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 September 30, 2009
 
  ̈ 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:   000-52074t
  4C Controls
Inc.
 (Exact
Name of Registrant as Specified in its Charter)
 
 Nevada
                                    
                                    98-0446287(State
      or other jurisdiction of
                                      incorporation
      or organization)
                                    
                                    (IRS
      Employer
                                      Identification
      No.)
 
 100
Wall Street, 21st
Floor
 New York, NY
 10005
 (Address
of principal executive offices)
 
 866-515-7069
 (Registrant’s
Telephone Number, Including Area Code)
 
 N/A
 (Former
Name, Former Address and Former Fiscal Year,
 if
Changed Since Last Report)
 
 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  ̈  No  ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large
      Accelerated Filer
                                 ̈
                                Accelerated
      Filer
                                 ̈Non-Accelerated
      Filer
                                 ̈
                                Smaller
      Reporting Company
                                x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 Yes  ̈  No x
 
 As of
November 20, 2009, the Issuer had 44,179,540 shares of its Common Stock
outstanding.
  
  TABLE
OF CONTENTS
  PART
      I: FINANCIAL INFORMATIONItem
      1: Financial Statements
                                  4Item
      2: Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
                                  15Item
      3: Quantitative and Qualitative Disclosures about Market
    Risk
                                  18Item
      4: Controls and Procedures
                                  18PART
      II: OTHER INFORMATIONItem
      1: Legal Proceedings
                                  19Item
      1A: Risk Factors
                                  19Item
      2: Unregistered Sales of Equity Securities and Use of
    Proceeds
                                  19Item
      3: Defaults Upon Senior Securities
                                  19Item
      4: Submission of Matters to a Vote of Security Holders
                                  19Item
      5: Other Information
                                  19Item
      6: Exhibits
                                  20SIGNATURES
                                  21
 
 2
  SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
  This
Report on Form 10-Q (this “Report”) includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements include statements concerning our plans,
objectives, goals, strategies, future events, future revenues or performance,
capital expenditures, financing needs and other information that is not
historical information and, in particular, appear in the section entitled
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and elsewhere in this Report. When used in this Report, the words
“estimates,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,”
“believes,” “seeks,” “may,” “will,” “should” and variations of these words or
similar expressions (or the negative versions of any these words) are intended
to identify forward-looking statements. However, as we issue “penny stock,” as
such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are
ineligible to rely on these safe harbor provisions. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of our Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.  All
forward-looking statements, including, without limitation, management’s
examination of historical operating trends, are based upon our current
expectations and various assumptions. Our expectations, beliefs and projections
are expressed in good faith and we believe there is a reasonable basis for
them.
 
 There are
a number of risks and uncertainties that could cause our actual results to
differ materially from the results referred to in the forward-looking statements
contained in this Report. Important factors outside the scope of our control
could cause our actual results to differ materially from the results referred to
in the forward-looking statements we make in this Report. Without limiting the
foregoing, if we are unable to acquire approvals or consents from third parties
or governmental authorities with respect to our new business model, our plans to
commence our new business may become irrevocably impaired.
 
 All
forward-looking statements included herein are expressly qualified in their
entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by applicable laws and regulations, the Company
undertakes no obligation to update these forward-looking statements to reflect
events or circumstances after the date of this Report or to reflect the
occurrence of unanticipated events.
 
 Unless
otherwise provided in this Report, references to the “Company,” the
“Registrant,” the “Issuer,” “we,” “us,” and “our” refer to 4C Controls
Inc.
 
 3
  PART
I                 FINANCIAL
INFORMATION
 4C
      Controls Inc.(A
      Development Stage Company)Consolidated
      Balance SheetsSeptember
      30
                              
                              
                              December
      312009
                              
                              
                              2008(Unaudited)ASSETSCurrent
      AssetsCash
                              
                              $
                              535
                              
                              
                              $
                              104,708Prepaid
      expenses and other current assets
                              
                              
                              38,527
                              
                              
                              
                              43,097Total
      Current Assets
                              
                              
                              39,062
                              
                              
                              
                              147,805Property
      & Equipment
                              
                              
                              4,191,120
                              
                              
                              
                              14,343Investment
      in and Advances to 4C Security Solutions, Ltd.
                              
                              
                              3,393,822
                              
                              
                              
                              3,806,601Total
      Assets
                              
                              $
                              7,624,004
                              
                              
                              $
                              3,968,749LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIENCY)Current
      LiabilitiesAccrued
      liabilities
                              
                              $
                              5,177,591
                              
                              
                              $
                              1,579,845Loan
      payable - officer
                              
                              
                              29,964
                              
                              
                              
                              -Interest
      payable - related party
                              
                              
                              143,855
                              
                              
                              
                              23,305Loan
      payable - related party
                              
                              
                              2,584,564
                              
                              
                              
                              1,539,175Total
      Current Liabilities and Total Liabilities
                              
                              
                              7,935,974
                              
                              
                              
                              3,142,325Stockholders'
      Equity (Deficiency):Common
      Stock, par value $.00001 per share100,000,000
      shares authorized,44,179,540
      shares issued and outstanding at September 30, 2009and
      December 31, 2008
                              
                              
                              451
                              
                              
                              
                              441Additional
      paid in capital
                              
                              
                              15,367,851
                              
                              
                              
                              13,428,602Donated
      Capital
                              
                              
                              24,000
                              
                              
                              
                              24,000Treasury
      Stock, 470,450 shares at cost
                              
                              
                              (940,895
                              )
                              
                              
                              (940,895
                              )Deficit
      accumulated during development stage
                              
                              
                              (11,374,064
                              )
                              
                              
                              (5,867,715
                              )Deferred
      Compensation
                              
                              
                              (5,358,329
                              )
                              
                              
                              (5,818,009
                              )Total
      4c Controls Stockholders' Equity (Deficiency)
                              
                              
                              (2,280,986
                              )
                              
                              
                              826,424Non
      Controlling Interest in Subsidiaries
                              
                              
                              1,969,016
                              
                              
                              
                              -Total
      Equity
                              
                              
                              (311,970
                              )
                              
                              
                              826,424Total
      Liabilities and Stockholders' Equity (Deficiency)
                              
                              $
                              7,624,004
                              
                              
                              $
                              3,968,749


See Notes
to Financial Statements




4


4C
      Controls Inc.(A
      Development Stage Company)
                                                                                                          (Unaudited)
      Consolidated Statements of OperationsAccumulated
      fromFor
      the Three Months Ended
                                                                                                        
