cmsf10qa.htm

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

CMSF CORP.

INDEX

PART I - FINANCIAL INFORMATION			PAGE

Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2009 (Unaudited)
and September 30, 2008			3

Condensed Consolidated Statements of Operations for the Three
Months Ended June 30, 2009 and 2008 (Unaudited)			4

Condensed Consolidated Statements of Operations for the Nine
Months Ended June 30, 2009 and 2008 (Unaudited)			5

Condensed Consolidated Statement of Shareholders’ Deficiency
for the Nine Months Ended June 30, 2009 (Unaudited)			6

Condensed Consolidated Statements of Cash Flows for the Nine
Months Ended June 30, 2009 and 2008 (Unaudited)			7

Notes to the Condensed Consolidated Financial Statements (Unaudited)			8

Item 2.	Management’s Discussion and Analysis of Financial Condition
	And Results of Discontinued Operations		15

Item 4T.	Controls and Procedures		18

PART II - OTHER INFORMATION			20

Item 5	Other Information

Item 6	Exhibits

	Signature

	Exhibit 31	Certification Pursuant to Section 302
		of the Sarbanes-Oxley Act of 2002

	Exhibit 32	Certification Pursuant to Section 906
		of the Sarbanes-Oxley Act of 2002

CMSF CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,			September 30,
	2009			2008
ASSETS	(Unaudited)


Assets related to discontinued operations	$	-		$	261,768

Total Assets	$	-		$	261,768

LIABILITIES AND SHAREHOLDERS' DEFICIENCY

Current Liabilities:

Accounts payable	$	14,342		$	-
Notes payable		2,850,000			2,850,000

Total Current Liabilities		2,864,342			2,850,000

Liabilities related to discontinued operations		-			800,680

Total Liabilities		2,864,342			3,650,680

Shareholders' Deficiency:
Common stock, no par value; authorized 500,000,000 shares;
issued and outstanding 50,316,355 and 16,781,415 shares		19,399,155			19,034,685

Accumulated Deficit		(22,263,497	)		(22,423,597	)

Total Shareholders' Deficiency		(2,864,342	)		(3,388,912	)

Total Liabilities and Shareholders' Deficiency	$	-		$	261,768

See accompanying notes to Condensed Consolidated Financial Statements

CMSF CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended
	June 30,

	2009			2008
Sales	$	-		$	-
Cost of sales		-			-

Gross Profit		-			-

General and administrative expenses		(35,212	)
Interest expense		(44,253	)		(44,692	)

Loss from continuing operations		(79,465	)		(44,692	)

Discontinued Operations
Income (loss) from discontinued operations		-			115,512
Gain on disposal of discontinued operations		-			-
		-			115,512


Net Income (loss)	$	(79,465	)	$	70,820

Weighted average number of common shares outstanding:
(basic and diluted):		44,308,242			15,547,426

Earnings per common share - basic and diluted:
Loss from continuing operations	$	(0.00	)	$	(0.00	)
Income from discontinued operations		-			0.01

Net Income (loss)	$	(0.00	)	$	0.00

See accompanying notes to Condensed Consolidated Financial Statements

CMSF CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Nine Months Ended
	June 30,

	2009			2008
Sales	$	-		$	-
Cost of sales		-			-

Gross Profit		-			-

General and administrative expenses		(35,212	)		-
Interest expense		(132,760	)		(155,262	)

Loss from operations		(167,972	)		(155,262	)

Discontinued operations
Income from discontinued operations		14,896			24,384
Gain on disposal of discontinued operations		313,176			-
		328,072			24,384

Net Income (loss)	$	160,100		$	(130,878	)

Weighted average number of common shares outstanding:
(basic and diluted):		29,415,174			14,879,458

Earnings per common share - basic and diluted:
Loss from continuing operations	$	(0.01	)	$	(0.01	)
Income from discontinued operations		0.01			0.00

Net Income (loss)	$	0.01		$	(0.01	)

See accompanying notes to Condensed Consolidated Financial Statements

CMSF CORP.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY
Nine Months Ended June 30, 2009
(UNAUDITED)

	Common Stock				Accumulated
	Shares		Amount		Deficit			Total

Balance at October 1, 2008		16,781,415	$	19,034,685	$	(22,423,597	)	$	(3,388,912	)

Fair value of stock issued for payment of
interest expense		10,363,924		132,760		-			132,760

