UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





x           QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarter ended June 30, 2009





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





For the transition period from _____ to _____





Commission File Number: 333-151419





FENARIO, INC.


(Exact name of small business issuer as specified in its charter)





Nevada

26-0299388(State of incorporation)

(IRS Employer ID Number)





410 Park Avenue, 15th Floor


New York, New York 110022


(Address of principal executive offices)





(888) 251-3422


(Issuer's telephone number)





________________________________________________________________


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





Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xNo 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large accelerated filer   o

Accelerated filer   oNon-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 x No o


As of August 12, 2009, 9,000,000 shares of common stock, par value $0.0001 per share, were outstanding.











TABLE OF CONTENTS





PagePART IItem 1. Financial Statements
F-1 - F-6Item 2. Management’s Discussion and Analysis or Plan of Operation
1Item 3. Quantitative and Qualitative Disclosures About Market Risk
8Item 4(T). Controls and Procedures
8PART IIItem 1. Legal Proceedings
10Item IA. Risk Factors
10Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
10Item 3. Defaults Upon Senior Securities
11Item 4. Submission of Matters to a Vote of Security Holders
11Item 5. Other Information
11Item 6. Exhibits
11











PART I


FINANCIAL INFORMATION





Item 1.Financial Statements.




FENARIO, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED BALANCE SHEET
 
 June 30, 2009


March 31, 2009(Unaudited)ASSETSCurrent Assets:Cash

$
340


$
340Total Current Assets


340



340Total Assets

$
340


$
340LIABILITIES AND STOCKHOLDERS’ DEFICIENCYCurrent Liabilities:Accrued Liabilities

$
11,340


$
1,170Loans Payable


16,000



15,500Total Current Liabilities


27,340



16,670Total Liabilities


27,340



16,670Commitments and ContingenciesStockholders’ Deficiency:Preferred Stock, $.0001 par value; 5,000,000 shares authorized, none issued and outstanding


—



—Common Stock, $.0001 par value; 500,000,000 shares authorized, 9,000,000 shares issued and outstanding at June 30, 2009 and March 31, 2009


900



900Additional Paid-In Capital


39,600



39,600Deficit Accumulated During the Development Stage


(67,500
)


(56,830
)Total Stockholders’ Deficiency


(27,000
)


(16,330
)Total Liabilities and Stockholders’ Deficiency

$
340


$
340
 
 The accompanying notes are an integral part of these financial statements.
  F-1
 
 FENARIO, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED STATEMENT OF OPERATIONS
 (Unaudited)
 For the
Quarter Ended
June 30, 2009


For the
Quarter Ended
June 30, 2008


For the Period
May 11, 2007
(Inception) to
June 30, 2009Net Revenues

$
—


$
—


$
—Costs and Expenses:Professional Fees


10,500



33,771



62,810Other Expenses


—



613



4,350Total Costs and Expenses


10,500



—



67,160Loss from Operations


(10,500
)


(34,384
)


(67,160
)Other Income (Expense):Interest Expense


(170
)


—



(340
)Net Loss

$
(10,670
)

$
(34,384
)

$
(67,500
)Basic and Diluted Loss Per Share

$
(.00
)

$
.00Weighted Average Common Shares Outstanding


9,000,000



9,000,000
 
 The accompanying notes are an integral part of these financial statements.
  F-2
  FENARIO, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
 FOR THE PERIOD MAY 11, 2007 (INCEPTION) TO JUNE 30, 2009
 Additional
Paid-In
Capital


Deficit
Accumulated
During the
Development StageCommon StockShares


Amount


TotalBalance, May 11, 2007


—


$
—


$
—


$
—


$
—Common Stock Issued to Founder at $.0001 per share, May 2007


5,000,000



500



—



—



500Common Stock Issued to Private Investors at $.01 Per Share, January 2008


4,000,000



400



39,600



—



40,000Net Loss for the Period


—



—



—



(2,850
)


(2,850
)Balance, March 31, 2008


9,000,000



900



39,600



(2,850
)


37,650Net Loss for the Year Ended March 31, 2009


—



—



—



(53,980
)


(53,980
)Balance, March 31, 2009


9,000,000



900



39,600



(56,830
)


(16,330
)Net Loss for the Quarter Ended June 30, 2009 (Unaudited)


—



—



—



(10,670
)


(10,670
)Balance, June 30, 2009 (Unaudited)


9,000,000


$
900


$
39,600


$
(67,500
)

$
(27,000
)
 
 The accompanying notes are an integral part of these financial statements.
  F-3
  
 FENARIO, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED STATEMENT OF CASH FLOWS
 (Unaudited)
 For the
Quarter Ended
June 30, 2009


For the
Quarter Ended
June 30, 2008


For the Period
May 11, 2007
(Inception) to
June 30, 2009Cash Flows from Operating Activities:Net Loss

