**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-Q**

 

**(Mark One)**

 

|   | **x** | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF** |
|--------|-------|---------------------------------------------------------|

**THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the Quarter Ended March 31, 2010**

 

|   | **[** | **]** | **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 333-143039**

 

**NINE MILE SOFTWARE, INC.**

(Exact name of registrant as specified in its charter)

 

|   | **Nevada** | **20-8006878** |
|--------|------------|----------------|

|   | (State or other jurisdiction of | (I.R.S. Employer Identification No.) |
|--------|---------------------------------|--------------------------------------|

|   | incorporation or organization) |
|--------|--------------------------------|

 

**579 W. Heritage Park Blvd. #220C, Layton, UT 84041**

(Address of principal executive offices)

 

**(888) 660-6568**

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90            days.                                                                                             Yes xNo o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post            such files). Yes o No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company

 

|   | Large accelerated filer | [ | ] | Accelerated filer | [ | ] |
|--------|-------------------------|---|---|-------------------|---|---|

|   | Non-accelerated filer | [ | ] | Smaller reporting company | x |
|--------|-----------------------|---|---|---------------------------|---|

(Do not check if a smaller reporting company)

 

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

|   | **APPLICABLE ONLY TO CORPORATE ISSUERS** |
|--------|------------------------------------------|

 

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

 

|   | **Class** | **Outstanding as of May 14, 2010** |
|--------|-----------|------------------------------------|

|   | Common Stock, $0.001 par value | 2,598,801 |
|--------|--------------------------------|-----------|

 

----

**TABLE OF CONTENTS**

 

| **Heading** | **Page** |
|-------------|----------|

 

|   | **PART I** | **—** | **FINANCIAL INFORMATION** |
|--------|------------|-------------|---------------------------|

 

| Item 1. | Financial Statements | 3 |
|---------|----------------------|---|

 

| Item 2. | Management's Discussion and Analysis of Financial Condition and Results |
|---------|-------------------------------------------------------------------------|

|   | of Operations | 11 |
|--------|---------------|----|

 

| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 13 |
|---------|------------------------------------------------------------|----|

 

| Item 4(T). | Controls and Procedures | 13 |
|------------|-------------------------|----|

 

 

|   | **PART II** | **—** | **OTHER INFORMATION** |
|--------|-------------|-------------|-----------------------|

 

| Item 1. | Legal Proceedings | 14 |
|---------|-------------------|----|

 

| Item 1A. | Risk Factors | 14 |
|----------|--------------|----|

 

| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 14 |
|--------|-------------------------------------------------------------|----|

 

| Item 3. | Defaults Upon Senior Securities | 14 |
|---------|---------------------------------|----|

 

| Item 4. | Submission of Matters to a Vote of Securities Holders | 14 |
|---------|-------------------------------------------------------|----|

 

| Item 5. | Other Information | 14 |
|---------|-------------------|----|

 

| Item 6. | Exhibits | 14 |
|---------|----------|----|

 

|   | Signatures | 15 |
|--------|------------|----|

 

 

-2-

----

**PART I — FINANCIAL INFORMATION**

 

| **Item 1.** | **Financial Statements** |
|-------------|--------------------------|

 

The accompanying unaudited balance sheet of Nine Mile Software, Inc. at March 31, 2010 and related unaudited statements of operations, stockholders' equity and cash flows for the three months ended March 31, 2010 and 2009 and the period from November 30, 2006 (date of inception) to March 31, 2010, have been prepared by management in conformity with United States generally accepted            accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2009 financial statements. Operating results for the period ended March 31,            2010, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2010 or any other subsequent period.