Stock issued for cash		23,171,016		231,710		-			231,710

Net income for the nine months ended
June 30, 2009		-		-		160,100			160,100

Balance at June 30, 2009		50,316,355	$	19,399,155	$	(22,263,497	)	$	(2,864,342	)


See accompanying notes to Condensed Consolidated Financial Statements

CMSF CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended
	June 30,

	2009			2008

CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss)	$	160,100		$	(130,878	)

Income from discontinued operations		328,072			24,384
(Loss) from continuing operations		(167,972	)		(155,262	)
Adjustments to reconcile loss from continued operations to net
cash provided by (used in) operating activities of continued operations:
Fair value of common stock issued for payment of interest expense		132,760			147,474
Amortization of debt discount		-			23,581
Fair value of common stock options issued to employees and
consultants		-			13,562
Increase in accounts payable		14,342			-
Net cash provided by (used in) operating activities of continued operations		(20,870	)		29,355

Net cash used in operating activities of discontinued operations		(210,840	)		(179,355	)
Net cash used in operating activities		(231,710	)		(150,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing on notes payable		-			150,000
Proceeds from sale of common stock		231,710			-
Net cash provided by financing activities		231,710			150,000

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		-			-

CASH AND CASH EQUIVALENTS, beginning of period		-			-

CASH AND CASH EQUIVALENTS, end of period	$	-		$	-

Cash paid for:
Interest	$	0		$	0
Income taxes	$	824		$	853


See accompanying notes to Condensed Consolidated Financial Statements

The accompanying condensed consolidated financial statements of CMSF Corp (the “Company”) have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s latest Annual Report on Form 10-KSB. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the consolidated financial position of the Company as of June 30 2009, and the statements of its operations for the three month and nine month periods ended June 30, 2009 and 2008 and statements of cash flows for the nine month periods ended June 30, 2009 and 2008 have been included. The results of operations for interim periods are not necessarily indicative of the results which may be realized for the full year.

Pursuant to a Stock Purchase Agreement dated as of January 26, 2009 (the “Purchase Agreement”) among the Company, CC Merger Corp. (the “Subsidiary”), a wholly owned subsidiary of the Company, and Stephen Crosson and Neil Murvin (collectively, the “Purchasers”), who are related parties, on March 31, 2009, (a) the Company transferred to the Subsidiary substantially all of its assets (the “Purchased Assets”), (b) the Purchasers purchased all of the outstanding shares of the Subsidiary, (c) the Subsidiary assumed all of the Company’s liabilities except any liability relating to indebtedness of the Company owed to funds advised by RENN Capital Group, Inc. (the “RENN Indebtedness”), and (d) the terms of all of the RENN Indebtedness which is not convertible into shares of the Company’s Common Stock were amended to make such indebtedness so convertible at $0.01 per share. The purchase price for the Purchased Assets was $1.00 in cash and 5% of the proceeds, if any, from the sale of all or substantially all of the voting stock of the Subsidiary; the sale of all or substantially all of the assets of the Subsidiary; a merger, share exchange or similar transaction with an unrelated entity pursuant to which the acquiring entity on the equity holders thereof hold more than a majority of the outstanding voting shares of the merged or surviving company; or an initial public offering of the Subsidiary.

Effective April 21, 2009,in connection with the closing, the Company changed its name from CaminoSoft Corp. to CMSF Corp. and the number of authorized shares of common stock of the Company was increased to 500,000,000. As a result of the foregoing, the Company is now a “shell company” with a plan to seek a reverse merger with an operating company.

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The condensed consolidated financial statements reflect the discontinued operating assets and liabilities and the discontinued operations for the periods covered in this report. There are no current operations and the public entity now called CMSF Corp. is a public shell.

Statement of Financial Accounting Standards No. 128, “Earnings per Share”, requires presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic earnings (loss) per share is computed by dividing earnings (loss) available to common shareholders by the weighted average number of common shares outstanding during the period.

Diluted earnings per share reflects the potential dilution, using the treasury stock method, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. In computing diluted earnings per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the optinos and warrants. Additionally, diluted earnings per share assume that any dilutive convertible debentures outstanding at the beginning of each period were converted at those dates, with related interest and outstanding common shares adjusted accordingly.

Warrants to purchase approximately 1,740,094 shares of common stock at various prices exceeding $0.01 per share were outstanding during the three and nine months ended June 30, 2009 but were not included in the computation of diluted earnings per share for those periods because the respective warrant exercise prices were greater than the average market price of the common shares during those periods, and their effect would be anti-dilutive. The convertible debentures to purchase approximately 94,112,766 shares of common stock were not included in the computation of diluted earnings per share because the effect of conversion would be anti-dilutive.

