U.S. 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 March 31, 2014

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

For the transition period from

Commission File No. 333-167249

BALLROOM DANCE FITNESS, INC.

(Exact name of registrant as specified in its charter)

Issuer's Telephone Number: (954) 684-8288

1150 Hillsboro Mile, St 1004

Hillsboro Beach, FL. 33062

(Former name, former address and former

Fiscal quarter, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days

[X] Yes      [   ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[  ] Yes      [X] No

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” "non-accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[    ] Yes      [X] No

State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date:  As of May 12, 2014, there were 13,242,786 shares of common stock, par value $0.0001 per share, of the Registrant issued and outstanding.  

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TABLE OF CONTENTS

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PART I - FINANCIAL INFORMATION

Item 1.      Condensed Consolidated Financial Statements

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BALLROOM DANCE FITNESS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

QUARTER ENDED MARCH 31, 2014

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

Organization

Ballroom Dance Fitness, Inc. was organized January 2, 2009 under the laws of the State of Florida. The Company has earned revenues from providing private dance lessons and fitness dance classes in South Florida and operates a ballroom dance venue in North Palm Beach, Florida. In October 2013, the Company acquired the assets of Plaza Ballroom and Event Centre.

The Company has created a wholly owned subsidiary, Palm Beach Dance Challenge, LLC under the laws of the state of Florida; for the purpose to market dance competitions in Palm Beach, Florida.

Basis of Accounting

The accompanying condensed consolidated financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments necessary to present the financial position, results of operations and cash flows for the stated periods have been made.  Except as described below, these adjustments consist only of normal and recurring adjustments. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed financial statements should be read in conjunction with a reading of the Company’s financial statements and notes thereto included in the Company’s Form 10-K annual report filed with the Securities and Exchange Commission (SEC) on April 9, 2014.  Interim results of operations for the three months ended March 31, 2014 are not necessarily indicative of future results for the full year. 

We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, these financial statements give effect to all normal recurring adjustments necessary to present fairly the financial position and results of operations and cash flows of the Company.

As a result of the October 2013 acquisition, the Company is no longer considered to be a development stage Company.  As a result, the Company no longer discloses activities since the inception of the development stage.

Principles of Consolidation

All inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles generally accepted in the Untied States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates

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Fair Value of Financial Instruments

The Company’s balance sheet includes certain financial instruments. The carrying amounts of accounts payable and due to stockholder approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

Cash and Cash Equivalents

 Cash and cash equivalents includes all cash deposits and highly liquid financial instruments with an original maturity of three months or less.

Intangible Assets

Intangible assets, which are composed music rights, rights to dance competitions, and goodwill are considered intangible assets with infinite lives, which are not amortized but are reviewed for impairment at least annually. All intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.  An impairment loss is recognized if the carrying amount of the asset exceeds its fair value.  No impairment loss has been recognized during the three months ended March 31, 2014.

Stock-based Compensation

Share-based payments to employees, including grants of employee stock options are recognized as compensation expense in the financial statements based on their fair values, in accordance with FASB ASC Topic 718.  That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).  The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented.  The Company may issue shares as compensation in future periods for employee services.

The Company may issue restricted stock to consultants for various services.  Cost for these transactions will be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.  The value of the common stock is to be measured at the earlier of:  (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached, or (ii) the date at which the counterparty's performance is complete.  The Company may issue shares as compensation in future periods for services associated with the registration of the common shares.

Revenue recognition

The Company leases its studio to third parties, who collect and retain fees for events and lessons.  The Company recognizes revenues related to these arrangements during the period in which the events are held or lessons are given.  Ancillary revenues related to events, including food and beverage sales, are recognized during the period in which the events are held.

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Income taxes

We account for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.  Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from quarter to quarter. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

ASC 740-10 requires that we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Loss per share

Basic loss per share calculations are determined by dividing the net loss by the weighted average number of common shares outstanding during the period.  Diluted loss per share calculations are determined by dividing the net loss by the weighted average number of common shares plus any potentially dilutive shares.  The Company has not issued any potentially dilutive securities since its inception.

Recent Accounting Pronouncements

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term.  The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

NOTE 2: GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period of time.  The Company had a loss of $57,802 for quarter ended March 31, 2014 and working capital deficit of $289,842 and accumulated deficit of $217,841 as of March 31, 2014.  The future of the Company is dependent on its ability to obtain funding from the sale of common stock pursuant to its S-1 registration statement, which was declared effective by the SEC on August 10, 2012.  These conditions cause substantial doubt about the Company’s ability to continue as a going concern. There have been no adjustments to the financial statements that may be necessary should the Company be unable to continue as a going concern.

