U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

T      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009

OR

£     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM  _____ TO _________

Commission File Number: 33-05902

CITY CAPITAL CORPORATION

(Exact Name of registrant as Specified in its Charter)

   

2000 Mallory Lane, Suite 130-301, Franklin, Tennessee		37067
(Address of Principal Executive Offices		(Zip Code)

Company’s telephone number, including area code:   (877) 367-1463

______________________________________________________________

(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes £     No S

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes £   No  £

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

Large accelerated filer   £

Accelerated filer   £

Non-accelerated filer     £

Smaller reporting company S

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes £   No T

As of January 5, 2010, the Company had 103,326,044 shares of common stock issued and outstanding.

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TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

CITY CAPITAL CORPORATION  

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,		December 31,
		2009		2008
		(Unaudited)		(Audited)
ASSETS
Current Assets:
Cash	$	124,589	$	213,988
Accounts receivable		29,130		--
Prepaids		3,712		3,462
Note receivable		18,000		18,000
Note receivable – related party		1,762,636		1,924,731
Other receivable		50,000		40,000
Inventory – homes for sale		48,891		100,094
Inventory – food, beverage & gas		50,000		--
Assets held for sale, net of liabilities of $41,919 and $373,838 at
June 30, 2009 and December 31, 2008, respectively		490,015		53,807
Other asset		21,186		15,862
Total current assets		2,598,159		2,369,944
Investment in unconsolidated investee		80,487		106,817
Fixed asset, net of accumulated depreciation of  $1,480
and $0 at June 30, 2009 and December 31, 2008, respectively		56,420		5,000
Goodwill		337,100		--
Domain names		50,000		50,000
Total Assets	$	3,122,166	$	2,531,761
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	310,669	$	83,148
Accrued consulting – related party		95,694		95,694
Accrued expense- related party		38,783		--
Deferred Revenues		78,318		--
Unsecured liability including accrued interest of $16,667 and
$16,667 at June 30, 2009 and December 31, 2008, respectively		616,249		616,249
Notes payable including accrued interest of $224,345 and
$139,085 at June 30, 2009 and December 31, 2008, respectively		5,762,938		3,757,556
Convertible debentures including interest of $61,823 and $56,835
at June 30, 2009 and December 31, 2008, respectively		166,823		161,835
Debt derivative		34,990		104,956
Total current liabilities		7,104,464		4,819,438
Long Term Liabilities:
Long term note payable including accrued interest of $6,132 and
$0 at June 30, 2009 and December 31, 2008, respectively		381,632		20,000
Total liabilities		7,486,987		4,839,438
Stockholders’ Deficit:
Common stock: $0.001 par value; authorized 235,000,000 shares;
issued and outstanding 95,126,044 and 4,597,473
at June 30, 2009 and December 31, 2008, respectively		95,126		4,597
Additional paid-in capital		10,924,393		9,839,920
Accumulated deficit		(14,690,613)		(12,152,194)
Stock subscription receivable		(580,000)		--
Total stockholders’ deficit		(4,251,092)		(2,307,677)
Non-controlling interest		(112,836)		--
Total Liabilities and Stockholders’ Deficit	$	3,122,166	$	2,531,761

 

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

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CITY CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

See Accompanying Notes to Condensed Consolidated Financial Statements

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CITY CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

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CITY CAPITAL CORPORATION  

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(continued)

See Accompanying Notes to Condensed Consolidated Financial Statements

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1.  BASIS OF PRESENTATION AND ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Organization.

The accompanying unaudited condensed consolidated financial statements of City Capital Corporation, a Nevada corporation (“Company”), have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations.  The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements.  Although management believes the disclosures and information presented are adequate to make the information not misleading, these interim condensed consolidated financial statements should be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its December 31, 2008 Annual Report on Form 10-K as may be amended.  Operating results for the period ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. As used in these Notes to the Consolidated Financial Statements, the terms the "Company", "we", "us", "our" and similar terms refer to City Capital Corporation and, unless the context indicates otherwise its consolidated subsidiaries.

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 bio fuel 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 a 100% of the assets of an express laundry location (“Express Cleaners”) in Kansas.  All subsidiaries of City Laundry are available for sale as the normal course of business of City Capital is the development, growth and sale of operating companies.

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 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.

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 dissolved and re-organized in New York on April 10, 2009.  City Petroleum engages in purchasing businesses in the oil and gas industry.  On April 3, 2009, City Petroleum purchased 100% of the assets at a gas station and convenience store located in Brookhaven, New York (“O.K. Petroleum”).

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”.  

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CITY CAPITAL CORPORATION

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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.

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, the existing locations are being renovated and outfitted for a profitable venture in the gaming arena.  The Company is awaiting licensing approval in the New York area.

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.

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.

Significant accounting policies have not changed from those disclosed in the Company’s Annual Report on Form 10-K, except those listed below.

Reclassifications.

The Company reclassified revenues and cost of revenues to discontinued operations related to St. Clair Superior, in connection with the sale of a majority of the Company’s ownership rights of the subsidiary on January 30, 2009.

Cash and Equivalents.

For the Statement 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 June 30, 2009 or December 31, 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 June 30, 2009 and December 31, 2008 the Company had zero and one bank account in excess of $250,000.  The Company has not experienced any losses in such account.

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

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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.

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.

Property and Buildings.

Property and buildings is stated at cost and is depreciated over the estimated useful lives of the related assets using the straight-line method.

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 June 30, 2009 the goodwill for all City Laundry and City Juice subsidiaries have been re-classed to assets held for sale in connections with the Company’s commitment to sell the entities.  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 location.  

Fair Value of Financial Instruments.

The carrying amounts for the Company’s cash, accounts payable and accrued liabilities 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.  As of June 30, 2009 and December 31, 2008, the Company determined that the conversion feature of its convertible debentures qualified for this treatment.  The change in the fair value of debt derivative as reported in the Company’s condensed consolidated statements of operations was ($69,966) and $245,589 as of June 30, 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 in accordance with Emerging Issues Task Force (“EITF”) No. 96-19, “Debtor’s Accounting for a

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CITY CAPITAL CORPORATION

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Modification or Exchange of Debt Instrument.”  During the first quarter of fiscal year 2009, no modified debt instruments met the qualifications for recognition as an extraordinary gain or loss.

Stock Based Compensation.

Shares of the Company’s common stock were issued for services.  These issuances are valued at the fair market value of the services provided and the number of shares issued is determined based upon what the price of the common stock is on the date of each respective transaction.  For those transactions without a fair market value in the service contract, the Company values the shares issued for services at the fair market value of its common stock on the grant date.

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 and retail 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.

Non-Controlling Interest

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of Accounting Research Bulletin (“ARB”) No. 51” (“SFAS 160”). SFAS 160 requires companies with noncontrolling interests to disclose such interests clearly as a portion of equity but separate from the parent’s equity. The noncontrolling interest’s portion of net income must also be clearly presented on the condensed consolidated statement of operations. We have recorded a deficit of $334,711 as a result of the Company’s non-controlling interest in Millionaire and NYC Liquidation Group.

