UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q (Mark One)  [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended March 31,2012  [  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT  For the transition period from ________________ to _______________  000-24835 (Commission file number)  CEPHAS HOLDING CORP. (Exact name of small business issuer as specified in its charter)  Delaware 38-3399098 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.)  2942 North 24th Street Ste. 114-508 Phoenix, AZ 85016 (Address of principal executive offices)  (623) 738-5792 (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 shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [   ]   No [X]  State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of May 14, 2012 , 28,235,155shares of common stock  Transitional Small Business Disclosure Format (check one):  Yes [ x ]   No [  ]   1


CEPHAS HOLDING CORP. Index  Page Number  PART I. FINANCIAL INFORMATION 2  Item 1. Financial Statements 2  Consolidated Balance Sheets as of March 31, 2012 (unaudited) and December 31, 2011(audited) 3  Consolidated Statements of Operations for the three  months ended March 31, 2012  and 2011 (unaudited) 5  Consolidated Statements of Cash Flows for the Three   months March 31, 2012 and 2011 (unaudited) 6  Notes to Consolidated Interim Financial Statements (unaudited) 7  Item 2. Management's Discussion and Analysis or Plan of Operation 16  Item 3. Controls and Procedures 19  PART II. OTHER INFORMATION 20  Item 1. Legal Proceedings 20  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20  Item 3. Defaults Upon Senior Securities 20  Item 4. Submission of Matters to a Vote of Security Holders 20  Item 5. Other Information 20  Item 6. Exhibits 20  SIGNATURES 21           2      CEPHAS HOLDING CORP. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSASSETSMarch 31,December 31,20122011(Unaudited)(Audited)CURRENT ASSETS:Cash$               235$          35,327Prepaid expenses36,00036,000TOTAL CURRENT ASSETS36,23571,327FIXED ASSETS - at costComputer and office equipment54,12454,124Less: Accumulated depreciation(53,242)(53,183)NET FIXED ASSETS882941INVESTMENTS, at cost355,000220,000TOTAL ASSETS$        392,117$        292,268LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIES:Accounts payable$        229,308$        235,757Accrued expenses929,250865,500Accrued interest2,427,8172,349,135Accrued derivative liability94,634212,031License fees payable200,000200,000Due to related parties58,56358,563Advances from an officer117,748106,648Notes payable1,038,200951,200Note payable - officer1,428,8161,432,066TOTAL CURRENT LIABILITIES6,524,3366,410,900COMMITMENTS AND CONTINGENCIES--STOCKHOLDERS' DEFICITSeries A Preferred Stock, $0.001 par value, 1,000,000 sharesauthorized; 44,500 shares issued and outstanding4444Series B Convertible Preferred Stock, $0.01 par value; 850,000shares authorized; 850,000 shares issued and outstandingauthorized; 1,000,000 Class A shares issued and outstanding8,5008,500  3       Series C Convertible Preferred Stock, $0.01 par value; 147,775shares authorized; 147,775 shares issued and outstanding1,4781,478Common stock; $0.001 par value; 75,000,000,000 sharesauthorized; 5,434,715 and 784,715 issued and outstanding, respectively'5,435785issued and outstandingAdditional paid-in capital17,012,75217,001,152Stock subscription receivable(156,300)(156,300)Non-controlling interest(9,168)(9,168)Accumulated deficit(22,994,960)(22,965,123)TOTAL STOCKHOLDERS' DEFICIT(6,132,219)(6,118,632)TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT$        392,117$        292,268     The accompanying notes are an integral part of these financial statements.  4       CEPHAS HOLDING CORP. AND SUBSIDIARIESCONSOLIDATED INTERIM STATEMENT OF OPERATIONS(UNAUDITED)THREE MONTHS    ENDEDMARCH 31,20122011REVENUE$             55$            101COST OF REVENUE--GROSS PROFIT55101EXPENSES:Selling, general and administrative68,60652,133TOTAL EXPENSES68,60652,133LOSS FROM OPERATIONS(68,551)(52,032)OTHER INCOME (EXPENSE):Change in derivative liability117,397(40,779)Interest expense and financing costs(78,683)(83,430)TOTAL OTHER INCOME (EXPENSE)38,714(124,209)LOSS BEFORE PROVISION FOR INCOME TAXES$   (29,837)$    (176,241)PROVISION FOR INCOME TAXES--NET LOSS$   (29,837)$    (176,241)BASIC AND DILUTED LOSS PERCOMMON SHARE$       (0.02)$          (0.35)WEIGHTED AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING -BASIC AND DILUTED1,258,895502,233The accompanying notes are an integral part of these financial statements.    5       CEPHAS HOLDING CORP. AND SUBSIDIARIESCONSOLIDATED INTERIM STATEMENT OF CASH FLOWS(UNAUDITED)THREE MONTHS ENDEDMARCH 31,20122011CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$        (29,837)$         (176,241)Adjustment to reconcile net loss to net cash used in operating activitiesStock issued for services rendered-2,000Depreciation5953Change in derivative liability(117,397)40,779Changes in operating assets and liabilities:Accounts payable57,30143,750Accrued interest78,68283,430Net cash used in operating activities(11,192)(6,229)CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition of computer equipment-(1,194)Investment in Network Talent, LLC(135,000)-Net cash used in investing activities(135,000)(1,194)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from an officer, net11,100403Notes payable100,0005,725Net cash provided by financing activities111,1006,128INCREASE (DECREASE) IN CASH(35,092)(1,295)CASH, Beginning of period35,3271,539CASH, End of period$              235$                 244SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Interest paid$         78,682$            83,430Income taxes paid$                 -$                    -  The accompanying notes are an integral part of these financial statements.        