Options, warrants, and convertible debentures to purchase approximately 10,954,603 shares of common stock at various prices were outstanding during the nine months ended June 30, 2008 but were not included in the computation of diluted earnings per share for those periods because the Company incurred a loss for those periods, and their effect would be anti-dilutive.

Warrants to purchase approximately 4,983,337 shares of common stock at various prices exceeding $0.07 per share were outstanding during the three months ended June 30, 2008 but were not included in the computation of diluted earnings per share for those periods because the respective warrant exercise prices were greater than the average market price of the common shares during those periods, and their effect would be anti-dilutive. Options to purchase approximately 1,858,500 shares of common stock at various prices exceeding $0.07 per share were outstanding during the three months ended June 30, 2008 but were not included in the computation of diluted earnings per share for this period, and their effect would be anti-dilutive. The convertible debentures to purchase approximately 4,112,766 shares of common stock were not included in the computation of diluted earnings per share because the effect of conversion would be anti-dilutive.

In December 2007, Financial Accounting Standards Board (FASB) Statement 141R, “Business Combinations (revised 2007)” (SFAS 141R”) was issued. SFAS 141R replaces SFAS 141 “Business Combinations”. SFAS 141R requires the acquirer of a business to recognize and measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at fair value. SFAS 141R also requires transactions costs related to the business combination to be expensed as incurred. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not expect the changes associated with adoption of SFAS 141R will have a material effect on its financial statements and disclosures.

In April 2009, the FASB issued FSP No. FAS 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies.” FSP No. FAS 141(R)-1 amends and clarifies FASB Statement No. 141(R), to address application issues raised on initial recognition and measurement, subsequent measurement and accounting and disclosure of assets and liabilities arising from contingencies in a business combination. FSP No. FAS 141(R)-1 is effective for the first annual reporting period on or after December 31, 2008. The impact of FSP No. FAS 141(R)-1 on the Company’s consolidated financial statements will depend on the number and size of acquisition transactions, if any, engaged in by the company.

In December 2002, the Company issued a 6% convertible debenture for $1,000,000 to RENN Capital Group. Interest at the rate of 6% per annum will be paid in monthly installments for three years based on the unpaid principal balance. The full $1,000,000 was borrowed during the year ended September 30, 2003 and was outstanding as of June 30, 2009. The debenture matured on November 27, 2005, at which time the unpaid principal amount and all accrued and unpaid interest would have become due and payable in full. The debenture is convertible, at the option of the holder, into shares of the Company’s common stock, with a conversion price of $0.62 per share. As part of the funding during the fiscal year ended September 30, 2003, the Company issued five-year warrants to the lender to purchase 500,000 shares of the Company’s common stock. The warrants were valued at $176,224 and recorded as debt discount, and were fully amortized as of November 27, 2005 the initial life of the loan.

In July 2003, the Company issued another 6% convertible debenture for up to $750,000 to RENN Capital Group. Interest at the rate of 6% per annum is payable in monthly installments for 26 months based on the unpaid principal balance. The debenture matured on November 27, 2005, at which time the unpaid principal amount and all accrued and unpaid interest would have become due and payable in full. The debenture is convertible, at the option of the holder, into shares of the Company’s common stock, with a conversion price of $0.41 per share. At June 30, 2009, the Company had borrowed $750,000, the entire amount available.

Pursuant to a Renewal and Modification agreement dated October 28, 2005, the Company negotiated an extension of the two convertible debentures referenced above with a total principal balance of $1,750,000. The lender agreed to extend the maturity date of the two 6% Convertible Debentures dated November 27, 2002 in the aggregate principal amount of $1,750,000 to May 27, 2007. In consideration of such extension, the Company granted the lender a five-year warrant to purchase 175,000 shares of the Company’s Common Stock at an exercise price of $1.14 per share (subject to adjustment). The estimated value of the warrant of $166,093 was recorded on the Company’s financial statements as debt discount and was fully amortized as of May 27, 2007 the term of the extension. On May 7, 2007, RENN Capital Group agreed to extend the maturity date of $1,750,000 convertible debenture until November 27, 2007. The Company will continue to pay interest of 6% on the current outstanding principal balance of $1,750,000, monthly during the term of the extension.

