UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x   QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHNAGE ACT OF
1934





For the
quarterly period ended November 30, 2009





or





o    TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
transition period
from            to





333-145443


Commission
File Number





Cinnabar
Ventures Inc.


(Exact
name of registrant as specified in its charter)





Nevada
            
            98-0585450(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)





17595
      S. Tamiami Trail, Suite 300
              Fort
      Myers, FL
            
            33908(Address
      of principal executive offices)
            
            (Zip
      Code)





(239)
561-3827


(Registrant’s
telephone number, including area code)








(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90
days.              Yes
x  No
o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Date 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 such shorter period that the
registrant was required to submit and post such
files).           Yes
o  No
o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
Accelerated Filer o                                                                                                           
 Accelerated Filer o





Non-accelerated
filer     o                                                                                                             Smaller
reporting company x





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





As of
January 19, 2010, there were 19,920,000 shares outstanding of the Company’s
common stock.










PART
I – FINANCIAL INFORMATION





Item
1. Financial Statements.





CINNABAR
VENTURES, INC.
 FINANCIAL
STATEMENTS
 NOVEMBER
30, 2009
 (UNAUDITED)
      
       Page(s)Financial
      Statements:Balance
      Sheets as of November 30, 2009 (Unaudited) andMay
      31, 2009 (Audited)
                1Statements
      of Operations for the Three and Six Months EndedNovember
      30, 2009 and 2008, and For the Period from May 24, 2006
      (Inception)to
      November 30, 2009 (Unaudited)
                2Statements
      of Cash Flows for the Six Months EndedNovember
      30, 2009 and 2008, and For the Period from May 24, 2006
      (Inception)to
      November 30, 2009 (Unaudited)
                3Notes
      to Financial Statements (Unaudited)
                4-13
    
    Cinnabar
      Ventures, Inc.(A
      Development Stage Company)Balance SheetsNovember
      30, 2009
                
                
                May
      31, 2009(Unaudited)
                
                
                (Audited)AssetsAssets:Cash
                
                $
                1,238
                
                
                $
                45Total
      Current Assets
                
                
                1,238
                
                
                
                45Total
      Assets
                
                $
                1,238
                
                
                $
                45Liabilities and Stockholders' Equity
      (Deficit)Liabilities:Accounts
      payable
                
                $
                -
                
                
                $
                315Loans
      payable - related party
                
                
                -
                
                
                
                22,469Total
      Current Liabilities
                
                
                -
                
                
                
                22,784Stockholders'
      Equity (Deficit):Common
      stock, ($0.001 par value, 75,000,000 shares authorized,19,845,000
      and 19,020,000 issued and outstanding)
                
                
                19,845
                
                
                
                19,020Additional
      paid in capital
                
                
                170,551
                
                
                
                62,380Deficit
      accumulated during the development stage
                
                
                (189,158
                )
                
                
                (104,139
                )Total
      Stockholders' Equity (Deficit)
                
                
                1,238
                
                
                
                (22,739
                )Total
      Liabilities and Stockholders' Equity (Deficit)
                
                $
                1,238
                
                
                $
                45
  See
accompanying notes to financial statements
  1
    Cinnabar Ventures,
      Inc.(A
      Development Stage Company)Statements of Operations(Unaudited)For
      the Period fromMay
      24, 2006For
      the Three Months Ended November 30,
                
                
                For
      the Six Months Ended November 30,
                
                
                (Inception)
      to2009
                
                
                2008
                
                
                2009
                
                
                2008
                
                
                November
      30, 2009Revenues
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -General
      and administrative expenses
                
                
                73,393
                
                
                
                7,406
                
                
                
                85,019
                
                
                
                20,492
                
                
                
                189,158Net
      loss
                
                $
                (73,393
                )
                
                $
                (7,406
                )
                
                $
                (85,019
                )
                
                $
                (20,492
                )
                
                $
                (189,158
                )Net
      loss per common share - basic and diluted
                
                $
                (0.00
                )
                
                $
                (0.00
                )
                
                $
                (0.00
                )
                
                $
                (0.00
                )
                
                $
                (0.01
                )Weighted
      average number of common shares outstandingduring
      the period - basic and diluted
                
                
                19,450,833
                
                
                
                19,020,000
                
                
                
                19,233,049
                
                
                
                19,020,000
                
                
                