                                                                                                        
                                                                                                        For
      the Nine Months Ended
                                                                                                        
                                                                                                        
                                                                                                        December
      28, 2004September
      30
                                                                                                        
                                                                                                        
                                                                                                        September
      30
                                                                                                        
                                                                                                        
                                                                                                        (Date
      of Inception)2009
                                                                                                        
                                                                                                        
                                                                                                        2008
                                                                                                        
                                                                                                        
                                                                                                        2009
                                                                                                        
                                                                                                        
                                                                                                        2008
                                                                                                        
                                                                                                        
                                                                                                        to
      September 30, 2009RevenueInterest
      Income
                                                                                                        
                                                                                                        $
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,210
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,210
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        3,219ExpensesDirector
      fees and expenses
                                                                                                        
                                                                                                        
                                                                                                        2,000
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        296,815
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        120,439
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        314,882
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        441,322Donated
      Services
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        24,000General
      & Administrative
                                                                                                        
                                                                                                        
                                                                                                        1,011,126
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        1,226,595
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,532,859
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        1,377,613
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        6,014,655Interest
      - related party
                                                                                                        
                                                                                                        
                                                                                                        43,245
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        26,101
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        120,550
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        30,664
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        173,171Marketing
      and public relations
                                                                                                        
                                                                                                        
                                                                                                        5,234
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        451,599
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        221,318
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        545,425
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        736,748Professional
      fees
                                                                                                        
                                                                                                        
                                                                                                        291,935
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        925,834
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        1,110,589
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        1,339,816
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,550,619Loss
      from unconsolidated entity
                                                                                                        
                                                                                                        
                                                                                                        30,822
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        13,692
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        412,779
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        13,692
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        448,952Total
      expenses
                                                                                                        
                                                                                                        
                                                                                                        1,384,362
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        2,940,636
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        5,518,534
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        3,622,092
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        11,389,467Net
      Loss
                                                                                                        
                                                                                                        $
                                                                                                        (1,384,362
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        (2,937,426
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        (5,518,534
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        (3,618,882
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        (11,386,248
                                                                                                        )Net
      Loss attributable to noncontrolling interest
                                                                                                        
                                                                                                        $
                                                                                                        441
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        (0
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        12,184
                                                                                                        
                                                                                                        
                                                                                                        $
                                                                                                        (0
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        12,184Net
      Loss attributable to 4C Controls
                                                                                                        
                                                                                                        $
                                                                                                        (1,383,921
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        (2,937,426
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        (5,506,350
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        (3,618,882
                                                                                                        )
                                                                                                        
                                                                                                        $
                                                                                                        (11,374,064
                                                                                                        )Net
      Loss Per Share
                                                                                                        
                                                                                                        
                                                                                                        (0
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (0
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (0
                                                                                                        )
                                                                                                        
                                                                                                        
                                                                                                        (0
                                                                                                        )Weighted
      Average Shares Outstanding
                                                                                                        
                                                                                                        
                                                                                                        45,179,540
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        42,805,360
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        44,978,075
                                                                                                        
                                                                                                        
                                                                                                        
                                                                                                        42,367,978












5


4C
      Controls Inc.(A
      Development Stage Company)(Unaudited)
      Consolidated Statement of Stockholders' EquityFor
      the Period from December 28, 2004 (Date of Inception) to September 30,
      2009
  Deficit
                                                                                                    AccumulatedDuring
      theCommon
      Stock
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Additional
                                                                                                  
                                                                                                  
                                                                                                  Treasury
      Stock
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Donated
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Deferred
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  DevelopmentShares
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Par
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Paid-in
      Capital
                                                                                                  
                                                                                                  
                                                                                                  Shares
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Value
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Capital
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  Stage
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  TotalValueCommon
      stock issued for cash at$0.00001
      per share
                                                                                                  
                                                                                                  
                                                                                                  35,000,000
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  350
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  (300
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  50Net
      loss for the period
                                                                                                  
                                                                                                  
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (6,520
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (6,520
                                                                                                  )Balance
      - December 31, 2004
                                                                                                  
                                                                                                  
                                                                                                  35,000,000
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  350
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  (300
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  (6,520
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  (6,470
                                                                                                  )Common
      stock issued for cash at$0.10
      per share
                                                                                                  
                                                                                                  
                                                                                                  7,053,550
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  70
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  100,695
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  100,765Shares
      issuance costs
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (1,548
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (1,548
                                                                                                  )Donated
      services
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  12,000
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  12,000Net
      loss for the year
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (48,442
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (48,442
                                                                                                  )Balance
      - December 31, 2005
                                                                                                  
                                                                                                  
                                                                                                  42,053,550
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  420
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  98,847
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  12,000
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  (54,962
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  56,305Donated
      services
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  12,000
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  12,000Net
      loss for the year
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (42,707
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (42,707
                                                                                                  )Balance
      - December 31, 2006
                                                                                                  
                                                                                                  
                                                                                                  42,053,550
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  420
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  98,847
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  24,000
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  (97,669
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  25,598Net
      loss for the year
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (93,677
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (93,677
                                                                                                  )Balance
      - December 31, 2007
                                                                                                  
                                                                                                  
                                                                                                  42,053,550
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  420
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  98,847
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  24,000
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  -
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  (191,346
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  (68,079
                                                                                                  )Issuance
      of Common Stock
                                                                                                  
                                                                                                  
                                                                                                  1,596,440
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  16
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  4,806,810
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  4,806,826Non
      cash compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  100,791
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  100,791Shareholder
      profits from sale of securities
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  1,522,164
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  1,522,164Stock
      grant
                                                                                                  
                                                                                                  
                                                                                                  1,000,000
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  10
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  6,899,990
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (6,900,000
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -Amortization
      of deferred compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  1,081,991
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  1,081,991Treasury
      stock acquired
                                                                                                  
                                                                                                  
                                                                                                  (470,450
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (5
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  470,450
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (940,895
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (940,900
                                                                                                  )Net
      loss for the year
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (5,676,369
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (5,676,369
                                                                                                  )Balance
      - December 31, 2008
                                                                                                  
                                                                                                  
                                                                                                  44,179,540
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  441
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  13,428,602
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  470,450
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  (940,895
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  24,000
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  (5,818,009
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  (5,867,715
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  826,424Stock
      grant
                                                                                                  
                                                                                                  
                                                                                                  1,000,000
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  10
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  1,799,990
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (1,800,000
                                                                                                  )Amortization
      of deferred compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  84,677
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  84,677Non
      cash compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  59,596
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  59,596Amortization
      of deferred compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  575,001
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  575,001Non
      Controlling Interest in Subsidiaries
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  1,981,200Net
      loss for the period
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (1,944,804
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (1,944,804
                                                                                                  )Balance
      - March 31, 2009
                                                                                                  