6       CEPHAS HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS MARCH 31, 2012 (UNAUDITED) Note 1 - Organization and Significant Accounting Policies  Organization and Lines of Business CEPHAS Holding Corp formerly Legend Mobile, Inc., (the "Company"), was incorporated in Delaware on January 13, 1998 and is the successor to Interactive Entertainment Studio, Inc. (IES). IES was incorporated in the State of Nevada on May 27, 1997 and was merged into the Company in March 1998 for the sole purpose of changing the domicile of the Company to Delaware. On June 27, 2002, the Company filed a Certificate of Amendment to its Certificate of Incorporation to amend the Company's Certificate of Incorporation name from PTN Media, Inc. to Legend Mobile, Inc. In October 2008, the Company amended its articles to change the name to CEPHAS Holding Corp.  The Company is a developer and marketer of branded mobile phone applications for the iPhone platform. The Company is an approved developer by Apple Computer to distribute its products on their iTunes store. The Company currently sells the Iron Sheik Soundboard and it distributes free of charge MMA Underboss -a newswire dedicated to mixed martial arts news.  The Company also has a license from Mixed Martial Arts Champion, Fedor Emelianeko to produce iPhone applications under his brand and is currently developing that application.  In February 2001, the Company formed Legend Credit as a wholly owned subsidiary.  On April 1, 2003, Mr. Peter Klamka, CEO of the Company, contributed the rights to an affinity credit card business valued at $37,000 to Legend Credit. Mr. Klamka's contribution has been determined pursuant to Accounting Principles Board Opinion No. 29, "Non monetary Transactions," using his cost basis in the investment, which is the most readily determinable cost.  In exchange for this contribution, Legend Credit issued to Mr.  Peter Klamka 60% of the issued and outstanding shares of Legend Credit common stock and the Company issued to Mr. Klamka 850,000 shares of Series B convertible preferred stock. These issuances were valued at $22,200 and $14,800, respectively.  The Company retains a 40% minority interest in Legend Credit which is accounted for using the equity method.  Effective October 1, 2004, Mr. Klamka contributed an additional 10% interest in Legend Credit to the Company that was valued at $3,700 (10% of $37,000, the original value of the affinity credit card business). The Company now owns 50% of Legend Credit and accounts for the subsidiary using the acquisition method. The subsidiary currently has no business operations.  In July 1999, the Company formed Legend Studios, Inc. (formerly FragranceDirect.com, Inc.)  ("Legend Studios"), a majority owned subsidiary.   As of June 30, 2011, Legend Studios did not have any operations.  Basis of Presentation and Going Concern The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.  The Company incurred a net loss for the three months ended March 31, 2012, had an accumulated deficit and a working capital deficit. In addition, the Company generates minimal revenue from its operations and is in default on the payment of notes payable and license fee payable obligations. These conditions raise substantial doubt as to the Company's   ability to continue as a going concern.   These consolidated interim financial statements do not include any adjustments that might result from the outcome of this uncertainty. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. In the opinion of management, these interim financial statements include all of the adjustments necessary to make them not misleading.  7       The financial statements have, in management's opinion, been properly prepared within the framework of the significant accounting policies summarized below:  The Company plans to take the following steps that it believes will be sufficient to provide the Company with the ability to continue in existence.  The Company is seeking additional equity or debt capital to expand its mobile application business.  Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its 91%-owned subsidiary, Legend Studios, and its 50% owned subsidiary, Legend Credit. Significant intercompany accounts and transactions have been eliminated.  Cash and Cash Equivalents For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid debt instruments purchased with a maturity of three months or less, plus all certificates of deposit.  Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As of December 31,, 2011 the Company used estimates in determining the value of common stock issued to consultants for services. Actual results could differ from these estimates.  Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $250,000 insurance limit. The Company extends credit based on an evaluation of the customer's financial condition, generally without collateral.  Exposure to losses on receivables is principally dependent on each customer's financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required.  Comprehensive Income The Company has adopted SFAS No. 130 (ASC220-10), "Reporting Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Examples of items to be included in comprehensive income, which are excluded from net income, include foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. Comprehensive income (loss) is not presented in the Company's financial statements since there is no difference between net loss and comprehensive loss in any period presented.  Stock Based Compensation  Stock-based compensation is accounted for at fair value in accordance with ASC 718.  During the three months ended March 31, 2012, the Company has not adopted a stock option plan and has not granted any stock options.  Stock-based compensation represents the cost related to common stock and options to purchase common stock granted to employees and related parties of the Company. The Company determines the cost of common stock grants at the date the common stock was issued, based on the quoted market price of the Companys common stock and recognizes the cost as expense over the requisite service period. The Company estimates the fair value of all warrants and options issued during the period using the Black-Scholes option-pricing model with the assumptions appropriate to the circumstances of the Company at the time of the transaction. There were no options or warrants issued during the three months ended March 31, 2012.  8       The Company records deferred tax assets for awards that result in deductions on the Companys income tax returns, based on the amount of compensation cost recognized and the Companys statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Companys income tax return are recorded in Additional Paid-In Capital.    Fair Value of Financial Instruments In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities.  The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entitys own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:  ·Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.·Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.·Level 3 - Inputs that are both significant to the fair value measurement and unobservable.  The Company applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2012. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, investments, accounts payable, accrued expenses, accrued interest, license fee payable, due to related parties, and advances from an officer. The fair value of the Companys notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value.  Financial AssetTotalLevel 1Level 2Level 3Investment, at cost$       355,000$       355,000$       355,000$                --$                --$       355,000  Property and equipment Property and equipment is recorded at cost. Depreciation is provided on a straight-line basis over estimated useful lives of the assets.  Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized.  Gains and losses on disposals are included in the results of operations.   9      Revenue Recognition The Company generates revenue from the sale of products on its web sites and through other channels, the sale of advertisements on radio stations it operated and service fees from the sale of debit cards. The Company recognizes revenue for these product sales when the product is shipped to the customer.  The Company recognizes revenue from the radio stations it operated when advertisements were aired.  The Company recognizes service fee revenue from the sale of debit cards at the time the customer is sent the debit card.  Shipping and handling costs are recorded as revenue and related costs are charged to cost of sales.  Income Taxes Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.  Impairment of Long-Lived Assets In October 2001, the FASB issued SFAS No. 144 (ASC 360), "Accounting for Impairment or Disposal of Long-Lived Assets".  This statement also amends ARB No. 51 (ASC 810), "Consolidated Financial Statements", to eliminate the exception to consolidation for a subsidiary for which control is likely to be impaired. SFAS No. 144 (ASC 360) requires that long-lived assets  to be  disposed  of by sale,  including  those of  discontinued operations,  be measured at the lower of carrying  amount or fair value less cost to sell,  whether  reported in  continuing  operations  or in discontinued  operations.  SFAS No. 144 (ASC 360)  broadens  the  reporting  of discontinued  operations  to include all  components  of an entity with operations  that can be  distinguished  from the rest of the entity and that will be eliminated from the ongoing  operations of the entity in a disposal  transaction.  SFAS No. 144 (ASC 360) also establishes a "primary-asset" approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. The Company's adoption effective January 1, 2002 did not have a material impact to the Company's financial position or results of operations.  