Management believes that its facilities are adequate for its present business.

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ITEM 3.

LEGAL PROCEEDINGS.

From time to time, the Company may become party to litigation or other legal proceedings that the Company considers to be a part of the ordinary course of the business.  There are no material legal proceedings to report, except as follows:

(a)

 In January 2004, the Company was advised that the parties with whom the Company negotiated a settlement and disposition of its former turf installation business are dissatisfied with the results of the settlement transaction and have not returned to the Company, for cancellation, the 4,000 restricted shares of the Company's common stock, adjusted for the stock split, as required by the settlement agreement, notwithstanding the performance by the Company of the obligations imposed on the Company by the settlement agreement.

Accordingly, the Company does not believe, based on its assessment, that it is necessary to make any provisions in its financial statements for any possible adverse result. As of December 31, 2009 the shares have not been returned to the Company.

(b)  

On July 28, 2007, the Company was named as a defendant is a lawsuit filed in the United States District Court for the Eastern District of Pennsylvania, Philadelphia Division: The Granite Companies v. City Capital Corporation.  The Granite Companies and the Company entered into an agreement to purchase the membership interests of The Granite Companies and continue to operate the entity, together with an agreement to honor certain outstanding liabilities. After the agreement was signed, the Company commenced its due diligence and became aware that the statements and representations made by representatives of The Granite Companies were materially false.  As a result, immediately thereafter, the Company, through counsel, sent a letter terminating the agreement and requesting the return of certain funds: The Company had previously provided The Granite Companies a $150,000 deposit and paid approximately $30,000 for the continued operations of The Granite Companies

The complaint alleges that the Company breached its contractual obligation and also should be found liable for fraud relating to the transaction. $1,238,719, together with punitive damages and any other relief deemed appropriate by the Court are being sought.  The Company has filed a motion to dismiss the complaint and several other pre-discovery motions have been filed.

There was mediation before a United States District Court Judge on March 19, 2009.  The case did not settle.

Management believes the Company has meritorious claims and defenses to the claims of The Granite Companies and ultimately will prevail on the merits.  However, this matter remains in the early stages of litigation and there can be no assurance as to the outcome of the lawsuit.  Litigation is subject to inherent uncertainties, and unfavorable rulings could occur.  Were unfavorable rulings to occur, there exists the possibility of a material adverse impact of money damages on the Company's financial condition, results of operations, or liquidity of the period in which the ruling occurs, or future periods.

                (c)     In the fall of 2009, the Company was advised that a complaint had been prepared in State Court in Minnesota seeking approximately $160,000.  This lawsuit allegedly stems from monies owed to the former insiders of the Company.  The monies allegedly owed were then assigned to a company named Deal Flow, which is owned by one of the former insiders of the Company.  The underlying complaint also sought to unwind a transfer from the Company to AmorCorp for

16

approximately $1,900,000.  The CEO of the Company was also named as a Defendant in the case in his individual capacity.  The Company, the CEO and AmoroCorp filed a motion to dismiss the complaint on a number of bases.  The CEO and AmoroCorp sought to dismiss the complaint, contending the Court lack personal jurisdiction over them.  The Company sought to dismiss the Complaint, contending that it failed to state a claim upon which relief could be granted.  In late January 2010, a hearing was conducted.  At the conclusion of the hearing the Court granted the Motion.  The Court found that it does not have personal jurisdiction over either the CEO or AmoroCorp.  Rather than dismissing the case against them, the case has been stayed, in case Deal Flow is able to present facts at some later time showing that the Court has personal jurisdiction.  With respect to the Company, the Court has directed Deal Flow to file an amended complaint.  On or about April 1, 2010, Deal Flow filed an amended complaint.  However, rather than complying with the Court’s Order, the amended complaint again raised claims against both AmoroCorp and the CEO of the Company.  The Company has filed another motion to dismiss, which is scheduled to be heard in June, 2010.  

The Company denies any liability and is vigorously disputing the claims.  The Company will take all appropriate action with respect to this claim, including investigating whether it has any claims against the former insiders for monies owed to the Company.

(d)  

In early 2010, a subsidiary of the Company, City Juice, which had operated a store in Kansas City, Missouri, was sued by the landlord for possession for failing to make some payments under its lease.  The parties settled the case and City Juice vacated that location.  

(e)

On December 8, 2008, the Company was named in an action entitled Escalada v. City Capital Corporation, et. al., filed in the United States District Court for the District of Kansas.  This action purports to be a case where the Company, among other defendants, is accused of violating the federal securities laws, together with the securities laws of the State of Kansas. These alleged violations occurred when Mr. Taylor was apparently as a representative of a company or companies other than the Company. The allegations indicate that Mr. Taylor induced the Escaladas to enter into a series of investment transactions, which resulted in some undefined loss.  It is unclear as to the involvement, if any, of the Company. The Escaladas allege that their damage is approximately $150,000; it is unclear how that amount has been calculated.

 On February 20,2009, all of the defendants, including the Company, filed a Motion for Change of Venue, to Dismiss, or in the Alternative, For a More Definite Statement. On March 15,2009, the Escaladas filed their response to the Motion. The defendants, including the Company, have filed a reply.  The Company was dismissed from this action on April 15, 2009.

ITEM 4.

[REMOVED AND RESERVED]

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PART II.

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information.

The Company’s common stock trades on the Pink Sheets under the symbol “CTCC”.  

The range of closing prices shown below is as reported by this market.  The quotations shown reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.

Per Share Common Stock Close Prices by Quarter

For the Fiscal Year Ended on December 31, 2009

Per Share Common Stock Close Prices by Quarter

For the Fiscal Year Ended on December 31, 2008

Holders of Common Equity.

As of June 4, 2010, the Company had approximately 847 stockholders of record of its common stock.  The number of registered stockholders excludes any estimate of the number of beneficial owners of common shares held in street name.

Dividend Information.

The Company has not declared or paid a cash dividend to stockholders since it was organized.  The board of directors presently intends to retain any earnings to finance the operations and does not expect to authorize cash dividends in the foreseeable future.  Any payment of cash dividends in the future will depend upon the Company’s earnings, capital requirements and other factors.

Equity Securities Sold Without Registration.

There were no sales of unregistered (restricted) securities during the year ended December 31, 2009 that have not previously been reported on a Form 8-K or 10-Q.

Issuer Purchases of Equity Securities.

None.

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ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

The following management’s discussion and analysis of financial condition and results of operations is based upon, and should be read in conjunction with, the Company’s audited financial statements and related notes included elsewhere in this Form 10-K, which have been prepared in accordance with accounting principles generally accepted in the United States.

Overview.

The Company is a socially conscious professional management and diversified holding company engaged in leveraging investments, holdings and other assets to build value for investors and shareholders. The Company is committed to creating positive change and self-sufficiency through “Socially-Conscious Investing That Empowers Communities.” These initiatives range from development and production of biofuels, to affordable homes for working-class families, to funding and acquisition of local businesses that support community jobs. The Company acquires and revitalizes distressed investment opportunities in multiple industry segments, creating potentially long-term returns for the Company.