Loss Per Share.

Net loss per share is calculated in accordance with SFAS 128, “Earnings Per Share.”  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 averaged 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.

 

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CITY CAPITAL CORPORATION

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 under Accounting Principles Board (“APB”) Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock”.  The Company accounts for its investments in The Male Room and St. Clair under the equity method of accounting and records its share of income as a component within Consolidated Statement of Operations.

Fair Value Accounting.

In September 2006, the FASB issued SFAS 157, “Fair Value Measurements.”  SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.  The provisions of SFAS 157 were adopted January 1, 2008.  In February 2008, the FASB staff issued Staff Position (“FSP”) No. 157-2, “Effective Date of FASB Statement No. 157.”  FSP No. 157-2 delayed the effective date of SFAS 157 for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).  The provisions of SP No. 157-2 are effective for the Company’s fiscal year beginning January 1, 2009.

SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under SFAS 157 are described below:

 

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities.”  SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value, with the objective of improving financial reporting by mitigating volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The provisions of SFAS 159 were adopted January 1, 2008. The Company did not elect the Fair Value Option for any of its financial assets or liabilities, and therefore, the adoption of SFAS 159 had no impact on the Company’s consolidated financial position, results of operations or cash flows.

New Accounting Pronouncements

In April 2009, the FASB issued FASB Staff Position 107-1 and Accounting Principles Board 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” (“FSP 107-1”). FSP 107-1 amends SFAS 107, “Disclosures About Fair Value of Financial Instruments,” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. FSP 107-1 also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in summarized financial information at interim reporting periods. FSP 107-1 is effective for interim reporting periods ending after June 15, 2009. FSP107-1 does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this FSP requires comparative disclosures only for periods ending after

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

initial adoption. The Company adopted FSP 107-1 in the second quarter of 2009. FSP 107-1 did not have a material impact on the financial statements.

In April 2009, the FASB issued FASB Staff Positions 115-2 and 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP 115-2 and 124-2”). FSP 115-2 and 124-2 amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. FSP 115-2 and 124-2 does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The Company adopted FSP 115-2 and 124-2 in the second quarter of 2009. FSP 115-2 and 124-2 did not have a material impact on the financial statements.

In April 2009, the FASB issued FASB Staff Position 157-4, “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,” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS No. 157, “Fair Value Measurements,” when the volume and level of activity for the asset or liability have significantly decreased. FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for interim and annual reporting periods ending after June 15, 2009. The Company adopted FSP 157-4 in the second quarter of 2009. FSP 107-1 did not have a material impact on the financial statements.

In June 2009, the FASB issued SFAS 165, “Subsequent Events,” SFAS 165 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. SFAS 165 applies to both interim financial statements and annual financial statements. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. SFAS 165 does not have a material impact on our financial statements.

In June 2009, the FASB issued SFAS 166, “Accounting for Transfers of Financial Assets, an amendment to SFAS No. 140,” (“SFAS 166”). SFAS 166 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. SFAS 166 is effective for fiscal years beginning after November 15, 2009. The Company will adopt SFAS 166 in fiscal 2010. The Company does not expect that the adoption of SFAS 166 will have a material impact on the consolidated financial statements.

In June 2009, the FASB issued SFAS 167, “Amendments to FASB Interpretation No. 46(R),” (“SFAS 167”). 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. SFAS 167 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 SFAS 167 in fiscal 2010. The Company does not expect that the adoption of SFAS 167 will have a material impact on the consolidated financial statements.

In June 2009, the FASB issued SFAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles,” (“SFAS 168”). SFAS 168 replaces FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles”, and establishes the FASB Accounting Standards Codification (“Codification”) 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 generally accepted accounting principles (“GAAP”). SFAS 168 is effective for interim and annual periods ending after September 15, 2009. The Company will begin to use the new Codification when referring to GAAP in its interim report on Form 10-Q for the period ended September 30, 2009. This will not have an impact on the consolidated results of the Company.

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2.  GOING CONCERN

The Company generated revenues of $873,432 during the six months ended June 30, 2009; however, the Company will continue to be dependent upon its ability to obtain additional debt or equity financing to accomplish its business strategy and to ultimately achieve profitable operations.  As shown in the accompanying interim condensed consolidated financial statements, the Company has incurred a net loss of $2,538,419 for the six months ended June 30, 2009 and has reported an accumulated deficit of $14,690,613 as of June 30, 2009.  This raises substantial doubt as to the Company’s ability to continue as a going concern.  The Company is dependent on more fully implementing the Company’s business plan as described in the Company’s 2008 Form 10-K.  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.

NOTE 3. FAIR VALUE

In accordance with SFAS No. 157 the table below sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy.  As required by SFAS No. 157, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

NOTE 4.  NOTE RECEIVABLE - RELATED PARTY TRANSACTION

As of June 30, 2009 the Company holds a note receivable from AmoroCorp with an outstanding balance of $1,762,636. 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 six months ended June 30, 2009 by $162,095 due to the following components:

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

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CITY CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

NOTE 5.  INVENTORY - HOMES FOR SALE

The Company purchased three redevelopment houses in the Kansas City, Missouri real estate market during the third quarter of 2008.  In March 2009 the second property was sold and recognized as home sales on the Company’s condensed consolidated statement of operations.  

NOTE 6.  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 of $203,785 as of June 30, 2009.  As of June 30, 2008, we reclassified all St. Clair Superior revenues and expenses to discontinued operations resulting in a loss from discontinued operations of $62,094.  

In accordance with FAS 160, the Company took 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 June 30, 2009.

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

In September and October 2009 the Company committed to make available the sale of all of City Juice’s subsidiaries, L.A. Juice and L.A. Juice 2, and City Laundry’s subsidiaries, 39 ^th Street, Blue Ridge, and Express Cleaners.  Due to the commitment to sell, the assets and liabilities of these subsidiaries have been presented as assets held for sale.  Additionally, revenues and expenses have been presented as a loss on discontinued operations in the consolidated statement of operations of $203,785 as of June 30, 2009.  

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following assets and liabilities have been presented as assets held for sale, net of liabilities as of June 30, 2009.

NOTE 7: 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 closer and discontinuation of the EBay drop off locations.  The space is being converted and repositioned into a more profitable model.

Fixed assets	$                  31,693
Intangible- 3 year agreement not to compete	72,000
Goodwill	119,065
Total price	$                222,758

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.  These assets have been re-classed to assets held for sale as of June 30, 2009 in connection with the Company’s commitment to sell 39 ^th Street.

Fixed assets	$                  55,208
Intangible- 3 year agreement not to compete	5,000
Goodwill	37,417
Total price	$                  97,625

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 re-classed to assets held for sale as of June 30, 2009 in connection with the Company’s commitment to sell L.A. Juice.

