Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-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, 2010
[ ] Transition Report Under Section 13 or 15(D) Of The Securities Exchange
Act Of 1934
For the transition period from __________ to __________
Commission File Number: 000-52883
CREATIVE LEARNING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 20-4456503
------------------------------- -------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
340 Paseo Reyes Drive
St. Augustine, FL 32095
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(Address of principal executive offices, including Zip Code)
(904)-825-0873
--------------
(Issuer's telephone number, including area code)
B2 Health, INC.
7750 N. Union Blvd., #201
Colorado Springs, CO 80920
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(Former name or former address if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(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 [x] No [ ]
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 (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions of "large accelerated filer," "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
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: 9,800,000 shares of common stock as
of August 10, 2010.
B2 Health, Inc.
(A Development Stage Company)
Consolidated Financial Statements
(Unaudited)
TABLE OF CONTENTS
Page
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheets 1
Consolidated statements of operation 2-3
Consolidated statements of cash flows 4-5
Notes to consolidated financial statements 6-8
INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
June 30,
Sept. 30, 2010
2009 (Unaudited)
---------- ------------
ASSETS
Current assets
Cash $ 174 $ -
Inventory 3,412 3,412
Marketable securities 12,603 120
---------- ----------
Total current assets 16,189 3,532
---------- ----------
Other - -
---------- ----------
Total Assets $ 16,189 $ 3,532
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 4,816 $ 30,526
Note payable - related party 13,875 17,175
Accrued interest payable 1,307 1,307
---------- ----------
Total current liabilities 19,998 49,008
---------- ----------
Total Liabilities 19,998 49,008
---------- ----------
Stockholders' Equity
Preferred stock, $.0001 par value;
10,000,000 shares authorized; none
issued and outstanding - -
Common stock, $.0001 par value;
50,000,000 shares authorized;
775,500 shares issued and outstanding 78 78
Additional paid in capital 247,060 247,060
Deficit accumulated during the
development stage (270,799) (310,379)
Accumulated other comprehensive
income (loss) 19,852 17,765
---------- ----------
Total Stockholders' Equity (3,809) (45,476)
---------- ----------
Total Liabilities and
Stockholders' Equity $ 16,189 $ 3,532
========== ==========
The accompanying notes are an integral part
of the consolidated financial statements.
1
B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF INCOME AND COMPRHENSIVE INCOME
(Unaudited)
Three Months Three Months
Ended Ended
June 30, 2009 June 30, 2010
-------------- --------------
Sales $ - $ -
Cost of goods sold - -
---------- ----------
Gross profit - -
---------- ----------
Operating expenses:
General and administrative 21,760 21,331
---------- ----------
21,760 21,331
---------- ----------
Gain (loss) from operations (21,760) (21,331)
---------- ----------
Other operating income:
Previously written off receivables - -
---------- ----------
Gain (loss) from operations (21,760) (21,331)
---------- ----------
Other income (expense):
Interest expense (509) -
Interest and dividend income 20 -
Realized gain (loss) on securities 11,945 -
---------- ----------
11,456 -
---------- ----------
Income (loss) before provision for income taxes (10,304) (21,331)
Provision for income tax - -
---------- ----------
Net income (loss) $ (10,304) $ (21,331)
Other comprehensive income (loss) -
net of tax
Unrealized gain (loss) on securities 5,433 -
---------- ----------
Comprehensive income (loss) $ (4,871) $ (21,331)
========== ==========
Net income (loss) per share
(Basic and fully diluted) $ (0.01) $ (0.03)
========== ==========
Weighted average number of
common shares outstanding 775,500 775,500
========== ==========
The accompanying notes are an integral part of this report.
2
B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF INCOME AND COMPRHENSIVE INCOME
(Unaudited)
March 8, 2006
Nine Months Nine Months (Inception)
Ended Ended Through
June 30, 2009 June 30, 2010 June 30, 2010
---------------- ---------------- ---------------
Sales $ 15,871 $ - $ 95,614
Cost of goods sold 12,653 - 87,037
---------- ---------- -----------
Gross profit 3,218 - 8,577
---------- ---------- -----------
Operating expenses:
General and administrative 25,916 45,443 276,713
---------- ---------- -----------
25,916 45,443 276,713
---------- ---------- -----------
Gain (loss) from operations (25,968) (45,443) (268,136)
---------- ---------- -----------
Other operating income:
Previously written off
receivables 7,450 3,300 12,450
---------- ---------- -----------
Gain (loss) from operations (18,518) (42,143) (255,686)
---------- ---------- -----------
Other income (expense):
Interest expense (1,591) - (4,139)
Interest and dividend income 988 - 3,806
Realized gain (loss) on
securities (47,851) 2,563 (54,360)
---------- ---------- -----------
Total other income (expense) (48,454) 2,563 (54,693)
---------- ---------- -----------
Income (loss) before provision
for income taxes (66,972) (39,580) (310,379)
Provision for income tax - - -
---------- ---------- -----------
Net income (loss) $ (66,972) $ (39,580) $ (310,379)
Other comprehensive income
(loss) - net of tax
Unrealized gain (loss)
on securities 8,748 (2,087) 17,765
---------- ---------- -----------
Comprehensive income (loss) $ (58,224) $ (41,667) $ (292,614)
========== ========== ===========
Net income (loss) per share
(Basic and fully diluted) $ (0.08) $ (0.05)
========== ==========
Weighted average number of
common shares outstanding 775,500 775,500
========== ==========
The accompanying notes are an integral part
of the consolidated financial statements.
