ce10q.htm

10-Q 1 ce10q.htm 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2009 ce10q.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, 2009


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

For the transition period from ___________ to ___________

Commission file number 000-52704

CAPITAL EQUITY FINANCE, INC.

(Exact name of small business issuer as specified in its charter)

Florida		20-8090841
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

5775 Blue Lagoon Drive Suite 100 Miami, Florida		33126
(Address of principal executive offices)		(Zip Code)

(786) 888-4567

(Issuer’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 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 þ No o

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


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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding as of November 24, 2009
Common Stock, $.001 par value per share		7,193,000 shares

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CAPITAL EQUITY FINANCE, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation or Plan of Operation	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4T.	Controls and Procedures	14

PART II -OTHER INFORMATION
Item 1.	Legal Proceedings.	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	15
Item 3.	Defaults Upon Senior Securities.	15
Item 4.	Submission of Matters to a Vote of Security Holders.	15
Item 5.	Other Information.	15
Item 6.	Exhibits	15

SIGNATURES		16

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PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

Capital Equity Finance, Inc.

(A Development Stage Company)

Financial Statements

September 30, 2009

(Unaudited)

CONTENTS

	Page
Financial Statements:
Balance Sheets - As of September 30, 2009 (Unaudited) and December 31, 2008 (Audited)	4

Statements of Operations -
For the nine months ended September 30, 2009 and 2008 and for the period from December 22, 2006 (inception) to September 30, 2009 (Unaudited)	5

Statements of Cash Flows -
For the nine months ended September 30, 2009 and 2008 and for the period from December 22, 2006 (inception) to September 30, 2009 (Unaudited)	6

Notes to Financial Statements (Unaudited)	7

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Capital Equity Finance, Inc.
(A Development Stage Company)
Condensed Balance Sheet

	September 30, 2009			December 31, 2008
	(Unaudited)			(Audited)

Assets

Current Assets:
Cash	$	1,333		$	120
Total Current Assets		1,333			120

Total Assets	$	1,333		$	120

Liabilities and Stockholders’ Deficit

Current Liabilities:
Accrued Expenses	$	1,315		$	-
Accounts Payable		9,000			2,885
Total Current Liabilites		10,315			2,885

Stockholders’ Deficit:
Preferred stock (no par value, 5,000,000 shares authorized,
none issued and outstanding)		-			-
Common stock ($0.001 par value, 100,000,000 shares authorized,
6,090,000 shares issued and outstanding)		6,234			6,090
Additional paid in capital		90,797			42,476
Deficit accumulated during development stage		(106,013	)		(51,331	)
Total Stockholders' Deficit		(8,982	)		(2,765	)

Total Liabilities and Stockholders’ Deficit	$	1,333		$	120

See accompanying notes to unaudited financial statements.

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Capital Equity Finance, Inc.
(A Development Stage Company)
Condensed Statement of Operations
(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Period from December 22, 2006 (inception) to September 30, 2009
	2009			2008			2009			2008

Revenues	$	-		$	-		$	-		$	-		$	-

Operating expenses
General and administrative		27,037			701			27,655			17,759			32,165
Legal and professional		7,630			3,860			27,027			1,374			73,848
Total operating expenses		34,667			4,561			54,682			19,133			106,013

Loss from operations		(34,667	)		(4,561	)		(54,682	)		(19,133	)		(106,013	)

Net loss	$	(34,667	)	$	(4,561	)	$	(54,682	)	$	(19,133	)	$	(106,013	)

Net loss per share - basic and diluted	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.02	)

Weighted average number of shares outstanding
during the year - basic		6,221,391			6,090,000			6,147,729			6,084,818			6,070,928

See accompanying notes to unaudited financial statements.

