10-Q 1 cien10q093009.txt CIENEGA CREEK HOLDINGS, INC. SEPTEMBER 30, 2009 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended September 30, 2009. OR [ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period to ------------------ ----------------------- Commission File Number 333-144508 ---------- CIENEGA CREEK HOLDINGS, INC. ------------------------------------------------------------------------------ (Exact name of small Business Issuer as specified in its charter) Nevada 20-5432794 --------------------------------- --------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 9181 S Antler Crest Drive Vail, AZ 85641 ---------------------------------------- ----------------------------- (Address of principal executive offices) (Postal or Zip Code) Issuer's telephone number, including area code: (520) 275-8129 ----------------------------- None ------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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. [X] Yes [ ] No Indicate by check mark whether the registrant has submitted electronically and posted on its corportate 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 [ ] No 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 definition of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (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). [x] Yes [ ] No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 2,294,250 Shares of $0.001 par value Common Stock outstanding as of November 1, 2009. PART I FINANCIAL INFORMATION Item 1. Financial Statements CIENEGA CREEK HOLDINGS, INC. (A Development Stage Company) INTERIM FINANCIAL STATEMENTS September 30, 2009 (Stated in US Dollars) (Unaudited) ----------- BALANCE SHEETS INTERIM STATEMENT OF OPERATIONS INTERIM STATEMENT OF CASH FLOWS STATEMENT OF STOCKHOLDERS' EQUITY NOTES TO INTERIM FINANCIAL STATEMENTS ----------------------------------------------------------------------- CIENEGA CREEK HOLDINGS, INC. (A Development Stage Company) BALANCE SHEETS (Stated in US Dollars)
September 30, March 31, 2009 2009 ---- ---- ASSETS (Unaudited) (Restated) ------ Current Cash and cash equivalents $ 2,254 $ 11,327 Prepaid Officer Salary 12,500 37,500 ------------ ------------ Total Current Assets 14,754 48,827 Fixed Assets, net 2,950 3,387 ------------ ------------ Total Assets $ 17,704 $ 52,214 ============ ============ LIABILITIES ----------- Current Related Party Payable $ 1,500 $ - Total Liabilities 1,500 - ------------ ----------- STOCKHOLDERS' EQUITY -------------------- Capital stock - Note 4 75,000,000 shares authorized, $0.001 par value 2,294,250 issued and outstanding, respectively 2,294 2,294 Additional paid in capital 173,131 173,131 Deficit accumulated during the development stage ( 159,221) ( 123,211) ------------ ------------- Total Stockholders' Equity 16,204 52,214 ------------ ------------- Total Liabilites and Stockholders' Equity $ 17,704 $ 52,214 ============ =============
The accompanying notes are an integral part of these financial statements CIENEGA CREEK HOLDINGS INC. (A Development Stage Company) STATEMENT OF OPERATIONS (Stated in US Dollars) (Unaudited)
Three months Three months Six months Six months August 17, 2006 Ended Ended Ended Ended (inception) September 30, September 30, September 30, Semptember 30, through September 30, 2009 2008 2009 2008 2009 ---- ---- ---- ---- ---- (Restated) (Restated) (Restated) Revenues $ - $ - $ - $ - $ - Expenses Officer salaries 12,500 - 25,000 - 37,500 Professional fees 500 6,800 6,499 56,138 86,230 Depreciation expense 218 82 437 165 1,270 General and Administrative 1,513 3,643 4,084 5,656 35,759 -------------- ---------- ------------ -------------- ---------- Loss From Operations (14,731) (10,525) (36,020) (61,959) (160,759) Other Income(Expense) Interest Income 5 16 10 103 1,538 -------------- ---------- ------------ -------------- ---------- Net loss before income taxes (14,726) (10,509) (36,010) (61,856) (159,221) Income tax expense - - - - - Net loss $ (14,726) $ (10,509) $ (36,010) $ (61,856) $ (159,221) ============== ========== ============ ============== ========== Basic loss per share $ ( 0.01) $ ( 0.00) $ ( 0.02) $ ( 0.01) ============== ========== ============== ============== Weighted average number of shares outstanding 2,294,250 8,294,250 2,294,250 7,929,590 ============== ========== ============ ==============
The accompanying notes are an integral part of these financial statements CIENEGA CREEK HOLDINGS INC. (A Development Stage Company) STATEMENT OF CASH FLOWS (Stated in US Dollars) (Unaudited)