3
B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
March 8, 2006
Nine Months Nine Months (Inception)
Ended Ended Through
June 30, 2009 June 30, 2010 June 30, 2010
-------------- ------------- -------------
Cash Flows From Operating
Activities:
Net income (loss) during the
development stage $ (66,972) $ (39,580) $ (310,379)
Adjustments to reconcile net loss
to net cash provided by (used for)
operating activities:
Compensatory stock issuances 10,500
Accounts receivable (14,171) - -
Inventory - (3,412)
Accounts payable 2,197 25,710 30,526
Accrued interest payable - 1,307
Realized (gains) loss on
sale of securities 47,851 - 56,923
---------- --------- ----------
Net cash provided by (used for)
operating activities (31,095) (13,870) (214,535)
---------- --------- ----------
Cash Flows From Investing
Activities:
Deferred offering costs (65,862)
Securities - purchases (922,269) - (1,387,608)
Securities - sales 850,438 10,396 1,348,330
Treasury stock purchase (25,000)
---------- --------- ----------
Net cash provided by (used for)
investing activities (71,831) 10,396 (130,140)
---------- --------- ----------
(Continued On Following Page)
4
B2 HEALTH, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued From Previous Page)
March 8, 2006
Nine Months Nine Months (Inception)
Ended Ended Through
June 30, 2009 June 30, 2010 June 30, 2010
-------------- ------------- -------------
Cash Flows From Financing
Activities:
Notes payable - borrowings $ 17,750 $ 3,300 $ 45,475
Note payable - payments (28,300)
Sales of common stock 327,500
---------- --------- ----------
Net cash provided by (used for)
financing activities 17,750 3,300 344,675
---------- --------- ----------
Net Increase (Decrease) In Cash (85,176) (174) -
Cash At The Beginning Of The Period 85,842 174 -
---------- --------- ----------
Cash At The End Of The Period $ 666 $ - $ -
========== ========= ==========
Schedule Of Non-Cash Investing
and Financing Activities
None
Supplemental Disclosure
Cash paid for interest $ 1,082 $ - $ -
Cash paid for income taxes $ - $ - $ -
The accompanying notes are an integral part
of the consolidated financial statements.
5
B2 HEALTH, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
B2 Health, Inc. (the "Company"), was incorporated in the State of Delaware
on March 8, 2006. The Company plans to design and manufacture specialized
chiropractic tables. The Company is currently in the development stage and has
no significant operations to date.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and disclosures required by generally accepted accounting principles
for complete financial statements. All adjustments which are, in the opinion of
management, necessary for a fair presentation of the results of operations for
the interim periods have been made and are of a recurring nature unless
otherwise disclosed herein. The results of operations for such interim periods
are not necessarily indicative of operations for a full year.
Fiscal year
The Company has chosen September 30 as a year end.
Principles of consolidation
The accompanying consolidated financial statements include the accounts of
B2 Health, Inc. and its wholly owned subsidiary. All intercompany accounts and
transactions have been eliminated in consolidation.
Cash and cash equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less as cash equivalents.
Accounts receivable
The Company reviews accounts receivable periodically for collectability and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed necessary. At March 31, 2010 the Company had no balance in its allowance
for doubtful accounts.
Property and equipment
Property and equipment are recorded at cost and depreciated under straight
line or accelerated methods over each item's estimated useful life.
6
Revenue recognition
Revenue is recognized on an accrual basis as earned under contract terms.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Income tax
The Company accounts for income taxes under ASC 740. Pursuant to ASC 740
deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss carry
forwards and deferred tax liabilities are recognized for taxable temporary
differences. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax assets are
reduced by a valuation allowance 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. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.