                18,740,680
   See
accompanying notes to financial statements
   2
   Cinnabar Ventures,
      Inc.Statements
      of Cash Flows(Unaudited)For
      the Period fromMay
      24, 2006Six
      Months Ended November 30,
                
                
                (Inception)
      to2009
                
                
                2008
                
                
                November
      30, 2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                
                $
                (85,019
                )
                
                $
                (20,491
                )
                
                
                (189,158
                )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Contributed
      services - former related party
                
                
                4,500
                
                
                
                9,000
                
                
                
                58,500Stock
      based compensation
                
                
                50,902
                
                
                
                -
                
                
                
                50,902Changes
      in operating assets and liabilities:Decrease
      in:Accounts
      payable
                
                
                (315
                )
                
                
                -
                
                
                
                -Net
      Cash Used in Operating Activities
                
                
                (29,932
                )
                
                
                (11,491
                )
                
                
                (79,756
                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from loan payable - related party
                
                
                8,125
                
                
                
                9,500
                
                
                
                30,594Proceeds
      from issuance of common stock
                
                
                -
                
                
                
                -
                
                
                
                27,400Contributed
      capital - related party
                
                
                23,000
                
                
                
                
                
                
                
                23,000Net
      Cash Provided by Financing Activities
                
                
                31,125
                
                
                
                9,500
                
                
                
                80,994Net
      Increase (Decrease) in Cash
                
                
                1,193
                
                
                
                (1,991
                )
                
                
                1,238Cash
      - Beginning of Period
                
                
                45
                
                
                
                2,271
                
                
                
                -Cash
      - End of Period
                
                $
                1,238
                
                
                $
                280
                
                
                $
                1,238SUPPLEMENTARY CASH FLOW
      INFORMATION:Cash
      paid during the period for:Income
      taxes
                
                $
                -
                
                
                $
                -
                
                
                $
                -Interest
                
                $
                -
                
                
                $
                -
                
                
                $
                -SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND
      FINANCING ACTIVITIES:Forgiveness
      of debt - related party
                
                $
                30,594
                
                
                $
                -
                
                
                $
                30,594
 See
accompanying notes to financial statements
  3
  Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
  Note 1 Basis of
Presentation
 The
accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and the rules and regulations of the United States Securities and Exchange
Commission for interim financial information with the instructions to Form 10-Q
and Article 10 of Regulation S-X.  Accordingly, they do not include
all the information and footnotes necessary for a comprehensive presentation of
financial position, results of operations, or cash flows. It is management's
opinion, however, that all material adjustments (consisting of normal recurring
adjustments) have been made which are necessary for a fair financial statement
presentation. The results for the interim period are not necessarily indicative
of the results to be expected for the full year.
 
 The
unaudited interim financial statements should be read in conjunction with the
Company’s Annual Report on Form 10-K, which contains the audited financial
statements and notes thereto, together with the Management’s Discussion and
Analysis, for the fiscal year ended May 31, 2009.  The interim results
for the period ended November 30, 2009 are not necessarily indicative of the
results for the full fiscal year.
 
 Note 2 Organization, Nature
of Operations and Summary of Significant Accounting Policies
 
 The  Company
was  incorporated  in the State of Nevada on May 24,
2006.  The Company never commenced any material
operations.  The Company is seeking a strategic acquisition and
intends to continue its operations based upon a yet to be determined business
model.
 
 The
Company’s year end is May 31.
 
 Development
Stage
 
 The
Company's financial statements are presented as those of a development stage
enterprise. Activities during the development stage primarily include equity
based financing and further implementation of the business plan. The Company has
not generated any material revenues since inception.
 
 Risks
and Uncertainties
 
 The
Company's operations are subject to significant risk and uncertainties including
financial, operational, technological, and regulatory risks including the
potential risk of business failure.
 
 Also see
Note 2 regarding going concern matters.
   4
  Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
 Use
of Estimates
 
 The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.
 
 Making
estimates requires management to exercise significant judgment. It is at least
reasonably possible that the estimate of the effect of a condition, situation or
set of circumstances that existed at the date of the financial statements, which
management considered in formulating its estimate could change in the near term
due to one or more future confirming events. Accordingly, the actual results
could differ significantly from estimates.
 
 Cash
and Cash Equivalents
 
 The
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents.  There were no cash
equivalents at November 30, 2009 or May 31, 2009, respectively.
 