 

 

 

 

**NINE MILE SOFTWARE, INC.**

 

**FINANCIAL STATEMENTS**

 

 

 

 

 

 

-3-

----

 

| **NINE MILE SOFTWARE, INC.**         |
|--------------------------------------|
| (A Development Stage Company)        |
| Balance Sheets                       |
|                                 |   |   |   |   |   |   |   |   |   |
| ASSETS                               |
|                                 |   |   |   |   | March 31, |   | December 31, |
|                                 |   |   |   |   | 2010 |   | 2009 |
|                                 |   |   |   |   | (Unaudited) |   | (Audited) |
|                                 |   |   |   |   |   |   |   |   |   |
| CURRENT ASSETS                       |   |   |   |   |   |   |   |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 | Cash |   |   |   | $ | 87,733 |   | $ | 138,604 |
|                                 | Prepaid expenses |   |   | 550 |   |   | 11,650 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   | Total Current Assets |   |   | 88,283 |   |   | 150,254 |
|                                 |   |   |   |   |   |   |   |   |   |
| EQUIPMENT, net                       |   |   |   | 3,132 |   |   | 3,460 |
|                                 |   |   |   |   |   |   |   |   |   |
| OTHER ASSETS                         |   |   |   |   |   |   |   |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 | Copyrights, net |   |   |   | 1,041 |   |   | 1,071 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   | Total Other Assets |   |   | 1,041 |   |   | 1,071 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   | TOTAL ASSETS |   | $ | 92,456 |   | $ | 154,785 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|                                 |   |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES                  |   |   |   |   |   |   |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 | Payroll liabilities |   |   | $ | 5,984 |   | $ | 6,288 |
|                                 | Accounts payable |   |   | 3,004 |   |   | 40 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   | Total Current Liabilities |   | 8,988 |   |   | 6,328 |
|                                 |   |   |   |   |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES        |   | - |   |   | - |
|                                 |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                 |   |   |   |   |   |   |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 | Common stock; 50,000,000 shares authorized, at |   |   |   |   |   |
|                                 | $0.001 par value, 2,598,801 and 2,598,801 |   |   |   |   |   |
|                                 | shares issued and outstanding, respectively |   | 2,599 |   |   | 2,599 |
|                                 | Additional paid-in capital |   |   | 646,269 |   |   | 635,426 |
|                                 | Deficit accumulated during the development stage |   | (565,400) |   |   | (489,568) |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   | Total Stockholders' Equity |   | 83,468 |   |   | 148,457 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 92,456 |   | $ | 154,785 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   |   |   |   |   |   |   |   |   |
|                                      |  |  |  |  |  |  |  |  |  |  |  |

 

 

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

 

 

-4-

----

 

| **NINE MILE SOFTWARE, INC.**                                              |
|---------------------------------------------------------------------------|
| (A Development Stage Company)                                             |
| Statements of Operations                                                  |
| (Unaudited)                                                               |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   | From Inception |
|                                                                      |   |   |   | For the Three |   | For the Three |   | on November 30, |
|                                                                      |   |   |   | Months Ended |   | Months Ended |   | 2006 Through |
|                                                                      |   |   |   | March 31, |   | March 31, |   | March 31, |
|                                                                      |   |   |   | 2010 |   | 2009 |   | 2010 |
|                                                                      |   |   |   |   |   |   | (Restated) |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| REVENUES                                                                  |   | $ | - |   | $ | - |   | $ | - |
| COST OF SALES                                                             |   |   | - |   |   | - |   |   | - |
| GROSS MARGIN                                                              |   |   | - |   |   | - |   |   | - |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                                        |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      | Research and development |   |   | 18,823 |   |   | 23,654 |   |   | 175,895 |
|                                                                      | General and administrative |   |   | 57,132 |   |   | 45,487 |   |   | 403,023 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   | Total Operating Expenses |   |   | 75,955 |   |   | 69,141 |   |   | 578,918 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| LOSS FROM OPERATIONS                                                      |   |   | (75,955) |   |   | (69,141) |   |   | (578,918) |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME                                                              |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      | Interest income |   |   | 123 |   |   | 1,228 |   |   | 13,518 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   | Total Other Income |   |   | 123 |   |   | 1,228 |   |   | 13,518 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| LOSS BEFORE INCOME TAXES                                                  |   |   | (75,832) |   |   | (67,913) |   |   | (565,400) |
| PROVISION FOR INCOME TAXES                                                |   |   | - |   |   | - |   |   | - |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS                                                                  |   | $ | (75,832) |   | $ | (67,913) |   | $ | (565,400) |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| BASIC AND DILUTED LOSS PER COMMON SHARE                                   |   | $ | (0.03) |   | $ | (0.03) |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER                                                   |   |   |   |   |   |   |   |   |   |
| OF COMMON SHARES OUTSTANDING                                              |   |   | 2,598,801 |   |   | 2,596,288 |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |

 

                             -5-

 

----

 

 

| **NINE MILE SOFTWARE, INC.**  |
|-------------------------------|
| (A Development Stage Company) |
| Statements of Cash Flows      |
| (Unaudited)                   |
|                          |   |   |   |   |   |   |   |   |   | From Inception |
|                          |   |   |   |   |   | on November 30, |
|                          |   |   |   | For the Three Months Ended |   | 2006 Through |
|                          |   |   |   | March 31, |   | March 31, |
|                          |   |   |   | 2010 |   | 2009 |   | 2010 |
|                          |   |   |   |   |   | (Restated) |   |   |
| OPERATING ACTIVITIES          |   |   |   |   |   |   |   |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          | Net loss | $ | (75,832) |   | $ | (67,913) |   | $ | (565,400) |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          | Adjustments to reconcile net loss to net cash |   |   |   |   |   |   |   |
|                          | used by operating activities: |   |   |   |   |   |   |   |   |
|                          |   | Fair value of options granted |   | 10,843 |   |   | 10,843 |   |   | 72,287 |
|                          |   | Amortization expense |   | 30 |   |   | 30 |   |   | 149 |
|                          |   | Depreciation expense |   | 328 |   |   | 92 |   |   | 807 |
|                          |   | Common stock issued for services |   | - |   |   | - |   |   | 880 |
|                          | Changes in operating assets and liabilities: |   |   |   |   |   |   |   |   |
|                          |   | Change in prepaid expenses |   | 11,100 |   |   | - |   |   | (550) |
|                          |   | Change in payroll liabilities |   | (304) |   |   | (11) |   |   | 5,984 |
|                          |   | Change in accounts payable |   | 2,964 |   |   | (7,471) |   |   | 3,004 |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |   | Net Cash Used in |   |   |   |   |   |   |   |   |
|                          |   |   | Operating Activities |   | (50,871) |   |   | (64,430) |   |   | (482,839) |
|                          |   |   |   |   |   |   |   |   |   |   |   |
| INVESTING ACTIVITIES          |   |   |   |   |   |   |   |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          |   | Purchase of equipment |   | - |   |   | (1,200) |   |   | (3,939) |
|                          |   | Copyright costs incurred |   | - |   |   | - |   |   | (1,190) |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |   | Net Cash Used in |   |   |   |   |   |   |   |   |
|                          |   |   | Investing Activities |   | - |   |   | (1,200) |   |   | (5,129) |
|                          |   |   |   |   |   |   |   |   |   |   |   |
| FINANCING ACTIVITIES          |   |   |   |   |   |   |   |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          |   | Proceeds from common stock issued |   | - |   |   | - |   |   | 575,701 |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |   | Net Cash Provided by |   |   |   |   |   |   |   |   |
|                          |   |   | Financing Activities |   | - |   |   | - |   |   | 575,701 |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          |   | NET INCREASE (DECREASE) IN CASH |   | (50,871) |   |   | (65,630) |   |   | 87,733 |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          |   | CASH AT BEGINNING OF PERIOD |   | 138,604 |   |   | 405,553 |   |   | - |
|                          |   |   |   |   |   |   |   |   |   |   |   |
|                          |   | CASH AT END OF PERIOD | $ | 87,733 |   | $ | 339,923 |   | $ | 87,733 |
|                          |   |   |   |   |   |   |   |   |   |   |   |