Net income (loss) per share
The net income (loss) per share is computed by dividing the net income
(loss) by the weighted average number of shares of common outstanding. Warrants,
stock options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share.
Financial Instruments
The carrying value of the Company's financial instruments, including cash
and cash equivalents and accrued payables, as reported in the accompanying
balance sheet, approximates fair value.
Marketable Securities
Marketable securities are classified as available-for-sale and are
presented in the balance sheets at fair market value. Gains and losses are
determined using the specific identification method.
NOTE 2. SUBSEQUENT EVENT
On July 2, 2010 the Company acquired BFK Franchise Company, LLC, a Nevada
limited liability company formed in May 2009, for 9,000,000 shares of the
Company's common stock.
7
BFK, which conducts business under the trade name, BRICKS 4 KIDS(R),
offers programs designed to teach principles of engineering, architecture and
physics to children ages 3-12+ using LEGO(R) bricks. BFK provides classes (both
in school and after school), special events programs and day camps that are
designed to enhance and enrich the traditional school curriculum, trigger young
children's lively imaginations and build self-confidence.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Plan of
Operation
The Company was formed in March 2006 to design, manufacture and sell
chiropractic tables and beds. The Company generated only limited revenue and
essentially abandoned its business plan in March 2008.
Unless otherwise indicated, any reference to the operations of the Company
includes the operations of BFK.
BUSINESS OF BFK
Lego Bricks
LEGO(R) is a line of construction toys manufactured by the Lego Group, a
privately held company based in Billund, Denmark. The flagship product, Lego,
consists of colorful interlocking plastic bricks and an accompanying array of
gears, minifigures and various other parts. Lego bricks can be assembled and
connected in many ways to construct such objects as vehicles, buildings, and
even working robots. Anything constructed can then be taken apart, and the
pieces used to make other objects. The toys were originally designed in the
1940s in Europe and have achieved an international appeal, with an extensive
subculture that supports Lego movies, games, video games, competitions, and four
Lego themed amusement parks.
Lego pieces of all varieties are a part of a universal system. Despite variation
in the design and purpose of individual pieces over the years, each remains
compatible in some way with existing pieces. Lego bricks from 1958 still
interlock with those made in 2010, and Lego sets for young children are
compatible with those made for teenagers.
Bricks, beams, axles, gears, mini figures, and all other parts in the Lego
system are manufactured to an exacting degree of precision. When snapped
together, pieces must have just the right amount of strength and flexibility
mixed together to stick together. They must stay together until pulled apart.
They cannot be too easy to pull apart, or the resulting constructions would be
unstable; they also cannot be too difficult to pull apart, since the disassembly
of one creation in order to build another is part of the Lego appeal.
Since it began producing plastic bricks, the Lego Group has released
thousands of sets themed around a variety of topics including town and city,
space, robots, pirates, Lego Trains, Racers, Vikings, castles, Bionicle,
dinosaurs, holiday locations, scuba diving and undersea exploration, the wild
west, the Arctic, airports and miners.
The Lego range has expanded to encompass accessory motors, gears, lights,
sensors, and cameras designed to be used with Lego components. Motors, battery
packs, lights and switches are sold under the name Power Functions. The Technics
line utilizes newer types of interlocking connections that are still compatible
with the older brick type connections. The Technics line can often be motorized
with Power Functions.
9
Lego initiated a robotics line of toys called "Mindstorms" in 1998, and
has continued to expand and update this range ever since. The product originated
from a programmable brick developed at the MIT Media Lab and the name is taken
from a paper written by a computer scientist and educator who developed the
educational theory of constructionism, and whose research was at times funded by
the Lego Group.
The programmable Lego brick which is at the heart of these robotics sets
has undergone several updates and redesigns, with the latest being called the
'NXT' brick, and sold under the brand name of Lego Mindstorms NXT 2.0 or 1.5.
The set includes sensors that detect touch, light, sound and ultrasonic waves,
with several others being sold separately, including an RFID reader. The
intelligent brick can be programmed using software available for both Windows
and Mac computers, and is downloaded onto the brick via Bluetooth.
Current Programs
IN-SCHOOL FIELD TRIPS. One-hour classes during school hours. Classes are
correlated to the science for a particular grade level. Teacher guides, student
worksheets, and step-by-step instruction are provided. Recommended fees: $5-$8
per student.
AFTER-SCHOOL CLASSES. One hour, one day a week class held after school.
Recommended fees: $10-$15 per class per child, minimum commitment is usually 4
classes.
PRE-SCHOOL CLASSES. Classes can be held in pre-schools for children of
pre-school ages. Recommended fees; $5-$7 per child.