                                                                                                  
                                                                                                  45,179,540
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  451
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  15,288,188
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  470,450
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (940,895
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  24,000
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (6,958,331
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (7,812,519
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  1,582,094Non
      cash compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  55,581
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  55,581Amortization
      of deferred compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  800,001
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  800,001Non
      Controlling Interest in Subsidiaries
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (441
                                                                                                  )Net
      loss for the period
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (2,177,624
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (2,177,624
                                                                                                  )Balance
      - June 30, 2009
                                                                                                  
                                                                                                  
                                                                                                  45,179,540
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  451
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  15,343,769
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  470,450
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (940,895
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  24,000
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (6,158,330
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (9,990,143
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  259,611Non
      cash compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  24,082
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  24,082Amortization
      of deferred compensation
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  800,001
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  800,001Non
      Controlling Interest in Subsidiaries
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (11,743
                                                                                                  )Net
      loss for the period
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (1,383,921
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (1,383,921
                                                                                                  )Balance
      - September 30, 2009
                                                                                                  
                                                                                                  
                                                                                                  45,179,540
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  451
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  15,367,851
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  470,450
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (940,895
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  24,000
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  (5,358,329
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (11,374,064
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (311,970
                                                                                                  )










6


4C
      Controls Inc.(A
      Development Stage Company)(Unaudited)
      Consolidated Statement of Cash FlowsAccumulated
      fromFor
      the Nine Months Ended
                                                    
                                                    
                                                    December
      28, 2004September
      30
                                                    
                                                    
                                                    (Date
      of Inception)2009
                                                    
                                                    
                                                    2008
                                                    
                                                    
                                                    to
      September 30, 2009Operating
      ActivitiesNet
      loss
                                                    
                                                    $
                                                    (5,506,350
                                                    )
                                                    
                                                    $
                                                    (3,618,882
                                                    )
                                                    
                                                    $
                                                    (11,374,064
                                                    )Adjustments
      to reconcile net loss to net cashused
      in operating activities:
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    506,990Amortization
      of deferred compensation
                                                    
                                                    
                                                    2,259,680
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (5,358,329
                                                    )Interest
      payable
                                                    
                                                    
                                                    120,550
                                                    
                                                    
                                                    
                                                    10,546
                                                    
                                                    
                                                    
                                                    143,855Depreciation
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    229Issuance
      of stock options
                                                    
                                                    
                                                    139,259
                                                    
                                                    
                                                    
                                                    40,285
                                                    
                                                    
                                                    
                                                    240,050Donated
      Services
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    24,000Impairment
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    5,000Loss
      from unconsolidated entity
                                                    
                                                    
                                                    412,779
                                                    
                                                    
                                                    
                                                    13,692
                                                    
                                                    
                                                    
                                                    (12,184
                                                    )Non
      controlling interest in subsidiary losses
                                                    
                                                    
                                                    (12,184
                                                    )Change
      in operating assets and liabilities
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -Accrued
      expenses
                                                    
                                                    
                                                    3,597,745
                                                    
                                                    
                                                    
                                                    1,105,949
                                                    
                                                    
                                                    
                                                    5,177,590Prepaid
      expenses and other current assets
                                                    
                                                    
                                                    4,572
                                                    
                                                    
                                                    
                                                    (54,076
                                                    )
                                                    
                                                    
                                                    (300,015
                                                    )Net
      Cash Used in Operating Activities
                                                    
                                                    
                                                    (1,016,051
                                                    )
                                                    
                                                    
                                                    (1,995,267
                                                    )
                                                    
                                                    
                                                    (11,454,097
                                                    )Investing
      ActivitiesInvestments
      in 4C Security Solutions, Ltd.
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (3,690,808
                                                    )
                                                    
                                                    
                                                    (3,241,856
                                                    )Advances
      to 4C Security Solutions, Ltd.
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (151,966
                                                    )Acquisition
      of Property and Equipment
                                                    
                                                    
                                                    (4,176,777
                                                    )
                                                    
                                                    
                                                    (15,300
                                                    )
                                                    
                                                    
                                                    (3,929,631
                                                    )Website
      development costs
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (5,000
                                                    )Net
      Cash Used in Investing Activities
                                                    
                                                    
                                                    (4,176,777
                                                    )
                                                    
                                                    
                                                    (3,706,108
                                                    )
                                                    
                                                    
                                                    (7,328,453
                                                    )Financing
      ActivitiesProceeds
      of Loan from related party
                                                    
                                                    
                                                    1,045,389
                                                    
                                                    
                                                    
                                                    1,398,535
                                                    
                                                    
                                                    
                                                    2,584,564Loan
      from Officer
                                                    
                                                    
                                                    29,964
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    29,964Net
      proceeds from issuance of common shares
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    4,806,821
                                                    
                                                    
                                                    
                                                    14,187,357Proceeds
      from non-controlling shareholder
                                                    
                                                    
                                                    1,981,200
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    1,981,200Net
      Cash Provided by (used in) Financing Activities
                                                    
                                                    
                                                    3,056,553
                                                    
                                                    
                                                    
                                                    6,205,356
                                                    
                                                    
                                                    
                                                    18,783,085Increase
      (Decrease) in Cash
                                                    
                                                    
                                                    (104,173
                                                    )
                                                    
                                                    
                                                    503,981
                                                    
                                                    
                                                    
                                                    535Cash-
      Beginning of Period
                                                    
                                                    
                                                    104,708
                                                    
                                                    
                                                    
                                                    6,313
                                                    
                                                    
                                                    
                                                    -Cash
      - End of Period
                                                    
                                                    $
                                                    535
                                                    
                                                    
                                                    $
                                                    510,294
                                                    
                                                    
                                                    $
                                                    535See
      Notes to Financial StatementsSupplemental
      disclosure of cash flow informationCommon
      Stock issued for deferred compensation
                                                    
                                                    
                                                    1,800,000
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    6,900,000Profits
      from shareholder sales of stock capitalized to loan
    receivable
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    1,522,164Treasury stock
      acquired through offset of loan to related party
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    940,895




7


NOTES TO
FINANCIAL STATEMENTS




September
30, 2009




(Unaudited)




NOTE 1
- BASIS OF PRESENTATION




The
accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted for interim financial information
and with the instructions to Form 10-Q and Article 8 of Regulation S-X relating
to smaller reporting companies.  Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles (“GAAP”) for complete financial statements.  In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included.  Operating results for the nine and three months period
ended September 30, 2009 are not necessarily indicative of the results that may
be expected for the year ended December 31, 2009.




The
balance sheet at December 31, 2008 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by GAAP for complete financial statements.




For
further information, refer to the consolidated financial statements and
footnotes thereto included in our Annual Report on Form 10-K for the year ended
December 31, 2008.