Fixed assets	$                    28,556
Intangible- 2 year agreement not to compete	27,230
Goodwill	4,849
Total price	$                    60,635

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CITY CAPITAL CORPORATION

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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.  These assets have been re-classed to assets held for sale as of June 30, 2009 in connection with the Company’s commitment to sell Blue Ridge.

Fixed assets	$                  53,142
Intangible- 3 year agreement not to compete	30,000
Goodwill	65,358
Total price	$                148,500

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 re-classed to assets held for sale as of June 30, 2009 in connection with the closing of this location and the Company’s commitment to sell L.A. Juice 2.

Fixed assets	$                  28,567
Intangible- 2 year agreement not to compete	3,933
Total price	$                  32,500

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

Fixed assets	$                 52,900
Inventory	50,000
Goodwill	337,100
Total price	$                440,000

In 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 have been re-classed to assets held for sale in connection with the Company’s commitment to sell this location.

Fixed assets	$                  87,900
Intangible- 3 year agreement not to compete	30,000
Goodwill	32,100
Total price	$                150,000

NOTE 8:  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.  The actual space is being repositioned into a more profitable business model.

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.  As of June 30, 2009 these assets have been re-classed to assets held for sale in connection with the Company’s commitment to sell 39 ^th Street.

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 June 30, 2009 these assets have been re-classed to assets held for sale in connection with the Company’s commitment to sell L.A. Juice.

 

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CITY CAPITAL CORPORATION

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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.  As of June 30, 2009 these assets have been re-classed to assets held for sale in connection with the Company’s commitment to sell Blue Ridge.

On April 2, 2009, the Company’s subsidiary, City Juice purchased assets of L.A. Juice 2 which operates a juice bare in Kansas.  Purchased in the acquisition were assets with a fair value of $28,567.  As of June 30, 2009 these assets have been re-classed to assets held for sale in connection with the closing of this location Company’s commitment to sell L.A. Juice 2.

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.  

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.

Additionally, the Company purchased equipment worth $5,000 for its subsidiary company, Goshen.  As of June 30, 2009, the equipment has not been put into production and no depreciation has been expensed.  

Fixed assets and accumulated depreciation consists of the following:

	June 30, 2009		December 31, 2008
Equipment	$                   57,900		$                           5,000
	57,900		5,000
Accumulated depreciation	(1,480)		--
Net book value of fixed assets	$                   56,420		$                           5,000

NOTE 9:  GOODWILL AND INTANGIBLES

Goodwill and intangible assets were purchased with the acquisition of Ichiban, 39 ^th Street, Blue Ridge, L.A. Juice, O.K. Petroleum and Express Cleaners.  The purchase price allocation of fair market values includes values assigned to intangible assets and a portion allocated to goodwill.  As of June 30, 2009 goodwill from Ichiban has been expensed as discontinued operations due to the closure and discontinuation of the EBay drop off locations.  Additionally, 39 ^th Street, Blue Ridge, L.A. Juice, Express Cleaners goodwill has been re-classed to assets held for sale in connection with the Company’s commitment to sell these subsidiaries.

Included in the purchase price of Ichiban, 39 ^th Street, Blue Ridge, L.A. Juice, L.A. Juice 2, and Express Cleaners were agreements not to compete with previous owners.  As of June 30, 2009 all of these intangible assets have been re-classed to assets held for sale in connection with the Company’s commitment to sell these subsidiaries.

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 June 30, 2009, the domain names had no impairment.  The Company expects to generate revenues on the asset through its subsidiary, Nitty Gritty, starting in late 2009.

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 10:  INVESTMENT IN UNCONCOLIDATED 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.  For the six months ended June 30, 2009, The Male Room reported net income of $10,636, of which the Company recorded $4,255 as an increase of investment in unconsolidated investee.

On January 30, 2009, the Company sold majority of its ownership in St. Clair Superior Apartments (Note 6).  For the five months ended June 30, 2009, St. Clair Superior reported a net loss of $57,202, of which the Company recorded $11,440 as a decrease in investment in unconsolidated investee.

	June 30, 2009
Balance in unconsolidated investee at   December 31, 2008	$               106,817
20% interest in St. Clair Superior	58,927
Additional investment for expenses paid on behalf of St. Clair Superior	33,000
20% net loss for the five months ended June 30, 2009 of St. Clair Superior	(11,440)
Impairment of The Male Room	(106,817)
Investment in unconsolidated investee at June 30, 2009	$                  80,487

NOTE 11:  DEFERRED REVENUES

In the second quarter of 2009, the Company launched an infomercial on self help techniques.  Payment for the merchandise from the infomercial is processed and then sent to the customer within 2-4 weeks.  Revenue is recognized upon the shipment of merchandise.  The Company has recorded $78,318 in deferred revenues as of June 30, 2009.

NOTE 12:  UNSECURED LIABILITY

In April 2007, the Company entered into an agreement with an independent third party (“Client 1”) to provide consulting services to invest funds of Client 1 in real estate related ventures.  As compensation for this service the Company is paid 20% of the gross proceeds received each month by Client 1 as a result of service performed by the Company until the client received gross proceeds of $100,000.  After Client 1 has received gross proceeds of $100,000 the Company fee increases to 80% of the gross proceeds received each month by Client 1.  As of June 30, 2009, the Company has received $500,000 from Client 1 and has accounted for this as an unsecured liability.  The Company has not yet invested those funds in real estate projects that have generated profit.  In the first quarter of 2008, the Company and the client verbally agreed to a quarterly return on the investment of $25,000.  The Company has accrued interest of $16,667 and $16,667 of June 30, 2009 and December 31, 2008.

In May 2007, the Company entered into an agreement with a different independent third party (“Client 2”) to provide consulting services to invest funds of Client 2 in real estate related ventures.  As compensation for this service, the Company is paid $5,000 per month over six years. As of June 30, 2009 and December 31, 2008, the Company has received $49,582 from Client 2 for investment purposes and has accounted for this an unsecured liability.  The Company has not yet invested those funds in real estate projects that have generated profit.

In December 2008, the Company received funds held for investment of $50,000 from an independent third party (“Client 3”).  In January 2009, the funds were returned to Client 3.

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 13:  NOTES PAYABLE

The Company’s notes payable as of June 30, 2009 consist of the following:

 

(1)  In default.  Management is currently attempting to renegotiate these pieces of debt.

 

 (…continued)

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(…continued)

(1)  In default.  Management is currently attempting to renegotiate these pieces of debt.

