Sputnik Enterprises (SPNI) 10-Q 2009 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _____________________ to ______________

Commission file number 333-126158

SPUTNIK ENTERPRISES, INC.

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

Nevada	52-2348956
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

650 5th Street, Suite 303

San Francisco, CA 94107

(Address of principal executive offices)

(415) 355-9500

(Issuer’s telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant 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	x

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

Yes  xNo ¨

As of April 30, 2009 there were 10,295,286shares issued and outstanding of the registrant’s common stock.

INDEX

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements	3
	Balance Sheets as of March 31, 2009 and December 31, 2008 (unaudited)	3
	Statements of Operations for the Three Months Ended March 31, 2009 and 2008, and from re-entering the development stage, February 29, 2008 to March 31, 2009 (unaudited)	4
	Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008, and from re-entering the development stage, February 29, 2008 to March 31, 2009 (unaudited)	5
	Notes to Unaudited Financial Statements	6
Item 2.	Management’s Discussion and Analysis or Plan of Operation	7
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	8
Item 4.	Controls and Procedures	8
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	8
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 3.	Defaults Upon Senior Securities	9
Item 4.	Submission of Matters to a Vote of Security Holders	9
Item 5.	Other Information	9
Item 6.	Exhibits	9
Signatures		9

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

SPUTNIK ENTERPRISES, INC.

 (A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

 (unaudited)

	March 31, 2009			December 31, 2008
ASSETS
Current Assets
Cash	$	-		$	-
Total Current Assets		-			-
TOTAL ASSETS	$	-		$	-
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accrued liabilities	$	1,940		$	1,940
Note payable		25,000			25,000
Total Current Liabilities		26,940			26,940
Stockholders' Deficit
Common stock, $.001 par value, 50,000,000 shares authorized, 295,286 shares issued and outstanding in both periods		295			295
Paid-in capital		1,934,654			1,932,090
Accumulated deficit from development stage		(49,026	)		(46,462	)
Accumulated deficit from prior operations		(1,912,863	)		(1,912,863	)
Total Stockholders' Deficit		(26,940	)		(26,940	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	-		$	-

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SPUTNIK ENTERPRISES, INC.

 (A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended						Re-entering
	March 31,						Development Stage to
	2009			2008			March 31, 2009
Revenue	$	-		$	-		$	-
Cost of goods sold		-			-			-
Gross profit		-			-			-
								-
Expenses:
General and administrative costs		2,064			-			47,527
Total operating expense		-			-			47,527
Operating Loss		-			-			(47,527	)
Interest expense		500			-			1,499
NET LOSS FROM CONTINUING OPERATIONS		2,564			-			(49,026	)
Discontinued operations
Loss from discontinued operations		-			(91,467	)
Loss on disposal		-			(3,864	)		-
NET LOSS	$	(2,564	)	$	(95,311	)	$	(49,026	)
Loss per common share from continuing operations – basic and diluted		(0.00	)		(0.00	)
Loss per common share from discontinued operations – basic and diluted		(0.00	)		(0.32	)
Basic and diluted loss per share	$	( 0.00	)	$	( 0.32	)
Weighted average shares outstanding		295,286			295,526

See notes to financial statements.

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SPUTNIK ENTERPRISES, INC.

 (A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

 (unaudited)

	Three Months Ended March 31,						Re-entering Development Stage
	2009			2008			to March 31, 2009
Cash Flows from Operating Activities
Net loss from operations	$	(2,564	)				$	(49,026	)
Net loss from discontinued operations		-			(91,467	)		-
Loss on disposal		-			(3,864	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		-			1,578			-
Imputed interest on note payable		500			1,909			1,499
Note payable issued for legal expenses		-			-			25,000
Changes in working capital:
Accounts receivable		-			(5,660	)		-
Inventory		-			(1,776	)		-
Prepaid expenses and other assets		-			(2,467	)		-
Accounts payable and accrued liabilities		-			6,404			1,940
Net cash used in operating activities		(2,064	)		(95,343	)		(20,587	)
Cash Flows from Investing Activities
Cash distributed in spin off		-			(23,580	)		-
Net cash used in investing activities		-			(23,580	)		-
Cash Flows from Financing Activities
Line of credit		-			(20,369	)		-
Donated capital		2,064						20,587
Proceeds from advance from shareholder		-			135,000			-
Net cash provided by financing activities		2,064			91,051			20,587
Net change in cash		-			(4,292	)		-
Cash at beginning of period		-			4,292			-
Cash at end of period	$	-		$	-		$	-
Supplemental Disclosures of Cash Flow Information
Cash paid for interest	$	-		$	853		$	-
Cash paid for income taxes		-			-			-

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SPUTNIK ENTERPRISES, INC.

 (A DEVELOPMENT STAGE COMPANY)

Notes to Financial Statements

 (unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Sputnik Enterprises, Inc. have been prepared in accordance with accounting principles generally accepted in the United Sates of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with Sputnik’s audited 2008 annual financial statements and notes thereto filed with the SEC on form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the result of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in Sputnik’s 2008 annual financial statements have been omitted.