The Company makes strategic investments and acquisitions that are intended to yield a positive return on investment.  The Company’s intent is to acquire assets at a significant discount to market, and then rebuild them for sale or cash flow.  These investments will also serve the communities the Company operates in by creating economic opportunities for underserved populations.  The Company maintains stakes in industries such as technology, biofuels, commercial laundry, and retail services.  New additions to the Company represent the Company’s strong devotion to educating and investing in future entrepreneurs.  

Recent Developments.

The Company began marketing community development programs nationwide via touring by the current CEO, Ephren Taylor. The Company has developed a presentation featured at www.WealthTourLive.com that has toured the nation domestically as well as internationally.  Over 30,000 people have experienced this economic empowerment presentation.  The presentation allows for positive Company exposure, as well as acquiring new partner clients. It also expanded the Internet marketing partnerships and Adword purchases, increasing lead flow.  Interested leads may enroll directly on various partner sites like www.IRACashFlow.com, or through the corporate website www.CityCapCorp.com.  These activities are expected to significantly increase the existing credit-investor client base, which directly affects the potential volume of properties the Company can develop.

In the area of biofuel, the Company’s subsidiary Goshen has partnered with universities to create and develop curriculum around biodiesel production.  In 2008 the Company partnered with Mississippi Valley State University to develop a commercial biofuel production facility.  The venture is still in the development and testing stage. The Company intends to have a commercial facility in production in 2010.  

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The model of partnering with higher learning educational institutions is something the Company will build on in 2010. The Company is actively seeking partnerships with an additional five institutions by the end of 2010. The Company sees this model as bringing a new line of green jobs to rural and urban communities, as well as educating future generations of industries to come.

The Company will use this acquisition to allow it to leverage its capital to mentor and foster an environment not only for aspiring entrepreneurs, but also to serve as an incubator for developing companies and future additions to the companies diversified portfolio in 2010.

During the first quarter of 2009 the Company increased its leveraged investments and holdings by creating four limited liability companies: City Juice Systems KS, LLC (“City Juice”), a Kansas limited liability company that engages in purchasing companies in the food and beverage arena; City Capital Petroleum, LLC (“City Petroleum”), a New York limited liability company that engages in purchasing companies in the oil industry; City Laundry Services, LLC (“City Laundry”), a Missouri limited liability company that engages in purchasing companies in the laundry arena; and City Beauty Systems, LLC (“City Beauty”), a Missouri limited liability company that engages in the health and beauty arena.  Each subsidiary is responsible for acquiring like companies with plans of operations that are similar to that of the acquiring subsidiary at a significant discount to market.  The Company intends to have the subsidiaries assist their acquired companies in turning a profit.  Subsequent to the turnaround, the Company will either sell or retain the acquisitions for cash flow as it sees fit.  

In 2009, the Company purchased two juice bar locations under City Juice, located in the Kansas area.  Both subsidiaries of City Juice are available for sale as the normal course of business of City Capital is the development, growth and sale of operating companies.  

The Company is the managing partner of City Laundry, which is intended to be jointly owned by several of the other partner entities. The Company’s laundromats will operate under the name City Laundry, while the dry cleaners will operate as Express Cleaners.  In February 2009 the Company completed the first acquisition for this commercial laundry subsidiary, the acquisition of a 2,000 sq. ft./30-machine laundromat with annual revenues of approximately $108,000. Additionally, the Company purchased their second commercial laundry subsidiary located in the Kansas City area in March 2009.  In April 2009, the Company purchased a third drop-off location in Kansas. Two subsidiaries of City Laundry have been sold in the fourth quarter of 2009 and the third is available for sale as the normal course of business of City Capital is the development, growth and sale of operating companies.

City Laundry is one more example of how, in this economic environment, the Company finds opportunities through its socially conscious model.  Reviving and refurbishing failing and successful neighborhood businesses and providing employment for local residents fulfils the Company's socially conscious mission.  Even though this first acquisition is a small operation, the cleaners industry is extremely suitable for the Company’s model.  It is a fragmented industry, yet it has a proven history of weathering, even thriving in economic downturns.

According to the Coin Laundry Association, there are over 35,000 coin laundries alone in the U.S.  “During periods of recession, when home ownership decreases, the self-service laundry market expands as more people are unable to afford to repair, replace or purchase new washers and dryers, or as they move to apartment housing with inadequate or nonexistent laundry facilities. The market size grows proportionately to the increase in population… people always need to wash clothes.” (source: http://coinlaundry.org)

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According to the U.S. Bureau of Labor, total gross revenues for the industry are nearly $20 billion annually (source: 2007 U.S. Bureau of Labor).  That translates into reliable cash flow for the Company and a strong, stable job source within the communities the Company operates.  These economic and data factors are what prompted Company management to make such an addition to the Company.

In April 2009, the Company’s subsidiary, City Petroleum purchased a gas station location in New York.  

In the first quarter of 2009, the Company acquired a 2.18% equity stake and a management role in NYC Liquidation Group, LLC.  This firm acquired a chain of EBay drop-off retail stores in the New York City area.  In July 2009, the Company closed and discontinued the two EBay drop-off locations due to increased expenses and drop in revenues.  The Company has been released from one rental space, and the other is in negotiations to be released.  

In November 2009, the Company created Clean Sweeps Holdings (“Clean Sweeps”) which owns and operates technology centers in Texas and North Carolina.  Clean Sweeps was formed to leverage the power of electronic gaming in order to help community organizations raise critical operation funding. Our concept of partnering entertainment gaming, with sweepstakes functionality is allowing the creation of strategic partnerships between retail merchants and charitable organizations.

Results of Operations for the Year ended December 31, 2009 Compared to the year ended December 31, 2008.

(a)

Revenue and Cost of Revenue.

     (1)  

     Mr. Taylor was appointed Chief Executive Officer and a director on May 5, 2006.

(2)

Mr. Brantley resigned as Executive Vice President and a director effective January 1, 2010.

(3)

Mr. McCarthy resigned as Director effective June 1, 2010.

(4)

Ms. Connor was appointed Chief Operating Officer on November 19, 2009, and Director of the Company effective June 4, 2010.

Executive Officer Contracts.

Ephren Taylor.

On January 1, 2008, the Company (“Employer”) entered into a ten-year employment agreement (“Agreement) with Mr. Taylor in his capacity as Chief Executive Officer.  Under the Agreement, Mr. Taylor agrees that he will devote his entire business time, attention, skill, and energy exclusively to the business of the Company, will use his best efforts to promote the success of the Company’s business, and will cooperate fully in the advancement of the best interests of the Company.  However, nothing in the Agreement will prevent Mr. Taylor from engaging in additional activities in connection with personal investments and community affairs that are not inconsistent with his duties under this Agreement.

Mr. Taylor is to be paid an annual salary of $500,000, which will be payable in equal periodic installments according to the Employer's customary payroll practices, but no less frequently than monthly.  Mr. Taylor will also be permitted to participate in such group pension, profit sharing, bonus, life insurance, hospitalization, major medical, and other group employee benefit plans that may be in effect from time to time.