 

| SUPPLEMENTAL DISCLOSURES OF                                                |                  |         |   |   |   |   |   |   |
|----------------------------------------------------------------------------|-----------------------|--------------|--------|--------|--------|--------|--------|--------|
|                                                                       | CASH FLOW INFORMATION |         |   |   |   |   |   |   |   |
|                                                                       |                  |         |   |   |   |   |   |   |   |   |   |
|                                                                       | CASH PAID FOR:        |         |   |   |   |   |   |   |   |
|                                                                       |                  |         |   |   |   |   |   |   |   |   |   |
|                                                                       |                  | Interest     | $      | -      |   | $      | -      |   | $ | - |
|                                                                       |                  | Income Taxes | $      | -      |   | $      | -      |   | $ | - |
|                                                                       |                  |         |   |   |   |   |   |   |   |   |   |
|                                                                       |                  |         |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |
|                                                                       |                  |         |   |   |   |   |   |   |   |   |   |

 

 

 

-6-

----

 

**NINE MILE SOFTWARE, INC.**

(A Development Stage Company)

Notes to the Financial Statements

 

 

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2010 and for all periods presented have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December            31, 2009 audited financial statements. The results of operations for the period ended March 31, 2010 and 2009 are not necessarily indicative of the operating results for the full years.

 

NOTE 2 - GOING CONCERN

 

The Company’s financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has had no revenues and has generated losses from operations.

 

In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources and to develop a consistent source of revenues. Management’s plans include investing in and developing all types of businesses related to the computer software industry.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could            differ from those estimates.

 

 

 

-7-

----

 

**NINE MILE SOFTWARE, INC.**

(A Development Stage Company)

Notes to the Financial Statements

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Recent Accounting Pronouncements

 

In January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in            that Subtopic and asset de-recognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied            retrospectively to the first period that an entity adopted FAS 160. The Company does not expect the provisions of ASU 2010-02 to have a material effect on the financial position, results of operations or cash flows of the Company.

 

In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the            amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis. The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company.

 

In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This update addressed the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than a combined unit and will be separated in more circumstances that under            existing US GAAP. This amendment has eliminated that residual method of allocation. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2009-13 to have a material effect on the financial position, results of operations or cash flows of the Company.

 

With the exception of the pronouncements noted above, no other accounting standards or interpretations issued or recently adopted are expected to have a material impact on the Company’s financial position, operations or cash flows.

 

 

 

-8-

----

**NINE MILE SOFTWARE, INC.**

(A Development Stage Company)

Notes to the Financial Statements

 

NOTE 4- STOCK PURCHASE OPTIONS

 

On May 1, 2007, the Company sold and issued a total of 610,000 stock purchase options exercisable for the purchase of our common stock at $0.025 per share for $160. The Company issued an additional 40,000 stock purchase options during 2008. The options were issued to directors, executive officers and other individuals expected to become employees. The options are not exercisable            for a period of one year and are subject to a vesting schedule. Fifty percent of the options will vest when the Company first realizes a quarterly profit from operations or when it has sold an aggregate of 80 of its stock trading programs. The balance of the options will vest when the Company first records $1.0 million in total revenues. The options will expire if not exercised within 60 months of issuance, on May 1, 2012.

 

The Company estimates the fair value of each stock award at the grant date by using the Black-Scholes option pricing model. The following weighted average assumptions used for grants in the year ended December 31, 2007: dividend yield of zero percent; expected volatility of 100.%; risk-free interest rates of 5.35% and expected life of 5.0 years. The Company recognized no expense            for the fair value of the options granted during 2007. Management has determined the performance conditions are improbable of occurring.