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared assuming that Sputnik will continue as a going concern. As shown in the accompanying financial statements, Sputnik suffered losses of $2,564for the three months ended March 31, 2009 and has an accumulated deficit of $1,961,889 at March 31, 2009. These conditions raise substantial doubt as to Sputnik's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Sputnik is unable to continue as a going concern.

NOTE 3 – ACCOUNTING POLICIES

Development Stage Enterprise – As a result of the Company’s sale of Laika, Inc., its only source of revenue, the Company is now considered a development stage enterprise pursuant to FASB Statement 7, which focuses on development stage companies. Users of the financial statements should be familiar with this Statement and its effect on the financial statements.

NOTE 4 – NOTE PAYABLE

On July 1, 2008, the Company issued a note in the amount of $25,000 to legal counsel for legal expenses. The note is due on demand and has no stated interest rate. Imputed interest in the amount of $500 is reflected as an increase to additional paid in capital for the three months ended March 31, 2009.

NOTE 5 – SUBSEQUENT EVENT

On April 1, 2009, Sputnik Enterprises, Inc. issued 10,000,000 shares of its common stock to Sputnik, Inc. for its continued funding of the Company’s expenses, including keeping it current in SEC reporting requirements until a controlling interest is sold.

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Item 2. Management’s Discussion and Analysis or Plan of Operation.

This 10−Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and accompanying notes and the other financial information appearing else where in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events. Refer also to "Cautionary Note Regarding Forward Looking Statements" and “Risk Factors” below.

The following discussion of our financial condition and results of operations as of March 31, 2009 should be read in conjunction with our financial statements and the related notes as provided under Item 1. With respect to the discussion within this Item 2, the terms “Sputnik,” “we,” “us,” and “our” refer to Sputnik Enterprises, Inc.

Overview

Sputnik, Inc. was incorporated in Delaware on September 27, 2001.  On February 10, 2005, we filed Articles of Conversion and new Articles of Incorporation in Nevada and became a Nevada corporation due to lower corporate filing fees.

On November 13, 2007, we formed a wholly owned subsidiary, Laika, Inc., and transferred all of our assets and liabilities to Laika. On February 29, 2008, we closed the sale of the stock of our wholly owned subsidiary, Laika, Inc. to AstroChimp, Inc., leaving us as a shell company. We also changed our name to Sputnik Enterprises on February 29, 2008.

Results of Operations for the Three Months Ended March 31, 2009 Compared to the Three Months Ended March 31, 2008

Because on February 29, 2008, we closed the sale of the stock of our wholly owned subsidiary, Laika, Inc. to AstroChimp, Inc., leaving us as a shell company, the quarterly results are not comparable or material and thus a discussion thereof is omitted.

Liquidity and Capital Resources

On February 29, 2008, we closed the sale of the stock of our wholly owned subsidiary, Laika, Inc. to AstroChimp, Inc., leaving us as a shell company.  All expenses will be funded as an advance by our officers as we have no assets, liabilities or source of revenues.

Cautionary Note About Forward-Looking Statements

The information contained in this Report includes some statements that are not purely historical and are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and as such, may involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, perceived opportunities in the market and statements regarding our mission and vision. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. You can generally identify forward-looking statements as statements containing the words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, but the absence of these words does not mean that a statement is not forward-looking. For example, our forward-looking statements may include statements regarding:

· Our projected sales and profitability,

· Our growth strategies,

· Anticipated trends in our industry,

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· Our future financing plans, and

· Our anticipated needs for working capital.

In light of these risks, uncertainties and assumptions, the future events, developments or results described by our forward-looking statements herein could turn to be materially different from those we discuss or imply.

Item 3.  Quantitative and Qualitative Disclosure about Market Risk

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation   of  our  management,  including   our   principal executive  officer  and  principal  financial  officer,  of   the effectiveness  of  our  disclosure controls  and  procedures  (as defined  in  Rules  13a-15(e) and 15d-15(e) of the  Exchange  Act (defined  below)).  Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including  our  principal  executive  officer   and principal  financial  officer, as  appropriate  to  allow  timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud.  A control system, no matter how well conceived and   operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.  Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control Over Financial Reporting

In addition, our management with the participation of our Principal Executive Officer and Principal Financial Officer have determined that no change in our internal control over financial reporting occurred during or subsequent to the quarter ended March 31, 2009 that has materially affected, or is (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

(a) Unregistered Sales of Equity Securities.

The Registrant did not sell any unregistered securities during the three months ended March 31, 2009.

(b) Use of Proceeds.

The Registrant did not sell any unregistered securities during the three months ended March 31, 2009.

8

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders.

The Registrant did not submit any matters to a vote of its security holders during the three-months ended March 31, 2009.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

(a) Exhibits.

Exhibit	Item
31.1	Certification of Principal Executive and Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive and Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002

________________

*  This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

 SIGNATURES

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

	SPUTNIK ENTERPRISES,INC.
Date: May 1, 2009	By:	/s/ David LaDuke
		(Authorized Officer and Principal Executive Officer)

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EXHIBIT INDEX

Exhibit	Item
31.1	Certification of Principal Executive and Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

________________

*  This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general.

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