4309 10-Q 2009 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
	For the quarterly period ended 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: 000-51885

4309,  INC.

(Exact name of registrant as specified in its charter)

DELAWARE	26-0645969
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

4140 E. Baseline Road, Suite 101, Mesa, AZ 85206

 (Address of Principal Executive Offices)

(Zip Code)

480-626-0039

 (Registrant’s Telephone Number, including area code)

Indicate by check mark whether the registrant (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 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 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 x

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

The number of shares outstanding of the Registrant’s common stock as of August 10, 2009 was 100,000 shares of common stock.

4309, INC.

FORM 10-Q

June 30, 2009

TABLE OF CONTENTS

PART I— FINANCIAL INFORMATION
Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4
Item 4.	Controls and Procedures	4
PART II— OTHER INFORMATION
Item 1.	Legal Proceedings	5
Item 1A.	Risk Factors	5
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5
Item 3.	Defaults Upon Senior Securities	5
Item 4.	Submission of Matters to a Vote of Security Holders	5
Item 5.	Other Information	5
Item 6.	Exhibits	5
SIGNATURES		6

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PART 1 - FINANCIAL INFORMATION

4309, Inc.

(a development stage company)

FINANCIAL STATEMENTS

AS OF JUNE 30, 2009

4309, Inc.

(a development stage company)

Financial Statements Table of Contents

FINANCIAL STATEMENTS	Page #
Balance Sheet	F-1
Statement of Operations and Retained Deficit	F-2
Statement of Stockholders Equity	F-4
Cash Flow Statement	F-5
Notes to the Financial Statements	F-6

2

4309, Inc.

(a development stage company)

BALANCE SHEET

As of June 30, 2009 and December 31, 2008

	6/30/2009			12/31/2008
ASSETS
CURRENT ASSETS
Cash	$	4,298		$	8,245
Prepaid State Withholding		561			0
Total Current Assets		4,859			8,245
TOTAL ASSETS	$	4,859		$	8,245
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued Expenses	$	1,559		$	2,579
Shareholder Loan		0			19,131
Accrued Interest		10,451			9,959
Note Payable		258,500			190,000
Total Current Liabilities		270,510			221,669
TOTAL LIABILITIES		270,510			221,669
STOCKHOLDERS' EQUITY
Preferred Stock - Par value $0.001; Authorized: 10,000,000 None issued and outstanding		-			-
Common Stock - Par value $0.001; Authorized: 100,000,000 Issued and Outstanding: 100,000		100			100
Additional Paid-In Capital		-			-
Accumulated Deficit		(265,751	)		(213,524	)
Total Stockholders' Equity		(265,651	)		(213,424	)
TOTAL LIABILITIES AND EQUITY	$	4,859		$	8,245

The accompanying notes are an integral part of these financial statements.

F-1

4309, Inc.

(a development stage company)

STATEMENT OF OPERATIONS

For the six months ending June 30, 2009 and 2008

from inception (December 9, 2005) through June 30, 2009

	6 MONTHS			6 MONTHS			FROM
	ENDING			ENDING			INCEPTION
	6/30/2009			6/30/2008			TO 6/30/2009
REVENUE	$	-		$	-		$	-
COST OF SERVICES		-			-			-
GROSS PROFIT OR (LOSS)		-			-			-
GENERAL AND ADMINISTRATIVE EXPENSES		52,227			94,957			265,751
NET INCOME (LOSS)		(52,227	)		(94,957	)		(265,751	)
ACCUMULATED DEFICIT, BEGINNING BALANCE		(213,524	)		(65,159	)		-
ACCUMULATED DEFICIT, ENDING BALANCE	$	(265,751	)	$	(160,116	)	$	(265,751	)
Earnings (loss) per share		(0.52	)		(0.95	)
Weighted average number of common shares		100,000			100,000

The accompanying notes are an integral part of these financial statements.

F-2

4309, Inc.

