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 December 31, 2010
Commission file number 1-12312
CMSF CORP.
(Name of registrant as specified in its charter)
Delaware 95-3880130
(State of incorporation) &# 160; (I.R.S. Employer Identification No)
980 Enchanted Way, Suite 201, Simi Valley, California 93065
(Address of principal executive offices)
Issuer’s telephone number: (805) 370-3100
Indicate by check mark whether the issuer (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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES __ NO__
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-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 issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act)
YES_X_ NO
Number of shares outstanding of each of the issuer’s classes of common stock, as of January 21, 2011: 181,390,394 shares of common stock, no par value.
Transitional Small Business Disclosure Format:
YES___ NO X
CMSF CORP. | |
INDEX | |
| | PAGE |
| PART I - FINANCIAL INFORMATION | |
| | |
| Item 1. Condensed Financial Statements | |
| | |
| Condensed Balance Sheets as of December 31, 2010 (Unaudited) | |
| and September 30, 2010 | 3 |
| | |
| Condensed Statements of Operations for the Three | |
| Months Ended December 31, 2010 and 2009 (Unaudited) | 4 |
| | |
| Condensed Statements of Shareholders’ Deficiency | |
| for the Three Months Ended December 31, 2010 (Unaudited) | 5 |
| | |
| Condensed Statements of Cash Flows for the Three | |
| Months Ended December 31, 2010 and 2009 (Unaudited) | 6 |
| | |
| | |
| Notes to the Condensed Financial Statements (Unaudited) | 7 |
| | |
| | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Discounted Operations | 10 |
| | |
| Item 4T. | Controls and Procedures | 12 |
| | |
| PART II - OTHER INFORMATION | 12 |
| | |
| Item 5 | Other Information | |
| | |
| Item 6 | Exhibits | |
| | |
| | Signature | |
| | |
| | Exhibit 31 | Certification Pursuant to Section 302 of the | |
| | Sarbanes-Oxley Act of 2002 | |
| | |
| | Exhibit 32 | Certification Pursuant to Section 906 of the | |
| | Sarbanes-Oxley Act of 2002 | |
| | | |
| CMSF CORP. | |
| CONDENSED BALANCE SHEETS | |
| | | | | | | |
| | | | | | | |
| | | December 31, | | | September 30, | |
| | | 2010 | | | 2010 | |
| ASSETS | | (Unaudited) | | | | |
| | | | | | | |
| | | | | | | |
| | $ | - | | | $ | - | |
| | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' DEFICIENCY | | | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | | | | | | | | |
| Accounts payable | | $ | 8,322 | | | $ | 5,773 | |
| | | | | | | | | |
| Total Current Liabilities | | | 8,322 | | | | 5,773 | |
| | | | | | | | | |
| Shareholders' Deficiency: | | | | | | | | |
| Common stock, $0.000001 par value; authorized 100,000,000,000 | | | | | | | | |
| shares; issued and outstanding 181,390,394 and 177,903,135 | | | | | | | | |
| shares respectively | | | 181 | | | | 178 | |
| Additional paid-in-capital | | | 22,424,337 | | | | 22,389,467 | |
| Common stock to be issued, 684,490 and 2,409,975 shares | | | 6,845 | | | | 24,100 | |
| | | | | | | | | |
| Accumulated Deficit | | | (22,439,685 | ) | | | (22,419,518 | ) |
| | | | | | | | | |
| Total Shareholders' Deficiency | | | (8,322 | ) | | | (5,773 | ) |
| | | | | | | | | |
| Total Liabilities and Shareholders' Deficiency | | $ | - | | | $ | - | |
| | | | | | | | | |
| See accompanying notes to Condensed Financial Statements | |
| CMSF CORP. | |
| CONDENSED STATEMENTS OF OPERATIONS | |
| (Unaudited) | |
| | | | | | | |
| | | Three Months Ended | |
| | | December 31, | |
| | | | | | | |
| | | 2010 | | | 2009 | |
| Sales | | $ | - | | | $ | - | |
| Cost of sales | | | - | | | | - | |
| | | | | | | | | |
| Gross Profit | | | - | | | | - | |
| | | | | | | | | |
| General and administrative expenses | | | (20,167 | ) | | | (40,669 | ) |
| Interest expense | | | - | | | | (4,377 | ) |
| | | | | | | | | |
| Net loss | | $ | (20,167 | ) | | $ | (45.046 | ) |
| | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | |
| (basic and diluted): | | | 177,941,040 | | | | 123,227,522 | |
| | | | | | | | | |
| Net loss per common share - basic and diluted: | | $ | (0.00 | ) | | $ | (0.00 | ) |
| | | | | | | | | |
| See accompanying notes to Condensed Financial Statements | |
