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EX-32.1 - CERTIFICATION - CONCEPT DIGITAL INC /DE/f10q0607ex32i_conceptdig.htm
EX-31.1 - CERTIFICATION - CONCEPT DIGITAL INC /DE/f10q0607ex31i_conceptdig.htm



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
 
FORM 1O-Q
_________________
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
 
QUARTERLY PERIOD ENDED June 30, 2007
 
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 No. 0-32029
_________________
 
CONCEPT DIGITAL, INC.
(Exact name of registrant as specified in its charter)
_________________
 
 
Delaware
 
22-3608370
 
 
(State or Other Jurisdiction  of
Incorporation or Organization)
 
(IRS Employer Identification No.)
 
 
298 Fifth Avenue
New York, NY 10001
 (Address of Principal Executive Offices)
 
(212) 564-1600
(Issuer’s Telephone Number, Including Area Code)
 
Check whether the Issuer (1) filed all reports required to be filed by Section 13 or l5( d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ¨ No  x
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o 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 filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):
 
Large Accelerated Filer   o Accelerated Filer   o Non-Accelerated Filer   o Smaller Reporting Company   x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.  Yes  ¨ No   x
 
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:  41,263,381 shares of common stock were outstanding as of November 18, 2009.
 

 
CONCEPT DIGITAL, INC.
FORM 10Q
FOR THE QUARTERLY PERIOD ENDING JUNE 30, 2007
 
 
PART I  
FINANCIAL INFORMATION
F-1
     
Item 1.
Consolidated Financial Statements (Unaudited)
 
     
 
Consolidated Balance Sheet (Unaudited)
 
     
 
Consolidated Statements of Operations (Unaudited)
 
     
 
Consolidated Statements of Cash Flows (Unaudited)
 
     
 
Notes to Unaudited Consolidated Financial Statements
 
     
Item 2.  
Management’s Discussion and Analysis and Results of Operations
1
     
Item 3.
Quantitative and Qualitative Disclosures
4
     
Item 4.   
Controls and Procedures
4
     
Part II   
OTHER INFORMATION
 
     
Item 1.  
Legal Proceedings
5
     
Item 1A.
Risk Factors
 5
     
Item 2.  
Unregistered Sales of Equity Securities and Use of Proceeds
5
     
Item 3.  
Defaults Upon Senior Securities
5
     
Item 4.  
Submission of Matters to a Vote of Security Holders
5
     
Item 5.  
Other Information
5
     
Item 6.  
Exhibits and Reports of Form 8-K
5
     
Signatures
6

 
 

 
 
PART I - FINANCIAL INFORMATION

Forward-Looking Statements
 
This Form 10-Q contains “forward-looking statements” relating to Concept Digital, Inc. (the “Company”), which represent the Company’s current expectations or beliefs including, but not limited to, statements concerning the Company’s operations, performance, financial condition and growth. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as “may”, “anticipation”, “intend”, “could”, “estimate”, or “continue” or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as losses, dependence on management, variability of quarterly results, and the ability of the Company to develop a growth strategy and compete with other companies in its industry, certain of which are beyond the Company’s control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements.
 
Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
 
Item 1. Financial Statements:
 
BASIS OF PRESENTATION

The accompanying unaudited financial statements are presented in accordance with US generally accepted accounting principles for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying statements should be read in conjunction with the audited financial statements for the year ended December 31, 2006. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the six months ended June 30, 2007 are not necessarily indicative of results that may be expected for the year ending December 31, 2007. The financial statements are presented on the accrual basis.
 
FINANCIAL STATEMENTS AND EXHIBITS.
 
For the information required by this Item, refer to the Index to Financial Statements appearing on page F-1 of the registration statement.

 

 
 
 

CONCEPT DIGITAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2007 AND DECEMBER 31, 2006
AND FOR THE SIX MONTHS ENDED JUNE 30,
2007 AND 2006 AND FOR THE PERIOD JANUARY 1,
2004 (COMMENCEMENT OF DEVELOPMENT
STAGE) TO JUNE 30, 2007
 

 
 
 
 
 
 

 

CONCEPT DIGITAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

TABLE OF CONTENTS

                                                                                                                                        
 
  Page(s)
   
Consolidated balance sheets  F-2
   
Consolidated statements of operations   F-3
   
Consolidated statements of cash flows   F-4
   
Notes to consolidated financial statements   F-5
 
 

 
F-1

 
 
CONCEPT DIGITAL, INC. AND SUBSIDIARY
(A Development Stage Company)

