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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

R Quarterly Report Pursuant To Section 13 or 15(d) Of The Securities Exchange Act Of 1934

For the quarterly period ended June 30, 2011

oTransition Report Under Section 13 or 15(d) Of The Securities Exchange Act Of 1934

For the transition period from __________ to __________

Commission File Number:    000-52883
 
CREATIVE LEARNING CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware   20-4456503       
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
 
701 Market St,, Suite 113
St. Augustine, FL 32095
 (Address of principal executive offices, including Zip Code)
 
(904)-825-0873
 (Issuer’s telephone number, including area code)

340 Paseo Reyes Dr., St. Augustine, FL 32095
 (Former name or former address if changed since last report) 

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ   No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o  No o

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

Large accelerated filer    o   Accelerated filer    o   Non-accelerated filer    o    Smaller reporting company   þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes o     No þ
  
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:   11,884,247 shares of common stock as of July 31, 2011.



 
 

 


CREATIVE LEARNING CORPORATION
Consolidated Financial Statements
(Unaudited)
 
Quarter Ended June 30, 2011
 
TABLE OF CONTENTS
 
    Page  
       
CONSOLIDATED FINANCIAL STATEMENTS      
       
Consolidated balance sheets     3  
         
Consolidated statements of operation      4  
         
Consolidated statements of operation      5  
         
consolidated statements of stockholders' equity
    6  
         
Consolidated statements of cash flows       7-8  
         
Notes to consolidated financial statements      9-12  
 
 
2

 

CREATIVE LEARNING CORPORATION
CONSOLIDATED BALANCE SHEETS
         
June 30,
 
   
Sept. 30,
   
2011
 
   
2010
   
(Unaudited)
 
             
ASSETS
Current assets
           
      Cash
  $ 27,271     $ 362,578  
             Total current assets
    27,271       362,578  
                 
      Fixed assets
    41,743       48,100  
      Less accumulated depreciation
    (589 )     (7,685 )
      Accounts Receivable
    -       315,000  
      Other assets
    9,819       19,819  
      50,973       375,234  
                 
Total Assets
  $ 78,244     $ 737,812  
                 
LIABILITIES & STOCKHOLDERS' EQUITY
                 
Current liabilities
               
      Accounts payable
  $ 39,700     $ 7,380  
      Note payable - rel. pty. - current portion
    650       -  
      Notes payable - current portion
    200,000       -  
      Debt discount
    (19,630 )     -  
      Accrued interest payable
    6,350       -  
      Due to shareholder
    6,250       6,250  
             Total current liabilities
    233,320       13,630  
                 
Total Liabilities
    233,320       13,630  
                 
Stockholders' Equity
               
   Creative Learning Corporation stockholders' equity
               
      Preferred stock, $.0001 par value;
               
          10,000,000 shares authorized; none issued and outstanding
    -       -  
      Common stock, $.0001 par value;
               
          50,000,000 shares authorized;
               
          2,581,268 and 3,763,237 respectively
               
          shares issued and outstanding
    258       376  
      Additional paid in capital
    670,427       1,516,547  
      Stock subscription
    -       315,000  
      Retained earnings (deficit)
    (771,027 )     (1,107,741 )
   Total Creative Learning Corporation stockholders' equity
    (100,342 )     724,182  
   Noncontrolling interest
    (54,734 )     -  
                 
Total Stockholders' Equity
    (155,076 )     724,182  
                 
Total Liabilities and Stockholders' Equity
  $ 78,244     $ 737,812  
                 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
3

 
 
CREATIVE LEARNING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
 
             
   
Three Months
   
Three Months
 
   
Ended
   
Ended
 
   
June 30, 2010
   
June 30, 2011
 
             
Revenues
  $ 154,517     $ 361,659  
Operating expenses:
               
     Advertising and promotions
    24,049       70,609  
     Commissions
    69,125       160,525  
     Consulting
    50,738       83,435  
     Equipment rental
    1,313       270  
     Legal and professional
    44,148       20,598  
     Office expense
    5,806       14,183  
     Rent
    2,636       25,998  
     Salaries and Wages
    30,860       40,074  
     Taxes and licenses
    3,373       17,917  
     Telephone
    743       2,813  
     Training
    12,350       34,940  
     Travel and entertainment
    9,524       13,443  
     Utilities
    -       1,843  
     Miscellaneous
    5,695       1,424  
     Depreciation
    -       2,405  
     General and administrative
    46,036       1,960  
      306,396       492,437  
                 
Gain (loss) from operations
    (151,879 )     (130,778 )
                 
Other income (expense):
               