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Although the Company plans to pursue its equity funding, there can be no assurance that the Company will be able raise sufficient working capital to maintain its operations.  If the Company is unable to raise the necessary working capital through the equity funding it will be forced to continue relying on cash from operations and loans from stockholder in order to satisfy its working capital needs.  There can be no assurance that the Company will be able rely on these sources to maintain its operations.

NOTE 3: DUE TO STOCKHOLDER

The Company has received advances from an officer and stockholder for working capital purposes.  These advances are due on demand and accrue interest at an annual rate of 4%. Interest expense totaled $4,164 for the three months ended March 31, 2014. At March 31, 2014 and December 31, 2013, the amount due to the stockholder was $281,854 and $179,910, respectively.

NOTE 4 -

PROPERTY AND EQUIPMENT

Depreciation expense amounted to $4,000 and $-0- for the quarters ended March 31, 2014 and March 31, 2013, respectively.

NOTE 5:  INCOME TAXES

As of March 31, 2014, the Company had approximately $225,000 of operating loss carry forwards available to offset future taxable income, beginning to expire in 2030.

NOTE 6: STOCKHOLDERS’ EQUITY (DEFICIENCY)

During the previous quarter ended December 31, 2013, the Company issued 1,000,000 common shares for the Plaza acquisition (see Note 8). Pursuant to its agreement to acquire the assets of Plaza Ballroom and Event Centre, the Company agreed that if the seller was unable to realize an aggregate profit of $300,000 by June 18, 2014, from the sale of the common stock issued as consideration for the acquisition, the Company will issue shares to the sellers so that the aggregate market value of all shares issued as of June 18, 2014 is $300,000.  If the seller was unable to sell the aggregate number of shares by June 18, 2014, the Company agreed to pay the seller $300,000.  Because there is no active market for the Company’s common stock, and the Company’s potential obligation is beyond its control, equity classification of the issuance of the shares was prohibited.  Accordingly, the Company recorded $300,000 as contingent guaranty obligation on the accompanying balance sheet as of December 31, 2013.  

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During the quarter ended March 31, 2014, the acquisition agreement was amended, relieving the Company of any potential obligations related to the realization of proceeds from the sale of the common stock issued as consideration for the acquisition.  Accordingly, the Company reclassed the $300,000 potential obligation as of December 31, 2013, to additional paid in capital.

On January 9, 2014 the Board of Directors approved issuing stock as prepayment for legal services to Corporate counsel for $25,000 of services; stock valued at $.20 a share based on the value of services to be provided. The Company recorded the fair value of $25,000 as deferred compensation to be expensed as services are provided, $2,000 was applied to accounts payable that was due as of December 31, 2013. Total shares issued were 125,000 shares.

NOTE 7: COMMITMENTS AND CONTINGENCIES

Plaza Lease Agreement

As a result of the October 2013 acquisition, the Company assumed a lease for its dance facility. The lease requires monthly payments of $5,500 commencing on November 1, 2012 increasing by 5% on each anniversary date through October 2015. Future minimum rental payments under the lease are as follows:

Twelve Months Ending March 31,

2015

$  60,640

2016

    49,878

$110,518

Rent expense for the quarter ended March 31, 2014 including operating expenses charged by the landlord, totaled $20,670.

Employment Agreements

Effective January 1, 2009, the Company entered into employment agreements with both Mr. William Forhan and Mr. Sean Forhan.  The agreements are the same for both officers and are for a term of four quarters and shall automatically renew for one-quarter terms thereafter unless terminated by either party at least 90 days prior to the next term.  Under the agreements, each employee shall receive a base salary of $72,000 per quarter and an annual bonus of 10% of EBITDA, but no wages shall be accrued until such time the Company has adequate cash flow.  The Officers shall also receive car allowance of $600 per month.  The employment agreements provide for health and life insurance and four weeks paid vacation.  Since inception, no amounts have been paid or accrued under the aforementioned employment agreements.

Legal Matters

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of March 31, 2014, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations and there are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial

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stockholder, is an adverse party or has a material interest adverse to our interest.