 

On July 31, 2008, the Company granted a total of 300,000 stock purchase options exercisable for the purchase of our common stock at $0.75 per share from the 400,000 stock purchase options under the 2008 plan. The options were issued to directors, executive officers and other individuals expected to become employees. The options vest over 3 years. The options will expire if not            exercised within 60 months of issuance, on July 31, 2013.

 

The following weighted average assumptions used for grants in the year ended December 31, 2008: dividend yield of zero percent; expected volatility of 100%; risk-free interest rates of 3.35% and expected life of 3.0. The Company recognized $10,843 and $43,372 of expense for the fair value of the options during the first quarter of 2010 and the year 2009, respectively. 

 

A summary of the status of the Company’s stock option plans as of March 31, 2010 and December 31, 2009 and the changes during the period are presented below:

 

|                                   | 2010    | 2009    |
|----------------------------------------|---------|---------|
|                                   |    |    |
| Unexercised options, beginning of year | 950,000 | 950,000 |
| Stock options issued during the year   | -       | -       |
| Stock options expired                  | -       | -       |
| Stock options exercised                | -       | -       |
| Unexercised options, end of period     | 950,000 | 950,000 |

 

 

 

NOTE 5 – RESTATEMENT

 

The Company has restated its financial statements for the period ended March to reflect an adjustment in the volatility used to compute the value of options granted, to accrue additional liabilities, and to reclassify some research and development expenses out of general and administrative expenses. A comparison of the Company’s balance sheet and statement of            operations before and after the adjustment is as follows:  

 

-9-

----

 

| **BALANCE SHEETS**                   |                                             |
|--------------------------------------|--------------------------------------------------|
| (Unaudited)

ASSETS

           |                                             |
|                                 |                                             |   |   |   |   |   |   |   |   |   |
|                                 |                                             |   |   |   | March 31, |   | March 31, |   |
|                                 |                                             |   |   |   | 2009 |   | 2009 |   |
|                                 |                                             |   |   |   |   | (original) |   |   | (restated) |   |
| CURRENT ASSETS                       |                                             |   |   |   |   |   |   |   |
|                                 | Cash                                             |   |   |   | $ | 340,870 |   | $ | 339,922 |   |
|                                 |                                             | Total Current Assets |   |   | 340,870 |   |   | 339,922 |   |
| EQUIPMENT, Net                       |                                             |   |   | - |   |   | 1,108 |   |
| OTHER ASSETS                         |                                             |   |   |   |   |   |   |   |
|                                 | Copyrights, net                                  |   |   |   | 1,160 |   |   | 1,160 |   |
|                                 |                                             | Total Other Assets |   |   | 1,160 |   |   | 1,160 |   |
|                                 |                                             |   |   |   |   |   |   |   |   |   |
|                                 |                                             | TOTAL ASSETS |   | $ | 342,030 |   | $ | 342,190 |   |
|                                 |                                             |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY |                                             |
|                                 |                                             |   |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES                  |                                             |   |   |   |   |   |   |
|                                 | Payroll liabilities                              |   | $ | - |   | $ | 6,255 |   |
|                                 | Accounts payable                                 |   |   | 3,075 |   |   | 316 |   |
|                                 |                                             | Total Current Liabilities |   | 9.787 |   |   | 6,571 |   |
|                                 |                                             |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                 |                                             |   |   |   |   |   |   |
|                                 | Common stock; 50,000,000 shares authorized, at   |   |   |   |   |   |   |
|                                 | $0.001 par value, 2,596,288 and 2,596,288        |   |   |   |   |   |   |
|                                 | shares issued and outstanding, respectively      |   | 2,596 |   |   | 2,596 |
|                                 | Additional paid-in capital                       |   |   | 574,553 |   |   | 602,020 |
|                                 | Deficit accumulated during the development stage |   | (238,194) |   |   | (268,997) |
|                                 |                                             | Total Stockholders' Equity |   | 338,955 |   |   | 335,619 |
|                                 |                                             | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 342,030 |   | $ | 342,190 |
|                                 |                                             |   |   |   |   |   |   |   |
|                                      |                                                  |  |  |  |  |  