     Interest expense
    (1 )     (1,834 )
     Interest expense - debt discount
            -  
     Interest income
    1       -  
     Other income
    -       8,904  
      -       7,070  
                 
Income (loss) before provision for income taxes
    (151,879 )     (123,708 )
                 
Provision for income tax
    -       -  
                 
Net income (loss)
  $ (151,879 )   $ (123,708 )
                 
Net income (loss) per share
               
(Basic and fully diluted)
  $ (0.10 )   $ (0.04 )
Weighted average number of
               
common shares outstanding
    1,557,000       2,753,716  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
4

 
 
CREATIVE LEARNING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
 
             
   
Nine Months
   
Nine Months
 
   
Ended
   
Ended
 
   
June 30, 2010
   
June 30, 2011
 
             
Revenues
  $ 375,503     $ 1,008,046  
Operating expenses:
               
     Advertising and promotions
    70,131       128,478  
     Commissions
    133,247       304,399  
     Consulting
    84,633       247,212  
     Equipment rental
    2,038       811  
     Legal and professional
    49,958       50,078  
     Office expense
    19,009       68,511  
     Rent
    7,384       68,939  
     Salaries and Wages
    30,860       173,359  
     Taxes and licenses
    5,138       42,917  
     Telephone
    743       8,266  
     Training
    34,042       50,618  
     Travel and entertainment
    26,773       66,326  
     Utilities
    -       3,869  
     Miscellaneous
    7,250       2,769  
     Depreciation
    -       7,096  
     General and administrative
    49,349       145,250  
      520,555       1,368,898  
                 
Gain (loss) from operations
    (145,052 )     (360,852 )
                 
Other income (expense):
               
     Interest expense
    (1 )     (16,023 )
     Interest expense - debt discount
            (19,630 )
     Interest income
    2       -  
     Other income
    -       59,791  
      1       24,138  
                 
Income (loss) before provision for income taxes
    (145,051 )     (336,714 )
Provision for income tax
    -       -  
                 
Net income (loss)
  $ (145,051 )   $ (336,714 )
                 
Net income (loss) per share (Creative Learning Corporation)
         
(Basic and fully diluted)
  $ (0.09 )   $ (0.12 )
                 
Weighted average number of
               
common shares outstanding
    1,557,000       2,753,716  
 
The accompanying notes are an integral part of the consolidated financial statements.
 
 
5

 
 
 
CREATIVE LEARNING CORPORATION
 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 
                                                 
                                 
Stockholders'
             
                                 
Equity -
             
   
Common Stock
               
Retained
   
Creative
         
Total
 
         
Amount
   
Additional
   
Stock
   
Earnings
   
Learning
   
Non-controlling
   
Stockholders'
 
   
Shares (1)
   
($.0001 Par)
   
Paid in Capital
   
Subscription
   
(Deficit)
   
Corporation
   
Interest
   
Equity
 
                                                 
Balances at September 30, 2008
    -     $ -     $ -     $ -     $ -     $ -     $ -     $ -  
Founders shares for cash
    1,557,000       156       49,844                       50,000               50,000  
Net income (loss) for the year
                                    7,002       7,002               7,002  
Balances at September 30, 2009
    1,557,000     $ 156     $ 49,844     $ -     $ 7,002     $ 57,002     $ -     $ 57,002  
Stock issued for reverse acquisition
    800,000       80       (26,410 )                     (26,330 )             (26,330 )
Compensatory warrant issuances
                    353,814                       353,814               353,814  
Compensatory stock issuances
    100,000       10       141,237                       141,247               141,247  
Paid in capital -
                                                               
    beneficial conversion feature
                    58,753                       58,753               58,753  
Sales of common stock
    124,268       12       93,189                       93,201               93,201  
Net income (loss) for the year
                                    (778,029 )     (778,029 )     (54,734 )     (832,763 )
Balances at September 30, 2010
    2,581,268     $ 258     $ 670,427     $ -     $ (771,027 )   $ (100,342 )   $ (54,734 )   $ (155,076 )
Acquisition of non-controlling       interest
                  $ (54,734 )                     (54,734 )   $ 54,734       -  
Sales of common stock
    636,067       64       560,613                       560,677               560,677  
Compensatory stock issuances
    545,902       55       340,241                       340,296               340,296  
Stock Subscription
                            315,000               315,000               315,000  
Net income (loss) for the period
                                    (336,714 )     (336,714 )     -       (336,714 )
Balances at June 30, 2011 -
                                                               
   Unaudited
    3,763,237     $ 376     $ 1,516,547     $ 315,000     $ (1,107,741 )   $ 724,182     $ -     $ 724,182  
                                                   
(1) As restated for a reverse acquisition on July 2, 2010
                                                 
   
 
The accompanying notes are an integral part of the consolidated financial statements.
 
