Heritage Organization 10QSB 2007 Q3 Quarterly report (small business)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-QSB

(Mark One)

þ	Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934
	for the quarterly period ended February 28, 2007.

o	Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934
	for the transition period from                    to                    .

Commission File No: 000-21951

THE HERITAGE ORGANIZATION, INC.

(Exact name of small business issuer as specified in its charter)

Colorado	84-1356383
(State or other jurisdiction	(IRS Employer Identification
of incorporation or organization)	No.)

ATTN: Vickie Walker, P.O. Box 910 Addison, Texas 75001

(Address of Principal Executive Offices)

Issuer’s telephone number: (214) 662-4094

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. Yesþ    Noo

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

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years.

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yeso     Noo

Applicable only to corporate issuers

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. At April 16, 2007 there were 14,000,000 shares of common stock outstanding.

Transitional Small Business Disclosure Format (Check one): Yeso    Noþ

TABLE OF CONTENTS

PART 1 — FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
	ITEM 3. CONTROLS AND PROCEDURES
PART II
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
Certification Pursuant to Rule 13a-14(a) or 15d-14(a)
Certification Pursuant to Section 906

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS

(a) The unaudited financial statements of registrant for the nine months ended February 28, 2007, follow. The financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented.

The Heritage Organization, Inc.
(A Development Stage Company)

FINANCIAL STATEMENTS
(Unaudited)

February 28, 2007

CONTENTS

Balance Sheets	F-1
Statements of Operations	F-2
Statements of Cash Flows	F-3
Notes to Financial Statements	F-4

THE HERITAGE ORGANIZATION, INC.
(A Development Stage Company)
BALANCE SHEETS

	February 28, 2007			May 31, 2006
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,752		$	7,994
Total Current Assets		1,752			7,994
Total Assets	$	1,752		$	7,994
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	150		$	4,633
Notes payable — related party		90,000			65,000
Accrued interest — related party		3,656			1,607
Total Current Liabilities		93,806			71,240
Total Liabilities		93,806			71,240
COMMITMENTS AND CONTINGENCIES		—			—
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.00001 par value; 99,000,000 shares authorized; 14,000,000 shares issued and outstanding		140			140
Class B common stock, $0.00001 par value; 1,000,000 shares authorized; no shares issued and outstanding		—			—
Additional paid-in capital		93,269			92,819
(Deficit) accumulated during the development stage		(185,463	)		(156,205	)
Total Stockholders’ Equity (Deficit)		(92,054	)		(63,246	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	1,752		$	7,994

See accompanying notes to the financial statements

F-1

THE HERITAGE ORGANIZATION, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)

	For the Period
	from Inception			For the three			For the three			For the nine			For the nine
	(8/28/96) to			months ended			months ended			months ended			months ended
	February 28, 2007			February 28, 2007			February 28, 2006			February 28, 2007			February 28, 2006
REVENUES	$	5		$	—		$	—		$	—		$	—
EXPENSES:
Amortization		300			—			—			—			—
Bank charges		611			35			42			102			118
Consulting fees		62,800			—			—			—			—
Directors fees		200			—			—			—			—
Filing fee		9,885			1,183			—			7,510			2,150
Legal & professional		85,185			2,613			575			15,711			11,053
Office expense		2,534			—			—			—			—
Licenses & Permits		50			—			—			—			—
Rent expense		6,300			150			150			450			450
Total Expenses		167,865			3,981			767			23,773			13,771
(LOSS) FROM CONTINUING OPERATIONS		(167,860	)		(3,981	)		(767	)		(23,773	)		(13,771	)
OTHER (EXPENSE):
Interest expense		(17,603	)		(2,153	)		(2,347	)		(5,485	)		(4,220	)
NET (LOSS)	$	(185,463	)	$	(6,134	)	$	(3,114	)	$	(29,258	)	$	(17,991	)
NET (LOSS) PER SHARE				$	*		$	*		$	*		$	*
Weighted Average Number ofShares Outstanding					14,000,000			14,000,000			14,000,000			14,000,000

* = less than $0.01 per share

See accompanying notes to the financial statements

F-2

THE HERITAGE ORGANIZATION, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Period
	from Inception			For the nine			For the nine
	(August 28, 1996) to			months ended			months ended
	February 28, 2007			February 28, 2007			February 28, 2006
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Net (loss)	$	(185,463	)	$	(29,258	)	$	(17,991	)
Adjustments to reconcile net (loss) to net cash flows used in operating activities:
Amortization		300			—			—
Non cash rent expense		6,300			450			450
Expenses paid by shareholders		15,609			—			—
Stock issued for directors’ fees		59,960			—			—
Stock issued for consulting fees		3,040			—			—
Increase in accounts payable		150			(4,483	)		17
Increase in accrued interest		3,656			2,049			1,357
Net Cash Flows (Used in) Operating Activities		(96,448	)		(31,242	)		(16,167	)
CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
Organization costs		(300	)		—			—
Net Cash Flows (Used in) Investing Activities		(300	)		—			—
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Issuance of common stock		8,500			—			—
Payments on notes payable — related party		(3,000	)		—			—
Proceeds from notes payable — related party		93,000			25,000			15,000
Net Cash Flows Provided By Financing Activities		98,500			25,000			15,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,752			(6,242	)		(1,167	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		—			7,994			1,426
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,752		$	1,752		$	259
Supplemental Disclosures of Cash Flow Information:
Interest paid				$	3,436		$	2,863
Taxes paid				$	—		$	—

See accompanying notes to the financial statements

F-3

THE HERITAGE ORGANIZATION, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 2007

NOTE 1 — BASIS OF PRESENTATION

The accompanying financial statements have been prepared by The Heritage Organization, Inc. without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments, which in the opinion of management, are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. These financial statements should be read in conjunction with the audited financial statements at May 31, 2006.