| CMSF CORP. | | | | | | | | | | | | |
| CONDENSED STATEMENT OF SHAREHOLDERS' DEFICIENCY | | | | | | | | | | | | |
| Three Months Ended December 31, 2010 | | | | | | | | | | | | |
| (UNAUDITED) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Common Stock | | | Additional Paid-In | | | Common Stock to be | | | | Accumulated | | | | | | | | |
| | | Shares | | | Amount | | | Capital | | | Issued | | | | Deficit | | | | Total | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at October 1, 2010 | | | 177,903,135 | | | $ | 178 | | | $ | 22,389,467 | | | $ | 24,100 | | | $ | (22,419,518 | ) | | $ | (5,773 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock issued for cash | | | 3,487,259 | | | | 3 | | | | 34,870 | | | | (24,100 | ) | | | - | | | | 10,773 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock to be issued for cash | | | - | | | | - | | | | - | | | | 6,845 | | | | - | | | | 6,845 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss for the three months ended December 31, 2010 | | | - | | | | - | | | | - | | | | - | | | | (20,167 | ) | | | (20,167 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at December 31, 2010 | | | 181,390,394 | | | $ | 181 | | | $ | 22,424,337 | | | $ | 6,845 | | | $ | (22,439,685 | ) | | $ | (8,322 | ) | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| See accompanying notes to Condensed Financial Statements | | | | | | | | | | | | |
| CMSF CORP. | |
| CONDENSED STATEMENTS OF CASH FLOWS | |
| (Unaudited) | |
| | | | | | | |
| | | Three Months Ended | |
| | | December 31, | |
| | | | | | | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | |
| Net loss | | $ | (20,167 | ) | | $ | (45,046 | ) |
| | | | | | | | | |
| Adjustments to reconcile net loss to net | | | | | | | | |
| cash used in operating activities: | | | | | | | | |
| Fair value of common stock issued for payment of interest expense | | | - | | | | 4,377 | |
| Increase in accounts payable | | | 2,549 | | | | (18,861 | ) |
| Net cash used in operating activities | | | (17,618 | ) | | | (59,530 | ) |
| | | | | | | | | |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| Proceeds from the sale of common stock | | | 17,618 | | | | 59,530 | |
| Net cash provided by financing activities | | | 17,618 | | | | 59,530 | |
| | | | | | | | | |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | | | - | | | | - | |
| | | | | | | | | |
| CASH AND CASH EQUIVALENTS, beginning of period | | | - | | | | - | |
| | | | | | | | | |
| CASH AND CASH EQUIVALENTS, end of period | | $ | - | | | $ | - | |
| | | | | | | | | |
| Supplemental Cash Flow Information | | | | | | | | |
| | | | | | | | | |
| Cash paid for: | | | | | | | | |
| Interest | | $ | - | | | $ | - | |
| Income taxes | | $ | 800 | | | $ | 800 | |
| | | | | | | | | |
| Supplemental Noncash Investing and Financing Activities | | | | | | | | |
| Common stock issued upon conversion of notes payable | | $ | - | | | $ | 2,850,000 | |
| | | | | | | | | |
| | | | | | | | | |
| See accompanying notes to Condensed Financial Statements | |
CMSF CORP.
Notes to Condensed Financial Statements
Three Months Ended December 31, 2010
(Unaudited)
Note 1: Basis of Presentation
The accompanying condensed financial statements of CMSF Corp (the “Company”) have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and related footnotes included in the Company’s latest Annual Report on Form 10-K. 60; In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the consolidated financial position of the Company as of December 31, 2010, and the statements of its operations for the three month periods ended December 31, 2010 and 2009 and statements of cash flows for the three month periods ended December 31, 2010 and 2009 have been included. The results of operations for interim periods are not necessarily indicative of the results which may be realized for the full year.
Organization
Effective April 21, 2009, in connection with the closing of the sale of operating assets and liabilities, the Company changed its name from CaminoSoft Corp. to CMSF Corp. and the number of authorized shares of common stock of the Company was increased to 500,000,000. As a result of the foregoing, the Company is now a “shell company” with a plan to seek a reverse merger with an operating company.