$
(10,670
)

$
(34,384
)

$
(67,500
)Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:Changes in Assets and Liabilities:Decrease in Deferred Offering Costs


—



7,500



—Decrease in Accounts Payable and Accrued Liabilities


10,170



(2,000
)


11,340Net Cash Used in Operating Activities


(500
)


(28,884
)


(56,160
)Cash Flows from Investing Activities:


—



—



—Cash Flows from Financing Activities:Proceeds from Loans


500



—



16,000Proceeds from Sale of Common Stock


—



—



40,500Net Cash Provided by Financing Activities


500



—



56,500Increase (Decrease) in Cash


—



(28,884
)


340Cash – Beginning of Period


340



32,150



—Cash – End of Period

$
340


$
3,266


$
340Supplemental Disclosures of Cash Flow Information:Interest Paid

$
—


$
—


$
—Income Taxes Paid

$
—


$
—


$
—
 
 The accompanying notes are an integral part of these financial statements.
  F-4
  FENARIO, INC.
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
 
 
 NOTE 1 -         Organization and Basis of Presentation
 
 Fenario, Inc. (“the Company”) was incorporated on May 11, 2007 under the laws of the State of Nevada.
 
 The Company has not yet generated revenues from planned principal operations and is considered a development stage company as defined in Statement of Financial Accounting Standards (“SFAS”) No. 7.  The Company intended to focus on developing and licensing proprietary
software solutions for healthcare providers, health care professionals and health insurance companies.  The Company has since abandoned its business plan and is now seeking an operation with which to merge or acquire.  Accordingly, the company is now considered a blank check company.  There is no assurance, however, that the Company will achieve its objectives or goals.
 
 In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein.  These financial statements are condensed
and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
 
 Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.
 
 The Company is a development stage company and has not commenced planned principal operations.  The Company had no revenues and incurred net losses of $10,670 for the three months ended June 30, 2009, and a net loss of $67,500 for the period May 11, 2007 (inception) to June 30,
2009.  In addition, the Company had working capital and stockholders' deficiencies of $27,000 at June 30, 2009.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.
 
 There can be no assurance that sufficient funds will be generated during the next year or thereafter from operations or that funds will be available from external sources such as debt or equity financings or other potential sources.  The lack of additional capital could force
the Company to curtail or cease operations and would, therefore, have a material adverse effect on its business.  Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.
 
 The Company is attempting to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof.  There can be no assurances that the Company will be able to raise the additional funds it requires.
 
 The accompanying condensed financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
 
 
  F-5
  
 FENARIO, INC.
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
 
 NOTE 2 -         Loans Payable
 
 Loans payable are due on demand and bear interest at 5% per annum.
 
 NOTE 3 -         Common Stock
 
 In May 2007 the Company issued 5,000,000 shares of common stock to the Founder for $500.
 
 In January 2008 the Company sold 4,000,000 shares of common stock to private investors at $.01 per share for gross proceeds of $40,000.
 
 NOTE 4 -         Preferred Stock
 
 The Company’s Board of Directors may, without further action by the Company’s stockholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences
and limitations of each series.  The holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the common stock.  Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of the common stock.
 
 
  F-6




Item 2. Management’s Discussion and Analysis or Plan of Operations.





As used in this Form 10-Q, references to the “Fenario,” Company,” “we,” “our” or “us” refer to Fenario, Inc., unless the context otherwise indicates.





Forward-Looking Statements





The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements
by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.





These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether
we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash, which are explained below under “Liquidity and Capital Resources”. We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.





Corporate Background





Fenario, Inc. was incorporated on May 11, 2007 in the state of Nevada. We were initially focused on developing and licensing proprietary software solutions for healthcare providers, health care professionals and health insurance companies. Currently, there is an increasing focus on medical cost containment within the medical community and
the general population as a whole. We were hoping to offer advanced clinical, financial and management information software which is focused on enabling the real time automation of routine patient transactions.





On May 11, 2007, we issued an aggregate of 5,000,000 shares of our common stock to Uziel Leibowitz, our President, Chief Executive Officer, Chairman, and Director.  The shares were issued in consideration for the payment of $500. This transaction was conducted in reliance upon an exemption from registration provided under Section
4(2) of the Securities Act of 1933, as amended.


1


In January 2008, we issued 4,000,000 shares of common stock to 40 investors at a purchase price of $.01 per share for gross proceeds of $40,000, in a private placement relying on the exemption from the registration requirements of the Securities Act provided by Regulation S and/or Section 4(2) of the Securities Act.  Each purchaser
represented to us that such purchaser was not a United States person (as defined in Regulation S) and was not acquiring the shares for the account or benefit of a United States person. Each purchaser further represented that at the time of the origination of contact concerning the subscription for the shares and the date of the execution and delivery of the subscription agreement for such shares, such purchaser was outside of the United States. We did not make any offers in the United States, and there were no
selling efforts in the United States. There were no underwriters or broker-dealers involved in the private placement and no underwriting discounts or commissions were paid.