6

 
 
CREATIVE LEARNING CORPORATION
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
             
   
Nine Months
   
Nine Months
 
   
Ended
   
Ended
 
   
June 31,
   
June 31,
 
   
2010
   
2011
 
             
Cash Flows From Operating Activities:
           
     Net income (loss) during the development stage
  $ (145,051 )   $ (336,714 )
 
               
     Adjustments to reconcile net loss to
               
     net cash provided by (used for)
               
     operating activities:
               
         Compensatory stock issuances
    -       283,954  
         Depreciation
    -       7,096  
         Accounts receivable
    (29,000 )     -  
         Note receivable
    (500 )     -  
         Security deposits
    (200 )     (10,000 )
         Interest expense - debt discount
    -       19,630  
         Accounts payables
    9,927       (32,320 )
         Accrued payables
    -       (6,350 )
                 
                 
               Net cash provided by (used for)
               
               operating activities
    (164,824 )     (74,704 )
                 
Cash Flows From Investing Activities:
               
         Fixed assets
  $ -     $ (6,357 )
               Net cash provided by (used for)
               
               investing activities
    -       (6,357 )
 
(Continued On Following Page)
The accompanying notes are an integral part of the consolidated financial statements.
 
7

 
 
CREATIVE LEARNING CORPORATION
 
(formerly B2 Health, Inc.)
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
             
(Continued From Previous Page)
 
             
             
   
Nine Months
   
Nine Months
 
   
Ended
   
Ended
 
   
June 31,
   
June 31,
 
   
2010
   
2011
 
             
Cash Flows From Financing Activities:
           
     Notes payable – borrowings
    650       (200,650 )
     Member contribution
    50,000          
     Sales of common stock
    -       617,018  
               Net cash provided by (used for)
               
               financing activities
    50,650       416,368  
                 
Net Increase (Decrease) In Cash
    (114,174 )     335,307  
                 
Cash At The Beginning Of The Period
    -       27,271  
                 
Cash At The End Of The Period
  $ (114,174 )   $ 362,578  
                 
                 
Schedule Of Non-Cash Investing And Financing Activities
               
                 
In 2010 the Company issued stock subscriptions payable for 50,000 shares in
         
connection with notes payable for compensation recorded at $100,000,
         
the Company issued 200,000 common stock purchase options in
         
connection with notes payable for compensation recorded at $353,814,
         
and the Company issued 713,000 shares of
               
common stock pursuant to a reverse acquisition for net liabilities of $200,330.
         
                 
Supplemental Disclosure
               
                 
Cash paid for interest
  $ -     $ -  
Cash paid for income taxes
  $ -     $ -  
 
 
8

 
 
CREATIVE LEARNING CORPORATION
(formerly B2 Health, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
Creative Learning Corporation (formerly B2 Health, Inc.) was incorporated March 8, 2006 in the State of Delaware. BFK Franchise Company LLC was formed in the State of Nevada on May 19, 2009. Effective July 2, 2010 Creative Learning Corporation was acquired by BFK Franchise Company LLC in a transaction was accounted for similar to a reverse acquisition as the members of BFK Franchise Company LLC retained the majority of the outstanding common stock of Creative Learning Corporation after the share exchange.  The accounting for the transaction was identical to that resulting from a reverse acquisition, except that no goodwill or other intangibles were recorded. Creative Learning Corporation concurrently changed its name from B2 Health, Inc. to Creative Learning Corporation. The financial statements represent the activity of BFK Franchise Company LLC from May 19, 2009 forward, and the consolidated activity of BFK Franchise Company LLC and Creative Learning Corporation from July 2, 2010 forward. BFK Franchise Company LLC and Creative Learning Corporation are hereinafter referred to collectively as the "Company". The Company, primarily through franchises, offers educational programs designed to teach principles of engineering, architecture and physics to children using Lego ® bricks. The Company may also engage in any other business that is permitted by law, as designated by the Board of Directors of the Company.
 
Basis of Presentation
 
The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.
 
Fiscal year
 
The Company employs a fiscal year ending September 30.
 
Principles of consolidation
 
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.
 
Cash and cash equivalents
 
The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.
 
 
9

 
 
CREATIVE LEARNING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
 
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
 
Accounts receivable
 
The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At June 30, 2011 the Company had no balance in its allowance for doubtful accounts.
 
Property and equipment
 
Property and equipment are recorded at cost and depreciated under straight line or accelerated methods over each item's estimated useful life.
 