During July 2004, the Company received $750,000 from a two year secured loan from Renaissance Capital Group managed funds. Interest is paid at 7% in monthly installments based on the outstanding principal balance. As part of the funding, the Company issued five year warrants to purchase an aggregate of 1,415,094 shares of Common Stock at an exercise price of $0.53 per share. The estimated value of the warrant of $311,953 was recorded on the Company’s financial statements as debt discount and was fully amortized as of January 19, 2006 the initial life of the loan.

During February 2006, the Company issued to the Renaissance Capital Group managed funds an aggregate of 150,000 warrants to purchase the Company’s common stock at $0.86 per share in consideration of an agreement to extend the $750,000 loan payable maturity date for an additional 18 months. The new maturity date for the note was January 19, 2008. The Company will continue to pay 7% interest on a monthly basis based on the current outstanding principal balance of $750,000. The estimated value of the warrants of $77,663 was recorded on the Company’s financial statements as debt discount and was fully amortized as of January 19, 2008 the term of the extension.

On February 7, 2007, the Company received an aggregate of $200,000 from two three month secured convertible notes from two of RENN Capital Groups managed funds. Interest of 8% will be paid in monthly installments during the term of the notes. The notes were to mature on May 7, 2007, at which time all principal and accrued and unpaid interest was due and payable in full. The notes are convertible at the option of the holder, into shares of the Company’s common stock, with an initial conversion price of $0.30 per share. The funds are being used to support the operations of the Company. Each holder of a note may convert in whole or in part the outstanding principal plus accrued but unpaid interest into the Company’s common stock at a conversion price of $0.30 per share. In the event that the Company issues additional common stock, or securities convertible into common stock, at a price lower than the conversion price while these notes are outstanding, the conversion price of these notes will automatically adjust downward to such price at which the new common stock has been issued. The conversion price of the note, however, shall never be adjusted to less than $0.01 per share. Pursuant to renewal and modification agreements dated May 7, 2007, the RENN Capital Group has agreed to extend the maturity dates of two $100,000 notes payable until November 7, 2007. The Company will continue to pay 8% interest monthly based on the current outstanding principal balance of $200,000.

During the quarter ended December 31, 2007, the Company negotiated with RENN Capital Group to extend the maturity dates of all outstanding debt due before January 31, 2008. Pursuant to renewal and modification agreements the Company extended the total debt with an aggregate principal balance of $2,700,000 to February 27, 2008. In addition to extending the due date the Company also converted from cash payments of interest to interest payments in unregistered common stock beginning with all interest due and payable during the current quarter. In October 2007, the Company received an additional $100,000 from RENN Capital Group funds via wire transfer to help pay for legal and accounting fees relating to the merger and acquisition previously in process with Shea Development previously disclosed. Although the funds have no terms or interest due, the Company recorded it as a loan payable and plans to repay or write off the balance due at the time the other debt is paid or otherwise satisfied.

During the quarter ended March 31, 2008, the Company negotiated to extend the maturity dates of the entire $2,800,000 of debt that was due January 31, 2008. Pursuant to renewal and modification agreements the Company extended the total debt with an aggregate principal balance of $2,800,000 to May 30, 2008. In February 2008, the Company received an additional $50,000 from RENN Capital Group funds to pay for legal and accounting fees and support operations. The note was recorded as a loan payable on the Company’s financial reports. Interest of 8% will be paid in monthly installments beginning March 1, 2008 until the principal balance is paid in full. Interest can be paid in cash or in unregistered common stock at the Company’s discretion.

Pursuant to the Renewal and Modification Agreements dated as of November 12, 2007, all interest payments commencing on November 1, 2007 are due and payable in restricted shares of Company common stock or cash at the Company’s discretion. The number of shares to be issued shall be equal to the amount of interest payment due divided by the average of the last sales prices (or closing bid prices) for the five trading days immediately preceding the payment date. As such, during the nine month period ending June 30, 2009, interest expense of $132,760 accruing to the note holders was converted into 10,363,924 shares of common stock (of which 8,802,055 shares are yet to be issued).

On January 26, 2009, the Company modified all non convertible debt held by RENN Capital Group managed funds, which included, RENN Capital Growth and Income Fund III, Inc., Renaissance US Growth Investment Trust, Plc., and Global Special Opportunities Trust Plc. Collectively, the (“Lenders”). The Company had issued to the Lenders promissory notes with an aggregate value of $900,000. The Company and Lenders amended the notes so that such instruments shall be convertible, at any time and from time to time, at the option of the applicable Lender, convertible (in whole or in part) into shares of the Company’s common stock, at a conversion price of $0.01 per share. The Company also amended its articles of incorporation to increase the number of shares of its authorized common stock in order to have sufficient shares of common stock to satisfy the full conversion of all the Company’s outstanding securities which are convertible into, or exercisable for, shares of the Company’s common stock, including the notes.