Six Months Six Months August 17, 2006 Ended Ended (inceptoin) September 30, September 30, through September 30, 2009 2008 2009 ---- ---- ---- (Restated) (Restated) Operating Activities Net loss for the period $ (36,010) $ (61,856) $ (209,221) Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activites: Common stock issued for services - 7,000 8,000 Prepaid officer salaries 25,000 - 37,500 Depreciation and amortization expense 437 165 1,270 ---------------- ---------------- ---------------- Net cash provided(Used) by operations (10,573) (54,691) (162,451) ---------------- ---------------- ---------------- Investing Activity Purchase of fixed assets - - (4,220) ---------------- ---------------- ---------------- Net Cash Provided(Used) by Investing Activites - - (4,220) ---------------- ---------------- ---------------- Financing Activities Related party payable 1,500 - 1,500 Common stock repurchased and retired - - (7,000) Common stock issued for cash - 102,425 174,425 ---------------- ---------------- ---------------- Net Cash Provided(Used) by Financing Activites 1,500 102,425 168,925 ---------------- ---------------- ---------------- Net Increase(Decrease) in cash and cash equivalents (9,073) 47,734 2,254 Cash, beginning of the period 11,327 47,795 - ---------------- ---------------- ---------------- Cash, end of the period $ 2,254 $ 95,529 2,254 ================ ================ ================ Supplementary disclosure of cash flow information: Cash paid for: Interest $ - $ - ================ ================ ================ Income Taxes $ - $ - ================ ================ ================
The accompanying notes are an integral part of these financial statements CIENEGA CREEK HOLDINGS INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY for the period August 17, 2006 (Inception) to September 30, 2009 (Stated in US Dollars) (Restated)
Deficit Accumulated Common Shares Common During the ------------- Paid in Shares Development Number Par Value Capital Subscription Stage Total --------- ------------ ------------ ------------ ------------ ------------ Balance, August 17, 2006 (Inception) -- $ -- $ -- $ -- $ -- $ -- Common stock issued for cash, $0.01 per share on June 30, 2007 7,200,000 7,200 64,800 -- -- 72,000 Net loss for the period inception through March 31, 2007 -- -- -- -- (2,640) (2,640) --------- ------------ ------------ ------------ ------------ ------------ Balance, March 31, 2007 7,200,000 7,200 64,800 -- (2,640) 69,360 Net loss for the year ended March 31, 2008 -- -- -- -- (20,414) (20,264) --------- ------------ ------------ ------------ ------------ ------------ Balance, March 31, 2008 7,200,000 7,200 64,800 -- (23,054) 49,096 Common shares issued for services, $0.10 per share on June 12, 2008 70,000 70 6,930 -- -- 7,000 Common shares issued for cash, $0.10 per share on June 30, 2008 1,024,250 1,024 101,401 -- -- 102,425 Common shares issued for service, $0.001 per share on January 1, 2009 1,000,000 1,000 -- -- -- 1,000 Common shares repurchased and retired, $0.001 per share on March 11, 2009 (7,000,000) (7,000) -- -- -- (7,000) Net loss for the year ended March 31, 2009 -- -- -- -- (100,157) (100,157) --------- ------------ ------------ ------------ ------------ ------------ Balance, March 31, 2009 2,294,250 2,294 173,131 -- (123,211) 52,364 Net loss for six months ended September 30, 2009 (Unaudited) - - - -- (36,010) (36,010) Balance, September 30, 2009 (Unaudited) 2,294,250 $ 2,294 $ 173,131 -- $ (159,221) 16,354 ========= ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements CIENEGA CREEK HOLDINGS INC. (A Development Stage Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS September 30, 2009 and March 31, 2009 (Stated in US Dollars) (Unaudited) Note 1 Condensed Financial Statements The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2009 and for all periods presented herein have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's March 31, 2009 audited financial statements. The results of operations for the period ended September 30, 2009 and 2008 are not necessarily indicative of the operating results for the full year. Note 2 Going concern The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Cienega Creek Holdings Inc. (A Development Stage Company) Notes to the Interim Financial Statements September 30, 2009 (Stated in US Dollars) (Unaudited) - Page 2 ---------- Note 3 Summary of Significant Accounting Policies ------------------------------------------ Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Cienega Creek Holding Inc. (A Development Stage Company) Notes to the Interim Financial Statements September 30, 2009 (Stated in US Dollars) (Unaudited) - Page 3 ---------- Note 3 Summary of Significant Accounting Policies - (cont'd) ------------------------------------------ Recent Accounting Pronouncements -------------------------------- In May 2009, the FASB issued FAS 165, "Subsequent Events". This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). FAS 165 requires and entity to disclose the date subsequent events were evaluated and whether that evaluation took place on the date financial statements were issued or were available to be issued. It is effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 165 did not have a material impact on the Company's financial condition or results of operation. In June 2009, the FASB issued FAS 166, "Accounting for Transfers of Financial Assets" an amendment of FAS 140. FAS 140 