**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 September 30, 2009**

 

|   | o |   | **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 oNo [ ]

 

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 | o |   | Accelerated filer |  o |   |
|--------|-------------------------|---|--------|-------------------|---------|--------|

|   | Non-accelerated filer | o |   | 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 oNo 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 November 18, 2009** |
|--------|-----------|-----------------------------------------|

 

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

 

----

 

| **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 | 12 |
|--------|---------------|----|

 

| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 14 |
|---------|------------------------------------------------------------|----|

 

| Item 4(T). | Controls and Procedures | 14 |
|------------|-------------------------|----|

 

 

|   | **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 | 15 |
|---------|-------------------------------------------------------|----|

 

| Item 5. | Other Information | 15 |
|---------|-------------------|----|

 

| Item 6. | Exhibits | 15 |
|---------|----------|----|

 

|   | Signatures | 16 |
|--------|------------|----|

 

 

 

 

-2-

----

**PART I — FINANCIAL INFORMATION**

 

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

 

The accompanying unaudited balance sheet of Nine Mile Software, Inc. at September 30, 2009 and related unaudited statements of operations, stockholders' equity and cash flows for the three and nine months ended September 30, 2009 and 2008 and the period from November 30, 2006 (date of inception) to September 30, 2009, 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, 2008 financial statements. Operating results for the period            ended September 30, 2009, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2009 or any other subsequent period.

 

 

 

 

 

 

**NINE MILE SOFTWARE, INC.**

 

**FINANCIAL STATEMENTS**

 

**September 30, 2009 and December 31, 2008**

 

 

 

-3-

----

 

| **NINE MILE SOFTWARE, INC.**                                               |
|----------------------------------------------------------------------------|
| (A Development Stage Company)                                              |
| Balance Sheets                                                             |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
| ASSETS                                                                     |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   | September 30, |   | December 31, |
|                                                                       |   |   |   |   | 2009 |   | 2008 |
|                                                                       |   |   |   |   | (unaudited) |   | (unaudited) |
|                                                                       |   |   |   |   |   |   |   | (restated) |
| CURRENT ASSETS                                                             |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       | Cash |   |   |   | $ | - |   | $ | 405,553 |
|                                                                       | Prepaid expenses |   |   |   | - |   |   | - |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Total Current Assets |   |   | - |   |   | 405,553 |
|                                                                       |   |   |   |   |   |   |   |   |   |
| OTHER ASSETS                                                               |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       | Copyrights, net |   |   |   | - |   |   | 1,190 |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Total Other Assets |   |   | - |   |   | 1,190 |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   | TOTAL ASSETS |   | $ | - |   | $ | 406,743 |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                       |
|                                                                       |   |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES                                                        |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       | Accounts payable |   |   | $ | - |   | $ | 9,787 |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Total Current Liabilities |   |   | - |   |   | 9,787 |
|                                                                       |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                       |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       | Common stock; 50,000,000 shares authorized, at |   |   |   |   |   |   |
|                                                                       | $0.001 par value, 2,598,801 and 2,596,288 |   |   |   |   |   |   |
|                                                                       | shares issued and outstanding, respectively |   |   | - |   |   | 2,596 |
|                                                                       | Additional paid-in capital |   |   | - |   |   | 591,177 |
|                                                                       | Deficit accumulated during the development stage |   |   | - |   |   | (196,817) |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Total Stockholders' Equity |   |   | - |   |   | 396,956 |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | - |   | $ | 406,743 |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
| 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 |   | For the Nine |   | For the Nine |   | on November 30, |
|                                                                      |   |   | Months Ended |   | Months Ended |   | Months Ended |   | Months Ended |   | 2006 Through |
|                                                                      |   |   | September 30, |   | September 30, |   | September 30, |   | September 30, |   | September 30, |
|                                                                      |   |   | 2009 |   | 2008 |   | 2009 |   | 2008 |   | 2009 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REVENUES                                                                  | $ | - |   | $ | - |   | $ | - |   | $ | - |   | $ | - |
| COST OF SALES                                                             |   | - |   |   | - |   |   | - |   |   | - |   |   | - |
| GROSS MARGIN                                                              |   | - |   |   | - |   |   | - |   |   | - |   |   | - |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      | Research and development |   | 698 |   |   | - |   |   | 5,464 |   |   | - |   |   | 58,641 |
|                                                                      | General and administrative |   | 76,668 |   |   | 27,161 |   |   | 210,490 |   |   | 109,532 |   |   | 361,439 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   | Total Operating Expenses |   | 77,366 |   |   | 27,161 |   |   | 215,954 |   |   | 109,532 |   |   | 420,080 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LOSS FROM OPERATIONS                                                      |   | (77,366) |   |   | (27,161) |   |   | (215,954) |   |   | (109,532) |   |   | (420,080) |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      | Interest income |   | 1,663 |   |   | 3,217 |   |   | 4,012 |   |   | 6,447 |   |   | 11,321 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   | Total Other Income |   | 1,663 |   |   | 3,217 |   |   | 4,012 |   |   | 6,447 |   |   | 11,321 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LOSS BEFORE INCOME TAXES                                                  |   | (75,703) |   |   | (23,944) |   |   | (211,942) |   |   | (103,085) |   |   | (408,759) |
| PROVISION FOR INCOME TAXES                                                |   | - |   |   | - |   |   | - |   |   | - |   |   | - |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS                                                                  | $ | (75,703) |   | $ | (23,944) |   | $ | (211,942) |   | $ | (103,085) |   | $ | (408,759) |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BASIC LOSS PER COMMON SHARE                                               | $ | (0.03) |   | $ | (0.01) |   | $ | (0.08) |   | $ | (0.05) |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER                                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   OF COMMON SHARES OUTSTANDING                                       |  | 2,597,199 |  |  | 2,146,266 |  |  | 2,596,592 |  |  | 2,146,266 |  |  |  |
|                                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| The accompanying notes are an integral part of these financial statements |
| -5-                                                                       |