On May 24, 2010, CMSF Corp., a California corporation (“CMSF-California”) and its newly formed, wholly owned subsidiary, CMSF Corp., a Delaware corporation (“CMSF-Delaware”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which CMSF-California merged with and into CMSF-Delaware, with CMSF-Delaware being the surviving entity (the “Reincorporation Merger”). The closing of the Reincorporation Merger took place immediately upon satisfaction by CMSF-Delaware of all requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pertaining to the Reincorporation Merger (the “Effective Time” of the Reincorporation Merger). As a result of the Reincorporation Merger, the authorized shares of common stock of the Company was increased to 100,000,000,000 shares, the par value was changed to $0.000001 per share and the legal domicile of the surviving corporation was changed to Delaware.
Going Concern
The accompanying condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.
The Company does not have sufficient resources to fund its operations for the next twelve months. The Company has no operations and is a public shell. The Company intends to pursue a reverse merger candidate with operations and growth to provide a new business as a public entity. However, the Company has not entered into any merger agreements and there can be no assurance that such an agreement can be entered into or on terms that would be favorable to the Company and its shareholders.
Note 2: Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Earnings (loss) per Common Share
Basic earnings (loss) per share is computed by dividing earnings (loss) available to common shareholders by the weighted average number of common shares outstanding during the period.
Diluted earnings per share reflects the potential dilution, using the treasury stock method, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. In computing diluted earnings per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. Additionally, diluted earnings per share assume that any dilutive convertible debentures outstanding at the beginning of each period were converted at those dates, with related interest and outstanding common shares adjusted accordingly.
Warrants to purchase approximately 150,000 and 325,000 shares, respectively, of common stock at various prices exceeding $0.01 per share were outstanding during the three months ended December 31, 2010 and 2009 but were not included in the computation of diluted earnings per share for this period because the respective warrant exercise prices were greater than the average market price of the common shares during those periods, and their effect would be anti-dilutive.
Recent Accounting Pronouncements
In April 2010, the Financial Accounting Standards Board (FASB) issued new accounting guidance in applying the milestone method of revenue recognition to research or development arrangements. Under this guidance management may recognize revenue contingent upon the achievement of a milestone in its entirety, in the period in which the milestone is achieved, only if the milestone meets all the criteria within the guidance to be considered substantive. This standard is effective on a prospective basis for research and development milestones achieved in fiscal years, beginning on or after June 15, 2010. Early adoption is permitted; however, adoption of this guidance as of a date other than January 1, 2011 will require the Company to apply this guidance re trospectively effective as of January 1, 2010 and will require disclosure of the effect of this guidance as applied to all previously reported interim periods in the fiscal year of adoption. As the Company plans to implement this standard prospectively, the effect of this guidance will be limited to future transactions. The Company does not expect adoption of this standard to have a material impact on its financial position or results of operations as it has no material research and development arrangements which will be accounted for under the milestone method.
In January 2010, the FASB issued new accounting guidance which requires new disclosures regarding transfers in and out of Level 1 and Level 2 fair value measurements, as well as requiring presentation on a gross basis of information about purchases, sales, issuances and settlements in Level 3 fair value measurements. The guidance also clarifies existing disclosures regarding level of disaggregation, inputs and valuation techniques. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2009. Disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010. As this guidance requires only a dditional disclosure, there should be no impact on the financial statements of the Company upon adoption.
In October 2009, a new accounting consensus was issued for multiple-deliverable revenue arrangements. This consensus amends existing revenue recognition accounting standards. This consensus provides accounting principles and application guidance on whether multiple deliverables exist, how the arrangement should be separated and the consideration allocated. This guidance eliminates the requirement to establish the fair value of undelivered products and services and instead provides for separate revenue recognition based upon management’s estimate of the selling price for an undelivered item when there is no other means to determine the fair value of that undelivered item. Previously the existing accounting consensus required that the fair value of the undelivered item be the price of the item either sold in a separate transaction between unrelated third parties or the price charged for each item when the item is sold separately by the vendor. Under the existing accounting consensus, if the fair value of all of the elements in the arrangement was not determinable, then revenue was deferred until all of the items were delivered or fair value was determined. This new approach is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is in the process of evaluating whether the adoption of this standard will have a material effect on its financial position, results of operations or cash flows.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the Securities Exchange Commission (the "SEC") did not or are not believed by management to have a material impact on the Company's present or future financial statements.
Note 3: Equity
During the three months ended December 31, 2010, the Company issued 3,487,259 shares of unregistered common stock to RENN Capital Group. 2,409,975 of the shares at $24,100 were shown as common stock to be issued at September 30, 2010. During the three months ended December 31, 2010, the Company received $10,733 from the sale of approximately 1,077,284 of the unregistered common stock isssued to RENN Capital Group at $0.01 per shares. As of December 31, 2010, $6,845 was recorded as common stock to be issued representing 684,490 shares. The Company used the funds for operations including all professional and ot her fees related to the ongoing filings with the Securities and Exchange Commission.