 The
Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At November 30, 2009 and May 31,
2009, respectively, the balance did not exceed the federally insured
limit.
 
 Fair
Value of Financial Instruments
 
 The
carrying amounts of the Company’s short-term financial instruments, including
the Company’s current assets (exclusive of cash) and current liabilities,
approximate fair value due to the relatively short period to maturity for these
instruments.
 
 Earnings
per Share
 
 Basic
earnings per share (“EPS”) is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding during
the period, excluding the effects of any potentially dilutive securities.
Diluted EPS gives effect to all dilutive potential of shares of common stock
outstanding during the period including stock options or warrants, using the
treasury stock method (by using the average stock price for the period to
determine the number of shares assumed to be purchased from the exercise of
stock options or warrants), and convertible debt or convertible preferred stock,
using the if-converted method. Diluted EPS excludes all dilutive potential of
shares of common stock if their effect is anti-dilutive. The Company has 75,000
options outstanding at November 30, 2009.
 
  5
  Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
 On
October 16, 2009, the Company effected a 3 for 1 forward stock
split.  All share and per share amounts have been retroactively
restated.
  Segment
Information
 
 During
the fiscal years 2010 and 2009, respectively, the Company only operated in one
segment; therefore, segment information has not been presented.
 
 Share
Based Payments
 
 Generally,
all forms of share-based payments, including stock option grants, restricted
stock grants and stock appreciation rights, are measured at their fair value on
the awards’ grant date, and based on the estimated number of awards that are
ultimately expected to vest. Share-based payment awards issued to non-employees
for services rendered are recorded at either the fair value of the services
rendered or the fair value of the share-based payment, whichever is more readily
determinable. The expense resulting from share-based payments are recorded as a
component of general and administrative expense.
 
 Recent Accounting
Pronouncements
 
 Effective
January 1, 2009, the Company adopted an accounting standard update
regarding the determination of the useful life of intangible assets. As codified
in ASC 350-30-35, this update amends the factors considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under intangibles accounting. It also requires a
consistent approach between the useful life of a recognized intangible asset
under prior business combination accounting and the period of expected cash
flows used to measure the fair value of an asset under the new business
combinations accounting (as currently codified under ASC 850). The update also
requires enhanced disclosures when an intangible asset’s expected future cash
flows are affected by an entity’s intent and/or ability to renew or extend the
arrangement. The adoption did not have a material impact on the Company’s
financial statements.
 
 In
February 2008, the FASB issued an accounting standard update that delayed
the effective date of fair value measurements accounting for all non-financial
assets and non-financial liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at
least annually), until the beginning of the first quarter of fiscal 2009. These
include goodwill and other non-amortizable intangible assets. The Company
adopted this accounting standard update effective January 1, 2009. The
adoption of this update to non-financial assets and liabilities, as codified in
ASC 820-10, did not have a material impact on the Company’s financial
statements.
   6
 Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
 
 Effective
January 1, 2009, the Company adopted a new accounting standard update
regarding business combinations. As codified under ASC 805, this update requires
an entity to recognize the assets acquired, liabilities assumed, contractual
contingencies, and contingent consideration at their fair value on the
acquisition date. It further requires that acquisition-related costs be
recognized separately from the acquisition and expensed as incurred; that
restructuring costs generally be expensed in periods subsequent to the
acquisition date; and that changes in accounting for deferred tax asset
valuation allowances and acquired income tax uncertainties after the measurement
period be recognized as a component of provision for taxes. The adoption did not
have a material impact on the Company’s financial statements.
 
 Effective
June 30, 2009, the Company adopted three accounting standard updates which
were intended to provide additional application guidance and enhanced
disclosures regarding fair value measurements and impairments of securities.
They also provide additional guidelines for estimating fair value in accordance
with fair value accounting. The first update, as codified in ASC 820-10-65,
provides additional guidelines for estimating fair value in accordance with fair
value accounting. The second accounting update, as codified in ASC 320-10-65,
changes accounting requirements for other-than-temporary-impairment
(OTTI) for debt securities by replacing the current requirement that a
holder have the positive intent and ability to hold an impaired security to
recovery in order to conclude an impairment was temporary with a requirement
that an entity conclude it does not intend to sell an impaired security and it
will not be required to sell the security before the recovery of its amortized
cost basis. The third accounting update, as codified in ASC 825-10-65, increases
the frequency of fair value disclosures. These updates were effective for fiscal
years and interim periods ended after June 15, 2009. The adoption of these
accounting updates did not have a material impact on the Company’s financial
statements.
 