Consolidated Balance Sheets

   
(Unaudited)
       
   
June 30,
   
December 31,
 
   
2007
   
2006
 
ASSETS
           
             
CURRENT ASSETS:
           
Cash
  $ 199,961     $ 2,661  
Prepaid expenses
    2,442       44,525  
                 
Total current assets
    202,403       47,186  
                 
TOTAL ASSETS
  $ 202,403     $ 47,186  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
               
                 
CURRENT LIABILITIES:
               
Accounts payable and accrued expenses
  $ 148,520     $ 177,542  
Notes payable – related party
    736,086       493,086  
Due to related party
    550       100  
                 
Total current liabilities
    885,156       670,728  
                 
STOCKHOLDERS’ DEFICIT:
               
      Common stock, par value $.0001 per shares;
               
50,000,000 shares authorized; 41,263,381 and
               
39,683,381 shares issued and outstanding, respectively
    4,126       3,968  
Additional paid-in capital
    1,488,060       1,488,060  
Deficit accumulated during the development stage
    (2,174,939 )     (2,115,570 )
                 
Total stockholders’ deficit
    (682,753 )     (623,542 )
                 
TOTAL LIABILITIES AND
               
STOCKHOLDERS’ DEFICIT
  $ 202,403     $ 47,186  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
F-2


 
CONCEPT DIGITAL, INC. AND SUBSIDIARY
(A Development Stage Company)

Consolidated Statements of Operations

               
(Unaudited)
 
               
For the Period
 
               
January 1, 2004
 
   
(Unaudited)
Six Months Ended
   
(Unaudited)
Three Months Ended
   
(commencement of
development stage) to
 
   
June 30,
   
June 30,
   
June 30,
 
   
2007
   
2006
   
2007
   
2006
   
2007
 
                               
Development stage revenues
    -     $ 748       -       -     $ 5,917  
Cost of services
    -       15       -       -       1,504  
                                         
      -       733       -       -       4,413  
                                         
Development stage expenses
                                       
Accounting
  $ 38,934       15,114     $ 13,469     $ 10,173       148,103  
Legal
    5,621       5,000       4,421       5,000       14,976  
Management fee
    -       4,500       -       2,250       32,500  
Office
    636       686       424       131       7,980  
Transfer agent fees
    1,250       450       225       225       6,031  
                                         
TOTAL DEVELOPMENT STAGE EXPENSES
    46,441       25,750       18,539       17,779       209,590  
                                         
Loss from operations
    (46,441 )     (25,017 )     (18,539 )     (17,779 )     (205,177 )
Corporate taxes
    (228 )     (227 )     (114 )     (113 )     (1,719 )
Interest expense
    (12,700 )     (8,138 )     (7,083 )     (4,310 )     (59,635 )
                                         
NET LOSS
  $ (59,369 )   $ (33,382 )   $ (25,736 )   $ (22,202 )   $ (266,531 )
                                         
NET LOSS PER COMMON SHARE
                                       
Basic and dilutes
  $ (0.0015 )   $ (0.0003 )   $ (0.0006 )   $ (0.0003 )        
                                         
Weighted-average number of common
                                       
shares outstanding
    39,709,569       39,683,381       39,735,469       39,683,381          
 
The accompanying notes are an integral part of these consolidated financial statements.
F-3


CONCEPT DIGITAL, INC. AND SUBSIDIARY
(A Development Stage Company)

Consolidated Statements of Cash Flows


 
                (Unaudited)  
                For the Period  
                January 1, 2004  
    (Unaudited)
Six Months Ended
    (commencement of
development stageto
 
    June 30,     June 30,  
    2007     2006     2007  
OPERATING ACTIVITIES:
                 
Net loss
  $ (59,369 )   $ (33,382 )   $ (266,531 )
Adjustment to reconcile net loss to net cash
                       
used in operating activities:
                       
Decrease (increase) in accounts receivable
                       
-   related parties
    -       -       14,028  
Decrease (increase)in prepaid expenses
    42,083       (29,701 )     107  
(Decrease) increase in accounts payable
    (28,572 )     (27,332 )     (46,572 )
(Decrease) increase in accounts payable
                       
-  related parties
    -       (38,567 )     75,243  
                         
Net cash (used in) operating activities
    (45,858 )     (128,982 )     (223,725 )
                         
FINANCING ACTIVITIES:
                       