Note 4: Stock Warrants
A summary of changes in outstanding warrants during the three months are presented below:
| | | Number of Shares | | | Weighted Average Exercise Price | | | Aggregate Intrinsic Value | | | Weighted Average Remaining Contractual Term (Months) | |
Warrants outstanding at September 30, 2010 | | | 325,000 | | | $ | 1.01 | | | | | | | |
| Warrants granted | | | - | | | | - | | | | | | | |
| Warrants expired | | | 175,000 | | | $ | 1.14 | | | | | | | |
Warrants outstanding at December 31, 2010 | | | 150,000 | | | $ | 0.86 | | | $ | ----- | | | | 2 | |
Warrants exercisable at December 31, 2010 | | | 150,000 | | | $ | 0.86 | | | $ | ----- | | | | 2 | |
Warrants exercisable at September 30, 2010 | | | 325,000 | | | $ | 1.01 | | | | | | | | | |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Quarterly Report contains forward-looking statements. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this section. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should caref ully review the risks described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended September 30, 2010, the Quarterly Reports on Form 10-Q filed by the Company and any Current Reports on Form 8-K by the Company.
The following discussion and analysis should be read in conjunction with the condensed financial statements and notes thereto in this quarterly report.
Overview
Prior to April 1, 2009, the Company had been engaged in the development, marketing and sale of data storage management software. Pursuant to a Stock Purchase Agreement dated as of January 26, 2009 (the “Purchase Agreement”) among the Company, CC Merger Corp. (the “Subsidiary”), a wholly owned subsidiary of the Company, and Stephen Crosson and Neil Murvin (collectively, the “Purchasers”), who are related parties, on March 31, 2009, (a) the Company transferred to the Subsidiary substantially all of its assets (the “Purchased Assets”), (b) the Purchasers purchased all of the outstanding shares of the Subsidiary, (c) the Subsidiary assumed all of the Company’s liabilities except any liability relating to indebtedness of the Com pany owed to funds advised by RENN Capital Group, Inc. (the “RENN Indebtedness”), and (d) the terms of all of the RENN Indebtedness which is not convertible into shares of the Company’s Common Stock were amended to make such indebtedness so convertible at $0.01 per share. The purchase price for the Purchased Assets was $1.00 in cash and 5% of the proceeds, if any, from the sale of all or substantially all of the voting stock of the Subsidiary Company; the sale of all or substantially all of the assets of the Subsidiary for; a merger, share exchange or similar transaction with an unrelated entity pursuant to which the acquiring entity on the equity holders thereof hold more than a majority of the outstanding voting shares of the merged or surviving company; or an initial public offering of the Subsidiary. The purchased assets included the name “CaminoSoft,” the data storage management software and personal property.
Effective October 9, 2009, all outstanding RENN Indebtedness (including accrued interest) was converted into an aggregate of 113,883,768 shares of unregistered common stock.
Effective April 21, 2009, in connection with the closing, the Company changed its name from CaminoSoft Corp. to CMSF Corp. and the number of authorized shares of common stock of the Company was increased to 500,000,000. As a result of the foregoing, the Company is now a “shell company” with a plan to seek a reverse merger with an operating company.
On May 24, 2010, CMSF Corp., a California corporation (“CMSF-California”) and its newly formed, wholly owned subsidiary, CMSF Corp., a Delaware corporation (“CMSF-Delaware”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which CMSF-California merged with and into CMSF-Delaware, with CMSF-Delaware being the surviving entity (the “Reincorporation Merger”). The closing of the Reincorporation Merger took place immediately upon satisfaction by CMSF-Delaware of all requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pertaining to the Reincorporation Merger (the “Effective Time” of the Reincorporation Merger). As a result of the Reincorporation Merger, the authorized shares of common stock of the Company was increased to 100,000,000,000 shares, the par value was changed to $0.000001 per share and the legal domicile of the surviving corporation was changed to Delaware.
Three-Month Periods Ended December 31, 2010 and December 31, 2009
During the current three month period the Company incurred approximately $20,167 in expenses relating to the public shell. During the quarter the Company issued 3,487,259 shares of unregistered common stock to RENN Capital Group. 2,409,975 of the shares at $24,100 were shown as common stock to be issued at September 30, 2010. During the three months ended December 31, 2010, the Company received $10,773 from the sale of approximately 1,077,284 of the unregistered common stock issued to RENN Capital Group at $0.01 per share. As of December 31, 2010, $6,845 was recorded as common stock to be issued representing 684,490 shares. The Company used the funds for operations including all professional and other fees rela ted to the ongoing filings with the Securities and Exchange Commission.