 Effective
June 30, 2009, the Company adopted a new accounting standard for subsequent
events, as codified in ASC 855-10. The update modifies the names of the two
types of subsequent events either as recognized subsequent events (previously
referred to in practice as Type I subsequent events) or non-recognized
subsequent events (previously referred to in practice as Type II subsequent
events). In addition, the standard modifies the definition of subsequent events
to refer to events or transactions that occur after the balance sheet date, but
before the financial statements are issued (for public entities) or available to
be issued (for nonpublic entities). It also requires the disclosure of the date
through which subsequent events have been evaluated. The update did not result
in significant changes in the practice of subsequent event disclosures, and
therefore the adoption did not have a material impact on the Company’s financial
statements.
 
 Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting
Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards
Codification(the “Codification”) as the source of authoritative
 
 
 7
 
 Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
  accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with U.S. GAAP. Rules and
interpretive releases of the SEC under authority of federal securities laws are
also sources of authoritative U.S. GAAP for SEC registrants. All guidance
contained in the Codification carries an equal level of authority. The
Codification superseded all existing non-SEC accounting and reporting standards.
All other non-grandfathered, non-SEC accounting literature not included in the
Codification is non-authoritative. The FASB will not issue new standards in the
form of Statements, FASB Staff Positions or Emerging Issues Task Force
Abstracts. Instead, it will issue Accounting Standards Updates (“ASUs”). The
FASB will not consider ASUs as authoritative in their own right. ASUs will serve
only to update the Codification, provide background information about the
guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout this document have
been updated for the Codification.
 
 Effective
July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurements and
Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments
to ASC 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities. ASU 2009-05 provides clarification that in circumstances in which a
quoted price in an active market for the identical liability is not available, a
reporting entity is required to measure fair value using certain techniques. ASU
2009-05 also clarifies that when estimating the fair value of a liability, a
reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in
an active market for the identical liability at the measurement date and the
quoted price for the identical liability when traded as an asset in an active
market when no adjustments to the quoted price of the asset are required are
Level 1 fair value measurements. Adoption of ASU 2009-05 did not have a material
impact on the Company’s results of operations or financial
condition.
 
 In
September 2009, the FASB issued Update No. 2009-13,
“Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging
Issues Task Force” (ASU 2009-13). It updates the existing multiple-element
revenue arrangements guidance currently included under ASC 605-25, which
originated primarily from the guidance in EITF Issue No. 00-21, “Revenue
Arrangements with Multiple Deliverables” (EITF 00-21). The revised guidance
primarily provides two significant changes: 1) eliminates the need for objective
and reliable evidence of the fair value for the undelivered element in order for
a delivered item to be treated as a separate unit of accounting, and 2)
eliminates the residual method to allocate the arrangement consideration. In
addition, the guidance also expands the disclosure requirements for revenue
recognition. ASU 2009-13 will be effective for the first annual reporting period
beginning on or after June 15, 2010, with early adoption permitted provided
that the revised guidance is retroactively applied to the beginning of the year
of adoption. The Company is currently assessing the future impact of this new
accounting update to its financial statements.
 
 
 8
 
 Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
 
 Reclassifications
 
 Certain
amounts in the fiscal year 2009 financial statements have been reclassified to
conform to the fiscal year 2010 presentation.  The results of these
reclassifications did not materially affect financial position, results of
operations or cash flows.
 
 Note 2 Going
Concern
 
 As
reflected in the accompanying financial statements, the Company has a net loss
of $85,019 and net cash used in operations of $29,932 for the six months ended
November 2009.  The Company is in the development stage and has
generated nominal revenues.
 
 The
Company may seek additional funds to finance its immediate and long-term
operations through debt and/or equity financing. The successful outcome of
future financing activities cannot be determined at this time and there is no
assurance that if achieved, the Company will have sufficient funds to execute
its intended business plan or generate positive operating results.
 
 These
factors, among others, raise doubt about the Company’s ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments related to recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.
  In
response to these problems, management has taken the following
actions:
  ·
                the
      Company is searching for an operating business to execute a merger with
      and develop new operating goals;
and
  ·
                the
      Company is seeking third party
financing.
 