Payments on loans payable – related party
    (140,000 )     (110,000 )     (250,000 )
Proceeds from loans payable – related party
    383,000       290,000       673,000  
Proceeds from issuance of common stock
    158       -       158  
                         
Net cash provided by financing activities
    243,158       180,000       423,158  
                         
 Increase in cash
    197,300       51,018       199,433  
Cash at beginning of period
    2,661       1,683       528  
                         
Cash at end of period
  $ 199,961     $ 52,701     $ 199,961  
                         
Supplemental cash flow information::
                       
Interest paid
  $ 1,795     $ 44,715     $ 46,510  
Income taxes paid
  $  -     $  -     $ 126  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
F-4


CONCEPT DIGITAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Information - The unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.  The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods.  Certain information and footnote disclosures normally presented in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations.  The condensed consolidated financial statements should be read in conjunction with the description of business and management’s plan of operations, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006  The results of operations for the six months June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007 or for any future period.  In the opinion of management, the accompanying consolidated financial statements of Concept Digital, Inc., contains all adjustments necessary to present fairly the Company’s financial position as of June 30, 2007 and December 31, 2006, the statements of operations for the six and three months ended June 30, 2007 and 2006 and the statements of cash flows for the six months ended June 30, 2007 and 2006.

The results of operations for the six and three months ended June 30, 2007 and June 30, 2006 are not necessarily indicative of the results to be expected for the full year.

The accounting policies followed by the Company are set forth in Note 3 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2006.
 
2.
RELATED PARTIES

The loan payable of $16,953 which bears interest at 6% per annum is due to Atlas Equity Group, Inc., an entity related to the Company through common ownership.  The note matured in May 2002 and is convertible into 730,468 shares of common stock at the discretion of the Company.  As of May 7, 2002 the loan was in default.  The payee has allowed the loan to continue as a demand loan accruing interest at 6% per annum.  At June 30, 2007 the entire balance of the note was outstanding.

In June 2006, the Company entered into a promissory note agreement totaling $290,000, which bears interest at 7% per annum and is due to Cool Mobile LLC, an entity related to the Company through common ownership.  The note is due 90 days after demand by the holder.  In addition, the loan has been guaranteed by an officer and major shareholder of the Company up to $250,000.  At June 30, 2007, the balance on the outstanding note was $150,000.
 
F-5

 
CONCEPT DIGITAL, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 
On May 10, 2007, the Company entered into a promissory note agreement totaling $35,000, which bears interest at 12%, per annum on demand from its founder, Joe Douek.

The loan payable of $383,000 which bears interest at 8.5%, per annum is due to Elliot Sasho, an individual who is a shareholder of the Company.  The note is due and payable within two years.  In addition, 795,000 shares of the Company’s common stock were issued as additional consideration in making the loan.  These shares were valued at $79, the value of the most recent sale of the Company’s common stock, and were expensed as incurred as additional interest on the note.  As of June 30, 2007, the balance on the loan is $383,000.

The remaining loan payable to an entity related through common ownership totaling $186,133 is a result of the transfer of cash collected on unearned warranty fees, which were assigned to the related party which is fulfilling the warranty obligations.

3.
DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN MATTERS

The Company’s activities have been devoted to developing a business plan, and raising capital for future operations and administrative functions.  The ability of the Company to achieve its business objectives is contingent upon its success in raising additional capital until adequate revenues are realized from operations.
 
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. As shown in the financial statements, losses (date of inception) to June 30, 2007 aggregated $(2,174,939).  The Company’s cash flow requirements during this period have been met by contributions of capital and debt financing. No assurance can be given that these sources of financing will continue to be available. If the Company is unable to generate profits, or unable to obtain additional funds for its working capital needs, it may have to cease operations.
 
The financial statements do not include any adjustments relating to the recoverability and classification of assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

4.
ADDITIONAL STOCK ISSUANCE

In June 2007, The Company 795,000 shares of its common stock for director services rendered.  The shares were valued at $79, the value of the most recent sale of its common stock, and was expensed as incurred.
 
F-6


 
Item 2.  Management’s Discussion and Analysis

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition.  The discussion should be read along with our consolidated financial statements and notes thereto.  Concept Digital Inc. is a development – stage company.  Because the Company has not generated any revenue, it intends to report its plan of operation below.
 
The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties.  The Company’s actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
 
The Company’s operations have been devoted primarily to developing a business plan and raising capital for future operations and administrative functions.  The Company intends to grow through internal development, strategic alliances, and acquisitions of existing businesses.  Because of uncertainties surrounding its development, the Company anticipates incurring development stage losses in the foreseeable future.  The ability of the Company to achieve its business objectives is contingent upon its success in raising additional capital until adequate revenues are realized from operations.
 