During the quarter ended December 31, 2009, RENN Capital Group managed funds purchased 5,953,246 shares of common stock at a price of $0.01 per share to pay for approximately $40,700 in expenses incurred during the quarter and to pay ongoing public company expenses.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended December 31, 2010, the Company received approximately $17,618 from the sale of shares of unregistered common stock to RENN Capital Group at a price of $0.01 per share. As of December 31, 2010, $6,845 was recorded as common stock to be issued representing 684,490 shares. The Company used the funds for operations including all professional and other fees related to the ongoing filings with the Securities and Exchange Commission.
Going Concern
The Company does not have sufficient resources to fund its operations for the next twelve months. The Company has no operations and is a public shell. The Company intends to pursue a reverse merger candidate with operations and growth to provide a new business as a public entity. However, the Company has not entered into any merger agreements and there can be no assurance that such an agreement can be entered into or on terms that would be favorable to the Company and its shareholders.
Recent Accounting Pronouncements
In April 2010, the Financial Accounting Standards Board (FASB) issued new accounting guidance in applying the milestone method of revenue recognition to research or development arrangements. Under this guidance management may recognize revenue contingent upon the achievement of a milestone in its entirety, in the period in which the milestone is achieved, only if the milestone meets all the criteria within the guidance to be considered substantive. This standard is effective on a prospective basis for research and development milestones achieved in fiscal years, beginning on or after June 15, 2010. Early adoption is permitted; however, adoption of this guidance as of a date other than January 1, 2011 will require the Company to apply this guidance retrospectively effective as of January 1, 2010 and will require disclosure of the effect of this guidance as applied to all previously reported interim periods in the fiscal year of adoption. As the Company plans to implement this standard prospectively, the effect of this guidance will be limited to future transactions. The Company does not expect adoption of this standard to have a material impact on its financial position or results of operations as it has no material research and development arrangements which will be accounted for under the milestone method.
In January 2010, the FASB issued new accounting guidance which requires new disclosures regarding transfers in and out of Level 1 and Level 2 fair value measurements, as well as requiring presentation on a gross basis of information about purchases, sales, issuances and settlements in Level 3 fair value measurements. The guidance also clarifies existing disclosures regarding level of disaggregation, inputs and valuation techniques. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2009. Disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010. As this guidance requires onl y additional disclosure, there should be no impact on the financial statements of the Company upon adoption.
In October 2009, a new accounting consensus was issued for multiple-deliverable revenue arrangements. This consensus amends existing revenue recognition accounting standards. This consensus provides accounting principles and application guidance on whether multiple deliverables exist, how the arrangement should be separated and the consideration allocated. This guidance eliminates the requirement to establish the fair value of undelivered products and services and instead provides for separate revenue recognition based upon management’s estimate of the selling price for an undelivered item when there is no other means to determine the fair value of that undelivered item. Previously the existing accounting consensus required that the fair value of the undelivered item be the pr ice of the item either sold in a separate transaction between unrelated third parties or the price charged for each item when the item is sold separately by the vendor. Under the existing accounting consensus, if the fair value of all of the elements in the arrangement was not determinable, then revenue was deferred until all of the items were delivered or fair value was determined. This new approach is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is in the process of evaluating whether the adoption of this standard will have a material effect on its financial position, results of operations or cash flows.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the Securities Exchange Commission (the "SEC") did not or are not believed by management to have a material impact on the Company's present or future financial statements.
Item 4T Controls and Procedures
| (a) | As of the end of the period covered by this report, our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based on their evaluation, the chief executive officer (“CEO”) and chief financial officer (“CFO”) concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2010. |
| (b) | Changes in Internal Controls Over Financial Reporting |
There were no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended December 31, 2010 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.
PART II
OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the quarter the Company received approximately $17,618 in cash in return for 3,487,259 shares of unregistered common stock. The Company used the funds to pay the overhead expense of the public shell for management consulting, legal and accounting and stock transfer agent fees related to the ongoing filings with the Securities and Exchange Commission. CMSF Corp. currently has no operations as a public shell. The unregistered shares will be issued to RENN Capital Group funds as soon as practicable. The sale was exempt from the regulation requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof.
Item 6. Exhibits
Exhibit 31 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURE
In accordance with the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CMSF CORP
Date: February 10, 2011 /s/ Stephen Crosson
Stephen Crosson, Chief Executive Officer and
Chief Financial Officer