NOTE
2 – ORGANIZATION AND BUSINESS DESCRIPTION




4C
Controls Inc. (the “Company”) was incorporated in the State of Nevada on
December 28, 2004 and is a development stage company as defined by Statement of
Financial Accounting Standard No. 7, “Development Stage
Companies”.  On January 10, 2008, a change of control of the Company
occurred and Rudana Investment Group AG (“Rudana”) a corporation formed under
the laws of Switzerland, became the new majority shareholder of the Company,
controlling approximately 66% of the issued and outstanding shares of the
Company’s common stock.  On February 12, 2008, the Company changed its
name from Amecs Inc. to 4C Controls Inc.  The Company’s business plan
focuses on offering cutting edge earth observation solutions, including
Synthetic Aperture Radar (SAR) and high resolution optical satellite images, and
integrated high technology security, surveillance and access control
solutions.  During the quarter-ended March 31, 2009, the Company has
been refining its business plan, recruiting its management team, and
establishing strategic alliances.




NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Use
of Estimates




The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.  The actual results experienced by the Company may differ
materially and adversely from the Company’s estimates.  To the extent
there are material differences between the estimates and the actual results,
future results of operations will be affected.





Cash
and cash equivalents




The
Company considers all highly liquid debt investments with original maturities of
three months or less when purchased to be cash equivalents.  The
carrying amounts approximate fair market value because of the short
maturity.




8


The
Company maintains cash balances at various financial
institutions.  Accounts at each institution are insured by the Federal
Deposit Insurance Corporation up to $250,000.  The Company's accounts
at these institutions may, at times, exceed the Federally insured
limits.  The Company has not experienced any losses in such
accounts.




Property
and Equipment




Property
and equipment consisting of office furniture and equipment, is stated at cost
and are depreciated over their estimated useful life (seven years), using the
straight line method. Maintenance and repairs are expensed as
incurred.




Income
taxes




The
Company accounts for income taxes in accordance with authoritative guidance
issued by the Fianacial Accounting Standards Board, which requires that deferred
tax assets and liabilities be recognized for future tax consequences
attributable to differences between financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.  In
addition, the recognition of future tax benefits, such as carry forwards, to the
extent that realization of such benefits is more likely than not and that a
valuation allowance be provided when it is more likely than not that some
portion of the deferred tax asset will not be realized.




Long-lived
assets




In
accordance with the authoritative guidance issued by the Fianacial Accounting
Standards Board, the carrying value of intangible assets and other long-lived
assets is reviewed on a regular basis for the existence of facts or
circumstances that may suggest impairment.  The Company recognizes
impairment when the sum of the expected undiscounted future cash flows is less
than the carrying amount of the asset.  Impairment losses, if any, are
measured as the excess of the carrying amount of the asset over its estimated
fair value.




Financial
instruments




The fair
values of cash, prepaid expense, accrued liabilities and amounts due to a
related party was estimated to approximate their carrying values due to the
immediate or short-term maturity of these financial instruments.




Basic
and diluted net income (loss) per share




The
Company computes net income (loss) per share in accordance with authoritative
guidance issued by the Fianacial Accounting Standards Board, which requires
presentation of both basic and diluted earnings per share (“EPS”) on the face of
the income statement.  Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period.  Diluted
EPS gives effect to all dilutive potential common shares outstanding during the
period including stock options, using the treasury stock method, and
convertible preferred stock, using the if-converted method.  In
computed Diluted EPS, the average stock price for the period is used in
determining the number of shares assumed to be purchased from the exercise of
stock options or warrants.  Diluted EPS excludes all dilutive
potential shares if their effect is anti-dilutive.




9




Stock based
compensation




Common
stock, stock options and warrants issued to other than employees or directors in
exchange for services are recorded on the basis of their fair value, which is
measured as of the date required by authoritative guidance. The non-employee
stock options or warrants are measured at their fair value by using the
Black-Scholes option pricing model as of the earlier of the date at which a
commitment for performance to earn the equity instruments is reached
(“performance commitment date”) or the date at which performance is complete
(“performance completion date”).  The stock-based compensation
expenses are recognized on a straight-line basis over the shorter of the period
over which services are to be received or the vesting
period.  Accounting for non-employee stock options or warrants which
involve only performance conditions when no performance commitment date or
performance completion date has occurred as of reporting date requires
measurement at the equity instruments then-current fair
value.  Any subsequent changes in the market value of the underlying
common stock are reflected in the expense recorded in the subsequent period in
which that change occurs.




Recent
accounting pronouncements





In
December 2007, FASB issued guidance related to Business Combinations under
ASC 805, Business Combinations, and guidance related to the accounting and
reporting of noncontrolling interest under ASC 810-10-65-1, Consolidation. This guidance
significantly changes the accounting for and reporting of business combination
transactions and noncontrolling (minority) interests in consolidated financial
statements. This guidance became effective January 1, 2009.





In March
2008, the FASB issued guidance related to the disclosures about derivative
instruments and hedging activities under
FASB ASC 815-10-50, Derivatives and Hedging. This guidance requires companies to
provide enhanced disclosures about (a) how and why they use derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under applicable guidance, and (c) how derivative
instruments and related hedged items affect a company's financial position,
financial performance, and cash flows.These disclosure
requirements are effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008.Our adoption of ASC 815-10-50 on January 1,
2009 did not have a material impact on our consolidated condensed financial
statements.





In June
2008, the FASB issued guidance to evaluate whether an instrument (or embedded
feature) is indexed to an entity’s own stock under ASC 815-40-15, Derivatives and Hedging. The
guidance requires entities to evaluate whether an equity-linked financial
instrument (or embedded feature) is indexed to its own stock in order to
determine if the instrument should be accounted for as a derivative under the
scope of ASC 815-10-15. This guidance is effective for financial statements
issued for fiscal years beginning after December 15, 2008 and interim periods
within those fiscal years. We adopted ASC 815-40-15 beginning January 1,
2009.  We applied this guidance to the conversion feature in our
Series M Convertible Preferred Stock (“Series M Preferred”).





In
November 2008, the FASB issued guidance related to accounting considerations for
equity method investments under ASC 323-10-35, Investments – Equity Method and
Joint Ventures. This guidance states that an equity method investor shall
account for a share issuance by an investee as if the investor had sold a
proportionate share of its investment. Any gain or loss to the investor
resulting from an investee's share issuance should be recognized in earnings.
Previous to this, changes in equity for both issuances and repurchases were
recognized in equity. This guidance is effective for financial statements issued
for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years. We adopted ASC 323-10-35 beginning January 1,
2009.





In May
2009, the FASB issued guidance related to subsequent events under ASC 855-10,
Subsequent Events. This
guidance sets forth the period after the balance sheet date during which
management or a reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure, the circumstances under which an
entity should recognize events or transactions occurring after the balance sheet
date, and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. It requires disclosure
of the date through which an entity has evaluated subsequent events and the
basis for that date, whether that date represents the date the financial
statements were issued or were available to be issued. This guidance is
effective for interim and annual periods ending after June 15, 2009. We adopted
ASC 855-10 beginning June 30, 2009 and have included the required disclosures in
our consolidated condensed financial statements.