As additional compensation for the services to be rendered pursuant to this Agreement, Mr. Taylor will also be paid the following bonus compensation:

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(a) An amount equal to 1% of the net operating income received by the Company during each fiscal year of the employment period. This bonus payment it to be paid within thirty days of the independent certified public accountant's completion of the annual audit for the Company at the close of each fiscal year;

(b) Annual issuance of common stock of the Company with a fair market value of $500,000; and

(c) An amount equal to 1% of any and all funds raised and received by the Company, solely based upon Mr. Taylor’s fundraising and marketing efforts, whether such funds are paid to him in the form of debt or equity. This bonus payment is to be calculated monthly and paid in quarterly disbursements, with the first payment on April 1, 2007, and each additional payment made on the first day of each quarter thereafter throughout the employment period of this Agreement.

The Employer may terminate this Agreement with cause upon delivery of written notice to Mr. Taylor stating the cause of termination. For purposes of this Agreement, “cause” shall mean his criminal indictment for or confession, plea of nolo contendere, or conviction of a crime involving theft, fraud or embezzlement against him. Upon the Company’s delivery of said notice, Mr. Taylor’s employment period would automatically terminate.

Upon the termination of the employment period, the bonus compensation, and any and all other rights under this Agreement or otherwise would also automatically terminate upon delivery of written notice of termination. Notwithstanding the above, within thirty days of the receipt of notice of termination for cause, the Company would pay to Mr. Taylor an aggregate amount equal to 50% of the unpaid salary he would have earned upon completion of the employment period.  In the event Company terminates the employment period without cause, the Company would pay to Mr. Taylor an aggregate amount equal to 100% of the unpaid salary he would have earned upon completion of the employment period.  Mr. Taylor has the right under this Agreement to terminate this Agreement at any time upon thirty days prior written notice to the Company.

Other Compensation.

There are no other plans that provide for the payment of retirement benefits, or benefits that will be paid primarily following retirement, including but not limited to tax-qualified defined benefit plans, supplemental executive retirement plans, tax-qualified defined contribution plans and nonqualified defined contribution plans.  In addition, there are no other contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payment(s) to a named executive officer at, following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of the Company or a change in the named executive officer’s responsibilities following a change in control, with respect to each named executive officer.

Wendy J. Connor.

On November 19, 2009, the Company (“Employer”) entered into a three-year employment agreement (“Agreement”) with Ms. Connor in her capacity as Chief Operating Officer.  Under the Agreement, Ms. Connor agrees that she will devote her entire business time, attention, skill, and energy exclusively to the business of the Company, will use her best efforts to promote the success of the Company’s business, and will cooperate fully in the advancement of the best interests of the Company.  However, nothing in the Agreement will prevent Ms. Connor from engaging in additional activities in

36

connection with personal investments and community affairs that are not inconsistent with her duties under this Agreement.

Ms. Connor is to be paid an annual salary of $200,000, which will be payable in equal periodic installments according to the Employer's customary payroll practices, but no less frequently than monthly.  Ms. Connor will also be permitted to participate in such group pension, profit sharing, bonus, life insurance, hospitalization, major medical, and other group employee benefit plans that may be in effect from time to time.

The Employer may terminate this agreement with cause upon delivery of written notice to Ms. Connor stating the cause of termination. For purposes of the Agreement, “cause” shall mean her criminal indictment for or confession, plea of nolo contendere, or conviction of a crime involving theft, fraud or embezzlement against her. Upon the Company’s delivery of said notice, Ms. Connor’s employment period would automatically terminate.

Upon the termination of the employment period, any and all rights under the Agreement or otherwise would also automatically terminate upon delivery of written notice of termination. In the event Company terminates the employment period without cause, the Company would pay to Ms. Connor a severance allowance of three months. Ms. Connor has the right under this Agreement to terminate this agreement at any time upon thirty days prior written notice to the Company.  In the event that Ms. Connor terminates the Agreement, she may be required to perform her duties and will be paid the regular salary to the date of termination but shall not receive severance allowance.  

Other Compensation.

There are no other plans that provide for the payment of retirement benefits, or benefits that will be paid primarily following retirement, including but not limited to tax-qualified defined benefit plans, supplemental executive retirement plans, tax-qualified defined contribution plans and nonqualified defined contribution plans.  In addition, there are no other contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payment(s) to a named executive officer at, following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of the Company or a change in the named executive officer’s responsibilities following a change in control, with respect to each named executive officer.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS

Beneficial Ownership Table.

The following table sets forth information regarding the beneficial ownership of shares of the Company’s common stock as of June 10, 2010 (95,999,957 issued and outstanding) by (i) all stockholders known to the Company to be beneficial owners of more than 5% of the outstanding common stock; (ii) each director and executive officer; and (iii) all officers and directors of the Company as a group.  Each person has sole voting power and sole dispositive power as to all of the shares shown as beneficially owned by him

37

(1)

None of these security holders have the right to acquire any amount of the shares within sixty days from options, warrants, rights, conversion privilege, or similar obligations.  Applicable percentage ownership of common stock is based on 95,999,957 shares issued and outstanding on June 10, 2010 divided into the total common stock for each beneficial owner.  Beneficial ownership is determined in accordance with the rules and regulations of the SEC.  In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or convertible or exchangeable into such shares of common stock held by that person that are currently exercisable, or exercisable within 60 days, are included.

(2)

Mr. Brantley resigned as Executive Vice President and Director effective January 1, 2010.

(3)

Mr. McCarthy resigned as Director effective June 1, 2010.

(4)

Ms. Connor was appointed Chief Operating Officer on November 19, 2009, and Director of the Company effective June 4, 2010.

Securities Authorized for Issuance under Equity Compensation Plans.

The Company has adopted two equity compensation plans and amended as one, neither of which has been approved by the Company’s shareholders:

(a)

Employee Stock Incentive Plan.

On March 5, 2002, the Company adopted an Employee Stock Incentive Plan (this plan was amended on November 20, 2002.  This plan is intended to allow designated officers, employees, directors and outside consultants of the Company to certain options to purchase Company common stock.  The

38

purpose of this plan is to provide these persons with equity-based compensation incentives to make significant and extraordinary contributions to the long-term performance and growth of the Company, and to attract and retain employees.  All 20,000,000 shares of common stock authorized under this plan have been registered under a Form S-8’s filed with the SEC.  The options are exercisable at whatever price is established by the board of directors, in its sole discretion, on the date of the grant.  No options have been granted under this plan.  These shares have not been deregistered with the SEC.

(b)

Non-Employee Directors and Consultants Retainer Stock Plan.

On March 5, 2001, the Company adopted a Non-Employee Directors and Consultants Retainer Stock Plan (Amendment No. 4 was adopted on March 29, 2007).  The purposes of the plan are to enable the Company to promote the interests of the Company by attracting and retaining non-employee directors and consultants capable of furthering the business of the Company and by aligning their economic interests more closely with those of the Company’s shareholders, by paying their retainer or fees in the form of shares of common stock.  All 20,000,000 shares of common stock authorized under this plan have been registered under the last Form S-8 filed with the SEC.  As of December 31, 2009, there were 927,021 shares issued and 17,534,863 shares remaining to be issued under the March 29, 2007 amended plan.  

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ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Certain Relationships and Related Transactions.

None.

Director Independence

Mr. McCarthy is independent as defined under the Nasdaq Marketplace Rules.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees.