 

 

NOTE 14:  GAIN ON EXINGUISHMENT OF DEBT AND DISCONTINUED OPERATIONS

On March 31, 2008, the Company successfully entered into a modified agreement with a debt holder as noted in Note. 12.  Three promissory notes plus interest of $89,949 and consulting fees of $100,000 totaling $189,949 were extinguished and renegotiated to a new note of $120,000. The modification, effective April 10, 2008, carries terms of one year at 8% interest with an initial payment of $2,000 and thereafter monthly payments of $2,000 through November 2008; payments of $10,000 through March 2009, and a balloon payment in April 2009.  The modification resulted in a gain on extinguishment of debt of $69,949.  As of the filing of this form the Company has paid $26,000 and is in default of the debt.  

As stated above, the Company sold a majority of its ownership in St. Clair Superior on January 30, 2009.  In accordance with the agreement, 80% of ownership was sold for $350,000.  The Company recorded a loss on discontinued operations of $203,785 and recorded as a gain on the deconsolidation of subsidiary of $346,404 as of June 30, 2009.  See Note 6.  

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In July 2009, the Company closed and discontinued the two EBay drop off locations in New York.  As of June 30, 2009, all assets have been discontinued ($222,758), and the revenues and expenses re-classed to loss on discontinued operations.  The physical space is being repositioned into a better business model.

Additionally, the Company has committed to sell all of the subsidiaries of City Juice and City Laundry.  Accordingly, all of the revenues and expenses have been re-classed to loss on discontinued operations as of June 30, 2009.  

NOTE 15:  RELATED PARTY TRANSACTIONS

As of March 31, 2009, the Company holds a note receivable from AmoroCorp with an outstanding balance of $1,762,636.  The President of the Company is also the President and a shareholder of the debtor.  See Note 4.

 

On January 1, 2008, the President of the Company entered into an employment agreement with the Company.  Under the terms of the agreement the President is to be paid a base amount of $500,000 per annum paid in monthly installments of $41,667.  Additional compensation is to consist of an annual bonus of the Company’s common stock of $500,000 valued on the effective renewal date of the agreement, one percent of any net operating income generated by the Company, and one percent of any funds raised and received by the Company based on the fundraising and marketing efforts of the President.  For the three months ended June 30, 2009, the President received $610,486 in payments in accordance with his employment agreement.

 

NOTE 16: STOCKHOLDER’S EQUITY

The authorized common stock of the Company consists of 235,000,000 shares of common stock with par value of $0.001.  The authorized preferred stock of the Company consists of 15,000,000 shares of preferred stock, designated as Series A, with a par value of $0.001.  As of June 30, 2009, the Company had no outstanding shares of preferred stock.

For the six months ended June 30, 2009, the Company issued common stock as follows:

(a)  71,428,571 restricted shares of common stock for officer compensation valued at $500,000 (contract value) at $0.007 per share in accordance with the President’s employment agreement dated January 1, 2008.

(b)  2,000,000 shares of restricted common stock for services of $20,000 at $0.01 per share.

(c)  300,000 shares of restricted common stock for services to a related party of $60,000 at $0.20 per share (contract price).  

(d)  On April 6, 2009, the Company issued 12,500,000 restricted shares of common stock in error.  As of the date of this filing those shares have not yet been returned to the Company.

(e)  300,000 restricted shares of common stock for services valued at $15,000 ($0.05 per share).

(f)  On May 12, 2009, the Company issued 4,000,000 restricted shares of common stock in error.  These shares were returned in August 2009.

The Company’s subsidiary NYC Liquidation Group converted two notes payables into member’s equity totaling $125,000.  This has been recorded as minority interest as of June 30, 2009.

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 17: SEGMENT INFORMATION

The Company’s operating segments are strategic business units that offer different products and services.  Operating segments of the Company are real estate, self enrichment, oil and gas, laundry services, food and beverage, health and beauty, and retail.  The real estate segment consists of the Company’s credit-investor program, and renovated home inventory; the self enrichment segment consists of the subsidiary The Millionaire Lifestyle, LLC, Nitty Gritty, LLC and the self help infomercial ; the oil and gas segment consists of Goshen Energy, Inc. and City Petroleum and its subsidiaries; the laundry services segment consists of City Laundry and its subsidiaries; the food and beverage segment consists of City Juice and its subsidiaries; the health and beauty segment consists of City Beauty; and the retail segment consists of NYC Liquidation and its subsidiaries.  In accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” the gas and oil, laundry services, food and beverage, and self enrichment segments qualify as reportable segments and those subsidiaries that have been fully consolidated in the Company’s financial statements.  The real estate and beauty segment have been classified as “all other” in this footnote and all equity investments have been excluded as of June 30, 2009.  During the six months ended June 30, 2008 the Company did not have multiple reportable segments.

Self Enrichment.

On August 21, 2008, the Company organized The Millionaire Lifestyle Group, LLC, a Missouri limited liability company that offers a web based initiative that provides self-help mentoring and training seminars

On October 6, 2008, the Company organized Nitty Gritty, LLC a Missouri limited liability company that provides a subscription based online forum, social network, and training network where members learn "All Things Internet Marketing”.  This website was originally scheduled to launch in May 2009, however the launch was pushed back until the fourth quarter of 2009.

Gas and Oil.

The Company’s subsidiary, Goshen Energy, Inc. and City Petroleum, do business in the oil and gas industry.  During the second quarter of 2009, City Petroleum purchased a gas station located in New York.

Laundry.

The Company’s subsidiary, City Laundry, engages in purchasing businesses in the laundry arena.  During the first quarter of 2009, City Laundry purchased two laundromats, 39 ^th Street and Blue Ridge located in Missouri.  

Food and Beverage.

The Company’s subsidiary City Juice engages in purchasing businesses in the food and beverage industry.  During the first quarter of 2009, City Juice purchased one juice bar, L.A. Juice, located in Kansas.  

Retail.

During the first quarter of 2009, the Company’s subsidiary NYC Liquidation Group purchased Ichiban that owns two retail drop off locations in which customers drop off items to be sold on Ebay located in New York.  All of the revenues and expenses for Ichiban have been re-classed to loss on discontinued operations in connection with the closure and discontinuation of the EBay drop off locations.  

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Other.

The Company’s subsidiary, City Beauty, engages in purchasing businesses in the health and beauty arena.  

The Company began aggressively marketing its credit-investment program in May 2008 with a long-term contract with satellite radio provider, XM Radio.  The program assists buyers in finding properties for purchase from partnering lenders. This is the first extended contract for promoting the program since May of 2007. 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. The Company has begun to purchase new real estate assets in the Kansas City real estate market in the third quarter of 2008.  The credit-investor program is a key element in these community development strategies.

These operating segments did not meet the criteria for a reportable segment as of June 30, 2009.  When these segments activities increase, real estate, and health and beauty will be reportable segments for the Company.  Activity for these segments has been presented as “all other” in this footnote.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies above. The Company evaluates performance based on profit or loss from operations before income taxes, not including nonrecurring gains and losses.

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CITY CAPITAL CORPORATION    

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 18:  SUBSEQUENT EVENTS

In July 2009, the Company’s two Ebay drop off retail locations owned 100% by NYC Liquidation was discontinued.  As of the second quarter of 2009, the Company has recorded all revenues and expenses as a loss on discontinued operations.  