(a development stage company)

STATEMENT OF OPERATIONS

For the three months ending June 30, 2009 and 2008

from inception (December 9, 2005) through June 30, 2009

	3 MONTHS			3 MONTHS			FROM
	ENDING			ENDING			INCEPTION
	6/30/2009			6/30/2008			TO 6/30/09
REVENUE	$	-		$	-		$	-
COST OF SERVICES		-			-			-
GROSS PROFIT OR (LOSS)		-			-			-
GENERAL AND ADMINISTRATIVE EXPENSES		31,324			46,478			265,751
NET INCOME (LOSS)		(31,324	)		(46,478	)		(265,751	)
ACCUMULATED DEFICIT, BEGINNING BALANCE		(2,100	)		(700	)		-
ACCUMULATED DEFICIT, ENDING BALANCE	$	(33,424	)	$	(47,178	)	$	(265,751	)
Earnings (loss) per share		(0.31	)		(0.46	)
Weighted average number of common shares		100,000			100,000

The accompanying notes are an integral part of these financial statements.

F-3

4309, Inc.

(a development stage company)

STATEMENT OF STOCKHOLDERS' EQUITY

From inception (December 9, 2005) through June 30, 2009

			COMMON		ACCUM.			TOTAL
	SHARES		STOCK		DEFICIT			EQUITY
Stock issued on acceptance of incorporation expenses December 9, 2005		100,000	$	100	$	-		$	100
Net Income (Loss)						(400	)		(400	)
Total, December 31, 2005		100,000		100		(400	)		(300	)
Net Income (Loss)						(1,450	)		(1,450	)
Total, December 31, 2006		100,000		100		(1,850	)		(1,750	)
Net Income (Loss)						(63,409	)		(63,409	)
Total, December 31, 2007		100,000		100		(65,259	)		(65,159	)
Net Income (Loss)						(148,265	)		(148,265	)
Total, December 31, 2008		100,000		100		(213,524	)		(213,424	)
Net Income (Loss)						(52,227	)		(52,227	)
Total, June 30, 2009		100,000	$	100	$	(265,751	)	$	(265,651	)

The accompanying notes are an integral part of these financial statements.

F-4

4309, Inc.

(a development stage company)

STATEMENTS OF CASH FLOWS

For the six months ending June 30, 2009 and 2008

from inception (December 9, 2005) through June 30, 2009

	6 MONTHS			6 MONTHS			FROM
	ENDING			ENDING			INCEPTION
	6/30/2009			6/30/2008			TO 6/30/2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(52,227	)	$	(94,957	)	$	(265,751	)
Stock issued as compensation		-			-			100
Increase (Decrease) in Accrued Expenses		(528	)		9,115			12,010
(Increase) Decrease Prepaid State Withholding		(561	)					(561	)
Total adjustments to net income		(1,089	)		9,115			11,549
Net cash provided by (used in) operating activities		(53,316	)		(85,842	)		(254,202	)
CASH FLOWS FROM INVESTING ACTIVITIES
None		-			-			-
Net cash flows provided by (used in) investing activities		-			-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Shareholder Loan		(19,131	)		-			-
Proceeds from Note Payable		68,500			93,000			258,500
Net cash flows provided by (used in) financing activities		49,369			93,000			258,500
CASH RECONCILIATION
Net increase (decrease) in cash		(3,947	)		4,970			4,298
Cash - beginning balance		8,245			8,437			-
CASH BALANCE - END OF PERIOD	$	4,298		$	13,407		$	4,298

The accompanying notes are an integral part of these financial statements.

F-5

4309, Inc.

(a development stage company)

NOTES TO FINANCIAL STATEMENTS

1. Summary of significant accounting policies:

Industry:

4309, Inc. (the Company), a Company incorporated in the state of Delaware as of December 9, 2005 plans to locate and negotiate with a business entity for the combination of that target company with The Company. The combination will normally take the form of a merger, stock-for-stock exchange or stock- for-assets exchange. In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that The Company will be successful in locating or negotiating with any target company.

The Company has been formed to provide a method for a foreign or domestic private company to become a reporting ("public") company whose securities are qualified for trading in the United States secondary market.

The Company has adopted its fiscal year end to be December 31.

Results of Operations and Ongoing Entity:

The Company is considered to be an ongoing entity for accounting purposes; however, there is substantial doubt as to the Company's ability to continue as a going concern. The Company borrows funds and relies on its shareholders to fund any shortfalls in The Company's cash flow on a day to day basis during the time period that The Company is in the development stage.