Earnings (Loss) Per Share The Company reports earnings (loss) per share in accordance with SFAS No. 128 (ASC 260), "Earnings per Share." Basic earnings (loss) per share are computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available.  Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share  except  that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  Diluted earnings (loss) per share have not been presented since the effect of the assumed conversion of options and warrants to purchase common shares would have an anti-dilutive effect.  The following potential common shares have been excluded from the computation of diluted net loss per share for the three months ended March 31, 2012 and 2011 respectively because the effect would have been anti-dilutive:  20122011Conversion of Series A preferred stock44,50044,500Conversion of Series B preferred stock8,500,0008,500,000Conversion of Series C preferred stock14,777,50014,777,500Total23,322,00023,322,000  All warrants and stock options were cancelled during the year ended December 31, 2007.  Non-Controlling Interest In December 2007, the FASB issued SFAS No. 160 (ASC 810), Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (ASC 810), which addresses the accounting and reporting framework for minority interests by a parent company. SFAS 160 (ASC 810) also addresses  10      disclosure requirements to distinguish between interests of the parent and interests of the non-controlling owners of a subsidiary. SFAS 160 (ASC 810) became effective beginning with our first quarter of 2009. We will be reporting minority interest as a component of equity in our Consolidated Balance Sheets and below income tax expense in our Consolidated Statement of Operations. As minority interest will be recorded below income tax expense, it will have an impact to our total effective tax rate, but our total taxes will not change. For comparability, we will be retrospectively applying the presentation of our prior year balances in our Consolidated Financial Statements.  Recently Issued Accounting Pronouncements   Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards CodificationTM (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. The Company has reviewed the FASB issued Accounting Standards Update (ASU) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporations reported financial position or operations in the near term.  The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.  Note 2  Property and Equipment  Property and equipment as March 31, 2012 and December 31, 2011 consisted of the following: March 31,        Dec 31, 20112011Computer equipment$54,124$54,124Less: Accumulated depreciation(53,242)(52,983)Net Fixed Assets$882$1,141  Depreciation expense for the three months ended March 31, 2012 and 2011 was $59 and $53, respectively.   Note 3  Investments The Company has made investments in a private company, in the amount of $355,000 and $220,000 as of March 31, 2012 and December 31, 2011, respectively.  Cephas does not have a controlling interest (less than 20%) or participate in management or share in profits or losses of the Company.  Cephas accounts for the investment at cost, as the investments are collateralized by demand notes payable.  There has been no negative evidence of impairment or reasons to reduce the investment.  Management has considered like values of like investment, future discounted cash flows, estimated return on investment and other unobservable considerations in determining that cost represents fair market value. See Note 10 Commitment and Contingencies.  Note 4 - Accrued Expenses  Accrued expenses at March 31, 2012 and December 31, 2011 consisted of the following:  The amount owing to Michael Jordan bears interest at 12% per annum and is currently in default.  Accrued interest on settlement, to date, amounts to $468,750.  An officer of the Company, as approved by the Board of Directors, is paid a salary of $175,000 per annum, renewable annually upon mutual consent until terminated by either party.  Amounts are currently being accrued until sufficient cash flows from operation allow payment.  11       Mar 31, 2012Dec 31, 2011Michael Jordan settlement$468,750$468,750Management salary457,500393,750Professional fees3,0003,000Total Accrued Expenses$929,250$865,500  Note 5 - Notes Payable - Officer  An officer, the controlling shareholder, has pledged his support to fund continuing operations; however there is no written commitment to this effect.  The Company is dependent upon continued support.  As of September 30, 2004, the Company converted $291,000 of advances from its CEO, Mr. Klamka, into a note payable that bears interest at 21% per annum and is payable upon demand.  As of March 31, 2012, the balance on this note is $263,496 with accrued interest related to this note amounted to $408,396.  During the year ended December 2006 the Company converted certain of the accrued amounts owing to the CEO and for salaries payable to the CEO into a note totaling $758,920.  This note is unsecured and bears interest at the rate of 21% per annum.  Accrued interest to date is $881,800.  A promissory note were issued during 2007 to Peter Klamka for prior year (2006) unpaid salaries of $175,000 bearing interest at the rate of 8% per annum. In 2011 payments, in the amount of $8,000 were applied to this note, resulting in a balance due of $167,000 as of March 31, 2012.  