 

  |  |  |  |  |  |  |  |  |  |

-10-

----

 

 

NOTE 5 – RESTATEMENT (Continued)

 

| **STATEMENT OF OPERATIONS**

**(Unaudited)** |
|----------------------------------------------|
|                                         |   |   |   |   |   |   |   |
|                                         |   |   | For the Three |   | For the Three |

|                       |                       |                     | Months Ended |   | Months Ended |
|----------------------------|----------------------------|--------------------------|--------------|--------|--------------|
|                       |                       |                     | March 31,    |   | March 31,    |
|                       |                       |                     | 2009         |   | 2009         |
|                       |                       |                     | (Original)   |   | (Restated)   |
|                       |                       |                     |         |   |         |   |   |
| REVENUES                   | $                          | -                        |         | $      | -            |
| COST OF SALES              |                       | -                        |         |   | -            |
| GROSS MARGIN               |                       | -                        |         |   | -            |
|                       |                       |                     |         |   |         |   |   |
| OPERATING EXPENSES         |                       |                     |         |   |         |
|                       | Research and development   |                     | 3,303        |   |         | 23,654 |
|                       | General and administrative |                     | 56,469       |   |         | 45,487 |
|                       |                       | Total Operating Expenses |         | 59,772 |         |   | 69,141 |
|                       |                       |                     |         |   |         |   |   |
| LOSS FROM OPERATIONS       |                       | (59,772)                 |         |   | (69,141)     |
|                       |                       |                     |         |   |         |   |   |
| OTHER INCOME               |                       |                     |         |   |         |
|                       | Interest income            |                     | 1,228        |   |         | 1,228 |
|                       |                       | Total Other Income       |         | 1,228  |         |   | 1,228 |
|                       |                       |                     |         |   |         |   |   |
| LOSS BEFORE INCOME TAXES   |                       | (58,544)                 |         |   | (67,913)     |
| PROVISION FOR INCOME TAXES |                       | -                        |         |   | -            |

 

| NET LOSS                                | $      | (58,544)  |   | $      | (67,913)  |
|-----------------------------------------|--------|-----------|--------|--------|-----------|
|                                    |   |      |   |   |      |   |   |
| BASIC AND DILUTED LOSS PER COMMON SHARE | $      | (0.02)    |   | $      | (0.03)    |
|                                    |   |      |   |   |      |   |   |
| WEIGHTED AVERAGE NUMBER                 |   |      |   |   |      |
| OF COMMON SHARES OUTSTANDING            |   | 2,596,288 |   |   | 2,596,288 |

 

 

NOTE 6 – SUBSEQUENT EVENTS

 

In accordance with ASC 855, management evaluated the subsequent events through the date of this 

report and has no material events to report.

 

-11-

----

**Item 2.**       **Management's Discussion and Analysis of Financial Condition and Results of Operations**

 

*The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-Q.*

 

**Plan of Operation**

 

Since our inception in November 2006, we have been developing the TradeWarrior rebalancing software and anticipate completing the software for during the second quarter of 2010. TradeWarrior is a portfolio rebalancing and trade generation program created for financial and investment advisory firms. It is designed to help advisors quickly and efficiently trade a            large number of client accounts to an assigned “target model”. TradeWarrior will be primarily marketed to independent Registered Investment Advisors (“RIAs”).

 

In February 2010, we successfully launched the beta version of TradeWarrior Small Business. Management anticipates the final release of TradeWarrior Small Business will occur shortly after the full release of the FinFolio Portfolio Management System, expected to be released in the second quarter 2010. We are writing the program in a robust programming language to            map out and optimize the logic flows of the program to make TradeWarrior a commercially viable product.