In September and October 2009, the Company committed to sell all of the subsidiaries under City Juice and City Laundry.  As of June 30, 2009, the Company has re-classed all assets and liabilities as assets held for sale, and revenues and expense as loss on discontinued operations.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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 unaudited condensed consolidated financial statements and notes included elsewhere in this Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States.

Overview.

City Capital Corporation (the “Company”, “we”, “us”, or “our”) 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 aggressively 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 bio-diesel 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.  

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 2010.  The Company sees this model and bringing a new line of green jobs to rural and urban communities, as well as educating future generations of industries to come.

On October 1, 2008 the Company acquired a domain name, NittyGrittyMarketing.com, from a third party that provides a subscription based online forum, social network, and training network where members learn “All Things Internet Marketing.”  Due to the domain being dormant throughout 2008, the Company purchased the domain with the intent to revitalize and update the website and subsequently build a business around the assets.  On October 6, 2008, the Company created Nitty Gritty and plans to re-launch the website in May 2009.

Founded by the successful Internet entrepreneur, Jermaine Griggs, NittyGrittyMarketing.com is a resource for teaching people all around the world how to build successful Internet businesses through various marketing courses, an exclusive online coaching club, live seminars, and workshops.

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.

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The site currently hosts a library of over 50-hours of digital content, video, training materials, searchable digital content, 38 domain names, 10,000+ person mailing list, more than 3,000 subscribers, and nearly 2,000 affiliate marketers. Members pay a monthly subscription fee, which will generate revenues for the Company.

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, a Missouri limited liability company that engages in purchasing companies in the laundry arena; and City Beauty Systems, LLC, 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.  It is the intention of the Company to have the subsidiaries assists 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 the six months ended June 30, 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.  All subsidiaries of City Laundry are 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’s socially conscious model finds opportunity.  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 smaller operation, the cleaners industry is extremely advantageous 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)

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 management role in NYC Liquidation Group, LLC.  This firm recently 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 physical space is being repositioned into a better business model.

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Results of Operations for the Three Months Ended June 30, 2009 Compared to the Three Months Ended June, 2008.

(a)

Revenue and Cost of Revenue.

	June 30, 2009	June 30, 2008	$ Change	% Change
Revenue	$              817,012	$            91,503	$        725,509	793%
Cost of Revenue	1,043,965	-	1,043,965	100%
Gross Profit	(226,953)	91,503	(318,456)	(348%)
Operating, General and Administrative Costs	1,532,277	1,235,834	296,443	24%
Net Operating Loss	$         (1,759,320)	$      (1,144,331)	$      (614,899)	54%

The Company had $817,012 of revenue for the three months ended June 30, 2009 compared to $91,503 for the three months ended June 30, 2008, an increase of $725,509 or 793%.  Revenue for the three months ended June 30, 2008 consisted $64,129 of commission revenues and $27,374 of other revenues from the CEO’s speaking engagements and book sales.  For the three months ended June 30 2009, revenues consisted of $89,517 from self enrichments infomercial and seminar sales, $726,123 from the new gas station purchased in April 2009, and $1,372 from other revenues.  Other revenues for the three months ended June 30, 2009 consisted of $1,372 from book sales .  

 

Additionally, revenues from food and beverage, laundry, and retail have been re-classed to discontinued operations in connection with the Company’s commitment to sell all the subsidiaries of City Juice and City Laundry, and the discontinuation of the EBay drop off locations.

Costs of revenue were $1,043,965 for the three months ended June 30, 2009 compared to $0 for the three months ended June 30, 2008.  Cost of revenue consisted of the self enrichment segment ($410,628) for expenses for the infomercial and merchandise, and the oil and gas segment ($633,337) for inventory of the gas station.  Additionally, costs of revenues for the laundry, juice and retail segment were re-classified to discontinued operations in connection with the Company’s commitment to sell all of the subsidiaries of City Juice and City Laundry.

As previously discussed, during 2009, the Company increased its leveraging investments and holdings by creating five limited liability companies, whose focus is on the oil and gas, laundry, food and beverage, health and beauty, and retail industries.  Although the subsidiaries of City Juice and City Laundry are available for sale, the Company expects revenues for the oil and gas and self enrichment segments to increase during 2009.

For the three months ended June 30, 2009, the Company did not close on any properties and generated no revenues from the credit investor program. The Company is actively seeking new buyers and plans on increasing its closed properties each quarter; however, because this is a newly structured endeavor and given the current economic environment the Company is unable to reasonably predict what it may have on its financial statements in the next 12 months.

(b)  

Operating, General and Administrative Expenses.

Operating, general and administrative expenses for the three months ended June 30, 2009 were $1,532,277 compared to $1,235,834 for the three months ended June 30, 2008, an increase of $296,443 or 24%.  The increase for the three months ended June 30, 2009 compared to 2008 was attributable to an increase in compensation ($40,633) due to an increased amount of employees in connection with our additional subsidiaries, marketing and investor relations ($262,278), depreciation ($1,480), and other selling, general and administrative expenses ($73,317) all due to the additional subsidiaries created and acquired during the first quarter of 2009.  Additionally, fees relating to St. Clair Superior have been re-classified to loss on discontinued operations in connection with the sale of majority of the Company’s ownership as of January 30, 2009.  Expenses for City Juice, City Laundry’s subsidiaries and Ichiban have also been re-classed to discontinued operations in connection with the Company’s commitment to sell all the subsidiaries of City Juice and City Laundry, and the close and discontinuation of the EBay drop off locations.

As previously discussed, during the first and second quarter of 2009, the Company increased its leveraging investments and holdings by creating five limited liability companies, whose focus is on the laundry, food and beverage, health and beauty, and retail industries.  Additionally, the Company subsidiaries, City Petroleum, City Laundry and City Juice each purchased an additional business during the second quarter of 2009.  Due to the increase in employees and operating costs, expenses are expected to increase during 2009.

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(c)  

Non-Operating Expense (Income).

Non-operating expense (income) increased by $720,578 or 136% for the three months ended June 30, 2009 compared to June 30, 2008.  The increase was attributed to increased interest expense ($108,949) due to a greater amount of note payables and loss on investment in subsidiary ($106,816), offset by a change in fair value of debt derivative ($374,819) for the three months ended June 30, 2009 compared to the same period in 2008.  In the three month period ended June 30, 2008, the Company recorded a significant gain on extinguishment of debt in connection with a modification of existing debt at the time.   

     

 

(d)  

Net Operating Loss.

     

The Company had a consolidated net operating loss of $1,759,230 for the three months ended June 30, 2009 compared to $1,144,331 for the three months ended June 30, 2008, an increase of $614,899 or 54% from operations.  The increase in consolidated net operating loss is the result of the factors mentioned above. The Company anticipates a decrease in its consolidated net operating loss during 2009 due to the increased revenues generated from the new subsidiaries.  