Interest accrued to date is $60,674.  On December 30, 2011 a promissory note was issued for accrued salaries for the last 2 years, issued to Peter Klamka, in the amount of $350,000 bearing interest at the rate of 8% per annum, payable upon written demand. The note is convertible, at the option of the holder, at a fixed share price of $.875, the closing bid for the common shares as of December 30, 2011. At December 30, 2011, the Company, at the request of the holder, issued 261,400 (post split) shares, reducing this note in the amount of $107,350.  There was no discount to the stated share conversion price at the date of the agreement; therefore no beneficial conversion rate is recognized. During the three months ended March 31, 2012, the Company issued stock valued at $3,250 to reduce the note to 239,400 as of March 31, 2012. Interest accrued to date is $4,788.  Per the convertible debt agreements the conversion price is to be calculated by dividing the amount of outstanding principal by the stated conversion price.   Since the convertible debt can be converted at anytime from the signing of the agreement forward, the closing prices of the convertible debt agreement dates were used for the calculation of the beneficial conversion feature, in accordance with ASC 470.  There was no beneficial conversion feature associated with the convertible debt, as the conversion rate approximated the fair market value of the trading shares at the date of signing.  Note 6 - Notes Payable  In July and August 1997, the Company received $56,250 through the issuance of 8% promissory notes and common stock purchase warrants to acquire Company stock.  In 1999, one of the note holders converted $25,000 of principal and $5,500 of accrued interest into 6,100 shares of the Company's common stock. The remainder of the notes, which amounts to $31,250, continues to be outstanding notwithstanding the fact that payments owed by the Company there under are now past due.  Interest accrued to date is $33,500.  In July and August of 1999, the Company's Subsidiaries, Legend Studios issued 10% promissory notes aggregating to $160,000.  The notes are due the earlier of one year or the completion of an initial public offering of Legend Studios common stock. In addition, Legend Studios issued to the note  holders  an  12      aggregate  of  96,000  two-year stock  purchase warrants to purchase  Legend  Studios  common stock at $3.50 per share. During the year ended December  31, 2002,  two note holders  converted principal  and accrued  interest  of $35,000  and  $13,358  into 48,358 shares of the Company's common stock. As of March 31, 2012, $125,000 of these notes and accrued interest of $155,209 are still outstanding. These notes were in default as of December 31, 2006.  In August  2001,  the Company  issued  notes  payable for  $100,000 and $300,000  which  were  due in 60 days  and 14  days,  respectively. The balance of those loans as of March 31, 2012 was $293,000.  The loan for $100,000 plus accrued interest of $132,000 was in default and has now been settled for a total of $110,000 including accrued interest.  The loan is repayable in installments and has a balance owing as of March 31, 2012 of $50,000 plus accrued interest of $29,250.  During the year ended December 31, 2010, the Company converted $88,000 of certain notes payable into 17,600,000 (70,400 post split) shares of the companys common stock.  During the year ended December 31, 2010, an outside party loaned the Company a total $85,000.  This loan is repayable interest only at the rate of 7% per annum with no fixed terms of repayment and may be converted into common stock at $.005 per share.  In 2011 an additional 70,000 was advanced by the party. The balance of the loan as at March 31, 2012 is $155,000 and accrued interest of $8,867.  The conversion feature of the notes resulted in a beneficial conversion expense of $155,000, which has been recognized in 2011.  During 2011 the company issued a series of notes  for expenses paid on behalf of the Company.  The notes totaled $19,700, payable upon demand, stated interest rate of 7%, convertible into shares of common stock at a fixed conversion price of $.005 per share.  A beneficial conversion has been recognized in the amount of $19,700, based on the fair market value of the stock at the time of agreement.  Interest accrued to date is $660 on these notes.  In December 2011 an outside party advanced an additional $45,000 bearing interest at 7% per annum.  As of March 31, 2012 an additional $100,000 was advanced leaving a balance owing of $145,000. The note is payable on demand and there are no fixed terms of repayment.  Interest accrued to date is $2,327.  The Company issued a note to an employee for unpaid salaries for 2006 for $100,000 of which $23,750 was repaid. The remaining balance of $76,250 bears interest at 7% per annum. An additional note for unpaid salary for 2011 was issued for $80,000 bearing interest at 7% per annum.  During the three months ended March 31, 2012, the note was reduced by the issuance of common stock with a value of $2,000 leaving a total balance outstanding of $154,250 and total interest accrued to date is $30,702.  