During the nine months ended June 30, 2009 the Company received $231,710 from the sale of 23,171,016 shares of unregistered common stock to RENN Capital Group at a price of $.01 per share. The Company used the funds to complete the sale of the operations including all professional and other fees related to the sale and on going filings with the Securities and Exchange Commission. CMSF Corp. currently has no operations as a public shell. The unregistered shares have not yet been issued, and will be issued to RENN Capital Group funds as soon as practicable.

				Weighted				Weighted Average
				Average		Aggregate		Remaining
	Number of			Exercise		Intrinsic		Contractual
	Shares			Price		Value		Term (Months)

Warrants outstanding at September 30, 2008		4,983,337		$	0.82

Warrants granted		-			-
Warrants expired		(3,243,243	)		0.92

Warrants outstanding at June 30, 2009		1,740,094		$	0.62	$	-		4

Warrants exercisable at June 30, 2009		1,740,094		$	0.62	$	-		4

Warrants exercisable at September 30, 2008		4,983,337		$	0.82

In accordance with the provision of FASB Statement 144 Accounting for the Impairment of Long Lived Asset, we have classified revenues and expenses and profit and loss of the sold business as discontinued operations. The related assets and liabilities have been classified as assets and liabilities held for sales for all periods presented in the accompanying condensed consolidated financial statements.


	Assets Related to Discontinued Operations as of					Liabilities Related to Discontinuted Operations as of
	June 30,		September 30,			June 30,		September 30,
	2009		2008			2009		2008
Cash	$	-	$	157,980	Accounts Payable	$	-	$	223,309
Accounts Receivable		-		83,066	Accrued Liabilities		-		99,980
Long Term Assets		-		20,722	Deferred Revenue		-		477,391
Total	$	-	$	261,768		$	-	$	800,680

As of the date of purchase, March 31, 2009, the Company had total assets of $276,008 and total liabilities of $589,185, which were acquired or assumed, respectively, by the Purchasers. The net liabilities of $313,177 were purchased for $1 resulting in a net gain on disposal of discontinued operations of $313,176. The Company remains contingently liable for any additional liabilities that may occur as a result of its former operations.

In addition to historical information, this Quarterly Report contains forward-looking statements. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this section. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-KSB for the fiscal year ended September 30, 2008, the Quarterly Reports on Form 10-Q filed by the Company and any Current Reports on Form 8-K by the Company.

On September 17, 1999, the Company acquired the assets (the “Camino Assets”) of Camino Software Systems, Inc. (“Camino”) for 468,000 shares of the Company’s common stock and assumed $315,172 of certain Camino liabilities. The Camino Assets consisted of the name, Camino Software Systems, Inc., data storage management software, certain business contracts, and intangible personal property. Camino had developed the Highway Server hierarchical storage management (“HSM”) software. The Company has continued development of HSM products and currently supports all levels of Novell NetWare and Microsoft Windows 2000. In addition, the Company has been certified by Computer Associates as “ca smart” for compatibility with the Computer Associates BrightStor Portal and ARCServe back up products. In addition, the Company’s HSM product has been certified for use with EMC Centera and Centera Compliance edition storage hardware. As of the date of this filing the operating assets and liabilities and the software sales and development business have been sold.

During the current quarter, the Company had net interest expense of approximately $44,250 as compared to approximately $44,690 in interest expense during the prior year’s quarter. Currently the Company has a principal balance of $1,750,000 on a convertible debenture from RENN Capital Group, with 6% interest paid monthly. The Company also has a principal balance of $750,000, in connection with a two year 7% loan from RENN Capital Group. The Company also has a principal balance of $300,000 for a short term loan from RENN Capital Group with interest of 8% on $200,000 of the principal balance being paid in monthly installments. In February 2008, the Company received an additional $50,000 in funding from the RENN Capital Group with interest of 8% to be paid in unregistered stock or cash at the Company’s discretion. The note will mature at the same time as other current debt with the RENN Capital Group. No cash interest was paid during the current quarter and all future interest payments relating to the debt principal on the balance sheet will be paid in cash or unregistered common stock at the Company’s discretion. The Company negotiated this change in interest payment during the recent extensions of the loan principal maturity dates.