The aggregate fees billed for professional services rendered the Company’s principal accountants for the audit of the Company’s financial statements, for the review of the financial statements included in its annual report on Form 10-K, and for other services normally provided in connection with statutory filings were $24,750 and $32,900 for the years ended December 31, 2009 and 2008, respectively.

Audit-Related Fees.

The Company did not incur any audited related fees and services not included in Audit Fees above for the years ended December 31, 2009 or 2008.

Tax Fees.

The fee billed for professional services rendered by the Company’s principal accountants for the preparation of its federal tax return was $5,318 and $5,165 for the years ended December 31, 2009 and 2008, respectively.

All Other Fees.

The Company did not incur any other fees and services not included above for the years ended December 31, 2009 or 2008.

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following documents are being filed as a part of this report on Form 10-K:

(a)

Audited financial statements as of and for the year ended December 31, 2009, and for the year ended December 31, 2008; and

(b)

Those exhibits required by Item 601 of Regulation S-K (included or incorporated by reference in this document are set forth in the Exhibit Index).

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.                    

City Capital Corporation

Dated: June 15, 2010

By: /s/  Ephren W. Taylor II    

Ephren W. Taylor II,

Chief Executive Officer (principal financial and accounting officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009

DECEMBER 31, 2008

CONTENTS

42

HAROLD Y. SPECTOR, CPA

             SPECTOR & ASSOCIATES, LLP

        70 SOUTH LAKE AVENUE

STEVEN M. SPECTOR, CPA

           Certified Public Accountants

     SUITE  630

                           (888) 584-5577

        PASADENA, CA 91101

                     FAX  (626) 584-6447

                                                                                                                            admin@swdcpa.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of City Capital Corporation

We have audited the accompanying consolidated balance sheets of City Capital Corporation as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial positions of City Capital Corporation as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company's ability to continue in the normal course of business is dependent upon the success of future operations. The Company has recurring losses, substantial accumulated deficit and negative cash flows from operations. Management's plans regarding these matters are also described in Note 2. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

See accompanying notes to these consolidated financial statements.

44

CITY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

See accompanying notes to these consolidated financial statements.

45

CITY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

See accompanying notes to these consolidated financial statements.

46

CITY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT

(continued)

See accompanying notes to these consolidated financial statements.

47

CITY CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

[Continued]

48

See accompanying notes to these consolidated financial statements

49

CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE 1:  HISTORY OF OPERATIONS

Basis of Presentation and Organization.

City Capital Corporation (“Company”) was incorporated on July 24, 1984, in Nevada as Diversified Ventures, Ltd.  From 1984 through November 3, 2003 the Company went through various name changes and business ventures.  On November 3, 2003 the Company changed its name from Justwebit.com, Inc. to Synthetic Turf Corporation, to reflect the change in core business that was anticipated at the time.  On December 4, 2006, the Company changed its name to City Capital Corporation.  Effective /January 3, 2007, the Company withdrew its status as a business development company with the Securities and Exchange Commission.  Currently City Capital Corporation manages diverse assets and holdings including real estate developments, self-enrichment companies, and the buying, selling and drilling of oil and gas properties. As the Company is in the initial stages of many of its projects in the real estate, self-enrichment, and oil and gas industries, all segments of business are important in the overall make up of the Company. These financial statements have been presented in accordance with the rules governing a smaller reporting company for both the periods ended December 31, 2009 and December 31, 2008.

Subsidiaries.

Goshen Energy, Inc. (“Goshen”), a Nevada corporation organized on August 10, 2006, engages in the buying, selling, and drilling of oil and gas.  The Company is also actively engaged in the exploration of biofuel development and production opportunities domestically and globally through available business opportunities.

City Laundry Services, LLC (“City Laundry”), a Missouri limited liability company, organized on January 22, 2009, engages in purchasing businesses in the cleaning arena.  City Laundry purchased 100% of the assets in 39^th Street Laundromat (“39^th Street”), a Missouri company, on February 6, 2009, and 100% of the assets in Blue Ridge Cleaners (“Blue Ridge”), a Missouri company, on March 23, 2009.  On April 24, 2009 the Company purchased 100% of the assets of an express laundry location (“Express Cleaners”) in Kansas.  In November 2009, the Company sold 39^th Street and Blue Ridge.  

City Juice Systems KS, LLC (“City Juice”), a Kansas limited liability company, organized on February 16, 2009, engages in purchasing businesses in the food and beverage arena.  On February 20, 2009, City Juice purchased 100% of the assets in L.A. Juice Company, Inc. (“L.A. Juice”), a Kansas corporation, and 100% of the assets of Blends 101, LLC (“L.A. Juice 2”), a Kansas limited liability company.  L.A. Juice 2 closed in August 2009, and L.A. Juice is available for sale as the normal course of business of City Capital is the development, growth and sale of operating companies.  In March 2010, the Company determined that L.A. Juice could not be successfully sold and closed the location.

City Beauty Systems, LLC (“City Beauty”), a Missouri limited liability company, organized on March 31, 2009, engages in purchasing businesses in the health and beauty arena.  The Company is exploring new revenue opportunities and markets for this subsidiary.

City Capital Petroleum, LLC (“City Petroleum”), a New York limited liability company, was originally organized in Missouri on January 26, 2009, and was dissolved and re-organized in New York on April 2, 2009.  City Petroleum engages in purchasing businesses in the oil and gas industry.  On April 3, 2009, City Petroleum purchased 100% of the assets of a gas station and convenience store located in Brookhaven, New York (“O.K. Petroleum”).

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Clean Sweeps Holdings Group, LLC (“Clean Sweeps”), a North Carolina limited liability company, organized on November 13, 2009, engages in opening and purchasing businesses that operate technology centers.  This subsidiary currently has one location in Texas which opened in October 2009.  On November 9, 2009, Clean Sweeps purchased 100% of the assets of Main Street Sweepstakes (“Main Street”) located in Rolesville, North Carolina from an individual. On December 28, 2009, Clean Sweeps purchased 100% of the assets of Walnut Cove Sweepstakes (“Walnut Cove”) located in Walnut Cove, North Carolina from an individual and Coffee & Calls (“Coffee & Calls”) located in Kernersville, North Carolina.  In the first quarter of 2010, the Company entered into an agreement to sell Walnut Cove and Coffee & Calls. As of the date of this filing the agreement has not yet been finalized.  

Nitty Gritty, LLC (“Nitty Gritty”), a Missouri limited liability company, organized on October 6, 2008, provides a subscription based online forum, social network, and training network where members learn "All Things Internet Marketing”.  This subsidiary has been reclassified as available for sale in connection with the Company’s commitment to sell the subsidiary.

A 33% interest and managing member in The Millionaire Lifestyle Group, LLC ("Millionaire"), a Missouri limited liability company, organized August 21, 2008, a web based initiative that provides self-help mentoring and training seminars.  This subsidiary was fully impaired due to the cessation of operations in December 2009.

A 2.18% interest and managing member in NYC Liquidation Group, LLC (“NYC Liquidation Group”), a New York limited liability company, organized January 5, 2009.  On January 16, 2009, NYC Liquidation Group purchased 100% of the assets in Ichiban Ventures, Inc. (“Ichiban”), a New York corporation that owns two retail EBay drop-off locations.  The two locations were closed and the EBay stores discontinued in July 2009.  