10


In June
2009, the FASB issued an amendment to ASC 810-10, Consolidation. This guidance
amends ASC 810-10-15 to replace the quantitative-based risks and rewards
calculation for determining which enterprise has a controlling financial
interest in a VIE with a primarily qualitative approach focused on identifying
which enterprise has the power to direct the activities of a VIE that most
significantly impact the entity’s economic performance. It also requires ongoing
assessments of whether an enterprise is the primary beneficiary of a VIE and
requires additional disclosures about an enterprise’s involvement in VIEs. This
guidance is effective as of the beginning of the reporting entity’s first annual
reporting period that begins after November 15, 2009 and earlier adoption is not
permitted. We are currently evaluating the potential impact, if any, of the
adoption of this guidance will have on our consolidated condensed financial
statements.





In June
2009, the FASB issued Accounting Standards Update No. 2009-01 which amends ASC
105, Generally Accepted
Accounting Principles. This guidance states that the ASC will become the
source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. Once effective, the Codification’s content will carry
the same level of authority. Thus, the U.S. GAAP hierarchy will be modified to
include only two levels of U.S. GAAP: authoritative and non-authoritative. This
is effective for financial statements issued for interim and annual periods
ending after September 15, 2009. We adopted ASC 105 as of September 30,
2009 and thus have incorporated the new Codification citations in place of the
corresponding references to legacy accounting pronouncements.





In August
2009, the FASB issued Accounting Standards Update No. 2009-05, Measuring Liabilities at Fair Value,which amendsASC 820,Fair Value Measurements and
Disclosures. This Update provides clarification that in circumstances in
which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure the fair value using one or
more of the following techniques: a valuation technique that uses the quoted
price of the identical liability or similar liabilities when traded as an asset,
which would be considered a Level 1 input, or another valuation technique that
is consistent with ASC 820. This Update is effective for the first reporting
period (including interim periods) beginning after issuance. Thus, we adopted
this guidance as of September 30, 2009, which did not have a material impact on
our consolidated condensed financial statements.





NOTE 4 - GOING
CONCERN




The
Company is in the development stage during which management has devoted most of
its activities to the development of a business plan for the
Company.  As of September 30, 2009, the Company has an accumulated
deficit of $11,374,064, has a working capital deficiency of $281,149 and has not
generated any revenue since its inception.  The ability of the Company
to continue as a going concern and to emerge from the development stage is
dependent upon its successful execution of its plan of operations and ability to
raise additional financing.  There is no guarantee that the Company
will be able to raise additional capital or sell any of its products and
services at a profit.  These factors, among others, raise substantial
doubt regarding the Company’s ability to continue as a going
concern.  The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.




NOTE
5 - STOCKHOLDERS’ EQUITY




On
December 18, 2007, the Board of Directors declared the payment of a stock
dividend to the stockholders of record of the Company as of January 2,
2008.  The stock dividend was paid on January 4, 2008.  Each
stockholder received six additional shares of the Company’s common stock for
each one share of the Company’s common stock which they held on the record
date.  Following the payment of the stock dividend, the issued and
outstanding share ownership of the Company increased from 6,007,650 shares of
Company common stock to 42,053,550 shares of common stock.  The
Company retained the current par value of $0.00001 per share for all common
shares. We have entered into financing arrangements which may result in the
issuance of warrants to the financing company.  See Note 10.




11


NOTE
6 - INVESTMENT IN 4C SECURITY SOLUTIONS LTD.




As of
September 30, 2009, the Company had made a cumulative investment of $3,690,808
(AUD $4,000,000) into 4C Security Solutions Limited (“FCS”), an Australian
company, formerly known as BQT Solutions Limited, in consideration for
12,800,000 ordinary shares of FCS representing approximately 19.8% of the issued
and outstanding shares of FCS.  The Company was also granted 9,500,000
options with a strike price of AUD $0.10 and an expiration date of December 31,
2013.  FCS is an Australian public company specializing in access
control systems, biometric and smart card readers, CCTV, cameras and customized
developments for selected clients. FCS’s strategy is to diversify and expand its
activities in the security and surveillance technology sector. FCS intends to
focus on commercializing its SMAX access control system and support sales of
existing company technologies of biometrics, smart card readers, CCTV cameras
and customized solutions for selected key clients. The SMAX Access Control
Management System is a sophisticated, intelligent and cost effective security
application that provides movement and access controls within a facility. In
addition, the Company advanced $151,966 to a subsidiary 4C Security
Solutions, which amount is included in investments and advances to 4C Security
Solutions on the accompanying Balance Sheets.




NOTE
7 - RELATED PARTY TRANSACTIONS




As of
September 30, 2009, Rudana the Company’s majority shareholder and companies
controlled by Rudana has advanced several loans to the Company with a cumulative
balance of $2,584,564. In addition, the Company has received a loan from Officer
in the amount of $29,000. The funds were used by the Company for general
corporate purposes and for financing its strategic alliance investment
obligations in FCS.  These loans bear interest at 7.5% per annum and
are due thirty (30) days after demand. Interest expense related to these loans
aggregated $120,550 and $43,245 the nine and three months ended September 30,
2009, in comparison to $30,664 and $26,101 the nine and three months ended
September 30, 2008.




The
Company has a management service agreement with Prime Asset Finance Ltd., a UK
company which is a wholly owned subsidiary of Rudana, to assist the Company in
advising and developing  its strategic plans. The agreement provides
for an initial service fee of $250,000, which is being amortized over the three
year life of the agreement, and (a) a monthly management fee of $25,000, (b) a
fee equal to 5% of the total value of each transaction involving mergers,
acquisitions, and divestitures by the Company or any of its subsidiaries, and
(c) a fee equal to 8% of the total value of each customer sales contracts,
contractor and sub-contractor agreements with the Company.  The
Company has recorded an expense of $191,667 relating to this agreement during
the six months ended June 30,, 2009, which is included in professional fees on
the Statement of Operations for the six months ended June 30,, 2009, and is
included in Accrued Liabilities on the accompanying Balance Sheet at June 30,,
2009.  The Company has recorded total expenses of $319,445 from
inception through June 30,, 2009 relating to this Agreement.  As of
the date of his Report the Company has not yet paid any amounts due in respect
of the management service agreement and all such amounts have only been
accrued.