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Capital Equity Finance, Inc.
(A Development Stage Company)
Condensed Statement of Cash Flows
(Unaudited)


	For the Nine Months Ended September 30,						For the period from December 22, 2006 ( Inception ) to September 30, 2009
	2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(54,682	)	$	(19,133	)	$	(106,013	)
Adjustments to reconcile net loss to net cash used in operating activities:
Contributed services - related party		3,737			6,659			22,569
Changes in operating assets and liabilities:
Increase in accounts payable		1,315			-			1,315
Increase in accrued liabilities		6,115			-			9,000
Net Cash Used In Operating Activities		(43,515	)		(12,474	)		(73,129	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock - related parties		-			-			6,000
Proceeds from sale of common stock		36,000			2,250			38,250
Contributed capital - related party		8,728			9,639			30,212
Net Cash Provided By Financing Activities		44,728			11,889			30,212

Net increase (decrease) in cash		1,213			(585	)		1,333
Cash - beginning of year/period		120			705			-
Cash - end of year/period	$	1,333		$	120		$	1,333-

Supplemental Disclosure of Cash Flow Information
Cash paid during the year/period for:
Income taxes	$	-		$	-		$	-
Interest	$	-		$	-		$	-

See accompanying notes to unaudited financial statements.

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Capital Equity Finance, Inc.

(A Development Stage Company)

Financial Statements

September 30, 2009

(Unaudited)

Note 1 Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders’ equity or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the full year.

The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended December 31, 2008. The interim results for the period ended September 30, 2009 are not necessarily indicative of the results for the full fiscal year.

Note 2 Nature of Operations and Summary of Significant Accounting Policies

Nature of operations

Capital Equity Finance, Inc. (the "Company"), was incorporated in Florida on December 22, 2006. The Company intends to serve as a vehicle to effect an asset acquisition, merger, or business combination with a domestic or foreign business.

Development stage

The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include related party equity-based financing and development of the business plan. At September 30, 2009, the Company had not yet commenced operations.

Use of estimates

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

Cash

For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. At September 30, 2009, the Company had no cash equivalents.

Net loss per share

Basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. At September 30, 2009, the Company does not have any outstanding common stock equivalents; therefore, a separate computation of diluted loss per share is not presented.

Stock-based compensation

All share-based payments to employees will be recorded and expensed in the statement of operations as applicable under SFAS No. 123R “Share-Based Payment”. The Company has not issued any stock based compensation since inception.

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Capital Equity Finance, Inc.

(A Development Stage Company)

Financial Statements

September 30, 2009

(Unaudited)

Income taxes

The Company accounts for income taxes under the liability method in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing an asset or liability. It also defines fair value and established a hierarchy that prioritizes the information used to develop assumptions. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company does not expect SFAS No. 157 to have a material impact on its financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities, which permits entities to choose to measure many financial instruments and certain other items at fair value. The unrealized gains and losses on items for which the fair value option has been elected should be reported in earnings. The decision to elect the fair value option is determined on an instrument-by-instrument basis, should be applied to an entire instrument and is irrevocable. Assets and liabilities measured at fair values pursuant to the fair value option should be reported separately in the balance sheet from those instruments measured using other measurement attributes. SFAS No. 159 is effective as of the beginning of the Company’s 2008 fiscal year. The adoption of SFAS No. 159 is not expected to have a material effect on its financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, changes in a parent’s ownership of a noncontrolling interest, calculation and disclosure of the consolidated net income attributable to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent retains its controlling financial interest and fair value measurement of any retained noncontrolling equity investment. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The adoption of SFAS No. 160 is not expected to have a material effect on its financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS 141R, Business Combinations (“SFAS 141R”), which replaces FASB SFAS 141, Business Combinations. This Statement retains the fundamental requirements in SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R will require an entity to record separately from the business combination the direct costs, where previously these costs were included in the total allocated cost of the acquisition. SFAS 141R will require an entity to recognize the assets acquired, liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, at their fair values as of that date. This compares to the cost allocation method previously required by SFAS No. 141. SFAS 141R will require an entity to recognize as an asset or liability at fair value for certain contingencies, either contractual or non-contractual, if certain criteria are met. Finally, SFAS 141R will require an entity to recognize contingent consideration at the date of acquisition, based on the fair value at that date. This Statement will be effective for business combinations completed on or after the first annual reporting period beginning on or after December 15, 2008. Early adoption of this standard is not permitted and the standards are to be applied prospectively only. Upon adoption of this standard, there would be no impact to the Company’s results of operations and financial condition for acquisitions previously completed. The adoption of SFAS No. 141R is not expected to have a material effect on its financial position, results of operations or cash flows.