 

Results of Operations for the Six Months Ended June 30, 2009 Compared to the Six Months Ended June, 2008.

(a)

Revenue and Cost of Revenue.

	June 30, 2009	June 30, 2008	$ Change	% Change
Revenue	$         873,432	$       98,503	$       774,929	787%
Cost of Revenue	1,106,484	-	1,106,484	100%
Gross Profit	(233,052)	98,503	(331,555)	(337%)
Operating, General and Administrative Costs	2,167,240	1,794,697	372,543	(21%)
Net Operating Loss	$    (2,400,292)	$  (1,696,194)	$     (704,098)	42%

The Company had $873,432 of revenue for the six months ended June 30, 2009 compared to $98,503 for the nine months ended June 30, 2008, an increase of $774,929 or 787%.  Revenue for the six months ended June 30, 2008 consisted $71,129 of commission revenues and $27,374 of other revenues from the CEO’s speaking engagements and book sales.  For the six months ended June 30 2009, revenues consisted of $94,517 from self enrichments infomercial and seminar sales, $726,123 from the new gas station purchased in April 2009, $49,473 from the sale of a redevelopment home, and $3,319 from other revenues.  Other revenues for the six months ended June 30, 2009 consisted of $3,319 from book sales .  

 

Additionally, rental revenues and cost of revenues for the six months ended June 30, 2008 has been reclassified to discontinued operations in the Company’s financial statements due to the sale of a majority of the Company’s ownership rights in its subsidiary, St. Clair Superior Apartment Inc.  Revenues from food and beverage, laundry, and retail for the six months ended June 30, 2009 have also been re-classed to discontinued operations in connection with the Company’s commitment to sell all the subsidiaries of City Juice and City Laundry, and the discontinuation of the EBay drop off locations.

Cost of revenue was $1,106,484 for the six months ended June 30, 2009 compared to $0 for the nine months ended June 30, 2008.  Cost of revenues includes the initial purchase price of the home, renovation expenses, and closing costs paid by the Company in connection with the sale of the home.  Cost of revenue consisted of the self enrichment segment ($421,509) for expenses for the infomercial and merchandise, and the oil and gas segment ($633,337) for inventory of the gas station.  Additionally, costs of revenues for the laundry, juice and retail segment for the six months ended June 30, 2009 were re-classified to discontinued operations in connection with the Company’s commitment to sell all of the subsidiaries of City Juice and City Laundry.

As previously discussed, during 2009, the Company increased its leveraging investments and holdings by creating five limited liability companies, whose focus is on the oil and gas, laundry, food and beverage, health and beauty, and retail industries.  Although the subsidiaries of City Juice and City Laundry are available for sale, the Company expects revenues for the oil and gas and self enrichment segments to increase during 2009.

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For the six months ended June 30, 2009, the Company did not close on any properties and generated no revenues from the credit investor program. The Company is actively seeking new buyers and plans on increasing its closed properties each quarter; however, because this is a newly structured endeavor and given the current economic environment the Company is unable to reasonably predict what it may have on its financial statements in the next 12 months.

(b)  

Operating, General and Administrative Expenses.

Operating, general and administrative expenses for the six months ended June 30, 2009 were $2,167,240 compared to $1,794,697 for the six months ended June 30 2008, an increase of $372,543 or 21%.  The increase for the six months ended June 30, 2009 compared to 2008 was attributable to an increase in compensation ($216,179) due a bonuses related to the employment agreement between the Company and our President and increased employees at the Company’s subsidiaries, marketing and investor relations ($283,338), depreciation ($1,480), and other selling, general and administrative expenses ($128,455) all due to the additional subsidiaries created and acquired during the first and second quarter of 2009.  Additionally, fees relating to St. Clair Superior have been re-classified to loss on discontinued operations in connection with the sale of majority of the Company’s ownership as of January 30, 2009.  Expenses for City Juice, City Laundry’s subsidiaries and Ichiban have also been re-classed to discontinued operations in connection with the Company’s commitment to sell all the subsidiaries of City Juice and City Laundry, and the close and discontinuation of the EBay drop off locations.

As previously discussed, during the first and second quarter of 2009, the Company increased its leveraging investments and holdings by creating five limited liability companies, whose focus is on the laundry, food and beverage, health and beauty, and retail industries.  Additionally, the Company subsidiaries, City Petroleum, City Laundry and City Juice each purchased an additional business during the second quarter of 2009.  Due to the increase in employees and operating costs, expenses are expected to increase during 2009.

(c)  

Non-Operating Expense (Income).

Non-operating expense (income) increased by $436,748 or 112% for the six months ended June 30, 2009 compared to June 30, 2008.  This was attributed significantly to the sale of 80% of St. Clair Superior which resulted in a gain on deconsolidated of subsidiary of $346,404, and $315,555 for the change in fair value of the Company’s debt derivative, offset by $118,253 as a loss on investments in unconsolidated subsidiaries, and $100,822 of interest expense for the six months ended June 30, 2009.  

     

 

(d)  

Net Operating Loss.

     

The Company had a consolidated net operating loss of $2,400,292 for the six months ended June 30, 2009 compared to $1,696,194 for the six months ended June 30, 2008, an increase of $704,098 or approximately 42% from operations.  The increase in consolidated net operating loss is the result of the factors mentioned above. The Company anticipates a decrease in its consolidated net operating loss during 2009 due to the increased revenues generated from the new subsidiaries.  

Factors That May Affect Operating Results.

The Company’s operating results can vary significantly depending upon a number of factors, many of which are outside its control.  General factors that may affect its operating results include:

·

market acceptance of and changes in demand for services;

·

a small number of customers account for, and may in future periods account for, substantial portions of our revenue, and revenue could decline because of delays of customer orders or the failure to retain customers;

·

gain or loss of clients or strategic relationships;

·

announcement or introduction of new services by us or by its competitors;

·

price competition;

·

the ability to upgrade and develop systems and infrastructure to accommodate growth;

·

the ability to introduce and market services in accordance with market demand;

·

changes in governmental regulation; and

·

reduction in or delay of capital spending by clients due to the effects of terrorism, war and political instability.

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The Company believes that its planned growth and profitability will depend in large part on the ability to promote its services, gain clients and expand its relationship with current clients.  Accordingly, the Company intends to invest in marketing, strategic partnerships, and development of its customer base.  If we are not successful in promoting our services and expanding our customer base, this may have a material adverse effect on our financial condition and our ability to continue to operate our business.

Operating Activities.

     

The net cash used in operating activities was $1,660,883 for the six months ended June 30, 2009 compared to $971,907 for the six months ended June 30, 2008, an increase of $688,975 or 71%.  This increase is attributed to many changes from period to period, including an increase in accounts payable and accrued expenses, deferred revenues in connection with the infomercial, offset by a decrease in the Company’s debt derivative, and note receivable-related party, and increase in accounts receivable, and inventory.