 9
 
 Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
 Note 3 Fair
Value
 
 The
Company has categorized its assets and liabilities recorded at fair value based
upon the fair value hierarchy specified by GAAP.
 
 The
levels of fair value hierarchy are as follows:
 
 ·
                Level
      1 inputs utilize unadjusted quoted prices in active markets for identical
      assets or liabilities that the Company has the ability to
      access;
 
 ·
                Level
      2 inputs utilize other-than-quoted prices that are observable, either
      directly or indirectly. Level 2 inputs include quoted prices for similar
      assets and liabilities in active markets, and inputs such as interest
      rates and yield curves that are observable at commonly quoted intervals;
      and
 
 ·
                Level
      3 inputs are unobservable and are typically based on our own assumptions,
      including situations where there is little, if any, market
      activity.
 
 In
certain cases, the inputs used to measure fair value may fall into different
levels of the fair value hierarchy. In such cases, the Company categorizes such
financial asset or liability based on the lowest level input that is significant
to the fair value measurement in its entirety. Our assessment of the
significance of a particular input to the fair value measurement in its entirety
requires judgment and considers factors specific to the asset or
liability.
 
 Both
observable and unobservable inputs may be used to determine the fair value of
positions that are classified within the Level 3 category. There were no
instruments requiring a fair value classification at November 30, 2009 or May
31, 2009.
 
 Note 4 Commitments and
Contingencies
 
 Litigations,
Claims and Assessments
 
 From time
to time, the Company may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However, litigation
is subject to inherent uncertainties, and an adverse result in these or other
matters may arise from time to time that may harm its business. At this time,
there are no pending lawsuits or legal proceedings.
  10
 
 Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
 
 Note 5 Loans Payable –
Related Party
  During
the six months ended November 30, 2009, the Company received advances from a
former director totaling $8,125.  The advances were non-interest
bearing, unsecured and due on demand.
  During
the year ended May 31, 2009, the Company received advances from a former
director totaling $19,469.  The advances were non-interest bearing,
unsecured and due on demand.
  During
the year ended May 31, 2008, the Company received advances from a former
director totaling $3,000.  The advances were non-interest bearing,
unsecured and due on demand.
  On
September 22, 2009, the former director forgave all amounts previously advanced.
The Company recorded this debt forgiveness as a charge to additional paid in
capital totaling $30,594.
 
 Note 6 Stockholders’ Equity
(Deficit)
 
 (A)
Common Stock Issuances
 
 In May
2006, the Company issued 15,000,000  shares of common stock to its
founders for $5,000 ($0.0003/share).
 
 In August
2006, the Company issued 720,000  shares of common stock for $2,400
($0.003/share).
 
 In
September 2006, the Company issued 3,000,000  shares of common stock
for $10,000 ($0.003/share).
 
 In
November 2006, the Company issued 300,000  shares of common stock for
$10,000 ($0.03/share).
 
 On
October 14, 2009, the Company issued 825,000 shares of common stock to a
consultant, in exchange for services rendered, having a fair value of $46,750
($.056/share), based upon the quoted closing trading price.
 
 (B)
Contributed Services
 
 For the
year ended May 31, 2007, the Company received contributed management services
and office space from a former director, having a fair value of
$18,000.
 
 For the
year ended May 31, 2008, the Company received contributed management services
and office space from a former director, having a fair value of
$18,000.
 
 
 11
 
 Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
 
 For the
year ended May 31, 2009, the Company received contributed management services
and office space from a former director, having a fair value of
$18,000.
 
 For the
six months ended November 30, 2009, the Company received contributed services
and office space from a former director, having a fair value of
$4,500.
 
 (C)
Contributed Capital
 
 During
November 2009, the Company’s Chief Executive Officer contributed
$23,000.
 