Revenue recognition
 
Revenue is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed or determinable, and collectability is reasonably assured.
 
Use of Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Income tax
 
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
 
 
10

 
 
CREATIVE LEARNING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
 
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
 
Prior to fiscal year 2010 the Company operated as an LLC, was a pass-through entity for federal income tax purposes and paid no income tax at the company level. At June 30, 2011 the Company had net operating loss carryforwards of approximately $1,107,741 which begin to expire in 2031. The deferred tax asset of approximately $221,548 created by the net operating loss has been offset by a 100% valuation allowance. The change in the valuation allowance in the nine month interim period ended June 30, 2011 was $67,344.
 
Advertising costs
 
Advertising costs are expensed as incurred. The Company had advertising costs for the nine month period ended June 30, 2011 was $128,478.
 
Net income (loss) per share
 
The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.
 
Financial Instruments
 
The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheets, approximates fair value.
 
Long-Lived Assets
 
In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.
 
Stock based compensation
 
The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.
 
 
11

 
 
CREATIVE LEARNING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
 
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
 
Non-controlling interest
 
On October 1, 2010 the Company acquired the remaining 50% portion of BFK Development LLC resulting in a $54,734 reduction in the additional paid in capital account.

 
12

 
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION
 
The Company was formed in March 2006 to design, manufacture and sell chiropractic tables and beds.  The Company generated only limited revenue and essentially abandoned its business plan in March 2008.
 
Although from a legal standpoint the Company, on July 2, 2010, acquired BFK Franchise Company, for financial reporting purposes, the acquisition of BFK constituted a recapitalization, and the acquisition was accounted for similar to a reverse merger, with the result that BFK was deemed to have acquired the Company.  As a result, the financial statements of the Company included as part of this report represent the activity of BFK from May 19, 2009 (the inception of BFK) to July 2, 2010, and the consolidated activity of BFK and the Company from July 2, 2010 forward.
 
Unless otherwise indicated, any reference to the operations of the Company includes the operations of BFK.
 
BFK, which conducts business under the trade name, BRICKS 4 KIDS®, offers programs designed to teach principles of engineering, architecture and physics to children ages 3-12+ using LEGO® bricks. BFK provides classes (both in school and after school), special events programs and day camps that are designed to enhance and enrich the traditional school curriculum, trigger young children’s lively imaginations and build self-confidence.  BFK’s programs foster creativity and provide a unique atmosphere for students to develop problem solving and critical thinking skills by designing and building machines, catapults, pyramids, race cars, buildings and numerous other systems and devices using LEGO® bricks
 
BFK operates through Corporate Creativity Centers and franchisees.
 
A Corporate Creativity Center is a store-front location, owned and operated by BFK, where BFK coordinates in school field trips, after school classes, parties, camps and other programs – as well as the retail sales of LEGO® merchandise.
 
BFK sold its first franchise in September 2009.  Since that time BFK has:

  
opened one Corporate Creativity Center in Florida; and
 
  
sold 71 additional franchises.
 
As of July 31, 2011 BFK, through its franchises, was operating in 27 states, and two foreign countries, and Puerto Rico.
 
The increase in the Company’s revenues and expenses during the nine months ended June 30, 2011, as compared to the same period last year, reflects the expansion of the Company’s business.
 
 
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Liquidity and Capital Resources
 
Sources and (uses) of funds for the nine months ended June 30, 2010 and 2011 are shown below:
 
   
Nine Months Ended June 30,
 
    2010     2011  
             
 Cash provided by (used in) operations   $ (164,824 )       $ (68,363 )
 Purchase of equipment     -       (6,357 )
 Loan from third party      650       -  
 Payments on loans to third parties     -       (150,650 )
 Capital contribution      50,000       -  
 Sale of common stock       -       560,677  
 
Subsequent to July 2, 2010, the date the Company acquired BFK Franchise Company, the Company had the following transactions in its common stock:
 
Between September 2010 and December 2010, the Company sold 55,342 units at a price of $3.00 per unit. Each Unit consisted of four shares of the Company’s common stock and one warrant.  Each Warrant entitles the holder to purchase one share of the Company’s common stock at a price of $3.00 per share.  The Warrants expire on the earlier of July 31, 2013, or twenty days following written notification from the Company that its common stock had a closing bid price at or above $4.00 for any ten of twenty consecutive trading days.  The proceeds from the sale of the Units were used to open a new Corporate Creativity Center in Coral Springs, Florida, as well as for developing the Company’s online Franchise Management Tool that is used by franchisees for business management and general and administrative expenses.
 