NOTE
8 – COUNTERPARTY RISKS




The
Company is exposed to counterparty risks in respect of financing the Company’s
business plan, and risks related to prospective service partners and clients of
the Company and its operating subsidiaries. The Company has entered into
agreement with e-GEOS, a joint venture between Italian Space Agency (ASI) and
Telespazio, to sell satellite images from the COSMO-SkyMed satellite
constellation in exclusive Company markets.  The Company is exposed to
risks that it may not be able to pay the minimum payments due as required under
the e-GEOS agreement as well as risks that e-GEOS may not be able to perform in
regard to delivery of the satellite images for Company customers in accordance
with the agreement.  The Company previously commissioned a business
plan and business case study by an outside consultant with respect to satellite
construction and sales (the “Consultant Plan”).  The Company is
preparing to execute and implement the Consultant
Plan.  The Company equity capitalization amounts to be raised by
Synergy are tied to the Consultant Plan.  The Company has commenced
marketing efforts to sell and/or lease capacity on its proprietary Synthetic
Aperture Radar (“SAR”) satellites.  The Company has been in
negotiations with Thales Alenia Space (Italy) with respect to negotiating the
prime contractor agreement for construction of the satellites.  The
Company believes that the negotiations with Thales Alenia Space are nearing
completion.  Synergy must introduce the Company to sufficient capital
resources in order for the Company to implement the Consultant Plan and to
engage Thales Alenia Space as prime contractor.  Prior to closing any
investments resulting from introductions, the Company will be exposed to
counterparty risk with respect to investment commitments introduced to the
Company through Synergy.  The Company will also be exposed to
counterparty risk with respect to any agreement with Thales Alenia Space (and
indirectly, to the subcontractors of Thales Alenia Space).




12


Additional
risks are detailed in the Company’s Form 10-K for the fiscal year ended December
31, 2008.




NOTE
9 – INCOME TAXES




The
Company has available approximately $11,400,000 of net operating loss
carryforwards available to offset future taxable income, if
any.  These carryforwards expire in the year 2024.




The
Company has a deferred tax asset of approximately $4,000,000 relating to
available net operating loss carryforwards for which a full valuation allowance
has been provided.  Utilization of the net operating loss carry
forwards may be limited due to the change in control referred to in Note 2.
The Company has provided a full valuation allowance of the deferred tax asset
since it is more likely than not that the net operating losses will not be
utilized.




NOTE
10 – FINANCING ACTIVITIES




We have
entered into an agreement with Synergy Investments & Finance Holding Limited
(“Synergy”) formerly known as Arimathea Limited, to assist us to raise
capital.  In consideration for assisting us to raise equity and debt
capital, we issued a warrant to Synergy. On May 29, 2008, the Company amended
the warrant (the “First Amended Warrant”).  The Company and Synergy
subsequently agreed to amend the Warrant again (the “Second Amended
Warrant”).  The Second Amended Warrant has an exercise term of 3 years
and will become exercisable only for the purchase of a number of shares equal to
the following: (i) 5% of the amount of capital raised by the Company from
introductions made by Synergy, divided by (ii) the original exercise price of
$3.45 per share, which was the closing publicly traded market price of the
Company’s common stock on March 25, 2008, the date immediately preceding the
date of grant of the original warrant.  Under the formulation, the
maximum number of shares that may be purchased under the Second Amended Warrant
is approximately one million shares of Company restricted common stock at a
purchase price of $3.45 per share (the exercise price of the original warrant),
assuming the Company raises $70 million attributable to introductions made by
Synergy. Under the terms of its warrant, Synergy will not be permitted to
exercise and own more than 4.9% of the Company’s Common Stock at any given time.
The Synergy Warrant does not contain any call provisions and there is no
obligation on the part of Synergy to exercise its warrant at any time. As a
result of the contingent nature of the vesting of the Synergy warrant, no
expense has been recognized.  Synergy has not yet raised any funds for
the Company and we cannot guarantee that Synergy will be successful in assisting
us to raise capital for our operations.  As of the date of this
Report, no warrants have been issued to Synergy. No firm commitments regarding
performance have been made by Synergy.  All other terms and conditions
of the original warrant remain the same.  The Company’s Agreement with
Synergy is nominally for a period of three years, however, the Agreement may be
terminated prior to that period so long as the Company compensates Synergy for
any introductions of capital which are attributable to Synergy.  The
parties have agreed that neither the original Warrant nor the First Amended
Warrant vested and no portion of the Second Amended Warrant has yet
vested. Performance in respect of the terms of the Second Amended Warrant
have not been met, so there has not been an accounting event that would require
valuation.




13





NOTE 11 – MINORITY INTEREST





Effective
March 31, 2009, ITIGROUP Corporation, an international logistics and software
security group, became a 5% shareholder and strategic alliance partner of 4C
SatImage Ltd., a subsidiary 4C Controls Inc.





NOTE 12 – SUBSEQUENT EVENTS





We have
evaluated events after the date of the financial statements, September 30, 2009
through November 20, 2009, the date that these financial statements were
available to be issued.








*           *




*




14


ITEM
      2.
              MANAGEMENT'S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS
 
 Introduction
 
 The
following discussion of the financial condition and results of operations of the
Company should be read in conjunction with the financial statements and the
related notes thereto included elsewhere in this Report. This Report contains
certain forward-looking statements and the Company's future operating results
could differ materially from those discussed herein. Certain statements
contained in this Report, including, without limitation, statements containing
the words “believes”, “anticipates,” “expects” and the like, constitute
“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 (the “Exchange Act”). However, as the Company intends to issue “penny
stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange
Act, the Company is ineligible to rely on these safe harbor provisions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Given
these uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. The Company disclaims any obligation to update any
such factors or to announce publicly the results of any revisions of the
forward-looking statements contained or incorporated by reference herein to
reflect future events or developments, except as required by the Exchange
Act.
 
 We were
incorporated in the State of Nevada on December 28, 2004 as Amecs
Inc.  Initially, the intention of the original founders of the Company
in 2004 was to provide Internet-based business to business
services.  The original founders subsequently decided that the Company
should pursue another type of business.  A change of control of the
Company occurred on December 18, 2007 and Rudana Investment Group AG, a Swiss
investment company, became the owner of a majority of our issued and outstanding
shares.  In connection with the change of control, on February 12,
2008 we changed our name from “Amecs Inc.” to “4C Controls Inc.” and our trading
symbol on the over-the-counter bulletin board changed to FOUR.  On
March 3, 2008, we announced a change in our business model as described
above.
 
 Our
principal business address is 100 Wall Street, 21st Floor,
New York, NY 10005 and our telephone number is 866-515-7069.
 
 Our
trading symbol on the over-the-counter bulletin board is FOUR.
 
 Current
Company Status
 
 At the
present time, the Company has no revenues, and has had no revenues since
inception.  The Company has insufficient capital to continue its
current limited operations, and without additional investment or loans, we can
not continue the development of our Company.  Without additional
investment or loans, the Company will not be able to take the necessary actions
to commence commercial activity.
 