Note 7 -Stockholders' Deficit  Series A Preferred Stock The Company has 1,000,000 shares of $0.001 par value Series A Preferred Stock ("Series A") authorized of which 44,500 shares are issued and outstanding at December 31, 2011. Each share of Series A can be converted into 20 shares of common stock.  Series B Convertible Preferred Stock The Company has 850,000 shares of $0.01 par value Series B Convertible Preferred Stock (Series B) authorized of which 850,000 shares are issued and outstanding at September 30, 2011.  In the event of a voluntary or involuntary liquidation,  dissolution or winding  up of the  Company,  prior to the time  the  Series B  becomes convertible  into  common  shares,  the  holders  of  Series B shall be entitled to $0.01 per share. In the event of a voluntary or involuntary liquidation,  dissolution  or winding up of the Company  after the time the Series B becomes  convertible  into common  shares,  the holders of Series B shall be entitled  to share with the  holders of common  stock pari  passu in the assets of the  Company,  on an as  converted  basis, whether such assets are capital or surplus of any nature. The Series  13      B shall be convertible upon the earlier to occur of: (i) the date the Company generates net profits in any two consecutive fiscal quarters or (ii) April 1, 2006.  The  conversion  of  Series B shall be on the  basis of ten  shares  of common  stock for one Series B share,  as may be adjusted  from time to time. Upon conversion, the holder of the Series B will be required to pay to the Company a conversion price for each share of common stock equal to $0.10.  The holders of the Series B shall vote on all matters with the holders of the common stock (and not as a separate class) on a ten vote per share basis.  The holders of the Series B shall be entitled to receive all notices relating to voting as are required to be given to the holders of the common stock.  During 2003, the Company issued to Mr. Peter Klamka, the Company's CEO, 850,000 shares of Series B as consideration for the contribution of an affinity credit card business to Legend Credit.  Series C Convertible Preferred Stock The Company has 147,775 shares of $0.01 par value Series C Convertible Preferred Stock (Series C) authorized of which 147,775 shares are issued and outstanding at September 30, 2011.  In the event of a voluntary or involuntary liquidation,  dissolution or winding  up of the  Company  prior  to the time  the  Series C  becomes convertible  into  common  shares,  the  holders  of  Series C shall be entitled to $0.01 per share. In the event of a voluntary or involuntary liquidation,  dissolution  or winding up of the Company  after the time the Series C becomes  convertible  into common  shares,  the holders of Series C shall be  entitled  to share with the holders of  shares of common stock and Series B convertible preferred stock pari passu in the assets of the Company, on an as converted  basis, whether such assets are capital or surplus of any nature.   The Series C shall be convertible upon the earlier to occur of:  (i) the date the Company generates net profits in any two consecutive fiscal quarters; (ii) April 1, 2006; or (iii) any date that the market price per share of common stock equals or exceeds $0.50.  The conversion of Series C shall be on the basis of one hundred shares of common stock for one Series C share, as may be adjusted from time to time. Upon conversion, the holder of the Series C will be required to pay to the Company a conversion price for each share of common stock equal to $0.10.  The holders of the Series C shall vote on all matters with the holders of the common stock (and not as a separate class) on a ten vote per share basis.  The holders of the Series C shall be entitled to receive all notices relating to voting as are required to be given to the holders of the common stock.  During 2004, the Company issued to Mr. Peter Klamka, the Company's CEO, 147,775 shares of Series C as consideration for the contribution of an additional 10% ownership in Legend Credit. (See Note 3)  Common Stock During the quarter ended March 31, 2010 the Company issued a total of 3,100,000 (12,400 post split) common shares to convert notes payable for a total consideration of $15,500.  During the quarter ended September 2010 the Company issued a total of 8,000,000 (32,000 post split) shares of common stock to convert certain notes payable in the amount of $40,000.  During the quarter ended September 30, 2010 the Company issued a total of 2,000,000 (8,000 post split) shares of common stock for services rendered totaling $14,000.  During the quarter ended December 31, 2010, the Company issued a total of 7,000,000 (28,000 post split) shares of common stock for services totaling $5,000 and to reduce notes payable by $32,500.  During 2011 the Company issued common shares to consultants for services provided.  We have recorded compensation costs at the fair value at the time of issuance and expensed in the periods the service were performed.  Total common shares issued for these services were 15,645,000 (62,580 post split) and recorded expenses of $110,000 related to the issuances.  14       During the quarter ended March 31, 2011, the Company issued a total of 54,600,000 (218,400 post split) shares for services of $2,000 and to reduce notes and loans by $85,600.  