Liquidity and Capital Resources:

In addition to debt and stockholder funding of capital shortfalls; The Company anticipates interested investors that intend to fund the Company's growth once a business is located.

Cash and Cash Equivalents:

The Company considers cash on hand and amounts on deposit with financial institutions which have original maturities of three months or less to be cash and cash equivalents.

Basis of Accounting:

The Company's financial statements are prepared in accordance with U.S. generally accepted accounting principles.

Income Taxes:

The Company utilizes the asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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. At this time, The Company has set up an allowance for deferred taxes but there is no company history to indicate the usage of deferred tax assets and liabilities.

F-6

Fair Value of Financial Instruments:

The Company's financial instruments may include cash and cash equivalents, short-term investments, accounts receivable, accounts payable and liabilities to banks and shareholders. The carrying amount of long-term debt to banks and others approximates fair value based on interest rates that are currently available to The Company for issuance of debt with similar terms and remaining maturities. The carrying amounts of other financial instruments approximate their fair value because of short-term maturities.

Concentrations of Credit Risk:

Financial instruments which potentially expose The Company to concentrations of credit risk consist principally of operating demand deposit accounts. The Company's policy is to place its operating demand deposit accounts with high credit quality financial institutions. At this time The Company has no deposits that are at risk.

2. Related Party Transactions and Going Concern:

The Company's financial statements have been presented on the basis that it is a going concern in the development stage, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. There can be no assurance these activities will be successful. At this time The Company has not identified the business in which it wishes to engage.

3. Accounts Receivable and Customer Deposits:

Accounts receivable and Customer deposits do not exist at this time and therefore have no allowances accounted for or disclosures made.

4. Use of Estimates:

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expenses. Management has no reason to make estimates at this time.

5. Revenue and Cost Recognition:

The Company uses the accrual basis of accounting in accordance with generally accepted accounting principles for financial statement reporting.

6. Accrued Expenses:

Accrued expenses consist of accrued tax, professional and office costs during this stage of the business.

7. Operating Lease Agreements:

The Company has no agreements at this time.

8. Demand Note Payable:

On August 1, 2007 the Company entered into a multiple advance note with 4309 Acquisition Trust whereby the Company may borrow up to $500,000.  The terms allow interest set to be accrued at the applicable federal rate as given by the Internal Revenue Service.  At June 30, 2009 the Company had a principal balance owed in the amount of $258,500 plus accrued interest.

F-7

9. Stockholder's Equity:

Preferred stock includes 10,000,000 shares authorized at a par value of $0.001, of which none are issued or outstanding.

Common Stock includes 100,000,000 shares authorized at a par value of $0.001, of which 100,000 have been issued for the amount of $100 on December 31, 2005 in acceptance of the incorporation expenses for the Company.

10. Required Cash Flow Disclosure for Interest and Taxes Paid:

The company has paid no amounts for federal income taxes and interest. The Company issued 100,000 common shares of stock to its sole shareholder in acceptance of the incorporation expenses for The Company.

11. Earnings Per Share:

Basic earnings per share ("EPS") is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period as required by the Financial Accounting Standards Board (FASB) under Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Shares". Diluted EPS reflects the potential dilution of securities that could share in the earnings.

12. Income Taxes:

The Company has available net operating loss carryforwards for financial statement and federal income tax purposes. These loss carryforwards expire if not used within 20 years from the year generated.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.  These losses may be limited by the Internal Revenue Service when there is a change of control of the Company.   Significant components of the Company's deferred tax liabilities and assets as of June 30, 2009 are as follows:

Deferred tax assets:
Federal net operating loss	$	39,863
State net operating loss		13,287
Total deferred tax assets		53,150
Less valuation allowance		(53,150	)
	$	—

The Company has provided a 100% valuation allowance on the deferred tax assets at June 30, 2009 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted.