Investing Activities.

     

Net cash used in investing activities was $798,138 for the six months ended June 30, 2009 compared to $5,000 for the six months ended June 30, 2008, an increase of $793,138 or 159%.  The increase is due to the purchase of six new businesses by the Company’s subsidiaries and associated assets, and increase in investments in unconsolidated subsidiaries due to the sale of a majority of the ownership in St. Clair Superior, offset by the proceeds from discontinued operations and gain on deconsolidation of subsidiary.

Financing Activities.

    Net cash provided by financing activities increased to $2,369,622 compared to $964,692 for the nine months ended June 30, 2009 and 2008, an increase of $1,404,930 or 146%.  This increase was due to the increased amount of debt the Company acquired to support its operations.

Liquidity and Capital Resources.

     

As of June 30, 2009, the Company had total current assets of $2,598,159 and total current liabilities of $7,104,464, resulting in a working capital deficit of $4,506,305.  The Company’s cash balance as of June 30, 2009 totaled $124,589.  Overall, cash and cash equivalents for the six months ended June 30, 2009 decreased by $89,399 from December 31, 2008 due to the increased purchase of subsidiaries.  As a result of substantially more subsidiaries purchased in the first and second quarters of 2009, expense for additional employees and operating costs have dramatically decreased the cash balance during 2009.  The Company’s debt load will also put considerable strain on its cash resources for the remainder of 2009.  

Whereas the Company has been successful in the past in raising capital, no assurance can be given that these sources of financing will continue to be available to it and/or that demand for equity/debt instruments will be sufficient to meet its capital needs, or that financing will be available on terms favorable to the Company.  The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

If funding is insufficient at any time in the future, the Company may not be able to take advantage of business opportunities or respond to competitive pressures, or may be required to reduce the scope of planned product development and marketing efforts, any of which could have a negative impact on business and operating results.  In addition, insufficient funding may have a material adverse effect on the Company’s financial condition, which could require it to:

·  

curtail operations significantly;

·

sell significant assets;

·  

seek arrangements with strategic partners or other parties that may require the Company to relinquish significant rights to products, technologies or markets; or

·

explore other strategic alternatives including a merger or sale of the Company.

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To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on the Company’s operations.  Regardless of whether cash assets prove to be inadequate to meet the Company’s operational needs, the Company may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing stockholders.

Inflation.

The impact of inflation on costs and the ability to pass on cost increases to the Company’s customers over time is dependent upon market conditions.  The Company is not aware of any inflationary pressures that have had any significant impact on operations over the past quarter, and the Company does not anticipate that inflationary factors will have a significant impact on future operations.

Off-Balance Sheet Arrangements.

The Company does not maintain off-balance sheet arrangements nor does it participate in non-exchange traded contracts requiring fair value accounting treatment.

Critical Accounting Policies.

The SEC has issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies” (“FRR 60”), suggesting companies provide additional disclosure and commentary on their most critical accounting policies.  In FRR 60, the SEC has defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.  Based on this definition, the Company's most critical accounting policies include: (a) use of estimates in the preparation of financial statements; (b) revenue recognition; (c) stock based compensation; (d) inventory - homes for sale; (e) impairment of long-lived assets; and (f) investment in unconsolidated investee.  The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results it reports in the financial statements.

(a)  

Use of Estimates in the Preparation of Financial Statements.

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.

(b)  

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 and retail 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.

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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.

(c)  

Stock Based Compensation.

Shares of the Company’s common stock were issued for services.  These issuances are valued at the fair market value of the services provided and the number of shares issued is determined based upon what the price of the common stock is on the date of each respective transaction.  For those transactions without a fair market value in the service contract, the Company values the shares issued for services at the fair market value of its common stock on the grant date.

(d)

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 under Accounting Principles Board (“APB”) Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock”.  The Company accounts for its investments in The Male Room and St. Clair under the equity method of accounting and records its share of income as a component in its consolidated statement of operations.

Forward Looking Statements.

Information in this Form 10-Q contains “forward looking statements” within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Exchange Act of 1934, as amended.  When used in this Form 10-Q, the words “expects,” “anticipates,” “believes,” “plans,” “will” and similar expressions are intended to identify forward looking statements.  These are statements that relate to future periods and include, but are not limited to, statements regarding the adequacy of cash, expectations regarding net losses and cash flow, statements regarding growth, the need for future financing, dependence on personnel, and operating expenses.  

Forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.  These risks and uncertainties include, but are not limited to, those discussed above as well as the risks set forth above under “Factors That May Affect Operating Results.”  These forward looking statements speak only as of the date hereof.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.  CONTROLS AND PROCEDURES.

Not applicable.

ITEM 4(T).  CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer/principal financial officer, to allow timely decisions regarding required disclosure.

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As of the end of the period covered by this report, the Company’s management carried out an evaluation, under the supervision and with the participation of the principal executive officer/principal financial officer, of disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).  Based upon the evaluation, the principal executive officer/principal financial officer concluded that the Company’s disclosure controls and procedures were not effective at a reasonable assurance level to ensure that information required to be disclosed by it in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms since the Company is currently late in filing this Form 10-Q.  The principal executive officer/principal financial officer concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the principal executive officer/principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

There have been no material developments in the legal proceedings as previously disclosed in response to Item 3 of Part I of the Company’s latest Form 10-K.

ITEM 1A.  RISK FACTORS.

There have been no material changes in the risk factors as previously disclosed in response to Item 1A.of Part I of the Company’s latest Form 10-K.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS .

 

               On April 15, 2009, the Company issued 300,000 shares of restricted common stock for services for $15,000 at $0.05 per share.

With respect to the unregistered sales made, the Company relied on Section 4(2) of the Securities Act of 1933, as amended.  No advertising or general solicitation was employed in offering the securities. The securities were offered to sophisticated investors and existing shareholders who were provided all of the current public information available on the Company.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5.  OTHER INFORMATION.

None.

ITEM 6.  EXHIBITS.

Exhibits included or incorporated by reference herein are set forth in the Exhibit Index.

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SIGNATURE

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.

City Capital Corporation

Dated: January 14, 2010  

By: /s/     Ephren W. Taylor II    

                   Ephren W. Taylor II,

Chief Executive Officer (principal financial and accounting officer)

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EXHIBIT INDEX

Number

                  

       Description

3.1

Articles of Incorporation, dated July 17, 1984 (incorporated by reference to Exhibit 3.1 of the Form 10-KSB filed on April 13, 2001).

3.2

Articles of Amendment to the Articles of Incorporation, dated February 20, 1987 (incorporated by reference to Exhibit 3.2 of the Form 10-KSB filed on April 13, 2001).    

3.3

Certificate of Amendment of Articles of Incorporation, dated March 28, 1994 (incorporated by reference to Exhibit 3.3 of the Form 10-KSB filed on April 13, 2001).