The accompanying consolidated 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.  As reflected in the consolidated financial statements, losses from June 15, 1999 (date of inception) through June 30, 2007 aggregated $(2,174,939) and raise substantial doubt about the Company’s ability to continue as a going concern.  The Company’s cash flow requirements during this period have been met by contributions of capital and debt financing, primarily from related parties.  The Company anticipates that financing will be required until such time that the Company has been able to develop its own business or find an appropriate merger candidate.  Currently, the Company can not determine when either will occur and as such the Company will need to obtain financing to cover its costs for the foreseeable future.  No assurance can be given that these sources of financing will continue to be available.  If the Company is unable to generate profits, or unable to obtain additional funds for its working capital needs, it may have to cease operations.
 
CRITICAL ACCOUNTING POLICIES
 
Our accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which require our management to make estimates that affect the amounts of revenues, expenses, assets and liabilities reported. The following are critical accounting policies which are important to the portrayal of our financial condition and results of operations and which require some of management’s most difficult, subjective and complex judgments. The accounting for these matters involves the making of estimates based on current facts, circumstances and assumptions which could change in a manner that would materially affect management’s future estimates with respect to such matters. Accordingly, future reported financial conditions and results could differ materially from financial conditions and results reported based on management’s current estimates.
 
Income taxes:
 
The Company utilizes Statement of Financial Standards (“SFAS”) No. 109, “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in financial statements or tax returns.  Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period based on enacted tax laws and statutory tax rates applicable to the period in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  The accompanying consolidated financial statements have no provision for deferred assets or liabilities.
 
1

 
Results of Operations

THE SIX MONTHS ENDED JUNE 30, 2007 AND JUNE 30, 2006
 
Development stage loss during the six months ended June 30, 2007 was ($59,369) as compared to development stage loss during the six months ended June 30, 2006 was ($33,382).
 
Expenses for the six months ended June 30, 2007 were primarily transfer agent fees ($1,250), accounting and legal services ($44,555) and interest expense ($12,700).
 
Expenses for the six months ended June 30, 2006 were primarily accounting and legal fees ($20,114), management fees ($4,500) and interest ($8,138).
 
THE THREE MONTHS ENDED JUNE 30, 2007 AND JUNE 30, 2006
 
Development stage loss during the three months ended June 30, 2007 was ($25,736) as compared to development stage loss during the three months ended June 30, 2006 was $($22,202).
 
Expenses for the three months ended June 30, 2007 were primarily accounting and legal services ($17,890) and interest expense ($7,083).
 
Expenses for the three months ended June 30, 2006 were primarily management fees ($2,250), accounting and legal expense ($15,173) and interest expense ($4,310).
 
PERIOD FROM JANUARY 1, 2004 (COMMENCEMENT OF DEVELOPMENT STAGE) THROUGH JUNE 30, 2007
 
Net losses since commencement of the development stage have amounted to ($266,531).  These expenses were primarily interest expense ($59,635), office expenses ($7,980), and professional fees such as legal ($14,976) and accounting ($148,103).
 
Liquidity and Capital Resources
 
Despite capital contributions and loans from a related party, the Company continues to experience cash flow shortages that have slowed the Company’s growth.
 
The Company has primarily financed its activities from issuance of common stock of the Company and from loans from Joseph Douek, (the Company’s majority shareholder) and other entities controlled by Mr. Douek.  A significant portion of the funds raised from loans from related and third parties has been used to cover working capital needs.
 
2

 
For the six months ended June 30, 2007 and June 30, 2006, we had a net loss of ($59,369) and ($33,382) respectively.  Our accumulated deficit since the date of inception is ($2,174,939).  Such accumulated losses have resulted primarily from costs incurred in the development of the website, salary and various professional fees.
 
In June 1999, the Company issued 22,000,000 common shares to the founder, in consideration for management services valued at $0.10.  Joseph Douek is deemed to be a founder and affiliate of the Company.
 
In November 1999 and December 1999, the Company entered into a private offering of securities pursuant to Regulation D, Rule 504, promulgated by the Securities Act of 1933.  Common stock was offered to accredited and non-accredited investors for cash consideration of $.10 per share.  8,350,260 shares were issued to several unaffiliated investors and the Company received net proceeds totaling approximately $786,000.  That offering is now closed.
 