The reconciliation of the effective income tax rate to the federal statutory rate for the periods ended June 30, 2009 and June 30, 2008 is as follows:

	2009			2008
Federal income tax rate		(15.0	)%	(15.0	)%
State tax, net of federal benefit		(5.0	)%	(5.0	)%
Increase in valuation allowance		20.0	%	20.0	%
Effective income tax rate		0.0	%	0.0	%

F-8

13. Changes in Control of Registrant:

On July 24, 2007 (the "Effective Date"), a total of 100,000 shares, or 100%, of the issued and outstanding common stock of the Company changed hands in a personal transaction.  In a change of control of a Company with net operating loss carryforwards there may be limitations in the amounts the Company can carryforward.

F-9

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

This Form 10-Q may contain “forward-looking statements”. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the Company’s market opportunities, strategies, competition and expected activities and expenditures, and at times may be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “intend”, “continue” and variations of these words or comparable words. Forward-looking statements inherently involve risks and uncertainties. Accordingly, actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risks described below under “Risk Factors” in Part II, Item 1A. The Company undertakes no obligation to update any forward-looking statements for revisions or changes after the date of this Form 10-Q.

Plan of Operation

The Registrant is continuing its efforts to locate a merger Candidate for the purpose of a merger. It is possible that the registrant will be successful in locating such a merger candidate and closing such merger. However, if the registrant cannot effect a non-cash acquisition, the registrant may have to raise funds from a private offering of its securities under Rule 506 of Regulation D. There is no assurance the registrant would obtain any such equity funding.

Results of Operation

The Company did not have any operating income from inception (December 9, 2005) through June 30, 2009, the Company recognized a net loss of $(265,751) through June 30, 2009. Some general and administrative expenses from inception were accrued. Expenses from inception were comprised of costs mainly associated with legal, accounting and office.

Liquidity and Capital Resources

At June 30, 2009 the Company had no capital resources and will rely upon the issuance of common stock, loans and additional capital contributions from shareholders to fund administrative expenses pending acquisition of an operating company.

Management anticipates seeking out a target company through solicitation. Such solicitation may include newspaper or magazine advertisements, mailings and other distributions to law firms, accounting firms, investment bankers, financial advisors and similar persons, the use of one or more World Wide Web sites and similar methods. No estimate can be made as to the number of persons who will be contacted or solicited. Management may engage in such solicitation directly or may employ one or more other entities to conduct or assist in such solicitation. Management and its affiliates will pay referral fees to consultants and others who refer target businesses for mergers into public companies in which management and its affiliates have an interest. Payments are made if a business combination occurs, and may consist of cash or a portion of the stock in the Company retained by management and its affiliates, or both.

Paul Poetter will supervise the search for target companies as potential candidates for a business combination. Paul Poetter will pay, as his own expenses, any costs he incurs in supervising the search for a target company. Paul Poetter may enter into agreements with other consultants to assist in locating a target company and may share stock received by it or cash resulting from the sale of its securities with such other consultants. Paul Poetter controls us and therefore has the authority to enter into any agreement binding us. Paul Poetter as our sole officer, director and only shareholder can authorize any such agreement binding us.

3

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for Smaller Reporting Companies.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e). promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of period covered by the report.  In designing and evaluating the Company’s disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, the Company’s chief executive officer and chief financial officer concluded that as of June 30, 2009, the Company’s disclosure controls and procedures were (1) designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s chief executive officer and chief financial officer by others within those entities, particularly during the period in which this report was being prepared and (2) effective, in that they provide reasonable assurance that information required to be disclosed by the Company in the reports that it 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.

Limitations on the Effectiveness of Internal Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material errors. An internal 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. Because of the inherent limitations on all internal control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. The design of any system of internal control is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in circumstances, and/or the degree of compliance with the policies and procedures may deteriorate. Because of the inherent limitations in a cost effective internal control system, financial reporting misstatements due to error or fraud may occur and not be detected on a timely basis.

There have been no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls or in other factors over financial reporting that occurred during the last fiscal quarter  that could significantly affect these controls subsequent to the date of the evaluation referenced in the above paragraph.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. 

ITEM 1A. RISK FACTORS

No applicable for smaller reporting company.

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

None

 ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer

32.1 Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer

5

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.

	4309, INC.
Date: August 13, 2009	By:	/s/ Paul Poetter
		Paul Poetter
		President/Director

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