A 40% interest in The Male Room, LLC (“The Male Room”), a New York limited liability company, organized on March 9, 2005, that provides salon services to males.   The subsidiary was fully impaired due to its closing in December 2009.

A 20% interest in St. Clair Superior Apartment, Inc. (“St. Clair Superior”), an Ohio corporation organized February 23, 2000, which operates an apartment complex.

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

NOTE 2:  GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The operating revenues generated during the years ended December 31, 2009 and 2008 are insufficient to fund our operations.  The Company has funded its operations primarily through the issuance of debt and equity. The Company has experienced reoccurring net losses, had a net loss of $6,316,328 for the year ended December 31, 2009, and $2,602,457 for the year ended December 31, 2008, and a working capital deficiency of $7,186,142 at December 31, 2009. Accordingly, the Company’s ability to accomplish its business strategy and to ultimately achieve profitable operations is dependent upon its ability to obtain additional debt or equity financing. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE 3:  SIGNIFICANT ACCOUNTING POLICIES

Estimates.

The preparation of these financial statements in conformity with generally accepted accounting principals requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an on-going basis, the Company evaluates these estimates, including those related to revenue recognition and concentration of credit risk.  The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

Cash and Equivalents.

For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2009 and 2008.

Concentrations.

The Company maintains cash balances at highly rated financial institutions throughout the United States. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of December 31, 2009, the Company had no bank accounts in excess of $250,000.  The Company has not experienced any losses in such account.

Accounts Receivable.

Accounts receivable relate to the Company’s subsidiary, O.K. Petroleum, and are evaluated each accounting period for collectability.  The Company believes that its credit risk for accounts receivable is limited because of its large number of customers and the relatively small account balances for most of its customers.

As of December 31, 2008, accounts receivable related to rental income of the Company’s subsidiary, St. Clair Superior. Due to the sale of majority of the ownership rights of St. Clair Superior on January 30, 2009, accounts receivable related to rental income has been presented in assets held for sale as of December 31, 2008.

Inventory - Homes for Sale.

Finished redevelopment house inventories are stated at the lower of accumulated cost or net realizable value. Inventories under development or held for development are stated at accumulated cost, unless certain facts indicate such cost would not be recovered from the cash flows generated by future disposition. In this instance, such inventories are measured at fair value.

Sold units are expensed on a specific identification basis.  Under the specific identification basis, cost of sales includes the rehabilitation cost of the home, closing costs and commissions.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Inventory – Food and Beverage.

Inventory – Food and Beverage is stated at the lower of cost (on a first-in, first-out basis) or market and consist primarily of restaurant food, paper, equipment and supplies.  All food and beverage inventory has been reclassified as assets held for sale in connection with the Company’s commitment to sell L.A. Juice as of December 31, 2009.

Inventory – Gas and Oil.

Inventory – Gas and Oil is stated at the lower of cost (on a last-in, first-out basis) or market and consists primarily of gasoline.

Inventory – Technology.

Inventory – Technology is stated at the lower of cost (on a first-in, first-out basis) or market and consists primarily of computer terminals at the technology café centers.  The inventory for Walnut Cove and Coffee & Calls has been reclassified as assets held for sale in connection with the Company’s commitment to sell the subsidiary as of December 31, 2009.

Property, Equipment and Buildings.

Property and equipment is stated at cost and is depreciated over the estimated useful lives of the related assets using the straight-line method. Estimated service lives of property and a building is 27.5 years. All the assets of L.A. Juice, Express Laundry, Walnut Cove, and Nitty Gritty have been reclassified as assets held for sale in connection with the Company’s commitment to sell the subsidiaries as of December 31, 2009. Due to the sale of majority of the Company’s ownership rights in St. Clair Superior on January 30, 2009, the Company has presented this asset in assets held for sale as of December 31, 2008.

Goodwill and Intangibles.

Goodwill represents the excess of purchase price over tangible and other intangible assets acquired less liabilities assumed arising from business acquisitions. The remaining useful life of the intangible asset is evaluated at least annually for impairment.  As of December 31, 2009 the goodwill and intangibles of L.A. Juice, and Express Laundry have been reclassified as assets held for sale in connection with the Company’s commitment to sell the subsidiaries.  The Company has also expensed to discontinued operations the entire goodwill and intangible balance of Ichiban in connection with the discontinuation of the EBay store locations.  

Due to the sale of a majority of the Company’s ownership rights in St. Clair Superior on January 30, 2009, the Company presented this asset as held for sale as of December 31, 2008.

Impairment of Long-Lived Assets.

The Company accounts for long-lived assets in accordance with the Property, Plant, and Equipment Topic of the Financial Accounting Standards Board ASC, (“FASB ASC”), which addresses financial accounting and reporting for the impairment and disposition of long-lived assets. The Company evaluates the recoverability of long-lived assets, other than indefinite life intangible assets, for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Events and circumstances that may indicate that an asset is impaired include significant decreases in the market value of an asset, significant underperformance relative to expected historical or projected future results of operations, a change in the extent or manner in which an asset is used, significant declines in the Company’s stock price for a sustained period, shifts in technology, loss of key management or personnel, changes in the Company’s operating model or strategy and competitive forces. As of December 31, 2009 the long lived assets for all City Laundry and City Juice subsidiaries, L.A Juice, Express Laundry, Walnut Cove, and Coffee & Calls, have been reclassified as assets held for sale in connection with the Company’s commitment to sell the entities.  The Company has also expensed to discontinued operations all of the long-lived assets of Ichiban and L.A. Juice 2 in connection with its closure in 2009

Fair Value of Financial Instruments.

The carrying amounts for the Company’s cash, accounts payable, accrued liabilities and notes payable approximate fair value due to the short-term maturity of these instruments.

Derivatives.

The Company occasionally issues financial instruments that contain an embedded instrument, such as a conversion feature. At inception, the Company assesses whether the economic characteristics of the embedded derivative instrument are clearly and closely related to the economic characteristics of the financial instrument (host contract), whether the financial instrument that embodies both the embedded derivative instrument and the host contract is currently measured at fair value with changes in fair value reported in earnings, and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument.  

If the embedded derivative instrument is determined not to be clearly and closely related to the host contract, is not currently measured at fair value with changes in fair value reported in earnings, and would qualify as a derivative instrument, the embedded derivative instrument is recorded apart from the host contract and carried at fair value with changes recorded in current-period earnings.  On December 31, 2009, the Company determined that the conversion feature of its convertible debentures no longer qualified for this treatment as the conversion ratio is fixed in nature, and reclassified the derivative liability of $262,486 to additional paid-in capital.  The change in the fair value of debt derivative as reported in the Company’s Consolidated Statements of Operations was $157,530 and ($45,313) as of December 31, 2009 and 2008, respectively.  

Debt Modification.

If at any time the Company is not able to pay back outstanding debt upon the maturity date, the Company actively works with the note holder to modify the terms of the agreement.  All modifications to debt are evaluated for debt extinguishment as required by the Debt Topic of the FASB ASC.

The Company reported $0 and $879,632 as gain on extinguishment of debt as of December 31, 2009 and 2008.

Stock Based Compensation.

