial statements include the accounts of CLC’s subsidiaries, BFK Development Company LLC (“BFKD”) from November 25, 2009 (BFKD’s inception) forward, CI Franchise Company LLC (“CI”) from September 14, 2012 (CI’s inception) forward, and Sew Fun Franchise Company LLC (SF) from January 8, 2013 (SF’s inception) forward.

Creative Learning Corporation operates through its wholly owned subsidiaries BFK FRANCHISE COMPANY, LLC, CI FRANCHISE COMPANY, LLC AND SEW FUN FRANCHISE COMPANY, LLC under the trade names Bricks 4 Kidz®, Challenge Islande®, and Sew Fun Studios™ respectively, that offer children's enrichment and education franchises.

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 financial statements 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.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year presentation. The reclassifications did not have any effect on the prior year net loss.

Cash and cash equivalents

The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. The Company had no cash equivalents at December 31, 2013 or September 30, 2013.

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 December 31, 2013 and September 30, 2013 the Company had $7,244 and $10,000, respectively, in its allowance for doubtful accounts.

Property and equipment

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, currently set at five years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.

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.

Since the Company’s franchises are primarily a mobile concept and do not require finding locations or construction, the franchisees can begin operations as soon as they leave training. The franchise fees are fully collectible as of the date of the signing of the franchise agreement, but the franchise fees are not recognized as revenue until the last day they complete training when substantially all of the services required by the franchise agreement have been provided by the Company. Royalty fees are recognized as earned.

As of December 31, 2013 and September 30, 2013, the Company had $35,900 and $35,900, respectively, in unearned revenue for franchise fees collected but not having completed training per the Revenue Recognition policy.

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 Taxes

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.

For the three months ended December 31, 2013 and 2012, the Company recorded a tax provision of $179,079 and $-0- respectively on its pretax income of $475,894 and $(1,536) respectively. The tax provision does not include any tax provision or benefit for certain foreign currency remeasurement gains and losses that are not recognized in any tax jurisdiction

The tax provision for the first three month period December 31, 2013 is based on an estimated annual effective rate, which requires management to make its best estimate of annual pretax income or loss. During the year, management regularly updates forecasted annual pretax results. To the extent that actual fiscal year ended September 30, 2014 pretax results for income or loss vary from estimate, the actual tax provision or benefit recognized for the fiscal year ended September 30, 2014 could be materially different from the forecasted amount used to estimate the tax provision for the three months ended December 31, 2013.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs for the three month period ended December 31, 2013 and 2012 were $191,942 and $60,450, respectively.

Net earnings (loss) per share

ASC 260-10-45, “Earnings Per Share”, requires presentation of "basic" and "diluted" earnings per share on the face of the statements of operations for all entities with complex capital structures. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. When the Company is in loss position, no dilutive effect is considered.

Fair Value of Financial Instruments

The Accounting Standards Codification (“820-10”) defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for an asset or liability. These include: quoted prices for similar assets or liabilities in active market; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying amounts of cash, accounts receivable and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments.

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.

Notes and Other Receivables

In July of 2013, the Company issued a $70,000 loan to a related party company, personally guaranteed by the related party, at 6% interest, monthly interest payments only and fully due and payable by July 1, 2015. The Note is convertible up to the maturity date to unrestricted shares in the related party company for any unpaid balance at $0.35 per share.

At December 31, 2013 and September 30, 2013, the Company had notes receivables from related parties of $70,000 and $70,000, respectively.

At December 31, 2013 the Company held certain notes and other receivables totaling $130,278, of which $126,818 was for extended payment terms of Franchise Fees, generally non-interest bearing notes with monthly payments, payable within one to two years, and Foreign Tax Credits of $3,460. These receivables are reported in the accompanying financial statements as current and long term other receivables in the accompanying financial statements.

At September 30, 2013, the Company had notes and other receivables of $131,792.

Notes Payables

In September of 2012 the Company issued a non-interest bearing promissory note of $40,000 to a related party for consulting services payable by issuance of 40,000 shares of the Company’s common stock. As of December 31, 2013 and September 30, 2013 the remaining balance on this promissory note was $20,000 and $20,000 respectively. This liability is reported in the accompanying financial statements as notes payable, related party, and will be paid with the issuance of the remaining 20,000 shares in FY 2014.