 

 

 

 

----

 

| **NINE MILE SOFTWARE, INC.**       |
|------------------------------------|
| (A Development Stage Company)      |
| Statements of Stockholders' Equity |
| (unaudited)                        |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                               |   |   |   |   |   |   |   |   | Deficit |   |   |
|                               |   |   |   |   |   |   |   |   | Accumulated |   |   |
|                               |   |   |   |   |   | Additional |   | During the |   | Total |
|                               | Common Stock |   | Paid-In |   | Development |   | Stockholders' |
|                               | Shares |   | Amount |   | Capital |   | Stage |   | Equity |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, November 30, 2006         | - |   | $ | - |   | $ | - |   | $ | - |   | $ | - |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at $0.025 per share                | 360,000 |   |   | 360 |   |   | 8,640 |   |   | - |   |   | 9,000 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at $0.025 per share                | 1,462,000 |   |   | 1,462 |   |   | 35,088 |   |   | - |   |   | 36,550 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss from inception            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| through December 31, 2006          | - |   |   | - |   |   | - |   |   | (1,002) |   |   | (1,002) |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2006         | 1,822,000 |   |   | 1,822 |   |   | 43,728 |   |   | (1,002) |   |   | 44,548 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at $0.50 per share                 | 60,000 |   |   | 60 |   |   | 29,940 |   |   | - |   |   | 30,000 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Value of common stock              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| options issued                     | - |   |   | - |   |   | 160 |   |   | - |   |   | 160 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ended December 31, 2007            | - |   |   | - |   |   | - |   |   | (26,360) |   |   | (26,360) |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2007         | 1,882,000 |   |   | 1,882 |   |   | 73,828 |   |   | (27,362) |   |   | 48,348 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at $0.70 per share                 | 714,288 |   |   | 714 |   |   | 499,277 |   |   | - |   |   | 499,991 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of options granted      | - |   |   | - |   |   | 18,072 |   |   | - |   |   | 18,072 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ended December 31, 2008            | - |   |   | - |   |   | - |   |   | (169,455) |   |   | (169,455) |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008         | 2,596,288 |   |   | 2,596 |   |   | 591,177 |   |   | (196,817) |   |   | 396,956 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of options granted      | - |   |   | - |   |   | 32,529 |   |   | - |   |   | 32,529 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for services         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at $0.35 per share                 | 2,513 |   |   | 3 |   |   | 877 |   |   | - |   |   | 880 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the nine months       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ended September 30, 2009           | - |   |   | - |   |   | - |   |   | (211,942) |   |   | (211,942) |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, September 30, 2009        | 2,598,801 |   | $ | 2,599 |   | $ | 624,583 |   | $ | (408,759) |   | $ | 218,423 |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |

| The accompanying notes are an integral part of these financial statements. |
|----------------------------------------------------------------------------|
| -6-                                                                        |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

 

----

| **NINE MILE SOFTWARE, INC.**                                               |
|----------------------------------------------------------------------------|
| (A Development Stage Company)                                              |
| Statements of Cash Flows                                                   |
| (unaudited)                                                                |
|                                                                       |   |   |   |   |   |   |   |   |   | From Inception |
|                                                                       |   |   |   |   |   | on November 30, |
|                                                                       |   |   |   | For the Nine Months Ended |   | 2006 Through |
|                                                                       |   |   |   | September 30, |   | September 30, |
|                                                                       |   |   |   | 2009 |   | 2008 |   | 2009 |
|                                                                       |   |   |   |   |   |   |   |   |   |
| OPERATING ACTIVITIES                                                       |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       | Net loss | $ | (211,942) |   | $ | (103,085) |   | $ | (408,759) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       | Adjustments to reconcile net loss to net cash |   |   |   |   |   |   |   |
|                                                                       | used by operating activities: |   |   |   |   |   |   |   |   |
|                                                                       |   | Fair value of options granted |   | 32,529 |   |   | - |   |   | 50,601 |
|                                                                       |   | Amortization expense |   | 89 |   |   | - |   |   | 89 |
|                                                                       |   | Common stock issued for services |   | 880 |   |   | - |   |   | 880 |
|                                                                       | Changes in operating assets and liabilities: |   |   |   |   |   |   |   |   |
|                                                                       |   | Change in prepaid expenses |   | (5,000) |   |   | - |   |   | (5,000) |
|                                                                       |   | Change in accounts payable |   | (7,747) |   |   | (1,719) |   |   | 2,040 |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   | Net Cash Used in |   |   |   |   |   |   |   |   |
|                                                                       |   |   | Operating Activities |   | (191,191) |   |   | (104,804) |   |   | (360,149) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
| INVESTING ACTIVITIES                                                       |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Copyright costs incurred |   | - |   |   | - |   |   | (1,190) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   | Net Cash Used in |   |   |   |   |   |   |   |   |
|                                                                       |   |   | Investing Activities |   | - |   |   | - |   |   | (1,190) |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
| FINANCING ACTIVITIES                                                       |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Proceeds from common stock issued |   | - |   |   | 499,991 |   |   | 575,701 |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   | Net Cash Provided by |   |   |   |   |   |   |   |   |
|                                                                       |   |   | Financing Activities |   | - |   |   | 499,991 |   |   | 575,701 |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | NET INCREASE (DECREASE) IN CASH |   | (191,191) |   |   | 395,187 |   |   | 214,362 |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | CASH AT BEGINNING OF PERIOD |   | 405,553 |   |   | 49,158 |   |   | - |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | CASH AT END OF PERIOD | $ | 214,362 |   | $ | 444,345 |   | $ | 214,362 |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF                                                |   |   |   |   |   |   |   |   |
|                                                                       | CASH FLOW INFORMATION |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       | CASH PAID FOR: |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   | Interest | $ | - |   | $ | - |   | $ | - |
|                                                                       |   | Income Taxes | $ | - |   | $ | - |   | $ | - |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these financial statements. |
| -7-                                                                        |

 

 

 

 

 

 

----

**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 September 30, 2009 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, 2008 financial statements as restated. See Note 6. The results of operations for the period ended September 30, 2009 and 2008 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 resourcesand to develop a consistent source of revenues. Management’s plans include of 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.