Stock based compensation is accounted for using the Equity-Based Payments to Non-Employee Topic of the FASB ASC, which establishes standards for the accounting for transactions in which an entity

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. We determine the value of stock issued at the date of grant. We also determine at the date of grant the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable.

Revenue Recognition.

Revenue for the Company is generated from the commissions earned through the credit-investor relations program.  The Company assists buyers in finding properties for purchase from partnering lenders. Revenue from commissions is recognized and earned upon the closing of escrow, at which time the Company receives a percentage of the proceeds.

Home sale revenue is recognized at the time of the closing of the sale, when title to and possession of the property are transferred to the buyer.  Buyers are required to obtain independent financing for purchase of the Company’s real estate properties.

Revenues from the self-enrichment, food and beverage, laundry, oil and gas, retail and technology center segments arise from the sale of merchandise and services.  We recognize revenue when the customer takes possession of the merchandise, or in the case of services, at the time the service is provided.

All revenues that are not generated through real estate renovation and sales, or sale of merchandise and services are classified as other revenue and recognized when the earning process is complete.  The earning process is complete when there is existence of an arrangement, delivery has occurred or services rendered, the price is fixed or determinable and the collectability of the revenue is reasonable.

Rental revenue from the St. Clair Superior is recognized as earned as it becomes receivable according to the provisions of the lease. Security deposits are taken into income in accordance with the lease contract in the event of default by the tenant. As of December 31, 2008, all rental revenues have been presented as part of discontinued operations due to the sale of majority of the Company’s ownership rights on January 30, 2009.

Income Taxes.

Income taxes are provided for using the liability method of accounting in accordance with the Income Taxes Topic of the FASB ASC. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized and when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Non-Controlling Interest.

As required by the Consolidation Topic of the FASB ASC, the Company discloses non-controlling interests clearly as a portion of equity but separate from the parent’s equity. The non-controlling interest’s portion of net income must also be clearly presented on the Consolidated Statements of Operations.  Effective July 1, 2009, the Company deconsolidated Millionaire due to the lack of control

55

CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

over the entity.  We have recorded a deficit of $365,284 and $0 as a result of the Company’s non-controlling interest in NYC Liquidation Group as of December 31, 2009 and 2008.

Loss Per Share.

Net loss per share is calculated as required by the Earnings Per Share Topic of the FASB ASC.  The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted-average number of shares and dilutive potential common shares outstanding. Potentially dilutive common shares consist of employee stock options and stock issuable upon conversion of convertible debentures, and are excluded from the diluted earnings per share computation in periods where the Company has incurred a net loss.

Fair Value Accounting.

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Investment in Unconsolidated Investee.

Entities in which the Company does not have a controlling financial interest (and therefore are not consolidated) but in which the Company exerts significant influence (generally defined as owning a voting interest of 20% to 50%, or a partnership interest greater than 3%) are accounted for as required by the Investments-Equity Method and Joint Venture Topic of the FASB ASC.  As of December 31, 2009 and December 31, 2008 the Company accounts for its investments in St. Clair Superior, Millionaire, and The Male Room under the equity method of accounting and records its share of income as a component within the Consolidated Statements of Operations.  The Company fully impaired their investment in The Male Room and Millionaire as of December 31, 2009.

Reclassifications.

The revenues and expenses of Millionaire have been reclassified as discontinued operations in connection with the deconsolidation of the subsidiary on July 1, 2009, upon the Company’s determination that it no longer had control over the day to day operations.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Recent Accounting Pronouncements.

Adopted

On September 30, 2009, the Company adopted changes issued by the Financial Accounting Standards Board ("FASB") to the authoritative hierarchy of Generally Accepted Accounting Principles (“GAAP”). These changes establish the FASB Accounting Standards CodificationTM ("ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. 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. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the ASC. These changes and the ASC itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Financial Statements.

In April 2009, the FASB issued authoritative guidance for Interim Disclosures about Fair Value of Financial Instruments, which requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This guidance also requires those disclosures to be in summarized financial information at interim reporting periods. This guidance is effective for interim reporting periods ending after June 15, 2009. The Company adopted this guidance in the second quarter of 2009 and it did not have a material impact on the financial statements.

In April 2009, the FASB issued authoritative guidance for the Recognition and Presentation of Other-Than-Temporary Impairments in order to make existing guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The Company adopted this guidance in the second quarter of 2009 and it did not have a material impact on the financial statements.

In April 2009, the FASB issued authoritative guidance for Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. This guidance provides additional direction for estimating fair value in accordance with established guidance for "Fair Value Measurements," when the volume and level of activity for the asset or liability have significantly decreased. This guidance also includes direction on identifying circumstances that indicate a transaction is not orderly. This guidance is effective for interim and annual reporting periods ending after June 15, 2009. The Company adopted this guidance in the second quarter of 2009 and it did not have a material impact on the financial statements.

In June 2009, the FASB issued authoritative guidance which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This guidance applies to both interim financial statements and annual financial statements and is effective for interim or annual financial periods ending after June 15, 2009. This guidance does not have a material impact on our financial statements.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Issued

In June 2009, the FASB issued authoritative guidance for Accounting for Transfers of Financial Assets, which eliminates the concept of a "qualifying special-purpose entity," changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information reported to users of financial statements by providing greater transparency about transfers of financial assets, including securitization transactions, and an entity's continuing involvement in and exposure to the risks related to transferred financial assets. This guidance is effective for fiscal years beginning after November 15, 2009. The Company will adopt this guidance in fiscal 2010 and does not expect that the adoption will have a material impact on the consolidated financial statements.

In June 2009, the FASB issued authoritative guidance amending existing guidance. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. This guidance is effective for the first annual reporting period beginning after November 15, 2009 and for interim periods within that first annual reporting period. The Company will adopt this guidance in fiscal 2010. The Company does not expect that the adoption will have a material impact on the consolidated financial statements.

In October 2009, the FASB issued changes to revenue recognition for multiple-deliverable arrangements. These changes require separation of consideration received in such arrangements by establishing a selling price hierarchy (not the same as fair value) for determining the selling price of a deliverable, which will be based on available information in the following order: vendor-specific objective evidence, third-party evidence, or estimated selling price; eliminate the residual method of allocation and require that the consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement to each deliverable on the basis of each deliverable’s selling price; require that a vendor determine its best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a stand alone basis; and expand the disclosures related to multiple-deliverable revenue arrangements. These changes become effective on January 1, 2011. The Company has determined that the adoption of these changes will not have an impact on the consolidated financial statements, as the Company does not currently have any such arrangements with its customers.

In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. The guidance will become effective for the Company beginning January 1, 2010. The Company does not expect that the adoption will have a material impact on the consolidated financial statements.

In February 2010, the FASB issued amended guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance will be adopted for the period ended March 31, 2010. The Company does not expect that the adoption will have a material impact on the consolidated financial statements.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE 4. FAIR VALUE

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, the table below sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy.  Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

NOTE 5:  ACCOUNTS, NOTES AND OTHER RECEIVABLES

As of December 31, 2009, the Company’s oil and gas segment had accounts receivables of $26,360.  Receivables for the oil and gas segment are primarily due to the timing of receipt of cash.