During the three months ended June 30, 2011 a total of 10,750,000 (43,000 post split) shares were issued to reduce notes payable by $21,750.  During the three months ended March 31, 2012 a total of 4,650,000 shares of common stock were issued to reduce notes payable by $16,250.  Note 8 - Income Taxes  The components of income tax (benefit) expense for the three months ended March 31, 2012 and 2011 respectively, are as follows:  20122011Federal:Current$-$-Deferred----State:Current--Deferred----$-$-  The Company has a net operating loss carry forward to offset future taxable income of $22,921,490 for federal purposes and $21,396,840 for state purposes.  Subject to current regulations, this carry forward will begin to expire in 2012 in varying amounts until 2021.  The amount and availability of the net operating loss carry forwards may be subject to limitations set forth by the Internal Revenue Code.  Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carry forwards.  The Companys income tax expense (benefit) for the three months ended March 31, 2012 and 2011 respectively, differed from the statutory federal rate of 34 percent as follows: 20122011Statutory rate applied to loss before income taxes$(7,793,307)$(7,527,087)Increase(decrease) in income taxes resulting from:State, income taxes--Other, including reserve for deferred tax asset7,793,3077,527,087Income Tax Expense$-$-  Temporary differences due to statutory requirements in the recognition of assets and liabilities for tax and financial reporting purposes, generally including such items as organizational costs, accumulated depreciation and amortization, allowance for doubtful accounts, organizational and start-up costs and vacation accruals.  These differences give rise to the financial statement carrying amounts and tax bases of assets and liabilities causing either deferred tax assets or liabilities, as necessary, as of March 31, 2012 and 2011, respectively:    15       March 31,20122011Deferred tax assetsNet operating loss carry forwards$22,921,490$22,138,490Less: valuation allowances(22,921,490)(22,138,490)Net Deferred Tax Asset$-$-   Note 9 - Commitments and Contingencies  Litigation Legend Studios, Inc. vs. Quorum Radio Partners, Inc., Quorum Radio Partners of Virginia, Inc. and Quorum Communications, Inc.  Legend Studios lawsuit arises from defendants' breach of the parties' Asset Purchase Agreement and Time Brokerage Agreement that govern the sale, programming, operations and revenues of certain radio stations (KELE-AM, KELE-FM, WIQO, WKEY and WKCI). Legend Studios seeks specific performance of the agreements, as well as in excess of $1.5 million in damages.  Defendants have been served with the complaint, but have not filed answers and may be subject to entry of default.  Quorum Radio Partners of Virginia, Inc., however, filed a bankruptcy petition after being served with the complaint, which stays Legend Studios proceedings solely against that entity.  In the ordinary course of business, the Company is generally subject to claims, complaints, and legal actions. At March 31, 2012, management believes that the Company is not a party to any action which result would have a material impact on its financial condition, operations, or cash flows.  Commitments In September, 2007, Legend Credit, Inc. entered into an agreement with UCE, Inc. in which the Company agreed to contribute $500,000 toward production, marketing and promotion costs for a weekly mixed martial arts event scheduled and produced by UCE, Inc.  The Company contributed $29,562 toward the agreed-upon.  The investment of $29,562 was fully impaired during the year ended December 31, 2008.  During the year ended December 31, 2010 the Company invested a total of $135,000 worth of units in Network Talent, LLC, (Network), a modeling agency in California.  The Company has committed to advance by way of purchase of units of Network a total of $400,000 of which $355,000 has been advanced to date.    Item 2. Management's Discussion and Analysis or Plan of Operation  Forward looking statements  This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Shareholders are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, our ability to fully establish our proposed websites and our ability to conduct business with Palm, Inc. and be successful in selling products. Although we believe the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking  16      statements contained in the report will prove to be accurate.  GENERAL  The following discussion and analysis should be read in conjunction with our consolidated financial statements and related footnotes for the year ended December 31, 2011 included in our Annual Report on Form 10-K.  The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future.  We were incorporated in Delaware on January 13, 1998 and are the successor to Interactive Entertainment Studio, Inc. (IES). IES was incorporated in the State of Nevada on May 27, 1997 and was merged into us in March 1998 for the sole purpose of changing the domicile of the company to Delaware. This merger was retroactively reflected in the December 31, 1997 financial statements. On June 27, 2002 we changed our name to Legend Mobile, Inc. In October 2008, the Company amended its articles to change the name to Cephas Holding Corp. . We currently sell two  applications on the iTunes store. Are first application is  The Iron Sheik Soundboard. The Iron Sheik is a popular character from professional wrestling. Are second application available for purchase is Mobile Fedor featuring  MMA star Fedor Emelineko  We also distribute free of charge an iPhone application called MMAUnderboss which is a collection of newswires covering the sport of mixed martial arts.  