In December of 2013, the Company entered into a settlement agreement to purchase three territories from a Nevada franchisee. As part of this settlement, the Company agreed to two non-interest bearing notes, payable in monthly installments over the next eighteen months. As of December 31, 2013 the remaining balance for these notes was $99,092 and is reported in the accompanying financial statements as current and long term other notes payables.

On December 31,2013 and September 30, 2013 the Company owed $8,775 and $8,857, respectively, in deferred commission payments, non-interest bearing, payable in monthly payments, on deferred payment schedules related to extended payment terms of Franchise Fees.

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.

Subsequent Events

Between January 1, 2014 and February 13, 2014 BFK Franchise Company, sold 14 new US franchises and 6 new international franchises and a Master Franchise in Bolivia. During this period CI Franchise Company sold 2 new US franchises and one Master Franchise in the Philippines.

XML

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Sep. 30, 2013
Current Assets:
Allowance for doubtful accounts	$ 7,244	$ 10,000
Accumulated depreciation	$ 67,863	$ 60,073
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	11,809,409	11,809,409
Common stock, outstanding	11,809,409	11,809,409

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Document and Entity Information	3 Months Ended
	Dec. 31, 2013	Feb. 13, 2014
Document And Entity Information
Entity Registrant Name	CREATIVE LEARNING Corp
Entity Central Index Key	0001394638
Document Type	10-Q
Document Period End Date	Dec. 31, 2013
Amendment Flag	true
Amendment Description	Amendment
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 Common Stock, Shares Outstanding		11,809,409
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014

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Consolidated Statements of Operations (USD $)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Revenues
Initial franchise fees	$ 1,558,454	$ 633,268
Royalty fees	300,652	149,534
Corporate Creativity Center Sales	14,640	30,201
Total revenues	1,873,746	813,003
Operating expenses:
Franchise consulting and commissions - related parties	248,844	136,265
Franchise consulting and commissions - Other	315,391	196,169
Franchise training and expenses	97,519	58,568
Salaries and payroll taxes	193,384	127,361
Advertising	191,942	60,450
Professional fees	49,193	27,738
Office expense	91,582	39,623
Depreciation	9,540	6,724
Other general and administrative expenses	202,330	161,507
Total Operating expenses	1,399,725	814,405
Income (loss) from operations	474,021	(1,402)
Other income (expense):
Interest (expense):		(134)
Other income (expense)	1,873
Total Other Income (expense)	1,873	(134)
Income (loss) before provision for income taxes	475,894	(1,536)
Provision for income taxes (Note 1)	179,079
Net Income (loss)	$ 296,815	$ (1,536)
Net Income (loss) per share
Basic	$ 0.03	$ 0.00
Basic Weighted average number of common shares outstanding	11,809,409	11,558,575
Diluted	$ 0.03
Diluted Weighted average number of common shares outstanding	11,842,711

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Consolidated Statements of Cash Flows (USD $)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net income (loss)	$ 296,815	$ (1,536)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	9,540	6,724
Loss on disposal of assets	1,475
Materials purchased with notes payables	26,300
Compensatory equity issuances		20,000
Changes in operating assets and liabilities:
Accounts receivable	54,143	5,623
Accounts payable	74,453	(27,509)
Accrued liabilities	8,474	(4,638)
Accrued marketing funds	8,562	18,460
Customer deposits	(57,501)	20,000
Deposits	(4,000)	(7,000)
Income tax payable	177,329
Other receivables	1,514	28,513
Prepaid Expenses	(9,745)	2,636
Net cash provided by operating activities	587,359	61,273
Cash flows from investing activities:
Property and equipment purchases	(2,437)	(9,183)
Intangible asset purchases
Net cash used by investing activities	(2,437)	(9,183)
Cash flows from financing activities:
Notes payable	(764)	(20,000)
Net cash provided (used) by financing activities	(764)	(20,000)
Net change in cash	584,158	32,090
Cash, beginning of period	2,004,947	1,041,786
Cash, end of period	2,589,105	1,073,876
Supplemental disclosure of cash flow information:
Cash paid during the period for: income taxes	1,750
Cash paid during the period for: interest
Supplemental non-cash investing and financing activities:
Common stock issued for services		20,000
Intangible assets acquired with notes payables	66,774
Equipment acquired with notes payables	6,000
Materials purchased with notes payables	$ 26,300