As of December 31, 2009 the Company holds a note receivable from AmoroCorp with an outstanding balance of $1,635,174. The President of the Company is also the President and a majority preferred shareholder of the debtor. The Company’s President has agreed to apply any accrued unpaid officer compensation received from City Capital Corporation to this receivable at each quarter period end, at his sole discretion.

This note receivable decreased for the year ended December 31, 2009 by $289,557 due to the following components:

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

Additionally, the Company holds two notes receivable for two unrelated parties of $10,000 and $8,000.  

In December 2009, the Company entered into two new debt agreements valued at $12,200 with third parties.  Due to the funds not received until January 2010, the Company has presented this as an other receivable at December 31, 2009.  Additionally, during 2009, the Company lent to independent investors $71,000, of which the Company has allowed for $46,750.      

On September 30, 2009, the Company deconsolidated the subsidiary Millionaire Lifestyle, and concurrently impaired the receivable-related party of $37,782.  

As of December 31, 2008 the Company presented $40,000 as an other receivable in connection with a new debt agreement entered into on December 20, 2008, these funds were received in January 2009.  

NOTE 6.  INVENTORY

During 2009, the Company held two homes in the Kansas City, Missouri real estate market As of December 31, 2009, one property was sold and recognized as home sales on the Company’s Consolidated Statements of Operations.  The Company plans to sell the remaining property during 2010.

The Company’s inventory account consists of the following as of December 31, 2009 and 2008:

NOTE 7.   PREPAIDS

As of December 31, 2009, the Company paid $40,500 to a third party for services rendered during 2010.  Additionally, the Company’s subsidiary, Clean Sweeps has recorded prepaid rent of $700 as of December 31, 2009.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE 8.  SALE OF SUBSIDIARY

On January 30, 2009 the Company transferred 80% of its interest in its subsidiary, St. Clair Superior Apartment Inc., to a third party.  Subsequent to the sale, the Company continues to hold a 20% non-controlling interest in the subsidiary and has recorded its investment under the equity method. Additionally, revenues and expenses for January 2009 have been presented as a loss from discontinued operations in the Consolidated Statements of Operations.  

In accordance with FASB authoritative guidance, the Company calculated the difference between the aggregate of the consideration received of $350,000 plus the fair value of the retained 20% non-controlling interest in St. Clair Superior at the date of deconsolidation of $58,927 minus the net carrying amount of St. Clair Superior’s assets and liabilities of $62,523.  This resulted in a gain on the deconsolidation of subsidiary of $346,404 as of December 31, 2009.

Gain on deconsolidation of subsidiary was calculated as the following on the date of sale:

In 2009, the Company committed to make available for sale of all of City Juice’s subsidiaries (L.A. Juice and L.A. Juice 2), City Laundry’s subsidiaries (39^th Street, Blue Ridge, and Express Cleaners), Clean Sweeps’ subsidiaries (Walnut Cove and Coffee & Calls), and Nitty Gritty. Due to the commitment to sell, the assets and liabilities of these subsidiaries have been presented as assets held for sale.  As of December 31, 2009, L.A. Juice 2 has been fully impaired due its closure and Blue Ridge and 39^th Street have been sold.  Additionally, revenues and expenses have been presented as a loss on discontinued operations in the Consolidated Statements of Operations of $736,121 as of December 31, 2009.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

The following assets and liabilities have been presented as assets held for sale, net of liabilities as of December 31, 2009.

On July 1, 2009, the Company deconsolidated the subsidiary Millionaire due to the determination that the Company no longer had control over the day to day management. Subsequent to the deconsolidation, the Company continues to have a 33.33% ownership.  

In accordance with FASB authoritative guidance, the Company calculated the difference between the aggregate of the fair value of the retained 33.33% non-controlling interest in Millionaire at the date of deconsolidation of $8,948 and the carrying amount of any non-controlling interest in the subsidiary at the date of deconsolidation of $34,217.  The subsidiary had no assets and liabilities at the date of deconsolidation.   This resulted in a gain on the deconsolidation of subsidiary of $43,165 offset by the Company’s portion of discontinued operations as of July 1, 2009 of $17,108 to total $26,057 as of December 31, 2009.  As of December 31, 2009, the Company reclassified all of Millionaire’s expenses to discontinued operations resulting in a loss from discontinued operations of $7,100.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

On November 10, 2009, the Company sold to a third party 100% of Blue Ridge in exchange for the payment of an existing note payable of $10,002 including interest.  No liabilities were included in the transaction. In accordance with FASB authoritative guidance, the Company calculated a loss on deconsolidation of $131,654.

On November 30, 2009, the Company sold to a third party 100% of 39^th Street Laundry for $20,000.  No liabilities were included in the transaction.  In accordance with FASB authoritative guidance, the Company calculated a loss on deconsolidation of $73,470.  Additionally, $6,997 of intercompany receivables have been written off to discontinued operations due to the forgiveness of the receivable from 39^th Street upon the sale.  

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE 9:  FIXED ASSETS

On January 16, 2009, the Company’s subsidiary, NYC Liquidation, purchased Ichiban Ventures, Inc. which owns a chain of retail EBay drop-off locations.  Purchased in the acquisition were assets with a fair value of $31,693.  As of June 30, 2009 these assets have been discontinued in connection with the closure and discontinuation of the EBay retail drop-off locations.  In January 2010, the Company was released from one rental space lease.  The other was released in the beginning of 2010.

On February 6, 2009, the Company’s subsidiary, City Laundry, purchased 39^th Street Laundromat which operates a laundromat in Missouri.  Purchased in the acquisition were assets with a fair value of $55,208.  On November 30, 2009, the subsidiary was sold to a third party.

On February 20, 2009, the Company’s subsidiary, City Juice, purchased L.A. Juice Company, Inc. which operates a juice bar in Kansas.  Purchased in the acquisition were assets with a fair value of $28,556. An additional vehicle of $7,000 was purchased for this subsidiary.  As of December 31, 2009, these assets have been reclassified as assets held for sale in connection with the Company’s commitment to sell L.A. Juice.

On March 23, 2009, the Company’s subsidiary, City Laundry, purchased Blue Ridge Cleaners which operates a laundromat in Missouri.  Purchased in the acquisition were assets with a fair value of $53,142.  On November 10, 2009, the subsidiary was sold to a third party in exchange for payment of a note payable.

On April 2, 2009, the Company’s subsidiary, City Juice, purchased assets of L.A. Juice 2 which operates a juice bar in Kansas.  Purchased in the acquisition were assets with a fair value of $28,567.  As of December 31, 2009, these assets have been fully impaired in connection with the closing of this location.

On April 3, 2009, the Company’s subsidiary, City Petroleum, purchased assets of O.K. Petroleum, a gas station in New York.  Purchased in the acquisition were assets with a fair value of $52,900.  

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

On April 24, 2009, the Company’s subsidiary, City Laundry, purchased the assets of Express Cleaners which operates a laundry drop-off location.  Purchased in the acquisition were assets with a fair value of $87,900.  The Company acquired four capital equipment leases with a fair value of $128,478.  As of December 31, 2009, these assets have been reclassified as assets held for sale in connection with the Company’s commitment to sell Express Cleaners.  

On September 28 2009, the Company purchased a security system for the Clean Sweeps, location in Texas for $1,837.  