 (D)
Stock Options
 
 On
October 14, 2009, the Company issued 75,000 stock options to a consultant for
services rendered.  These options had a fair value of $4,152, based
upon the following management assumptions:
 
 Risk-free
      interest rate
                0.70
                %Expected
      dividend yield
                0
                %Expected
      volatility
                616
                %Expected
      life
                90
                daysExpected
      forfeitures
                0
                %
 
 These
options were fully vested and exercisable on the date of grant. These options
were exercised on December 18, 2009, and the Company issued 75,000 shares of
common stock for $750.
  The
following is a summary of the Company’s stock option activity:
 
 Options
                
                
                Weighted Average Exercise
    Price
                
                
                Weighted Average Remaining Contractual
      Life
                
                
                Aggregate Intrinsic ValueOutstanding
      – May 31, 2009
                
                
                -
                
                
                $
                -
                
                
                
                -
                
                
                
                -Granted
                
                
                75,000
                
                
                
                0.003
                
                
                
                -
                
                
                
                -Exercised
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Forfieted
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Outstanding
      – November 30, 2009
                
                
                75,000
                
                
                $
                0.003
                
                
                0.12 years
                
                
                $
                12,500Exercisable
      – November 30, 2009
                
                
                75,000
                
                
                $
                0.003
                
                
                0.12 years
                
                
                $
                12,500
 
 The
weighted-average grant date fair value of options granted during the three and
six months ended November 30, 2009 was $0.003/share. Total compensation cost
recognized for the three and six months ended November 30, 2009 for stock
options granted amounted to $4,152 and $4,152, respectively. Total unamortized
compensation expense related to stock options at November 30, 2009 amounted to
$0.
   12
  Cinnabar
Ventures, Inc.
 Notes
to Financial Statements
 November
30, 2009
 (Unaudited)
 
 Note 7 Subsequent
Events
 
 The
Company has evaluated for subsequent events between the balance sheet date of
November 30, 2009 and January 19, 2010, the date the financial statements were
issued.




13




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





Forward-Looking
Information





You
should read the following discussion and analysis of our financial condition and
plan of operations together with our financial statements and related notes
appearing elsewhere in this Quarterly Report.  Various statements have been
made in this Quarterly Report on Form 10-Q that may constitute “forward-looking
statements”. Forward-looking statements may also be made in Cinnabar’s other
reports filed with or furnished to the United States Securities and Exchange
Commission (the “SEC”) and in other
documents. In addition, from time to time, Cinnabar, through its management, may
make oral forward-looking statements. Forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
from such statements. The words “believe,” “expect,” “anticipate,” “optimistic,”
“intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and
similar expressions are intended to identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are
made. Cinnabar undertakes no obligation to update or revise any forward-looking
statements.





Plan of
Operations





Over the
next twelve months, we will direct our resources both current and future on
efforts that will result in Cinnabar becoming an efficient and profitable data
services provider.  We will operate with specific emphasis in the
cloud-computing technology sector including, but not limited to, a fully
implemented data center running a cloud operating system and user/client
interface, and content distribution in the form of cloud resident videos, games,
communications applications, and productivity tools over the
internet.





By
utilizing Software as a Service (SAAS) middleware configurations, our customers
will be able to access secure virtual private networks via a customizable web
based client that will enable services in support of hosting, collocation, and
business to business services that we intend to support through our datacenter
and in house developed software capabilities. Over time, through collaboration
with and potential acquisitions of specific data and network access and
infrastructure providers, we plan on providing our customers with a fully
vertically integrated IT solution over a virtualized applications local area
network.





Results of
Operations





Summary
Income Statement for the three months ended November 30, 2009 and
2008.


Cinnabar Ventures,
      Inc.(A
      Development Stage Company)Statements of Operations(Unaudited)  For
      the Three Months Ended November 30,2009
                      
                      
                      2008Revenues
                      
                      $
                      -
                      
                      
                      $
                      -General
      and administrative expenses
                      
                      
                      73,393
                      
                      
                      
                      7,406Net
      loss
                      
                      $
                      (73,393
                      )
                      
                      $
                      (7,406
                      )Net
      loss per common share - basic and diluted
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.00
                      )Weighted
      average number of common shares outstandingduring
      the period - basic and diluted
                      
                      
                      19,450,833
                      
                      
                      
                      19,020,000
  For the
three months ended November 30, 2009 as compared to the three months ended
November 30, 2008, the Company reported a net loss of $73,393, or $0.00 per
share and a net loss of $7,406 or $0.00 per share,
respectively.





General
and Administrative Expense: General and administrative expenses increased to
$73,393 during the three months ended November 30, 2009, up from $7,406 during
the three months ended November 30, 2008.  The increase in general and
administrative expenses is primarily attributable to an increase in stock based
compensation of approximately $50,902.