 

 

 

-8-

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**NINE MILE SOFTWARE, INC.**

(A Development Stage Company)

Notes to the Financial Statements

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Recent Accounting Pronouncements

In May 2009, the FASB issued SFAS 165 (ASC 855-10) entitled “Subsequent Events”. Companies are now required to disclose the date through which subsequent events have been evaluated by management. Public entities (as defined) must conduct the evaluation as of the date the financial statements are issued, and provide disclosure that such date was used for this            evaluation. SFAS 165 (ASC 855-10) provides that financial statements are considered “issued” when they are widely distributed for general use and reliance in a form and format that complies with GAAP. SFAS 165 (ASC 855-10) is effective for interim and annual periods ending after June 15, 2009 and must be applied prospectively. The adoption of SFAS 165 (ASC 855-10) during the quarter ended September 30, 2009 did not have a significant effect on the Company’s            financial statements as of that date or for the quarter or year-to-date period then ended. In connection with preparing the accompanying unaudited financial statements as of September 30, 2009 and for the quarter and nine month period ended September 30, 2009, management evaluated subsequent events through the date that such financial statements were issued (filed with the SEC).

 

In June 2009, the FASB issued SFAS 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. (“SFAS 168” pr ASC 105-10) SFAS 168 (ASC 105-10) establishes the Codification as the sole source of authoritative accounting principles recognized by the FASB to be applied by all nongovernmental entities in the preparation            of financial statements in conformity with GAAP. SFAS 168 (ASC 105-10) was prospectively effective for financial statements issued for fiscal years ending on or after September 15, 2009 and interim periods within those fiscal years. The adoption of SFAS 168 (ASC 105-10) on July 1, 2009 did not impact the Company’s results of operations or financial condition. The Codification did not change GAAP, however, it did change the way GAAP is organized and presented. As a result,            these changes impact how companies reference GAAP in their financial statements and in their significant accounting policies. The Company implemented the Codification in this Report by providing references to the Codification topics alongside references to the corresponding standards. 

 

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.

 

 

 

-9-

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**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, 2013.

 

The Company accounts for stock purchase options in accordance with Accounting Standards Codification (“ASC”) Topic 718. 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 because management has determined the performance conditions are currently improbable of occurring.

 

On July 31, 2008, the Company issued 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.

 

Under ASC Topic 718, 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 nine months ended September 30, 2009 and 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. For the nine months ended September 30, 2009 and 2008,the Company recognized $32,529 and $0 of expense for the fair value of the options granted during 2009 and 2008, respectively.

 

As of September 30, 2009, there was $529,079 of total unrecognized cost related to non-vested stock purchase options with a weighted average recognition period of 3.31 years.

 

A summary of the status of the Company’s stock option plans as of September 30, 2009 and December 31, 2008 and the changes during the period are presented below:

 

|                                   | 2009    | 2008    |
|----------------------------------------|---------|---------|
|                                   | Shares  | Shares  |
| Unexercised options, beginning of year | 950,000 | 610,000 |
| Stock options issued during the year   | -       | 340,000 |
| Stock options expired                  | -       | -       |
| Stock options exercised                | -       | -       |
| Unexercised options, end of year       | 950,000 | 950,000 |

 

  NOTE 5 – STOCK COMPENSATION

 

On August 28, 2009 the Company issued 2,513 shares of common stock at $0.35/share to its Chief Technology Officer as compensation. The Company recognized $880 as compensation expense. 