On November 6, 2009, the Company’s subsidiary, Clean Sweeps, purchased the assets of Main Street which operates a technology center.  Purchased in the acquisition were assets with a fair value of $5,242.  Subsequent to the acquisition, the Company purchased additional fixed assets of $4,658.  

On December 28, 2009, the Company’s subsidiary, Clean Sweeps purchased the assets of Walnut Cove which operates a technology center.  Purchased in the acquisition were assets with a fair value of $68,525.  These assets have been recorded as assets held for sale in connection with the sale of the subsidiary in the first quarter of 2010.  Due to the Company immediately including these assets as held for sale upon purchase, no goodwill or intangible asset for a covenant not to compete was recorded.  If this subsidiary was not immediately classified as an asset held for sale, fixed assets would have been $13,262.

On December 28, 2009, the Company’s subsidiary, Clean Sweeps, purchased the assets of Coffee & Calls which operates a technology center.  Purchased in the acquisition were assets with a fair value of $18,610.  These assets have been recorded as assets held for sale in connection with the sale of the subsidiary in the first quarter of 2010.  Due to the Company immediately including these assets as held for sale upon purchase, no goodwill or intangible asset for a covenant not to compete was recorded.  If this subsidiary was not immediately classified as an asset held for sale, fixed assets would have been $14,132.

Additionally, the Company purchased equipment worth $5,000 for its subsidiary company, Goshen.  As of December 31, 2009, the equipment has not been put into production and no depreciation has been expensed.  

Fixed assets and accumulated depreciation consists of the following:

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE 10: ACQUISITION PURCHASES

On January 16, 2009, the Company’s subsidiary, NYC Liquidation, purchased assets from Ichiban Ventures, Inc. for $222,758 which owns two retail EBay drop-off locations.  These assets have been impaired as of June 30, 2009 due to the closure and discontinuation of the EBay drop-off locations.  In January 2010 the Company was released from one rental space lease.  The other was released in the beginning of 2010.

On February 6, 2009, the Company’s subsidiary, City Laundry, purchased assets from 39^th Street Laundromat for $97,625 which operates a laundromat in Missouri.  On November 30, 2009, the Company sold 39^th Street to a third party for $20,000.

On February 20, 2009, the Company’s subsidiary, City Juice, purchased assets from L.A. Juice Company, Inc. for $60,635 which operates a juice bar in Kansas.  These assets have been reclassified as assets held for sale as of December 31, 2009 in connection with the Company’s commitment to sell L.A. Juice.

On March 23, 2009, the Company’s subsidiary, City Laundry, purchased assets from Blue Ridge Cleaners for $148,500 which operates a laundromat in Missouri.  On November 10, 2009 the Company sold Blue Ridge to a third party as payment of a note payable with a balance of $10,002 including interest.

66

CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

On April 2, 2009, the Company’s subsidiary, City Juice, purchased assets of L.A. Juice 2 for $32,500 which operates a juice bar in Kansas.  These assets have been fully impaired as of December 31, 2009 in connection with the closing of this location.

On April 3, 2009, the Company’s subsidiary, City Petroleum purchased assets of O.K. Petroleum, gas stations in New York for $440,000.

On April 24, 2009, the Company’s subsidiary, City Laundry, purchased the assets of Express Cleaners, a laundry drop-off location in Kansas for $150,000.  These assets and liabilities have been reclassified to assets held for sale in connection with the Company’s commitment to sell this location as of December 31, 2009.

On November 6, 2009, the Company’s subsidiary, Clean Sweeps, purchased the assets of Main Street, a technology café located in Rolesville, North Carolina for $55,000.  

On December 28, 2009, the Company’s subsidiary, Clean Sweeps, purchased the assets of Walnut Cove, a technology café located in Walnut Cove, North Carolina for $87,200.  These assets have been recorded as assets held for sale in connection with the sale of the subsidiary in the first quarter of 2010.  Due to the immediate recording of this subsidiary as an asset held for sale, goodwill or intangible for a two year agreement not to compete was not recorded.  If this subsidiary was not immediately recorded as held for sale, $25,000 and $30,263 of the purchase price would have been allocated to an intangible asset and goodwill.

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

On December 28, 2009, the Company’s subsidiary, Clean Sweeps, purchased the assets of Coffee & Calls, a technology café located in Kernersville, North Carolina for $46,000.  These assets have been recorded as assets held for sale in connection with the sale of the subsidiary in the first quarter of 2010.  Due to the immediate recording of this subsidiary as an asset held for sale, an intangible for a two year agreement not to compete was not recorded.  If this subsidiary was not immediately recorded as held for sale, $4,478 of the purchase price would have been allocated to an intangible asset.

NOTE 11:  GOODWILL AND INTANGIBLES

Goodwill and intangible assets were purchased with the acquisition of Ichiban, 39^th Street, Blue Ridge, L.A. Juice, L.A. Juice 2, O.K. Petroleum, Express Cleaners, Main Street, Walnut Cove, and Coffee & Calls.  The purchase price allocation of fair market values includes values assigned to intangible assets and a portion allocated to goodwill.  As of December 31, 2009 goodwill from Ichiban and L.A. Juice 2 has been expensed as discontinued operations due to the closure and discontinuation of the locations.  L.A. Juice and Express Cleaners goodwill has been reclassified as assets held for sale in connection with the Company’s commitment to sell the subsidiary. Walnut Cove’s goodwill was allocated to fixed assets in connection with the subsidiary’s immediate recording as an asset held for sale.

Included in the purchase price of Ichiban, 39^th Street, Blue Ridge, L.A. Juice, L.A. Juice 2, Express Cleaners, Main Street, Walnut Cove, and Coffee & Calls were agreements not to compete with previous owners.  As of December 31, 2009 the intangible asset from Ichiban and L.A. Juice 2 has been expensed as discontinued operations.  Additionally, the intangible for L.A. Juice and Express Cleaners has been reclassified as assets held for sale.  The intangible value of Walnut Cove and Coffee & Calls has been allocated to fixed assets in connection with the subsidiaries immediate recording as an asset held for sale.

As of December 31, 2009, 39^th Street and Blue Ridge were sold to independent third parties.

On October 1, 2008, the Company purchased domain names from a third party for $50,000.  The domain features an online subscription based forum, social network, and marketing training for members.  As of December 31, 2009, the domain has been reclassified as assets held for sale in connection with the Company’s commitment to sell the subsidiary.   

The Company’s intangible assets consisted of the following:

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CITY CAPITAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2009 AND 2008

NOTE 12:  INVESTMENT IN UNCONSOLIDATED INVESTEE

In October 2008, the Company purchased a 40% interest in The Male Room for $125,000. The Male Room is a New York based salon that specializes in male spa services.  The Company impaired the total investment due to the closure of the salon in December 2009.

On January 30, 2009, the Company sold a majority of its ownership in St. Clair Superior Apartments (Note 8).  For the year ended December 31, 2009, St. Clair Superior reported a net loss of $61,020, of which the Company recorded $12,204 as a decrease in investment in unconsolidated investee.

As of December 31, 2009, the Company deconsolidated Millionaire due to the lack of control over the subsidiary, and concurrently impaired the investment account due to the cessation of operations in December 2009.