Going
Concern: As shown in the accompanying financial statements, the Company incurred
a net loss of $85,019 and net cash used in operations of $29,932 during the six
months ended November 30, 2009.  Those factors raise substantial doubt
about the Company’s ability to continue as a going concern.




14





Management
of the Company plans to address this concern by doing the
following:





·
            Raising
      additional capital through convertible note
  offerings.


·
            Revenue
      from potential acquisitions of operating
  companies.


·
            Secondary
      offerings


·
            Continuing
      to increase brand awareness for the Company’s
  business.





The
ability of the Company to continue as a going concern is dependent on its
ability to do all or most of the above listed steps. As illustrated above, the
Company has already been successful in setting its plan in action and looks
forward to further progress as the year progresses.





Liquidity
and Capital Resources





The
following table summarizes total current assets, liabilities and working capital
at November 30, 2009 compared to May 31, 2009.


Cinnabar
      Ventures, Inc.(A
      Development Stage Company)Balance SheetsNovember
      30, 2009
                  
                  
                  May
      31, 2009(Unaudited)
                  
                  
                  (Audited)AssetsAssets:Cash
                  
                  $
                  1,238
                  
                  
                  $
                  45Total
      Current Assets
                  
                  
                  1,238
                  
                  
                  
                  45Total
      Assets
                  
                  $
                  1,238
                  
                  
                  $
                  45Liabilities and Stockholders' Equity
      (Deficit)Liabilities:Accounts
      payable
                  
                  $
                  -
                  
                  
                  $
                  315Loans
      payable - related party
                  
                  
                  -
                  
                  
                  
                  22,469Total
      Current Liabilities
                  
                  
                  -
                  
                  
                  
                  22,784


As of
November 30, 2009, we had working capital of $1,238.





Net cash
used for operating activities for the three months ended November 30, 2009 was
$29,932. The Net loss for the three months ended November 30, 2009, was
$85,019.





Net cash
obtained through all financing activities for the three months ended November
30, 2009 was $31,125, as compared to $9,500 for the three months ended November
30, 2008.





Management
anticipates being able to fund the Company’s foreseeable liquidity requirements
through the financing it will continue to obtain during the rest of 2010.
However, the Company can give no assurances that any more financing will be
consummated. The Company continues to explore potential expansion opportunities
in the industry in order to boost sales, while leveraging distribution systems
to consolidate lower costs.  We expect that our operations will
require approximately $100,000 per month for the next twelve months. We do not
have sufficient cash reserves for the next twelve months and we plan to seek
additional capital to continue our planned operations.





Critical Accounting Policies
and Estimates





We have
identified critical accounting principles that affect our financial statements
by considering accounting policies that involve the most complex or subjective
decisions or assessments as well as considering newly adopted principals. They
are:





Use of
Estimates, Going Concern Consideration – The preparation of financial statements
in conformity with generally accepted accounting principles in the United States
of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could differ
from those estimates. Among the estimates we have made in the preparation of the
financial statements is an estimate of our projected revenues, expenses and cash
flows in making the disclosures about our liquidity in this report. As a
development stage company, many variables may affect our estimates of cash flows
that could materially alter our view of our liquidity and capital requirements
as our business develops. Our  financial statements have been prepared
assuming we are a “going concern”. No adjustment has been made in the financial
statements which could result should we be unable to continue as a going
concern.




15





Share-Based
Compensation - US GAAP requires public companies to expense employee
share-based payments (including options, restricted stock units and performance
stock units) based on fair value.  We must use our judgment to
determine key factors in determining the fair value of the share-based payment,
such as volatility, forfeiture rates and the expected term in which the award
will be outstanding.





Warrants
and derivative liabilities - The Company reviews any common stock purchase
warrants and other freestanding derivative financial instruments at each balance
sheet date and will classify on the balance sheet as:





a)       Equity
if they (i) require physical settlement or net-share settlement, or
(ii) gives us a choice of net-cash settlement or settlement in our own
shares (physical settlement or net-share settlement), or as





b)       Assets
or liabilities if they (i) require net-cash settlement (including a
requirement to net cash settle the contract if an event occurs and if that event
is outside our control), or (ii) give the counterparty a choice of net-cash
settlement or settlement in shares (physical settlement or net-share
settlement).