 

After launching the TradeWarrior Small Business, we plan to begin development on TradeWarrior Ultimate, which will be the full-featured version of TradeWarrior. Management anticipates launching TradeWarrior Ultimate in the 3rd Quarter 2010, but it will be largely dependent on sales of TradeWarrior Small Business and/or additional funds being available.            During the development period, a beta group of 5-10 RIA users will be using the program and providing industry feedback. This is essential to gain perspective and insight into the industry needs in a real time feedback loop in order to adjust the program to real life needs of end users.

 

We also plan to develop a client relation management (“CRM”) database. Most investment advisory firms have a CRM database that is used to store general client information such as names, mailing and e-mail addresses and account numbers. It is also used to keep track of client contacts, such as letters sent, e-mails, and phone calls, client financial            planning information, and prospects and business contacts. We do not plan to use proceeds from our public offering to develop a CRM product, but we expect to develop and market the CRM product when sufficient cash flows from TradeWarrior sales are realized. Adding CRM capability to TradeWarrior is a potential area of expansion for our business.

 

We do not expect to make major capital expenditure for completing development and marketing TradeWarrior. We do anticipate an increase in employees if and when TradeWarrior is completed and marketed successfully. In preparation for marketing TradeWarrior, management will assess the potential demand for up to two customer service personnel to assist in responding            to new customers’ questions, orientation and installation of programs. In addition, we will assess the potential demand to hire additional programmers to speed development of functionality within TradeWarrior. Management believes we could be generating revenue within the first quarter or two after we commercially release TradeWarrior Small Business.

 

**Results of Operations and Liquidity and Capital Resources**

 

We have not realized revenues since inception. For the three-month period ended March 31, 2010 (“first quarter”), we realized a net loss of $75,832, or ($0.03) per share, compared to a net loss of $67,913, or ($0.03) per share, for the three-month period ended March 31, 2009. The increase in net loss for the first quarter of 2010 is attributed to the 25%            increase in general and administrative expenses from $45,487 in 2009 to $57,132 in 2010, primarily due to increased audit and advertising expenses.

 

-12-

----

At March 31, 2010, we had total assets of $92,456, primarily in cash, and stockholders’ equity of $83,468, compared to total assets of $154,785 and stockholders' equity of $148,457 at December 31, 2009. The decrease in total assets and stockholders' equity at March 31, 2010is primarily attributed to the 37% decrease in cash from $138,604            to $87,733, due to payment of operating expenses. Net cash used in operating activities was $50,871 for the first quarter of 2010 compared to $64,430 for the first quarter of 2009. First quarter 2010 results were primarily due to net loss of $75,832 offset by the $11,100 decrease in prepaid expenses and $2,964 increase in accounts payable. We did not realize any cash proceeds from financing activities or investing activities during the first three months of 2010 or 2009.

 

At March 31, 2010, working capital decreased to $79,295 compared to $143,926 at December 31, 2009, attributed to the $50,871 decrease in cash, $11,100 decrease in prepaid expense and $2,964 increase in accounts payable. We anticipate meeting our working capital needs during the remainder of 2010. We have no other agreements or arrangements for additional funding and            there can be no assurance any such funding will be available to us, or if available, such funding will be on acceptable or favorable terms to us.

 

**Going Concern Consideration**

 

Because we are a development stage company with no current revenues, we are relying on the proceeds of our initial public offering to launch our software product. If we do not have adequate capital to eventually develop a consistent source of revenues, we may have to curtail or cease operations. Additionally, even if we complete development of the TradeWarrior and            generate revenues, there can be no assurances that revenues will be sufficient to enable us to generate profits and cash flows from operations. In that event, if we are unable to secure additional funding there is substantial doubt about our ability to continue as a going concern.