3.4

Certificate of Amendment of Articles of Incorporation, dated October 31, 1996 (incorporated by reference to Exhibit 3.4 of the Form 10-KSB filed on April 13, 2001).

3.5

Certificate of Amendment to Articles of Incorporation, dated August 17, 1999 (incorporated by reference to Exhibit 3.5 of the Form 10-KSB filed on April 13, 2001).

3.6

Certificate of Amendment to Articles of Incorporation, dated April 12, 2002 (incorporated by reference to Exhibit 3.6 of the Form 10-KSB filed on April 15, 2003).

3.7

Certificate of Amendment to Articles of Incorporation, dated November 6, 2002 (incorporated by reference to Exhibit 3.7 of the Form 10-KSB filed on April 15, 2003).

3.8

Certificate of Amendment to Articles of Incorporation, dated August 4, 2004 (incorporated by reference to Exhibit 3.8 of the Form 10-KSB filed on April 25, 2005).

3.9

Certificate of Amendment to Articles of Incorporation, dated December 10, 2004 (incorporated by reference to Exhibit 3.9 of the Form 10-KSB filed on April 25, 2005).

3.10

Certificate of Amendment to Articles of Incorporation, dated December 10, 2004 (incorporated by reference to Exhibit 3.10 of the Form 10-KSB filed on April 25, 2005).

3.11

Bylaws, dated December 10, 2004 (incorporated by reference to Exhibit 3.11 of the Form 10-KSB filed on May 1, 2008).

4

Amended And Restated Employees And Consultants Retainer Stock Plan  (Amendment No. 4), dated February 28, 2007 (incorporated by reference to Exhibit 4 of the Form S-8 filed on March 29, 2007).

10.1

Exchange Agreement between the Company and Ephren Capital Corporation, dated April 19, 2006 (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on April 25, 2006).

10.2

Investment Agreement between the Company and The Lucian Group Inc., dated October 30, 2006 (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on November 13, 2006).

10.3

Stock Purchase Agreement between the Company and Montreal Beneficial, Inc., dated April 9, 2007 (incorporated by reference to Exhibit 10.1 of the Form 10-QSB filed on May 21, 2007).

10.4

Limited Liability Company Interest Purchase Agreement between the Company and Granite Companies LLC, dated May 1, 2007 (incorporated by reference to Exhibit 10.2 of the Form 10-QSB filed on May 21, 2007).

10.5

Management Agreement between the Company and Cimino Development, LLC, dated  May 1, 2007 (incorporated by reference to Exhibit 10.7 of the Form 10-KSB filed on May 1, 2008).

10.6

Employment Agreement between the Company and Ephren Taylor, Jr., dated January 1, 2008 (incorporated by reference to Exhibit 10.8 of the Form 10-Q filed on May 20, 2008).

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10.7

Asset Acquisition Agreement between the Company and InfoMind, Inc. dba Nitty Gritty Marketing, dated October 7, 2008 (incorporated by reference to Exhibit 10 of the Form 8-K filed on October 22, 2008).

10.8

Stock Purchase Agreement between City Capital Corp and Purchaser, dated January 30, 2009 (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on April 1, 2009).

10.9

Consulting Services Agreement between the Company and Web3Direct, Inc., dated June 5, 2008 (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on September 3, 2009).

10.10

Agreement Between the Company and REIAssure, Inc., dated June 5, 2008 (incorporated by reference to Exhibit 10.2 of the Form 8-K filed on September 3, 2009).

10.11

Purchase Agreement between the Company and 39^th Street, dated January 29, 2009 (incorporated by reference to Exhibit 10.11 of the Form 10-Q filed on September 17, 2009).

10.12

Purchase Agreement between the Company and Blue Ridge, dated March 12, 2009 (incorporated by reference to Exhibit 10.12 of the Form 10-Q filed on September 17, 2009).

10.13

Escrow Agreement between the Company and Ichiban Ventures, Inc., dated January 16, 2009 (incorporated by reference to Exhibit 10.13 of the Form 10-Q filed on September 17, 2009).

10.14

General Release, Termination and Indemnification Agreement between Guiseppe Arlia. and the Company dated January 16, 2009 (incorporated by reference to Exhibit 10.14 of the Form 10-Q filed on September 17, 2009).

10.15

Asset Purchase Agreement between the Company and LA Juice, dated February 20, 2009 (incorporated by reference to Exhibit 10.15 of the Form 10-Q filed on September 17, 2009).

10.16

Asset Purchase Agreement between the Company and Blendz 101, LLC, dated April 2, 2009 (filed herewith).

10.17

Asset Purchase Agreement between the Company and Hebron Consulting, dated April 24, 2009 (filed herewith).

10.18

Lease Transfer and Asset Purchase Agreement between the Company and Brookhaven Gasoline

Co., Inc., dated April 3, 2009 (filed herewith).

14

Code of Business Conduct and Ethics, adopted by the Company’s board of directors (incorporated by reference to Exhibit 14 of the Form 10-KSB filed on April 25, 2005).

16.1

Letter on Change in Accountant, dated February 7, 2007 (incorporated by reference to Exhibit 16.1 of the Form 8-K filed on February 8, 2007).

16.2

Letter on Change in Accountant, dated May 14, 2007 (incorporated by reference to Exhibit 16.2 of the Form 8-K filed on May 29, 2007).

16.3

Letter on Change in Accountant, dated October 5, 2007 (incorporated by reference to Exhibit 16.3 of the Form 8-K filed on October 9, 2007).

17.1

Letter on Director Resignation of Gary Borglund, dated May 1, 2007 (incorporated by reference to Exhibit 17.1 of the Form 8-K filed on May 8, 2007).

17.2

Letter on Director Resignation of Richard Overdorff, dated May 1, 2007 (incorporated by reference to Exhibit 17.2 of the Form 8-K filed on May 8, 2007).

17.3

Letter on Director Resignation of Melissa Grimes, dated September 4, 2007 (incorporated by reference to Exhibit 17.3 of the Form 8-K filed on September 7, 2007).

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17.4

Letter on Director Resignation of Phillip St. James, dated September 12, 2007 (incorporated by reference to Exhibit 17.4 of the Form 8-K filed on September 17, 2007).

21

Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Form 10K filed on May 20, 2009).

31

Rule 13a-14(a)/15d-14(a) Certification of Ephren W. Taylor II (filed herewith).

32

Section 1350 Certification of Ephren W. Taylor II (filed herewith).

99.1

Audit Committee Charter, dated April 19, 2005 (incorporated by reference to Exhibit 99 of the Form 10-KSB filed on April 25, 2005).

99.2

Press release issued by the Company, dated October 31, 2006 (incorporated by reference to Exhibit 10.2 of the Form 8-K filed on November 13, 2006).

99.3

Press release issued by the Company, dated April 23, 2007 (incorporated by reference to Exhibit 99.2 of the Form 8-K filed on April 23, 2007).

37