is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets: the effects of a transfer on its financial position, financial performance , and cash flows: and a transferor's continuing involvement, if any, in transferred financial assets. This statement must be applied as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 166 to have an impact on the Company's results of operations, financial condition or cash flows. In June 2009, the FASB issued FAS 167, "Amendments to FASB Interpretation No. 46(R) ". FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FAS 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provided timely and useful information about an enterprise's involvement in a variable interest entity. This statement must be applied as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 167 to have an impact on the Company's results of operations, financial condition or cash flows. In June 2009, the FASB issued FAS 168, "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles". FAS 168 will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009.The Company does not expect the adoption of FAS 168 to have an impact on the Company's results of operations, financial condition or cash flows. Cienega Creek Holding Inc. (A Development Stage Company) Notes to the Interim Financial Statements September 30, 2009 (Stated in US Dollars) (Unaudited) - Page 4 ---------- Note 4 Related Party Footnote As of Setember 30, 2009 and March 31, 2009 the Company owed $1,500 and $- to related parties. The note is noninterest bearing and due on demand. Cienega Creek Holding Inc. (A Development Stage Company) Notes to the Interim Financial Statements September 30, 2009 (Stated in US Dollars) (Unaudited) - Page 5 ---------- Note 5 Restatement of Financial Statements On September 29, 2009 the Company discovered a material error in its accounting that resulted in a misstatement of the financial statements for the fiscal year ended March 31, 2009. The Company failed to record a prepaid expense for officer salaries resulting in an understatement of current assets and an overstatement of operating expenses of $37,500. Below are presented summaries of the difference between the original and restated Balance Sheets. BALANCE SHEETS March 31, March 31, 2009 2009 ---- ---- ASSETS (Original) (Restated) ------ Current Assets Cash $ 11,321 $ 11,327 Prepaid Officer Salary - 37,500 ---------- ---------- Total Current Assets 11,321 48,827 Property and Equipment, net 3,620 3,387 ---------- ---------- Total Assets $ 14,941 $ 52,214 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities Accounts payable $ - $ - Related Party Payable - - ---------- ---------- Total Current Liabilities - - ---------- ---------- Stockholders' Equity Common stock: $0.001 par value, 75,000,000 shares authorized, 2,294,250 issued and outstanding 2,294 2,294 Additional paid in capital 173,131 173,131 Deficit accumulated during the development stage ( 160,484) ( 123,211) ---------- ---------- Total Stockholders' Equity 14,941 52,214 ---------- ---------- Total Liabilites and Stockholders' Equity $ 14,941 $ 52,214 ========== =========== Forward-Looking Statements -------------------------- This Form 10-Q includes "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All statements other than historical facts included in this Form, including without limitation, statements under "Plan of Operation", regarding our financial position, business strategy, and plans and objectives of management for the future operations, are forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, market conditions, competition and the ability to successfully complete financing. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation Overview of Our Business Cienega Creek Holdings Inc. (referred to herein as "we" or the "Company") was incorporated in the State of Nevada on August 17, 2006. Our fiscal year end is March 31. The Company is engaged in the computer software business. The The company has not realized revenue from operations as of September 30, 2009 and accordingly is classified as a development stage company. The company has not generated any revenue to date and has limited resources. As a result, the company is pursuing business activities in areas outside of the computer software industry. In addition to business development, Management's plans include acquiring, merging or otherwise combining with an operating company. Management is currently seeking an entity with which to affiliate. Management's main objective is to seek to increase shareholder value. All viable alternatives will be evaluated, including, but not limited to: investments, mergers, purchases, or the offering of Company securities, etc. Alternatives that provide the existing shareholders with the greatest potential benefit will be favored. In connection with a business combination, it is possible that shares of common stock constituting control of us may be purchased from our current principal shareholders ("insiders") by the acquiring