During the current nine month period, the Company had net interest expense of approximately $133,000 as compared to approximately $155,000 in net interest expense during the prior year’s nine month period. The decrease of approximately $22,000, or 14%, in interest expense is a result of reduction in monthly non cash interest charges based on current loan payable balances and warrant expenses relating to an extension of the convertible debenture and loan payable maturity dates. Currently the Company has a principal balance of $1,750,000 on a convertible debenture from RENN Capital Group, with 6% interest paid monthly. The Company also has a principal balance of $750,000, in connection with a two year 7% loan from RENN Capital Group. The Company also has a principal balance of $300,000 for a short term loan from RENN Capital Group with interest of 8% on $200,000 of the principal balance being paid in monthly installments. In February 2008, the Company received an additional $50,000 in funding from the RENN Capital Group with interest of 8% to be paid in unregistered stock or cash at the Company’s discretion. The note will mature at the same time as other current debt with the RENN Capital Group as of September 30, 2009. No cash interest was paid during the current nine months and all future interest payments relating to the debt principal on the balance sheet will be paid in cash or unregistered common stock at the Company’s discretion. The Company negotiated this change in interest payment during the recent extensions of the loan principal maturity dates.

During July 2004, the Company received $750,000 from a two year secured loan from Renaissance Capital Group managed funds. Interest is being paid at 7% in monthly installments based on the outstanding principal balance. As part of the funding, the Company issued five year warrants to purchase an aggregate of 1,415,094 shares of Common Stock at an exercise price of $0.53 per share. During February 2006, the Company issued to the Renaissance Capital Group managed funds an aggregate of 150,000 warrants to purchase the Company’s common stock at $0.86 per share in consideration of an agreement to extend the $750,000 loan payable maturity date for an additional 18 months. The new maturity date for the notes was January 19, 2008. The Company will continue to pay 7% interest on a monthly basis based on the current outstanding principal balance of $750,000. The estimated value of the warrants of $77,663 was recorded on the Company’s financial statements as debt discount and was amortized over the term of the extension.

Pursuant to a Renewal and Modification Agreement dated October 28, 2005, the lender agreed to extend the maturity date of the two 6% Convertible Debentures dated November 27, 2002 in the aggregate principal amount of $1,750,000 to May 27, 2007. In consideration of such extension, the Company agreed to grant to the lender a five-year warrant to purchase 175,000 shares of Company Common Stock at an exercise price of $1.14 per share (subject to adjustment). The estimated value of the warrant ($166,093) was recorded on the Company financial statements as debt discount and was amortized over the term of the extension.

On February 7, 2007, the Company received an aggregate of $200,000 from two three month secured convertible notes from two of RENN Capital Groups managed funds. Interest of 8% will be paid in monthly installments during the term of the notes. The notes matured on May 7, 2007, at which time all principal and accrued and unpaid interest would have been due and payable in full. The notes are convertible at the option of the holder, into shares of the Company’s common stock, with an initial conversion price of $0.30 per share. The funds are being used to support the operations of the Company. Each holder of a note may convert in whole or in part the outstanding principal plus accrued but unpaid interest into the Company’s common stock at a conversion price of $0.30 per share. In the event that the Company issues additional common stock, or securities convertible into common stock, at a price lower than the conversion price while these notes are outstanding, the conversion price of these notes will automatically adjust downward to such price at which the new common stock has been issued. The conversion price of the note, however, shall never be adjusted to less than $0.01 per share.

In October 2007, the Company received an additional $100,000 from RENN Capital Group funds to help pay for legal and accounting fees relating to the merger and acquisition process happening at that time with Shea Development now known as Riptide Worldwide, Inc. previously disclosed. Although the funds have no terms or interest due, the Company recorded it as a loan payable and plans to repay or write off the balance due at the time the other debt is paid or otherwise satisfied. In February 2008, the Company received an additional $50,000 8% loan from RENN Capital Group funds via wire transfer to help pay for additional legal and accounting fees relating to the proposed merger and acquisition with Riptide Worldwide, Inc. previously known as Shea Development. Interest of 8% will be paid in monthly installments beginning March 1, 2008, until the principal balance is paid in full. Interest can be paid in cash or in unregistered common stock at the Company’s discretion. During the quarter ended March 31, 2008, the Company negotiated to extend the maturity dates of debt due before March 31, 2008. Pursuant to renewal and modification agreements the Company extended the total debt with an aggregate principal balance of $2,700,000 to May 30, 2008. In addition to extending the due date the Company also continued the ability to pay monthly interest in cash or payments in unregistered common stock. On June 20, 2008 the Company formally terminated the merger and acquisition agreement with Riptide Worldwide, Inc. Management is currently negotiating maturity extensions for loans and debentures with RENN Capital Group.