 

**Inflation**

 

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

 

**Off-balance Sheet Arrangements**

 

|   | We have no off-balance sheet arrangements. |
|--------|--------------------------------------------|

 

**Forward-Looking and Cautionary Statements**

 

This report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will” “should," “expect," "intend," "plan," anticipate," "believe," "estimate," "predict," "potential," "continue," or similar            terms, variations of such terms or the negative of such terms. These statements are only predictions and involve known and unknown risks, uncertainties and other factors included in our periodic reports with the SEC. Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements. Except as required by applicable law, including            the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

 

| **Item 3.** | **Quantitative and Qualitative Disclosures About Market Risk.** |
|-------------|-----------------------------------------------------------------|

 

|   | This item is not required for a smaller reporting company. |
|--------|------------------------------------------------------------|

 

|  

**Item 4(T).** |  

**Controls and Procedures.** |
|------------------------|--------------------------------------|

 

*Evaluation of Disclosure Controls and Procedures*. Disclosure controls and procedures (as defined in Rules  13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified            in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and principal accounting officer, to allow timely decisions regarding required disclosures.

 

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management            recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to            apply its reasonable judgment. Based on the evaluation described above, our management, including our principal executive officer and principal accounting officer, have concluded that, as of March 31, 2010, our disclosure controls and procedures were not effective due to a lack of adequate segregation of duties and the absence of an audit committee.

 

*Changes in Internal Control Over Financial Reporting*. Management has evaluated whether any change in our internal control over financial reporting occurred during the first quarter of fiscal 2010. Based on its evaluation, management, including the chief executive officer and principal accounting officer, has concluded that there has been no change in our internal control over            financial reporting during the first quarter of fiscal 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

 

 

-13-

----

 

**PART II — OTHER INFORMATION**

 

| **Item 1.** | **Legal Proceedings** |
|-------------|-----------------------|

There are no material pending legal proceedings to which we are a party or to which any of our property is subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.

 

| **Item 1A.** | **Risk Factors** |
|--------------|------------------|

 

|   | This item is not required for a smaller reporting company. |
|--------|------------------------------------------------------------|

 

| **Item 2.** | **Unregistered Sales of Equity Securities and Use of Proceeds** |
|-------------|-----------------------------------------------------------------|

 

|   | This Item is not applicable. |
|--------|------------------------------|

 

| **Item 3.** | **Defaults Upon Senior Securities** |
|-------------|-------------------------------------|

 

|   | This Item is not applicable. |
|--------|------------------------------|

 

| **Item 4.** | **Submission of Matters to a Vote of Security Holders** |
|-------------|---------------------------------------------------------|

 

|   | This Item is not applicable. |
|--------|------------------------------|

 

| **Item 5.** | **Other Information** |
|-------------|-----------------------|

 

|   | This Item is not applicable.

  |
|--------|--------------------------------------|

| **Item 6.** | **Exhibits** |
|-------------|--------------|

 

|   | Exhibit 31.1 | Certification of C.E.O. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|--------|--------------|------------------------------------------------------------------------------------|

 

|   | Exhibit 31.2 | Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|--------|--------------|----------------------------------------------------------------------------------------------------------|

 

|   | Exhibit 32.1 | Certification of C.E.O. Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|--------|--------------|-----------------------------------------------------------------------------------------------------------------------------------|

 

|   | Exhibit 32.2 | Certification of Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

  |
|--------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

-14-

----

 

 

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.

 

|   | **NINE MILE SOFTWARE, INC.** |
|--------|------------------------------|

 

 

| Date: May 17, 2010 | By: | /s/ DAMONDERU |
|--------------------|-----|---------------|

|   | ***Damon Deru*** |
|--------|------------------|

C.E.O. and Director

 

 

| Date: May 17, 2010 | By: | /s/ MICHAELCHRISTENSEN |
|--------------------|-----|------------------------|

|   | ***Michael Christensen*** |
|--------|---------------------------|

Secretary and Director

|   | (Principal Accounting Officer) |
|--------|--------------------------------|

 

                                                                                                                                                                                   

-15-