entity or its affiliates. Simultaneous with our plan to acquire, merge or otherwise combine with an operating company we plan to focus on software development, sales, and support. We will generate revenue through the sale of custom and packaged software solutions. Our software products will be developed by our employees and contracted employees. We will market our products directly to corporate and government customers. Plan of Operations For the next twelve months our plans include designing and developing a single software package and selling the software directly to corporate and government customers. Our initial product will focus on cross-platform document creation with bi-directional database updating. This product will allow customers an easy way to generate standard business documents while simultaneously updating their organization's existing database. We require additional financing in order to proceed with our business plan. We cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our marketing plan and operations. We believe that debt financing will not be an alternative for funding the marketing plan. We do not have any arrangements in place for any future equity financing. Results of Operations For Period Ending September 30, 2009 ---------------------------------------------------------- We did not earn any revenues during the three-month period ending September 30, 2009. During the period ended September 30, 2009, we incurred operating expenses in the amount of $14,731, compared to operating expenses of $10,525 incurred during the same period in 2008. These operating expenses were comprised of officer salaries of $12,500 (2008: $0), professional fees of $500 (2008: $6,800), and general and administrative costs of $1,731 (2008: $3,752). The increase in operating expenses during the three months ended September 30, 2009, compared to the three month period ended September 30, 2008, was due to the increase in officer salaries. As of September 30, 2009, the Company had cash of $2,254, and liabilities totalling $1,500 for working capital of $13,254 compared to working capital of $97,656 as of September 30, 2008. We have not generated any revenue since inception and are dependent upon obtaining additional financing to pursue the development of our health and fitenss center. For these reasons, our auditors believe that there is substantial doubt that we will be able to continue as a going concern. Critical Accounting Policies ---------------------------- Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet dates, and the recognition of revenues and expenses for the reporting periods. These estimates and assumptions are affected by management's application of accounting policies. Revenue Recognition ------------------- The Company will determine its revenue recognition policies upon commencement of principle operations. ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. The company does not operate and its only assets are fully insured interest- bearing checking and savings accounts. Therefore, this item is not applicable given the company's current operations. ITEM 4T. Controls and Procedures. ------------------------------ Evaluation of Disclosure Controls We evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2009. This evaluation was conducted by Michael Klinicki, our chief executive officer and our principal accounting officer. Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported. Limitations on the Effective of Controls Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. Conclusions Based upon their evaluation of our controls, Michael Klinicki our chief executive officer and principal accounting officer, has concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared. There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls. PART II OTHER INFORMATION Item 1. Legal Proceedings ------------------------- The Company is not a party to any pending legal proceedings. Management is not aware of any threatened litigation, claims or assessments. Item 1A. Risk Factors --------------------- This item is not required of smaller reporting companies. Item 2. Unregistered Sale of Equity Securities and Use of Proceeds ----------------------------- None. Item 3. Defaults Upon Senior Securities --------------------------------------- None. Item 4. Submission of Matters to a Vote of Security Holders ----------------------------------------------------------- None. Item 5. Other Information ------------------------- None. Item 6. Exhibits ---------------- 31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 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. Cienega Creek Holdings Inc. Dated: November 20, 2009 /s/ Michael A. Klinicki --------------------------- Michael A. Klinicki President, Chief Executive Officer, and Director Dated: November 20, 2009 /s/ Michael A. Klinicki --------------------------- Michael A. Klinicki Chief Financial Officer, Secretary Treasurer, principal accounting officer and Director