The
Company assesses classification of our common stock purchase warrants and other
freestanding derivatives at each reporting date to determine whether a change in
classification between assets and liabilities is required.





Revenue
recognition-The
Company follows the guidance of the Securities and Exchange Commission’s Staff
Accounting Bulletin No. 104 for revenue recognition and records revenue when all
of the following have occurred: (1) persuasive evidence of an arrangement
exists, (2) the product is delivered, (3) the sales price to the customer is
fixed or determinable, and (4) collectability of the related customer receivable
is reasonably assured.  There is no stated right of return for
products.  Sales are recognized upon shipment of products to
customers.





Off-Balance Sheet
Arrangements





We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).





Item
3. Quantitative and Qualitative Disclosures About Market Risk.





We do not
hold any derivative instruments and do not engage in any hedging
activities.





Item
4. Controls and Procedures.





(a) Evaluation of Disclosure Controls
and Procedures. Our Chief Executive Officer and Chief Financial Officer
evaluated the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this report. Based on that evaluation, our Chief
Executive and Chief Financial Officer concluded that our disclosure controls and
procedures as of the end of the period covered by this report were ineffective
such that the information required to be disclosed by us in reports filed under
the Exchange Act is (i) recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms and (ii) accumulated and
communicated to our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding disclosure. A controls system
cannot provide absolute assurance, however, that the objectives of the controls
system are met, and no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within a company have
been detected.





Our
management is Our Chief Executive Officer and Chief Financial Officer are
responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States.





16




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance of achieving their control
objectives. Furthermore, smaller reporting companies face additional
limitations. Smaller reporting companies employ fewer individuals and find it
difficult to properly segregate duties. Often, one or two individuals control
every aspect of the Company's operation and are in a position to override any
system of internal control. Additionally, smaller reporting companies tend to
utilize general accounting software packages that lack a rigorous set of
software controls.





Our Chief
Executive Officer and Chief Financial Officer evaluated the effectiveness of the
Company's internal control over financial reporting as of October 31,
2009. In making this assessment, our Chief Executive Officer and Chief
Financial Officer used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control -
Integrated Framework.  Based on this evaluation, Our Chief Executive
Officer and Chief Financial Officer concluded that, as of November
30, 2009, our internal control over financial reporting was
effective.





(b)  Changes in Internal
Control over Financial Reporting. There were no changes in
our internal control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act, during our most recently completed fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.




17





PART
II – OTHER INFORMATION





Item
1. Legal Proceedings.





We are
currently not involved in any litigation that we believe could have a material
adverse effect on our financial condition or results of operations. There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of our company or any of our
subsidiaries, threatened against or affecting our company, our common stock, any
of our subsidiaries or of our companies or our subsidiaries’ officers or
directors in their capacities as such, in which an adverse decision could have a
material adverse effect.





Item
1A. Risk Factors.





We
believe there are no changes that constitute material changes from the risk
factors previously disclosed in our Annual Report of Form 10-K for the year
ended May 31, 2009, filed with the SEC on July 15, 2009.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





There
were no unregistered sales of Equity Securities and Use of Proceeds during the
period ended November 30, 2009.





Item
3. Defaults Upon Senior Securities.





There
were no defaults upon senior securities during the period ended November 30,
2009.





Item
4. Submission of Matters to a Vote of Security Holders.





There
were no matters submitted for a vote of our security holders during the period
ended November 30, 2009.





Item
5. Other Information





There is
no other information required to be disclosed under this item that was not
previously disclosed.





Item
6. Exhibits.





Exhibit
      Number
            Description
      of Document31.1
            Rule
      13a-14(a) / 15d-14(a) Certification of Richard Granville, Principal
      Executive Officer of the Company31.2
            Rule
      13a-14(a) / 15d-14(a) Certification of Richard Granville, Principal
      Financial Officer of the Company32.1
            Certification
      Pursuant to 18 U.S.C. section 1350 of Richard Granville, Principal
      Executive Officer of the Company32.2
            Certification
      Pursuant to 18 U.S.C. section 1350 of Richard Granville, Principal
      Financial Officer of the Company




18





SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.








CINNABAR
      VENTURES INC.Date:
      January 19, 2010
            By:
            /s/
      Richard GranvilleRichard
      Granville
              Chief
      Executive Officer
              Chief
      Financial Officer