 

 

 

-10-

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**NINE MILE SOFTWARE, INC.**

(A Development Stage Company)

Notes to the Financial Statements

 

NOTE 6 – RESTATED FINANCIAL STATEMENTS

 

The Company has restated its financial statements for the year ended December 31, 2008 to reflect an adjustment in the volatility used to compute the value of options granted. The adjustment resulted in an increase in additional paid in capital and accumulated deficit of $17,167. The adjustment had no effect on the statement of operations of the Company for the 3            months and 9 months ended September 30, 2008. A comparison of the Company’s balance sheet before and after the adjustment is as follows:

 

| **BALANCE SHEETS**                   |
|--------------------------------------|
| ASSETS                               |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   |   |   |   | December 31, |   | December 31, |
|                                 |   |   |   |   | 2008 |   | 2008 |
|                                 |   |   |   |   |   | (original) |   |   | (restated) |
| CURRENT ASSETS                       |   |   |   |   |   |   |   |
|                                 | Cash |   |   |   | $ | 405,553 |   | $ | 405,553 |
|                                 |   | Total Current Assets |   |   | 405,553 |   |   | 405,553 |
| OTHER ASSETS                         |   |   |   |   |   |   |   |
|                                 | Copyrights, net |   |   |   | 1,190 |   |   | 1,190 |
|                                 |   | Total Other Assets |   |   | 1,190 |   |   | 1,190 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                 |   | TOTAL ASSETS |   | $ | 406,743 |   | $ | 406,743 |
|                                 |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|                                 |   |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES                  |   |   |   |   |   |   |
|                                 | Accounts payable |   | $ | 9,787 |   | $ | 9,787 |
|                                 |   | Total Current Liabilities |   | 9.787 |   |   | 9,787 |
|                                 |   |   |   |   |   |   |   |   |   |
| 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 |   |   | 574,010 |   |   | 591,177 |
|                                 | Deficit accumulated during the development stage |   | (179,650) |   |   | (196,817) |
|                                 |   | Total Stockholders' Equity |   | 396,956 |   |   | 396,956 |
|                                 |   | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 406,743 |   | $ | 406,743 |
|                                 |   |   |   |   |   |   |   |   |   |
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

NOTE 7 – SUBSEQUENT EVENTS

 

In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Company’s management, events that have occurred after September 30, 2009, up until the issuance of the financial statements, which occurred on November 19, 2009.

 

 

 

-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 commercialization within the next four to five months. 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”. 

 

In June 2009, we successfully launched the beta version of TradeWarrior Express, the free demo version of TradeWarrior that will be installed with every FinFolio license that is sold. Management anticipates the final release of TradeWarrior Express will coincide with the full release of the FinFolio Portfolio Management System, which is expected to be released at            the end of the 4th Quarter 2009. 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. Management anticipates launching a beta version of TradeWarrior Small Business in the 4th Quarter 2009, and anticipates completing the first commercially available version of TradeWarrior for launch in the 1st Quarter 2010. After the launch of            TradeWarrior Small Business, the company will 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 our development period, a beta group of 10 -15 RIA users that we have previously identified 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. 

 

After a successful beta iteration period, we will prepare to launch the TradeWarrior product commercially. The goal of management is to launch no later than the 1st Quarter 2010. We continue to use proceeds from our public offering to develop TradeWarrior. If necessary, we may seek additional funding in the future to further accelerate the development and            launch of TradeWarrior into the marketplace. 

 

Following the launch of the TradeWarrior, we plan to develop the 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 preparing to commence 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.

 

 

 

-12-

----

 

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

 

We have not realized revenues since inception. For the three-month period ended September 30, 2009 (“third quarter”), we realized a net loss of $75,703, or ($0.03) per share, compared to a net loss of $23,944, ($0.01) per share, for the three-month period ended September 30, 2008. The increase in net loss for the third quarter of 2009 is attributed to            the 182% increase in general and administrative expenses from $27,161 in 2008 to $76.668 in 2009, primarily due to hiring our CEO full time at the end of 2008 and other corporate expenses relating to the cost of being public including an increase in stock based compensation.