Pursuant to renewal and modification agreements dated as of November 12, 2007, all interest payments commencing on November 1, 2007 or after are due and payable in either cash or restricted shares of Company common stock at the Company’s discretion. The number of shares to be issued shall be equal to the amount of interest payment due divided by the average of the last sale price (or closing bid prices) for the five trading days immediately preceding the payment date. As such, during the nine month period ended June 30, 2009, interest expense of approximately $132,800 was recorded on the Company’s financial statements and paid with the issuance of 10,363,924 shares of unregistered common stock.

Effective April 24, 2009, the Company entered into a Renewal and Modification Agreement (the “Renewal Agreement”) with US Special Opportunities Trust PLC (formerly BFS US Special Opportunities Trust PLC), Renaissance Capital Growth & Income Fund III, Inc., Renaissance US Growth Investment Trust PLC and RENN Capital Group, Inc. pursuant to which the maturity date of the Loan Documents as enumerated in the Renewal Agreement was changed so that payment of the unpaid principal, and all accrued and unpaid interest and any other charges, fees and payments due under the Loan Documents, are due and payable in full on September 30, 2009. As of the date of this filing the Company and Lenders are negotiating an extension of the maturity dates of all the notes.

We have identified the following critical accounting policies and estimates that affect our more significant judgments and estimates used in the preparation of our financial statements. The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America requires that we make estimates and judgments that affect the reported amounts of assets and liabilities. We evaluate those estimates on an ongoing basis, including those related to asset impairment, contingencies and litigation. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could vary from those estimates under different assumptions or conditions. We believe that the following critical accounting policies affect significant judgments and estimates used in the preparation of our financial statements.

We review our long-lived assets, for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than its carrying value, we record a write-down to reduce that asset to its estimated fair value. The fair value is determined based on discounted cash flows or appraised values depending on the nature of the asset.

Research and development costs, which consist primarily of software development costs, are expensed as incurred. Statement of Financial Accounting Standards No. 86, “Accounting for the Cost of Computer Software to be Sold, Leased, or Otherwise Marketed” (“SFAS 86”), provides for the capitalization of certain software development costs incurred after technological feasibility of the software is established.

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. We enter into certain arrangements where we are obligated to deliver multiple products and/or services (multiple elements). In these transactions, we allocate the total revenue among the elements based on the sales price of each element when sold separately (vendor-specific objective evidence).

Revenue for products licensed to original equipment manufacturers (OEMs), and perpetual licenses for current products in our server based data management suite of products is recognized as products are shipped. If annual service is a part of the sale agreement that portion of the revenue is recorded as unearned due to undelivered elements including, annual telephone support and the right to receive unspecified upgrades/updates of our data management products on a when-and-if-available basis. Unspecified upgrades, or patches, are included in our product support fee. The upgrades are delivered only on a when-and-if-available basis and as defined in SOP 97-2, are considered PCS. Vendor-specific objective evidence does exist for these services in the aggregate; however, no vendor-specific objective evidence exists for the unspecified upgrades on a stand-alone basis. When-and-if-available deliverables should be considered in determining whether an arrangement includes multiple elements; however, SOP 97-2 states that if sufficient vendor-specific objective evidence does not exist for the allocation of revenue to the various elements of the arrangement, and if the only undelivered element in an arrangement is PCS, the entire fee for the support should be recognized ratably. Because the timing, frequency, and significance of unspecified upgrades/updates can vary considerably, the point at which unspecified upgrades/updates are expected to be delivered should not be used to support income recognition on other than a straight-line basis. As such, the Company recognizes the product support fee consisting of PCS and unspecified upgrades/updates ratably over the service contract period.

(a)

As of the end of the period covered by this report, our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based on their evaluation, the chief executive officer (“CEO”) and chief financial officer (“CFO”) concluded that our disclosure controls and procedures had the material weaknesses in our financial reporting discussed below, our CEO and CFO concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of June 30, 2009.