CLASSES FOR HOME-SCHOOLED CHILDREN. Classes can be held in the home of one of
the parents of a home-schooled child. Recommended fees: $8-$10 per child.
CAMPS. Normally 3 hours per day for 5 days. Camps can take place at schools or
at other child-related venues. Children use Lego(R) bricks to explore various
science and math concepts while working in an open, friendly environment. The
material covered each session varies depending on students' ages, experience,
and skill level. A new project is built each week. Architectural concepts are
taught while assembling buildings, castles and other structures. Instructional
content includes concepts of friction, gravity and torque, scale, gears, axles
and beams. The curriculum can include the construction of a scaled model of the
children's school or the school mascot. The children work and play with
programmable LEGO(R) bricks along with electric motors, sensors, system bricks,
and LEGO(R) Technic pieces (i.e. gears, axles, and beams). Recommended fees:
$125-$150/child. Children go home with a small Lego(R) project (cost about
$5/child)
BIRTHDAY PARTIES. In the home of the birthday child. Recommended fees: $150 per
party up to 10 children. If over 10 children the fee is $10/child.
SPECIAL EVENTS. Activities with Lego(R) bricks can be held in various locations
including church centers, lodges, child-related venues, private schools,
pre-schools, etc. Program can include parents, grandparents and all children in
the family. Recommended fees: $5 per family.
10
Operating Units
BFK operates through Corporate Creativity Centers and franchisees.
A Corporate Creativity Center is a store-front location, owned and
operated by BFK, where BFK coordinates in school field trips, after school
classes, parties, camps and other programs - as well as the retail sales of
LEGO(R) merchandise.
As of August 10, 2010 BFK had:
o One Corporate Creativity Center in Florida;
o Sixteen franchises in twelve states and one foreign country;
Franchise Program
A franchisee pays a one-time, non-refundable franchise fee of $22,000
upon the execution of the franchise agreement and is required to pay BFK a
royalty of 7% of the amount received from the operation of the franchise.
The franchisee is granted an exclusive territory and a license to use the
"Bricks 4 Kidz(R)" name and trademarks in the franchised territory. The
franchisee is required to conform to certain standards of business practices.
Each franchise is run as an independent business and, as such, is responsible
its operation, including employment of adequate staff.
Franchisees are permitted to assign their franchise provided that BFK
receives advance notice of the proposed assignment, the transferee assumes the
obligations under the franchise agreement, the transferee meets certain
conditions and qualifications, and BFK receives a $5000 transfer fee.
The term of the franchise is for ten years. BFK has the right to
terminate any franchisee in the event of the franchisee's bankruptcy, a default
under the franchise agreement, or other events. The franchisee has the right to
renew the franchise for an additional ten years if, at the time of renewal, the
franchisee is in good standing and pays a renewal fee in the amount of $5000.
11
In addition to the $22,000 franchise fee, a franchisee is advised that an
additional investment of between $8,000 and $23,000 will be required for such
things as equipment and supplies, insurance, marketing and working capital
during the start-up phase of the business.
Capital Requirements
The Company is in the development stage and has only generated limited
revenue. The Company need additional capital to complete the development of its
franchise business and to fund any operating losses. The Company will attempt to
raise capital through the private sale of its common stock or other securities.
The Company projects that its capital requirements for the twelve months
ending August 31, 2011 will be as follows:
Opening new Corporate Creativity Centers in
Las Vegas, Phoenix, Duval County, Florida,
and Broward County, Florida $320,000
Advertising 60,000
General and administrative expenses 320,000
Miscellaneous and contingency 356,000
Item 4. Controls and Procedures.
(a) The Company maintains a system of controls and procedures designed to
ensure that information required to be disclosed in reports filed or submitted
under the Securities Exchange Act of 1934, as amended ("1934 Act"), is recorded,
processed, summarized and reported, within time periods specified in the SEC's
rules and forms and to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act, is
accumulated and communicated to the Company's management, including its
Principal Executive and Financial Officer, as appropriate to allow timely
decisions regarding required disclosure. As of June 30, 2010, the Company's
Principal Executive and Financial Officer evaluated the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Principal Executive and Financial Officer concluded that
the Company's disclosure controls and procedures were effective.
(b) Changes in Internal Controls. There were no changes in the Company's
internal control over financial reporting during the quarter ended June 30,
2010, that materially affected, or are reasonably likely to materially affect,
its internal control over financial reporting.
12
PART II
Item 6. Exhibits
Exhibits
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act.
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CREATIVE LEARNING CORPORATION
August 23, 2010 By: /s/ Brian Pappas
------------------------------
Brian Pappas, Principal Executive,
Financial and Accounting Officer