In March 2008, the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments and Hedging Activities—An Amendment of FASB Statement No. 133.” (“SFAS 161”). SFAS 161 establishes the disclosure requirements for derivative instruments and for hedging activities with the intent to provide financial statement users with an enhanced understanding of the entity’s use of derivative instruments, the accounting of derivative instruments and related hedged items under Statement 133 and its related interpretations, and the effects of these instruments on the entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2008. We do not expect its adoption will have a material impact on our financial position, results of operations or cash flows.

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Capital Equity Finance, Inc.

(A Development Stage Company)

Financial Statements

September 30, 2009

(Unaudited)

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board’s amendments to AU section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company is currently evaluating the impact of SFAS 162, but does not expect the adoption of this pronouncement will have a material impact on its financial position, results of operations or cash flows.

In May of 2008, FASB issued FASB No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” The scope of the statement is limited to financial guarantee insurance (and reinsurance) contracts. The pronouncement is effective for fiscal years beginning after December 31, 2008. The Company does not believe this pronouncement will impact its financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date and are not expected to have a material impact on the financial statements upon adoption.

Note 3 Going Concern

As reflected in the accompanying financial statements, the Company has a net loss of $54,682 and net cash used in operations of $43,515 for the nine months ended September 30, 2009, and a deficit accumulated during the development stage of $106,013 at September 30, 2009. In addition, the Company is in the development stage and has not yet generated any revenues. The ability of the Company to continue as a going concern is dependent on Management's plans, which include potential asset acquisitions, mergers or business combinations with other entities. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 4 Stockholders’ Equity (Deficit)

(A) Common Stock Issuance for Cash

(1) Year ended December 31, 2006

On December 22, 2006, the Company issued 6,000,000 shares of common stock, par value $0.001 per share, to its founding shareholders in exchange for $2,000 and a $4,000 subscription receivable. The subscription was received in 2007.

(2) Year ended December 31, 2008

In January 2008, the Company issued 90,000 shares of common stock for $2,250 ($0.025/share).

(3) Nine Months ended September 30, 2008

In May 2009, the Company issued 72,000 shares of common stock for $18,000 ($0.25/share).

In June 2009, the Company issued 44,000 shares of common stock for $11,000 ($0.25/share).

In July 2009, the Company issued 16,000 shares of common stock for $4,000 ($0.25/share).

In August 2009, the Company issued 4,000 shares of common stock for $1,000 ($0.25/share).

In September 2009, the Company issued 8,000 shares of common stock for $2,000 ($0.25/share).

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Capital Equity Finance, Inc.

(A Development Stage Company)

Financial Statements

September 30, 2009

(Unaudited)

(B) Contributed Capital and Contributed Services – Related Party

(1) Year ended December 31, 2006

During 2006, a related party of the Company’s President paid $70 for certain general and administrative expenses on behalf of the Company.

During 2006, a related party of the Company’s President contributed professional services to the Company aggregating $750. The value of these contributed services was based upon the fair value of the services provided.

(2) Year ended December 31, 2007

During 2007, a related party of the Company’s President paid $2,590 for certain general and administrative expenses on behalf of the Company.

During 2007, the Company received $8,750 from related party stockholders to fund future expenses of the Company.

During 2007, a related party of the Company’s President contributed professional services to the Company aggregating $10,848. The value of these services was based upon the fair value of the services provided.