 

For the nine months ended September 30, 2009, our net loss was $211,942, or ($0.08) per share, a 105% increase from the net loss of $103,085, ($0.05) per share, for the nine months ended September 30, 2008. The increased net loss for the 2009 period is primarily attributed to the 92% increase in general and administrative expenses, from $109,532 in 2008 to $210,490            in 2009, due to hiring our full-time CEO and CTO at the end of 2008, together with other corporate expenses relating to the cost of being public including an increase in stock based compensation. Also, the net loss for the first nine months of 2009 included $5,464 in research and development expenses compared to $0 for the first nine months of 2008 and a decrease in interest income from $6,447 for the 2008 period to $4,012 for the 2009.

 

At September 30, 2009, we had total assets of $220,463, primarily in cash, and stockholders’ equity of $218,423, compared to total assets of $406,743 and stockholders' equity of $396,956 at December 31, 2008. The decrease in total assets and stockholders' equity at September 30, 2009 is attributed to expenditures related to the development of the TradeWarrior            program during the first three quarters of 2009. We did not realize any cash proceeds from financing activities during the first nine months of 2009 compared to realizing $499,991 from the sale of our common stock during the first nine months of 2008.

 

At September 30, 2009, our working capital decreased to $217,322 compared to $395,766 at December 31, 2008, primarily due to the $191,191 decrease in cash. We anticipate meeting our working capital needs during the remainder of 2009 with the remaining proceeds from our public offering. 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.

 

 

-13-

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**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 September 30, 2009, our disclosure controls and procedures were not effective due to certain assumptions used to calculate the volatility in computing the value of options granted during 2008 and reported in our financial statements at December 31, 2008.            Accordingly, we have restated our balance sheet of December 31, 2008 to reflect the adjusted calculation of the value of options granted. This may be considered a material weakness in our internal controls over financial reporting.

 

In light of the above, we are developing a plan to ensure that in working with our independent consultants, who assist in the preparation of the reports and financial statements, we fully assess the assumptions used in making future calculations so as to arrive at the best possible results to be included in our financial statements and requisite reports. We also            plan to allot sufficient time and resources to conduct management’s review of internal control over financial reporting prior to the end of the fiscal year ending December 31, 2009 and to timely file our “Management’s Report on Internal Control Over Financial Reporting” in our Annual Report on Form 10-K for the year ending December 31, 2009.

 

 

 

-14-

----

 

 

 

*Changes in Internal Control Over Financial Reporting*. Management has evaluated whether any change in our internal control over financial reporting occurred during the third quarter of fiscal 2008. 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 third quarter of fiscal 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

**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** |
|-------------|-----------------------------------------------------------------|

During the period ended September 30, 2009, we issued 2,513 shares of our authorized, but previously unissued common stock to our Chief Technical Officer for services rendered. The shares were valued at $0.35 per share and were issued in a private, non-public, isolated transaction pursuant to exemption from registration provided by Section 4(2) of the Securities Act            of 1933.

 

| **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** |
|-------------|-----------------------|

 

On November 13, 2009, our board of directors concluded that it would be necessary to restate the company’s balance sheet for the year ended December 31, 2008 to reflect an adjustment in the volatility used to compute the value of options granted. The adjustment resulted in an increase in additional paid in capital and accumulated deficit of $17,167. The            adjustment had no effect on the statements of operations for the three months and nine months ended December 31, 2008. Accordingly, our financial statements for the year ended December 31, 2008 should no longer be relied upon. The restated balance sheet at December 31, 2008 is presented herein as Note 5 to our financial statements and will also be included as a part of our upcoming Form 10-K filing for the year ending December 31, 2009. We have discussed this matter with our            independent registered public accounting firm.

 

-15-

----

 

 

| **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. |
|--------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

-16-

----

**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.

 

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

 

 

| Date: November 19, 2009 | By:/S/ |  DAMONDERU______________ |
|-------------------------|--------|-------------------------------|

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

|   | C.E.O. and Director |
|--------|---------------------|

 

 

| Date: November 19, 2009 | By:/S/ |  MICHAELCHRISTENSEN_____ |
|-------------------------|--------|-------------------------------|

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

|   | Secretary and Director |
|--------|------------------------|

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

 

 

 

 

 

-17-