On June 24, 2010 the Company borrowed $100,000 from a franchisee.  During the nine months ended June 30, 2011 this loan was converted into 252,500 shares.
 
On July 15, 2010 the Company borrowed $100,000 from three persons.  During the nine months ended June 30, 2011 these loans were converted into 215,902 shares. Of this amount, 62,500 shares had not been issued as of July 31, 2011.

On December 28, 2010 the Company borrowed $10,000 from a franchisee.  The loan was repaid on April 2, 2011.  In partial consideration for providing this loan, the Company agreed to issue 7,500 shares of common stock to the franchisee.  Of this amount, 2,500 shares have been issued as of July 31, 2011 and 5,000 shares remain to be issued.
 
Between January 1, 2011 and June 30, 2011 the Company issued 100,000 shares to unrelated parties for investor relations services.
 
On January 12, 2011 the Company issued 20,000 shares to employees for services rendered.

 
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In March 2011 the Company granted a third party an option to purchase up to 667,000 shares at a price of $0.675 per share.  As of June 30, 2011 the option holder had purchased all 667,000 shares.
 
On February 27, 2011 the Company borrowed $15,000 from a third party. This loan was repaid on March 22, 2011. In partial consideration for providing this loan, the Company agreed to issue 2,500 shares to the lender.  As of July 31, 2011, these shares had not been issued.
 
In May 2011, the Company issued 50,000 shares to Dan O’Donnell, the Company’s Vice President of Operations, for services rendered.
 
Between April 1, 2011 and July 31, 2011, the Company sold 194,000 shares, at a price of $1.00 per share, to a group of private investors
 
Between April 1, 2011 and July 31, 2011 the Company sold 252,671 shares, at a price of $0.75 per share, to a group of private investors
 
Except as indicated, none of the shares listed above were issued to an officer, director, principal shareholder or an affiliate of the Company.
 
As of July 31, 2011 the Company’s operating cash requirements were approximately $63,000 per month.
 
The Company anticipates that its capital requirements for the twelve-month period ending June 30, 2012 will be as follows
 
General and administrative expenses      $ 343,200  
Marketing     $ 180,000  
Business development    $ 100,000  
Opening new Corporate Creativity Centers   $ 200,000  
                                                                                                                                                                                                                                                                                                                                          
The Company will need to raise the capital it requires through the sale of its securities or from loans from third parties.  The Company does not have any commitments or arrangements from any person to provide the Company with any additional capital.  If additional financing is not available when needed, the Company may need to curtail operations.  The Company may not be successful in raising the capital it needs.
 
As of June 30, 2011 the Company had outstanding short term loans of $50,000, accrued interest payable of $6,341 and $6,250 due to a shareholder. The Company’s remaining liabilities consisted of trade payables. There is no assurance the Company’s operations will be profitable or that the Company will continue to generate a positive cash flow.
 
 
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Contractual Obligations
 
The following table summarizes the Company’s contractual obligations as of June 30, 2011:
 
 Item   Payments Due by Year  
    2011     2012     2013     Total  
                         
Lease of corporate office   $ 24,000       -       -     $ 24,000  
Lease of Creative Learning Center   $ 42,119     $ 44,175     $ 45,267     $ 131,561  
 
Off-Balance Sheet Arrangements
 
The Company does not have any off-balance sheet arrangements that have or are reasonable likely to have a current or future material effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity or capital resources.

Outlook
 
Other than as disclosed above, the Company does not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, the Company’s liquidity increasing or decreasing in any material way.
 
Other than as disclosed above, the Company does not know of any significant changes in its expected sources and uses of cash

Critical Accounting Policies and Recent Accounting Pronouncements
 
See Note 1 to the Company’s financial statements included as part of this report for a discussion of the Company’s critical accounting policies and recent accounting pronouncements, the adoption of which may have a material effect on the Company’s financial statements.
 
ITEM 4.  CONTROLS AND PROCEDURES.
 
(a)           The Company maintains a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported, within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act, is accumulated and communicated to the Company’s management, including its Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure.  As of June 30, 2011, the Company’s Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures.  Based on that evaluation, the Principal Executive and Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

(b)           Changes in Internal Controls.  There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2011, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

 
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PART II
ITEM 6.  EXHIBITS

Exhibits
 
 
31.1
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 
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Certification pursuant to Section 906 of the Sarbanes-Oxley Act.
 
 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


  CREATIVE LEARNING CORPORATION  
       
August 10, 2011 
By:
/s/ Brian Pappas  
    Brian Pappas  
    Principal Executive, Financial and Accounting Officer  
 
 
 
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