NOTE 8: Plaza Ballroom and Event Centre, LLC Acquisition

The Board of Directors of the Company authorized the execution of that certain asset purchase agreement dated October 18, 2013 (the "Asset Purchase Agreement") with Plaza Ballroom & Event Centre LLC, a Florida limited liability Company ("Plaza Ballroom"). In accordance with the terms and provisions of the Asset Purchase Agreement, the Company acquired certain assets from Plaza Ballroom including, but not limited to, a dance studio and associated lease, domain address and associated website and data base of approximately 1,100 customers (collectively, the "Assets"). In consideration for the purchase of the Assets by the Company, the Company paid aggregate consideration to Plaza Ballroom in the amount of $325,000 consisting of: (i) cash in the amount of $25,000 of which $5,000 was a non-refundable advance; and (ii) issuance in the name of Plaza Ballroom or its designee an aggregate of 1,000,000 shares of its restricted common stock.  In further accordance with further terms of the Asset Purchase Agreement, if on the date nine months (June 18, 2014) from the date of the Asset Purchase Agreement Plaza Ballroom was unable to sell the 1,000,000 shares of common stock on the open market to realize an aggregate gross profit of $300,000 because the Company's shares of common stock dropped below a per share price of $0.30, the Company was to further issue to Plaza Ballroom that number of shares of common stock based upon the trading price on June 18, 2014 to resolve the difference between the $300,000 and the amount received by Plaza Ballroom from the sale of the original 1,000,000 shares of common stock during the nine month period. In the event Plaza Ballroom was not able to sell the new shares and the original 1,000,000 shares for $300,000, Plaza Ballroom will notify the Company and request cash payment aggregating $300,000 due thirty days from Plaza Ballroom's request. During the quarter ended March 31, 2014, the acquisition agreement was amended, relieving the Company of any potential obligations related to the realization of proceeds from the sale of the common stock issued as consideration for the acquisition. 

The fair value of the acquired assets and liabilities, and the resulting amount of goodwill was determined as follows:

The following are pro form statements of operations for the quarter ended March 31, 2013 as though the acquisition occurred at the beginning of each period presented:

NOTE 9: Subsequent Events

Effective April 22, 2014, the Company purchased a license for Ballroom Dance Contests sanctioned by The National Dance Council of America for cash consideration of $20,000, which was paid in March 2014. The license is for two annual competitions in the county of Palm Beach, Florida. The license does not expire and can be upgraded to a two day competition after two years of competition. The competition dates are scheduled by the National Dance Council of America: the third Saturday in September and the third Saturday in January, of every year.

The Company has created a wholly owned subsidiary, Palm Beach Dance Challenge, LLC under the laws of the state of Florida; for the purpose to market the Competitions.

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Item 2.       Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Report contains statements that we believe are, or may be considered to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plans,” “forecasts,” “continue” or “could” or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.

Unless stated otherwise, the words “we,” “us,” “our,” the “Company,” or “Ballroom Dance Fitness, Inc.” in this section collectively refer to BDF.

Overview

General: Ballroom Dance Fitness, Inc. was incorporated in the State of Florida on January 2, 2009. We filed a registration statement on Form S-1 with the Securities and Exchange Commission. The Securities and Exchange Commission declared our registration statement effective on August 10, 2012. We obtained a trading symbol and commenced trading on the OTC Markets QB of our shares of common stock on April 22, 2014 .  

The Company is competing in the weight loss and ballroom dance business and operates a dance study for lessons and competition in Palm Beach, Florida. Ballroom Dance Fitness, Inc. was organized January 2, 2009 under the laws of the State of Florida.  The Company creates fitness videos and DVD’s that promote “Fun Exercise” to the Ballroom Dance and fitness enthusiasts. 

The videos and DVD’s are designed for individuals that want to lose weight and also learn Ballroom Dance steps. The DVD’s will be marketed via TV infomercial, Corporate web site and

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Internet marketing. The Company will realize revenues when paid in full for purchase of DVD’s and merchandise purchased.

Fitness DVD Routines: Producing, marketing and selling DVD’s that will feature six different ballroom dances: the Cha-Cha, Swing, Salsa, Merengue, Rumba and Waltz.   The program is to promote “Fun Exercise” to Ballroom Dance and fitness enthusiasts. The videos will be marketed as exercise videos designed for individuals that want to lose weight and also learn Ballroom Dance steps. The fitness routines will stress dance steps and use them in exercise routines, building the lower body, strengthening heart endurance, plus show how the use of hand free weights will develop and tone the upper body. When funds become available, the Company also plans to launch infomercials which will promote our DVDs.

The Company provides fun exercise that teaches the exerciser how to dance while losing weight. The Company provides a training DVD that includes six dances that are learned from repetitive steps, providing fun exercise and cardio workout at the convenience of the exerciser, from their home.

Certified Fitness Instructors: We intend to offer fitness trainers and ballroom dance instructors and opportunity to become certified as a Ballroom Dance Fitness instructor after completing a six hour training session with Sean Forhan, the Company’s Founder.  The certified trainer will offer Ballroom Dance Fitness classes in his/her city and keep all of the revenue.  It is intended that the instructors will pay a one-time fee of $250 to become certified.  There will be an annual renewal fee of $175 to keep the certification active.  