(3) Year ended December 31, 2008

During 2008, a related party of the Company’s President paid $1,809 for certain general and administrative expenses on behalf of the Company.

During 2008, the Company received $8,265 from related party stockholders to fund future expenses of the Company.

During 2008, a related party of the Company’s President contributed professional services to the Company aggregating $7,234. The value of these services was based upon the fair value of the services provided.

(4) Nine months ended September 30, 2009

During 2009, a related party of the Company’s President paid $5,963 for certain general and administrative expenses on behalf of the Company.

During 2009, the Company received $2,765 from related party stockholders to fund future expenses of the Company.

During 2009, a related party of the Company’s President contributed professional services to the Company aggregating $3,737. The value of these services was based upon the fair value of the services provided.

Note 5 Change in Control

On May 8, 2009, Neurotech, Inc., acquired from various shareholders 6,000,000 shares of common stock of Capital Equity Finance, Inc., at varying prices from various shareholders, which resulted in a change of control. Neurotech, Inc., beneficially and directly owns 6,000,000 shares of Common Stock which represents (98.5%) of the outstanding Common Stock of the Company based on 6,090,000 shares outstanding as reported in the latest available filing with the Securities and Exchange Commission. The shares acquired by Neurotech, Inc. include 6,000,000 shares of voting power.

Note 6 Subsequent Event

(A) Common Stock Issuance for Cash

As of November 20, 2009, the Company issued 4,000 shares of common stock for $1,000 ($0.25/share).

As of November 20, 2009, the Company issued 955,000 shares of common stock for $477,500 ($0.50/share).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The information presented in Item 2 contains forward-looking statements. You should understand that forward-looking statements are only predictions reflecting our current beliefs and are based on information currently available to us. Although we believe that the assumptions reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

You can identify a forward-looking statement by our use of a word such as “may”, “will”, “should”, “could”, “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “predict”, “project”, “propose”, “potential” “continue” and similar terms and expressions, or the negative of these words or other variations on these words or comparable terminology.

In evaluating a forward-looking statement, you should understand that a forward looking statement involves known and unknown risks, uncertainties, contingencies, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement. Known risks related to an investment in our Company, risks related to our business, and risks related to our securities are identified in our Form 10-SB12G as amended and are incorporated herein by reference. You should also understand that we have no obligation and do not undertake to update or revise forward-looking statements made in this Report to reflect events or circumstances occurring after the date of this Report.

Background

Capital Equity Finance, Inc. (the "Company", "our", "us" or "we") was incorporated under the laws of the State of Florida on December 22, 2006. We have been in the developmental stage since inception and have conducted virtually no business operations, other than organizational and administrative activities. We have no full-time employees and own no real estate or personal property. We were formed as a vehicle to pursue a business combination but have not entered into a letter of intent concerning any target business. Our business purpose is to seek the acquisition of, or merger with, an existing company. We have been seeking a suitable acquisition or merger candidate since September 3, 2007, the day after our Form 10-SB12G registration statement, as amended, went effective.

Our discussion of the proposed business under this caption and throughout this Form 10-Q is purposefully general and is not meant to restrict our virtually unlimited discretion to search for and enter into potential business opportunities.

Description of Business

Based on our business activities, we are a "blank check" company. The U.S. Securities and Exchange Commission (the "SEC") defines such companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the "Securities Act"), we also qualify as a "shell company," because we have no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. No trading market currently exists for our securities, and Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, or to register any securities under the Securities Act or state blue sky laws or the regulations thereunder until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.

We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

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We have conducted no business operations to date and expect to conduct none in the future, other than our efforts to effectuate a business combination. We, therefore, can be characterized as a "shell" corporation. As a "shell" corporation, we face risks inherent in the investigation, acquisition, or involvement in a new business opportunity. Further, as a "development stage" or "start-up" company, we face all of the unforeseen costs, expenses, problems, and difficulties related to such companies, including whether we will continue to be a going concern entity for the foreseeable future.