 RESULTS
OF OPERATIONS
 
 Revenues
 
 During
the quarter ended September 30, 2009, the Company had no revenues from
operations.  The Company has not yet commenced commercial operations
and has not yet generated any revenues.
 
 Expenses
 
 Our total
expenses for the quarter ended September 30, 2009 were $1,384,362, which
consisted primarily of general and administrative expenses of $1,011,126,
professional fees of $291,935, marketing and public relations expenses of
$5,234, a loss from an unconsolidated subsidiary of $30,822, interest in the
amount of $43,242 and director fees and expenses of $2,000.  Expenses
in each of these categories fees have decreased over the amounts for the three
months ended September 30, 2008, in which total expenses were
$2,940,636.  During the three month period ended September 30, 2008,
our total expenses included general and administrative expenses of $1,226,595,
professional fees of $925,834, marketing and public relations expenses of
$451,599, a loss of equity in an unconsolidated subsidiary of $13,692, interest
in the amount of $26,101 and director fees and expenses of
$296,815.
 
 15
 During
the nine months ended September 30, 2009, the Company had total expenses of
$5,518,534, as compared to the nine months ended September 30, 2008, during
which the Company had total expenses of $3,622,092.
 
 Since the
inception of the Company, we have incurred aggregate total expenses of
$11,389,467.  Our expenditures incurred to date are related to the
business set-up and on business development.  Our business set-up
expenditures have included business model definition, market studies and
analysis, business plans, design of ground station and satellite
facilities.  Our business development expenditures have included
formation of strategic alliances and distribution relationships, scouting
business locations and establishing other business
relationships.  These expenditures are included in the company’s
general and administrative expenses in the amount of $6,014,655, professional
fees in the amount of $3,550,619 and marketing and public/investor relations
expenses in the amount of $736,748.  During the fourth quarter of
2009, expenses are anticipated to decrease following restructuring of the
Company associated significant operations expenditure reductions implemented by
the company’s management, with primary focus on reduction of general and
administrative expenses.
 
 Liquidity
and Capital Resources
 
 During
the three months ended September 30, 2009 and through the date of this Report,
our primary source of capital has been short term cash advances from Rudana
Investment Group AG, the majority shareholder of our Company.  Our
operations to date have consumed substantial amounts of cash.  Our
negative cash flows from operations during the foreseeable future are expected
to be held at substantially the same levels as of the period covered by this
Report and possibly reduced further in the two financial quarters subsequent to
the period covered by this Report pursuant to significant further reduction of
operations expenditures planned by management.
 
 As of the
date of this Report we have not been able to commence revenue-generating
commercial activity.
 
 As of the
date of the filing of this Report, the Company has only nominal cash on
hand.  While Rudana has previously supported the Company’s overhead
and expenses, the Company has no assurance that such support will
continue.  Rudana has advised the Company that it will make additional
loans to support the Company if its financial circumstances permit it
to.
  The
Company and its affiliates are currently seeking bridge financing.  If
the Company is unable to raise or borrow additional funds in the immediate
future to cover basic overhead and operating expenses, we may be required to
cease all operations.
 
 Our total
current assets at September 30, 2009 were $39,061, consisting of $535 in cash
and $38,526 in prepaid expenses and other current assets.  As of
September 30, 2009, our total assets (consisting of cash, prepaid expenses,
property and equipment, and investment in 4C Security Solutions) were $8,377,710
and our total liabilities were $8,658,859.  Both of these figures have
increased over the past nine months; as of December 31, 2008, our total assets
were $3,968,749 and our total liabilities were $3,142,325.
 
 During
the three months ended September 30, 2009, the Company had net losses of
$1,384,362, as compared to the three months ended September 30, 2008, during
which the Company had net losses of $2,937,426. During the nine months ended
September 30, 2009, the Company had net losses of $5,518,534, as compared to the
nine months ended September 30, 2008, during which the Company had net losses of
$3,618,882.  From inception through September 30, 2009, the Company
had net losses of $11,386,248.
 
 We will
need to raise additional capital to implement our business plan and continue
operations. We are continuing to seek sources of financing through private
placements of securities and loans in order for us to fully deploy our business
plan.  We have also commenced a capital sourcing plan to accept
investments of strategic equity partners directly into our operating
subsidiaries.  We expect such operating level investments to provide
us with necessary means to commence our business plans as well as beneficially
leverage the regional marketing and sales strengths of our strategic alliance
partners.  We will endeavor to maintain majority ownership of our
operating subsidiaries; however, due to certain legal regional requirements, we
may in some circumstances be obliged to be a minority partner in certain
operating subsidiaries.  Our capital resources as of the date of this
Report are dependent on shareholder loans, third party investments by
strategic alliance partners and other strategic investors investing directly
into our operating subsidiaries.  Although we expect some of the
operating subsidiaries to generate sufficient cash for internal working capital
purposes, we will be dependent on shareholder loans and third party investment
capital at the subsidiary level in order to implement and sustain our overall
Company business plans during the foreseeable future.  We believe the
overall benefits expected to be derived from accepting investments directly into
our operating subsidiaries and benefitting from the strengths of our strategic
equity partners will overcome the effects of diluting our prospective revenues
in our operating subsidiaries.
 
 16
 We expect
our costs of revenue to be substantial, including minimum annual commitment
payments for capacity access to the Cosmo-SkyMed constellation of satellites,
building and maintaining our satellite image direct receiving ground stations,
processing the data retrieved, costs of personnel, as well as the cost of
operations expected to be incurred in connection with our prospective satellite
construction program.  We expect our selling, general and
administrative expenses for all of our business activities to consist primarily
of labor, benefits, travel, rent and related overhead costs, third-party
consultant payments, sales commissions and marketing expenses.  We
expect these expenses to be substantial and increase as we expand our sales and
administrative resources to accommodate anticipated revenue growth and increases
in capacity for product sales and distribution.  We will also incur
substantial expenses as a result of the costs related to being a public company,
including remedying material weaknesses in our internal controls.  As
we expand our worldwide presence, we expect an increase in travel, selling and
administrative expenses.  Depreciation and amortization expenses may
become material.  We anticipate financing a significant portion of our
construction requirements through loans and we will therefore incur material
interest expenses which could adversely affect our earnings.  Although
we expect to share some of our capital requirements costs with our strategic
alliance partners, our expenses may cause us to incur operating
losses.  Taxable income in the future may be offset by utilization of
net operating loss carry-forwards, however, we cannot provide any assurance in
such regard.
 
 We
believe that the current deep and potentially prolonged global recession that
officially began in the United States in December 2007 is having a significant
impact on our ability to raise the funds necessary to implement our business
plans.  Credit markets throughout the world have experienced
significant contraction, de-leveraging and reduced liquidity.  The
uncertainty surrounding the future of global credit markets has resulted in
reduced access to credit worldwide. These current market conditions may last for
a considerable length of time. In mid-February 2009, the Federal Reserve warned
that the United States economy faces an “unusually gradual and prolonged” period
of recovery from this recessionary period. These developing economic factors
have had a material adverse effect on our ability to raise funds and grow the
Company.
 