We have a material weakness due to the lack of a documented and reviewed system of internal controls. We have determined that to perform the processes and remediate this internal control deficiency, we will either need to engage an internal control consultant or reassign existing personnel. The complete remediation of these deficiencies may take several quarters.

We have limited staff in our corporate offices and, as such, there is a lack of segregation of duties. Many functions including; purchasing, accounts payable, bank reconciliations, revenue recognition and month end closings, are not adequately segregated. The lack of a proper segregation of duties can lead to individuals performing incompatible functions such as approving vendor invoices and signing checks. Due to our limited number of personnel and until such time as we have additional employees, we may require additional oversight from our board of directors in addressing certain weaknesses related to a proper segregation of duties.

Our employees are authorized to purchase goods and services and approve the related invoices for payment without obtaining supervisory approval or pursuant to a delegation of authority. Additionally, one employee is allowed to order goods and services, approve invoices and sign checks. Only one signature is required on disbursement checks. This lack of control and lack of segregation of duties can lead to errors and irregularities. There is no review of invoices that are coded into the general ledger. Therefore, it is possible that expenses might be posted to the wrong account and the error would not be identified.

Controls are inadequate to assure that customers are billed whenever service department employees provide software access information to customers. Therefore, it is possible that customers might obtain the use of software without compensating the Company. Additionally, it is also possible that employees might sell Company software for their own benefit.

The application and general controls over our information and technology systems are not adequate. Our accounting software lacks appropriate controls and most computer generated reports are reviewed by the author without independent verification. To partially compensate for this weakness, the Company’s board of directors receives quarterly financial statements that compare actual results to budgeted results and variances are analyzed.

During the quarter the Company received $20,870 in cash in return for 2,087,000 shares of unregistered common stock. The Company used the funds to pay the overhead expense of the public shell for management consulting, legal and accounting and stock transfer agent fees related to the ongoing filings with the Securities and Exchange Commission.. CMSF Corp. currently has no operations as a public shell. The unregistered shares will be issued to RENN Capital Group funds as soon as practicable. The sale was exempt from the regulation requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof.

As of the date of this filing, the Company has sold all of its assets and transferred all of its liabilities except the indebtedness to the RENN Capital Group. The assets and liabilities were transferred into the Company’s wholly owned subsidiary CC Merger Corp. and the subsidiary was purchased by Stephen Crosson the Company’s chief executive officer and Neil Murvin the Company’s chief technology officer. The public entity will remain available for a merger of a business into the public shell or outright sale of the public shell. The Company filed an information statement on March 24, 2009.

On January 26, 2009, the Company modified all non convertible debt held by RENN Capital Group managed funds, which included, RENN Capital Growth and Income Fund III, Inc., Renaissance US Growth Investment Trust, Plc, and Global Special Opportunities Trust Plc. Collectively, the (“Lenders”). The Company had issued to the Lenders promissory notes with an aggregate value of $900,000, and the Company and Lenders agreed to amend the notes so that such instruments shall be convertible, at any time and from time to time, at the option of the applicable Lender, into shares of the Company’s common stock, at a conversion price of $0.01 per share. The Company also amended its articles of incorporation to increase the number of shares of its authorized common stock to 500,000,000 in order to have sufficient shares of common stock to satisfy the full conversion of all the Company’s outstanding securities which are convertible into, or exercisable for, shares of the Company’s common stock, including the notes and debentures. The Company also changed its corporate name to CMSF Corp.

California	95-3880130
(State of incorporation)	(I.R.S. Employer Identification No)

October 8, 2009	By:	/s/ Stephen Crosson
		Stephen Crosson
		Chief Executive Officer and Chief Financial Officer

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





Outstanding								Exercisable
				Weighted Average						Weighted Average
Exercise				Life		Exercise				Exercise
Price		Warrants		(Months)		Price		Warrants		Price
$	0.53		1,415,094		1		0.53		1,415,094	$	0.53
	0.86		150,000		20		0.86		150,000		0.86
	1.14		175,000		16		1.14		175,000		1.14

$	0.53-$1.14		1,740,094			$	0.62		1,740,094		0.62


	Nine Months Ended June 30,						Three Months Ended June 30,
	2009			2008			2009		2008
Revenues	$	488,877		$	1,208,029			-	$	432,236
Expenses		(473,981	)		(1,183,645	)		-		(316,724	)
Net income		14,896			24,384			-		115,512
Net gain on disposal		313,176			-			-		-
Income from discontinued operations	$	328,072		$	24,384			-	$	115,512