Ballroom Dance Lessons and  Plaza Events: The Company on October 18, 2013 purchased the assets of Plaza Ballroom & Event Centre, LLC. In accordance with the terms and provisions of the Asset Purchase Agreement, the Company purchased certain assets to including, but not limited to, a dance studio and associated lease, domain address and associated website and data base of approximately 1,100 customers.

Through it’s acquisition of the assets of Plaza Centre and Events the Company is engaged in the business of providing ballroom dance lessons and hosting events in its leased facility, located in North Palm Beach, Florida.

Dance Competition:  In April 2014, Ballroom Dance Fitness Inc. announces the purchase of a license for Ballroom Dance Contests sanctioned by The National Dance Council of America. The license is for two annual competitions in the county of Palm Beach, Florida. The license does not expire and can be upgraded to a two day competition after two years of competition. The competition dates are scheduled by the National Dance Council of America: the third Saturday in September and the third Saturday in January, of every year.

The Company has created a wholly owned subsidiary, Palm Beach Dance Challenge, LLC under the laws of the state of Florida; for the purpose to market the Competitions. The competition dates are September 20, 2014 and January 24, 2015, hosted in Palm Beach Gardens, Florida. The competition will include over 100 professional dancers (Teachers) and students; competing in over 1,000 dances, judged by 5 professional instructors.

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Results of Operations:

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Quarterly Report. Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of our products and through equity or debt securities.

Three Month Period Ended March 31, 2014 Compared to Three Month Period Ended March 31, 2013

Revenues

Revenues for the three months ended March 31, 2014 were $40,122 and revenues in the three months ended March 31, 2013 were $-0-. Revenues in 2014 were primarily due to Plaza Events sales from dance lessons and event rentals.

Operating Expenses

Operating expenses for the quarter ended March 31, 2014 were $74,694 as compared to $6,441 for the quarter ended March 31, 2013. The increase in expenses during 2014 are due to rent expense of $20,670 and personnel wages and other expenses of $26,627 related to the Plaza operations. In addition there was $20,100 of professional fees for the quarter and other fees to the auditor and consultants.

Net Loss

Net loss for the quarter ended March 31, 2014 was $57,802 compared to a net loss of $6,441 for the quarter ended March 31, 2013. The net loss for 2014 is after increased expenses in video production and fees for labor and expenses related to the Plaza operations.

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Liquidity and Capital Resources

The Company realized cash used in operations of $62,713 for quarter ended March 31, 2014 as compared to $9,941 used in quarter ended March 31, 2013. Increase cash used is mainly a result of higher net loss for the quarter.

During the quarter ended March 31, 2014 the Company was provided cash from financing activities of $101,944 as compared to $11,900 provided for quarter ended March 31, 2013. The increase was primarily  a result of addition advances from stockholder for the quarter.

Assets

At December 31, 2013, we had total assets of $421,908 compared to $457,139 at March 31, 2014. Increase in total assets at March 31, 2014 was mainly to the purchase of license for dance competition of $20,000 and purchase of fixed assets for the Plaza Events location.

Liabilities

Our total liabilities were $199,870 at December 31, 2013, compared to $290,903 at March 31, 2014. The increase from 2013 to 2014 was primarily due to a $102,000 increase of loans from stockholder.

At March 31, 2014, the stockholder was owed $281,854.

Total Stockholders' Equity

Our stockholders' deficit was $77,962 at December 31, 2013, compared to equity of  $166,236 at March 31, 2014. The increase from 2013 to 2014 was mainly due to the reclassification of the $300,000 contingent obligation upon the waiver of the guaranty related to the October 2013 acquisition.  The reclassication was offset by the additional loss in the quarter.

Our auditors in 2013 expressed doubt about our ability to continue as a going concern. Due to the low revenues the Company in 2014 have expressed a similar concern. At March 31, 2014, the Company had negative working capital and a stockholder deficit.  

On August 10, 2012, our Registration Statement on Form S-1 (the "Registration Statement") was declared effective by the SEC.  In the Registration Statement, we have authorized  6,000,000 shares of common stock to be sold by Company at a price of $0.40 per share.  We have not sold any shares to investors.

Off –Balance Sheet Operations

We do not have any off-balance sheet operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

With respect to the period ending March 31, 2014, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.  

Based upon our evaluation regarding the period ending March 31, 2014, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its disclosure controls and procedures were not effective.  Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.  

The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.  However, the Company’s management, including its Chief Executive Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

PART II

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

Not applicable.

Item 1A. Risk Factors.

Not applicable.

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Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

January 9, 2014 the Board approved issuing 125,000 shares for $25,000 fees to its attorney for future services.

Item 3.   Defaults upon Senior Securities.

Not applicable.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information.

Not applicable.

Item 6.   Exhibits.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

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