 Management
Services
 
 We have a
management services agreement with Prime Asset Finance Ltd., a UK company which
is a wholly owned subsidiary of Rudana Investment Group AG, our majority
stockholder.  Under the terms of the agreement, Prime Asset Finance
will assist and advise us on developing strategic plans for inception of
operations, preparing acquisition growth plans, identifying potential
acquisition candidates, initiating discussion with potential acquisition
candidates and strategic alliance partners, analyzing the financial implications
of potential acquisitions and strategic alliances; negotiating terms and
conditions of transactions and strategic alliances; outlining and managing the
due diligence process; developing strategies to maximize revenue and corporate
value including growth through sales, utilizing alternative distribution
channels and enhancing marketing programs and providing support for investor
relations programs.
  Employees
 
 Mr.
Angeloglou is serving as Group CEO of 4C Controls and all of its operating
units, subsidiaries and joint ventures.  Mr. Angeloglou is serving as
the Chief Executive Officer of 4C Security Solutions Limited, an Australian
company which has a strategic alliance with 4C Controls.  The
Company’s Chief Financial Officer functions are currently being performed on an
interim basis by Mr. Angeloglou.  Mr. Angeloglou does not receive
additional compensation in connection with such supplemental
services.
 
 As of the
date of this Report all of our employees serve on a part time
basis.  Our Chief Executive Officer devotes approximately 80% of his
time to our Company and 20% of his time to our strategic alliance partner 4C
Security Solutions Ltd.   Our Chief Technology Officer, Dr. Riccardo
Maggiora, devotes approximately 70% of his time to our Company and allocates the
balance of his professional time as an Associate Professor at Politecnico di
Torino and as CEO of 4C Polito Space.  Our other employees serve the
Company on a part time basis devoting between 25%-50% of their professional time
to our Company.  We have no collective bargaining agreements with our
employees.
 
 Subsequent
to the period covered by this Report, Mr. Angeloglou, our Chief Executive
Officer and Acting Chief Financial Officer, has determined that he will accept a
reduction in his monthly salary to $25,000 U.S. Dollars per month until such
time as the Company’s finances improve.  Simultaneously, he has agreed
that his monthly salary contributions from 4C Security Solutions Ltd. will be
cancelled until such time as that company becomes profitable and its finances
permit the re-instatement of his remuneration.
 
 Resignation
of Dr. Augustine Fou as Director
 
 Effective
as of August 4, 2009, Dr. Augustine Fou resigned as a member of the Board of
Directors of the Company.
 
 17
 OFF-BALANCE
SHEET ARRANGEMENTS
 
 As of
September 30, 2009, we did not have any 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.
 
 ITEM 3.     QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
 
 Not
Applicable.
  ITEM 4.     CONTROLS AND
PROCEDURES
 
 As of the
end of the period covered by this report, the Company carried out, under the
supervision and with the participation of the Company’s management, including
its Chief Executive Officer, also serving in the role on an interim basis as
Chief Financial Officer, an evaluation of the effectiveness of the design and
operation of the Company’s disclosure controls and procedures (as defined in
Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) in
ensuring that information required to be disclosed by the Company in its reports
is recorded, processed, summarized and reported within the required time
periods. In carrying out that evaluation, management identified a material
weakness in our internal control over disclosure controls and
procedures.  The Company’s management also identified material
weakness in controls and procedures over financial reporting (as defined in
Public Company Accounting Oversight Board Standard No. 2).
 
 The two
material weaknesses identified by Management both consisted of inadequate
staffing and supervision within the bookkeeping and accounting operations of the
Company and lack of a full time Chief Financial Officer of the
Company.  The relatively small number of employees who have
bookkeeping and accounting functions prevents us from segregating duties within
the Company’s internal control system. The inadequate segregation of duties is a
weakness because it could lead to the untimely identification and resolution of
accounting and disclosure matters or could lead to a failure to perform timely
and effective reviews. Accordingly, based on their evaluation of the Company’s
disclosure controls and procedures as of September 30, 2009, the Company’s Chief
Executive Officer, also serving in the role on an interim basis as Chief
Financial Officer, concluded that, as of that date, the Company’s controls and
procedures with respect to disclosures and financial reporting were not
effective for the purposes described above.  The Company has initiated
steps to remediate such procedures as soon as reasonably possible, however,
without additional qualified staff the material weaknesses in controls and
procedures with respect to disclosures and financial reporting, the Company has
not yet been able to remediate such weaknesses.
 
 There was
no change in the Company’s internal control over financial reporting (as defined
in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934)
during the quarter ended September 30, 2009 that has materially affected or is
reasonably likely to materially affect the Company’s internal control over
financial reporting, other than the material weaknesses discussed
above.
  18
 
 PART II.
     OTHER
INFORMATION
  ITEM 1.     LEGAL PROCEEDINGS
  The
Company is not, and has not been during the period covered by this Report, a
party to any legal proceedings.
  ITEM
1A.   RISK FACTORS
 
 Not
Applicable.
 
 ITEM 2:     UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
  None.
  ITEM 3:     DEFAULTS UPON SENIOR
SECURITIES
 
 Not
Applicable.
  ITEM 4:     SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
  No
matters were submitted to the vote of the Company’s security holders during the
period covered by this Report.
  ITEM 5:     OTHER INFORMATION
 
 Clarification
 
 The
Company clarifies that contrary to certain published media reports, the Company
is not planning to commence work in December 2009 on its satellite processing
center in Abu Dhabi.  The construction of this center has been delayed
pending the completion of necessary fund raising.
 
 Resignation
of Vice President for Middle East Space Military and Defense
 
 Major
General Khalid Abdulla Mabarak Al Buainain resigned as the Company’s Vice
President for Middle East Space Military and Defense.
 
 Resignation
of Corporate Secretary
 
 Ms.
Barbara Salz resigned as the Company’s Corporate Secretary.
  19
  ITEM 6.     EXHIBITS
  Exhibit
                  
                  Description31.1
                  
                  Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.32.1
                  
                  Certification
      of the Principal Executive Officer and Principal Financial Officer
      pursuant to 18 U.S.C. Section 1350, as
                    adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.
  20
 
 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.
 
 4C
      CONTROLS INC.By:
                /s/
      Anastasios AngeloglouName:
                Anastasios
      AngeloglouTitle:
                Chief
      Executive Officer andActing
      Principal FinancialOfficer
      and Acting PrincipalAccounting
      Officer
 
 Dated:
November 23, 2009
  21