NOTE 2 — GOING CONCERN AND PLAN OF OPERATION

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is in the development stage and has not earned any revenues from operations to date.

The Company is currently devoting its efforts to seeking business opportunities. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, and ultimately, achieve profitable operations. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 3 — NOTES PAYABLE, RELATED PARTY

Notes Payable

The Company has thirteen unsecured notes payable to a shareholder totaling $90,000 as follows:

Maturity Date	Interest Rate		Principal Amount
May 16, 2007		8.25%		5,000
June 2, 2007		10.00%		5,000
August 4, 2007		10.25%		5,000
August 18, 2007		10.25%		5,000
August 31, 2007		10.25%		5,000
September 18, 2007		10.25%		5,000
September 30, 2007		10.25%		5,000
October 2, 2007		10.25%		25,000
November 8, 2007		10.25%		5,000
November 21, 2007		10.25%		5,000
February 10, 2008		10.25%		5,000
March 18, 2008		8.25%		5,000
March 31, 2008		8.25%		10,000
			$	90,000

The notes are payable on the earlier of demand or the maturity date specified above. All outstanding notes payable are for a term of one year. The Company has historically paid the shareholder accrued interest at the maturity date of notes payable and has entered into a new one-year loan for the outstanding principal balance. For the three and nine month period ended February 28, 2007, $900 and $3,436 of interest was paid to a related party.

The shareholder is the Company’s sole lender. Management of the Company anticipates that the shareholder will continue to renew its notes payable and make new advances to the Company as necessary.

F-4

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Liquidity and Capital Resources.

The Company remains in the development stage, and since inception, has experienced no significant change in liquidity or capital resources or stockholders’ equity other than the receipt of net proceeds in the amount of $8,500 from its inside capitalization funds, and $90,000 as loans from a principal shareholder. Consequently, the Company’s balance sheet for the quarter ended February 28, 2007, reflects a total asset value of $1,752.

The Company does not have sufficient assets or capital resources to pay its on-going expenses while it is seeking out business opportunities, and it has no current plans to raise additional capital through sale of securities, or otherwise. As a result, although the Company has no agreement in place with its shareholders or other persons to pay expenses on its behalf, it is currently anticipated that the Company will rely on loans, if available, from shareholders or third parties to pay expenses at least until it is able to consummate a business combination. There is no assurance that the Company will have sufficient assets or capital to pay its ongoing expenses or continue as a going concern.

Results of Operations.

During the period from August 28, 1996 (inception) through February 28, 2007, the Company has engaged in no significant operations other than organizational activities, acquisition of capital and registering its securities under the Securities and Exchange Act of 1934, as amended. No significant revenues were received during this period, and the Company experienced a cumulative net loss of $185,463.

As of the end of the quarter ending February 28, 2007, the Company has not been able to reach any agreement or definitive understanding with any person concerning a business combination transaction between the Company and any other entity or business. At the present time, no prospects exist for the potential business combination of the Company and any other entity and none is presently anticipated.

The Company intends to continue with its previous business plan to seek, investigate and possibly acquire one or more properties or businesses. Such an acquisition may be made by purchase, merger, exchange of stock, or otherwise and may encompass assets or a business entity, such as a corporation, joint venture, or partnership. The Company has very limited capital, and it is unlikely that the Company will be able to take advantage of more than one such business opportunity. The Company intends to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings.

The Company experienced a net loss of $6,134 and $29,258 for the three and nine months ended February 28, 2007, compared with a net loss of $3,114 and $17,991 for three and nine months ended February 28, 2006. The loss during the quarter is primarily the result of an increase of legal and professional fees. The Company does not expect to generate any revenue until it completes a business combination, but it will continue to incur legal and accounting fees and other costs associated with compliance with its reporting obligations. As a result, the Company expects that it will continue to incur losses each quarter at least until it has completed a business combination. Depending upon the performance of any acquired business, the Company may continue to operate at a loss even following completion of a business combination.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report contains various forward-looking statements that are based on the Company’s beliefs as well as assumptions made by and information currently available to the Company. When used in this report, the words “believe,” “expect,” “anticipate,” “estimate” and similar expressions are intended to identify forward-looking statements. Such statements may include statements regarding seeking business opportunities, payment of operating expenses, and the like, and are subject to certain risks, uncertainties and assumptions which could cause actual results to differ materially from projections or estimates contained herein. Factors which could cause actual results to differ materially include, among others, unanticipated delays or difficulties in location of a suitable business acquisition candidate, unanticipated or unexpected costs and expenses, competition and changes in market conditions, lack of adequate management personnel and the like. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. The Company cautions against placing undue reliance on forward-looking statements all of which speak only as of the date made.

ITEM 3. CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report (the “Evaluation Date”), has concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to provide reasonable assurance of the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. There were no changes in the Company’s internal control over financial reporting during the quarter ended February 28.

PART II

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following Exhibits are filed herewith or incorporated herein by reference below:

Designation	Exhibit Description
31.1*	Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1 *	Certification of Chief Executive Officer and President of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* filed herewith

SIGNATURES

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

Date: April 16, 2007	By:	/s/ Vickie Walker
		Vickie Walker
		Secretary Chief Executive Officer Chief Financial Officer