We believe that this application will allow us to advertise additional apps that will be sold on a per download basis. We also have the option to add advertising to the MMA Underboss application but have not done so yet.  We are also developing applications for the iPhone under license from MMA star, Fedor Emelinekos Wanderlai Silva and Rich Franklin . We are negotiating with several other MMA and UFC personalities and brands for licenses related to the iPhone platform.  We also offer a newswire dedicated to rock music called Metal News. Metal News is advertiser supported and is a free download to users who agree to look at banner ads in exchange for free content.  We intend to develop more free applications with the intention of creating a large user base that can be attractive to advertisers as well as to allow us to  sell virtual goods such as images and ringtones, develop fantasy-type sports contests, and for location based incentives such as coupons and geographically specific offers.  We also expect to use our free newswire apps such as MMAUnderboss for the promotion and sale of fee based apps like Mobile Fedor.   17      Since our inception, we have incurred significant losses and at March 31, 2012 our current liabilities exceeded current assets. In addition, we are delinquent in certain payments due for license fees and notes payable. In an effort to preserve our cash, we are currently using shares of our common stock to pay down debt.  We may be unable to continue in existence unless we are able to arrange additional financing and achieve profitable operations. We plan to raise additional capital   Significant Accounting Policies and Estimates  Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experiences and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of the Company's financial statements relate to the allowance for doubtful accounts. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the consolidated financial statements included in this Annual Report on Form l0-K for the year ended December 31, 2011.  Results of Operations Three  months ended  March 31, 2012  vs. March 31, 2011  Revenue for the three  months ended March 31, 2012 was $55 compared to $101 for the three months ended March 31, 2011  The cost of revenue for the three months ended March 31, 2012 was $0  as compared to  $0 for the period ended March 31, 2011  Selling, general and administrative expenses for the three months ended March 31, 2012 was $68,606 as compared to $52,032  for the three months ended March 31, 2011.  Liquidity and Capital Resources  We have incurred an accumulated deficit since our inception of $22,994,960. In order for us to continue in existence, we will have to raise additional capital through the sale of equity or debt or generate sufficient profits from operations, or a combination of both.   18      Off-balance sheet arrangements  There are no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.  Item 3. Controls and Procedures  As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded that the design and operation of our disclosure controls and procedures are effective except in regard weakness in our controls related to the issuance of shares for the three months ended March 31, 2012. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities & Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.   Part II. OTHER INFORMATION  Item 1. Legal Proceedings  The company is party to legal proceedings from time to time. None of the legal proceedings in managements opinion would have an adverse material impact on the company.  On September 26, 2008, Mr. Denner filed a suit against the Company and Mr. Klamka in the Iowa District Court for Polk County alleging, among other things, that the Companys and Mr. Klamkas alleged failure to pay a loan made by Mr. Denner to the Company constituted a breach of contract.  The company and Mr. Klamka denied these claims.  As Of July 31, 2010 case against Cephas Holdings f/k/a Legend Mobile and Peter Klamka,, individually, was dismissed.  There are several judgments against our company that could effect our operations  19       Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   During the quarter ended March 31, 2012 the Company issued a total of 4,650,000 common shares to convert notes payable for a total consideration of $16,500.  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 Certification of the Chief Executive Officer and Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  32.1 Certification of the Chief Executive Officer and Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   20       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.  Cephas Holding ,Corp.    Dated: May 15, 2012 By: /s/ Peter Klamka Peter Klamka, Principal  Executive Officer  and Principal Financial  Officer   21