In November 1999, the Company issued 1,600,000 common shares in exchange for equipment at $.07 share to Douek Holdings Ltd., a company controlled by the Company’s majority stockholder.
 
In December 1999, The Company issued 350,000 common shares for services performed which was valued at $35,000.
 
In February 2000, the Company entered into a private offering of securities pursuant to Regulation D, Rule 504, promulgated by the Securities Act of 1933.  Common stock was offered to accredited and non-accredited investors for cash consideration of $.10 per share.  200,000 shares were issued to several unaffiliated investors and the Company received net proceeds totaling approximately $20,000.  That offering is now closed.
 
In May through October 2000, the Company entered into a private offering of securities pursuant to Regulation D, Rule 504, promulgated by the Securities Act of 1933.  Common stock was offered to accredited and non-accredited investors for cash consideration of $.12 per share.  850,000 shares were issued to several unaffiliated investors.  The Company received net proceeds totaling approximately $102,000. That offering is now closed.
 
In December 2000, The Company issued 505,000 common shares for compensation of services valued at $51,000.
 
In December 2000, 200,000 options were exercised at $.10 per share, receiving $20,000 in proceeds.
 
In March 2001, the Company exchanged 800,143 common shares for monies loaned by an affiliate of CDI and the Company recognized a loss of $71,000.
 
In June 2001, the Company issued 195,000 common shares in exchange of an advance by unaffiliated individual and the Company recognized a loss of $17,000.
 
In June 2001, the Company granted as compensation for services, stock options to purchase 300,000 shares of the Company’s common stock at an exercise price of $.12 per share.

 
3

 
 
In September 2001, a company controlled by the Company’s majority stockholder, exchanged for 1,500,000 shares of the Company’s common stock (valued at $180,000) agreed to fund substantially all current sales, marketing and administrative expenses for one year.  This was being amortized through September 30, 2002 and the unamortized balance was included as a component of the capital deficiency.
 
In September 2001, 100,000 common shares were issued in exchange for services rendered valued at $12,000.
 
On September 26, 2001, Photo America, Inc. merged with Concept Digital, Inc. (“CDI”) a publicly traded development stage enterprise that had 3,032,978 shares of common stock outstanding prior to the merger.  Pursuant to the merger agreement, the Company acquired all of the outstanding common stock of Photo America, Inc. in exchange for 36,650,403 shares of CDI common stock.  The merger has been accounted for as a recapitalization by Photo America, Inc.  The equity accounts of PAI have been restated to give effect to the CDI shares issued by the PAI shareholder.
 
In September 2001, the Company granted as compensation for services, stock options to purchase 300,000 shares of the Company’s common stock at an exercise price of $.12 per share.
 
On May 10, 2007, the Company entered into a promissory note agreement totaling $35,000, which bears interest at 12%, per annum on demand from its founder, Joe Douek.

The loan payable of $383,000 which bears interest at 8.5%, per annum is due to Elliot Sasho, an individual who is a shareholder of the Company.  The note is due and payable within two years.  In addition, 795,000 shares of the Company’s common stock were issued as additional consideration in making the loan.  These shares were valued at $79, the value of the most recent sale of the Company’s common stock, and were expensed as incurred as additional interest on the note.  As of June 30, 2007, the balance on the loan is $383,000.
 
The Company continues to experience cash flow shortages and anticipates this continuing through the foreseeable future.  Management believes that additional funding will be necessary in order for it to continue as a going concern.  The Company is investigating several forms of private debt and/or equity financing, although there can be no assurances that the Company will be successful in procuring such financing or that it will be available on terms acceptable to the Company.
 
Item 3.      Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to certain market risks, including changes in interest rates and currency exchange rates.  The Company does not undertake any specific actions to limit those exposures
 
Item 4.    Controls and Procedures.
 
Evaluation of disclosure controls and procedures
 
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal controls

There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the quarter ended June 30, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 
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PART IIOTHER INFORMATION
 
Item 1.         Legal Proceedings
 
None.
 
Item 2.         Unregistered Sales 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
 
(a)      Exhibits

   31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002

   32.1 Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002

 
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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
Concept Digital, Inc.
 
       
Date: November 20, 2009
By:  
/s/ Joseph Douek
 
   
Joseph Douek
 
   
Chief Executive Officer
 
       
       
Date: November 20, 2009
By:  
/s/ Joseph Douek
 
   
Joseph Douek
 
   
Chief Financial Officer
 
       

 
 
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