We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

We do not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury, if any, or with additional money contributed by our stockholders, or another source.

During the next 12 months, we anticipate incurring costs related to filing of Exchange Act reports and costs relating to consummating an acquisition. We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.

Since the effective date of our registration statement on Form 10-SB12G, as amended, we have had preliminary contact or discussions with representatives of several entities regarding a possible business combination with us. To date, we have not entered into a term sheet with any entity. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital that we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

The Company may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

Liquidity and Capital Resources

As of September 30, 2009, the Company had assets equal to $1,333 consisting exclusively of cash and cash equivalents. This compares with assets of $120, comprised exclusively of cash and cash equivalents, as of December 31, 2008. The Company’s current liabilities as of September 30, 2009 totaled $10,315, comprised of accrued expenses and accounts payable. This compares to the Company’s current liabilities as of December 31, 2008 of $2,885. The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.

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The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities:

					Cumulative Period From December 22, 2006 (Inception) to September 30,
	Nine months Ended September 30,
	2009		2008		2009

Net cash used in operating activities	$	(43,515)		(12,474)		(73,129	)
Net cash used in investing activities		-		-		-
Net cash provided by financing activities		44,728		11,889		74,462
Net effect on cash		1,333		120		1,333	)

The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investments or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. Recurring expenses, which include accounting, auditing, legal, and administrative expenses, have averaged $3,213 per month since December 22, 2006, are expected to continue for until such time as we execute our business plan to acquire or merge with a private operating company. In addition, the Company is dependent upon its largest shareholders and new investors to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.

Results of Operations

The Company has not conducted any active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from December 22, 2006 (Inception) to September 30, 2009. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management's assertion that these circumstances may hinder the Company's ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.

For the nine months ending September 30, 2009, the Company had a net loss of approximately $54,682, consisting of legal, accounting, audit and other professional service fees incurred in relation to the filing of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2009. This compares with a net loss of approximately $19,133 for the nine months ending September 30, 2008 comprised mostly of legal, accounting, audit and other professional service fees incurred in relation to the filing of the Company’s Form 10-KSB for the fiscal year ended December 31, 2008.

For the period from December 22, 2006 (Inception) to September 30, 2009, the Company had a net loss of $106,013, comprised mostly of legal, accounting, audit and other professional service fees incurred in relation to the filing of the Company’s registration statement on Form 10-SB12G in July 2007 and its one amendment and the filing of the Company’s quarterly and annual reports on Form 10-QSB and Form 10-KSB, respectively.

Off-Balance Sheet Arrangements

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

Contractual Obligations

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

Item 4T. Controls and Procedures.

The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Our sole officer and director has reviewed the effectiveness of the Company’s disclosure controls and procedures and have concluded that the disclosure controls and procedures, as of September 30, 2009, are effective in timely alerting her to material information relating to the Company that is required to be included in its periodic filings with the Commission.

In connection with its evaluation during the quarterly period ended September 30, 2009, the Company has made no change in the Company’s internal controls over financial reporting that has materially affected or is reasonably likely to materially affect the Company’s internal controls over financial reporting. There also were no significant deficiencies or material weaknesses identified for which corrective action needed to be taken.

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PART II OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

Recent Events

Item 6. Exhibits

(a) Exhibits

Description

31.1	13a-14(a)-15d-14(a) Certification – Chad B. Beemer
31.2	13a-14(a)-15d-14(a) Certification - Chad B. Beemer
32.1	18 U.S.C. § 1350 Certification - Chad B. Beemer
32.2	18 U.S.C. § 1350 Certification - Chad B. Beemer

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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.


	CAPITAL EQUITY FINANCE, INC.

Date: November 23, 2009	By:	/s/ Chad B. Beemer
		Chad B. Beemer
		President, Secretary and Treasurer (Principal Accounting Officer and Authorized Officer)

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