On June 20, 2008, the Company commenced an offering of up to 3,000,000 shares of common stock, $0.05 per share, pursuant to the prospectus contained in the Registration Statement on Form S-1, filed with the Securities and Exchange Commission on June 4, 2008, and declared effective on June 19, 2008 (file number 333-151419).  On
July 23, 2008, the Company closed the offering prior to the offering termination date because it had not been successful at selling any shares in the offering as of said date.





Our offices are currently located at 410 Park Avenue, 15th Floor, New York 10022.  Our telephone number is (917) 497- 2692.  We do not currently have a functioning website.





Business Overview





Due to the state of the economy, the Company has conducted virtually no business other than organizational matters, filing its Registration Statement and filings of periodic reports with the SEC. The Company has since abandoned its business plan and is now seeking an operating company with which to merge or to acquire.





We are now considered a blank check company. The U.S. Securities and Exchange Commission (the “SEC”) defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that
has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the “Securities Act”), we also qualify as a “shell company,” because we have no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their
respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.





The Company’s current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into the Company. In certain instances, a target company may wish to become a subsidiary of ours or may wish to contribute or sell assets to the Company rather than to merge. No assurances can be
given that we will be successful in identifying or negotiating with any target company, or, if we do enter into such a business combination, no assurances can be given as to the terms of a business combination, or as to the nature of the target company. We seek to provide a method for a foreign or domestic private company to become a


2


reporting or public company whose securities are qualified for trading in the United States secondary markets.





Competition





The Company is an insignificant participant among firms which engage in business combinations with, or financing of, development stage enterprises. There are many established management and financial consulting companies and venture capital firms which have significantly greater financial
and personnel resources, technical expertise and experience than the Company. In view of the Company’s limited financial resources and management availability, the Company will continue to be at a significant competitive disadvantage vis-a-vis the Company’s competitors.





Regulation and Taxation





The Investment Company Act of 1940 defines an “investment company” as an issuer which is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading of securities.  While the Company does not intend to engage in such activities,
the Company could become subject to regulations under the Investment Company Act of 1940 in the event the Company obtains or continues to hold a minority in a number of development stage enterprises.





The Company could be expected to incur significant registration and compliance costs if required to register under the Investment Company Act of 1940.  Accordingly, management will continue to review the Company’s activities from time to time with
a view toward reducing the likelihood the Company could be classified as an “investment company.”





The Company intends to structure a merger or acquisition in such manner as to minimize Federal and state tax consequences to the Company and to any target company.





Employees





We have no full time employees at this time. All functions, including development, strategy, negotiations and clerical are currently being provided on a voluntary basis by our two officers.





Plan of Operation





During the next 12 months, the Company intends to seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, the Company has no plan, proposal, agreement, understanding or
arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation.  No member of management has had any material discussions with any other company with respect to any acquisition of that company.





The Company will not restrict its search to any specific business, industry or geographical location, and the Company may participate in a business venture of virtually any kind or nature. The discussion of the proposed plan of operation under this caption and throughout this Quarterly Report is purposefully general and is not meant to be
restrictive of the Company’s virtually unlimited discretion to search for and enter into potential business opportunities. The Company will have to obtain funds in one or more private placements to finance the operation of any acquired business. Persons purchasing securities in these placements and other shareholders will


3


likely not have the opportunity to participate in the decision relating to any acquisition.  The Company’s proposed business is sometimes referred to as a “blind pool” because any investors will entrust their investment  monies to the Company’s management before they have chance to analyze
any ultimate use to which their money may be put.





Consequently, the Company’s potential success is heavily dependent on the Company’s management, which will have virtually unlimited discretion in searching for and entering into a business opportunity. None of the officers and directors of the Company has had any
experience in the proposed business of the Company.  There can be no assurance that the Company will be able to raise any funds in private placements.  In any private placement, management may purchase shares on the same terms as offered in the private placement.





Management anticipates that it will only participate in one potential business venture. This lack of diversification should be considered a substantial risk in investing in the Company because it will not permit the Company to offset potential losses from one venture against gains from another.  The
Company may seek a one business opportunity with a firm which only recently commenced operations, or a developing company in need of additional funds for expansion into new products or markets, or seeking to develop a new product or service, or an established business which may be experiencing financial or operating difficulties and is in the need for additional capital which is perceived to be easier to
raise by a public company.  In some instances, a business opportunity may involve the acquisition or merger with a corporation which does not need substantial additional cash but which desires to establish a public trading market for its common stock.  The Company may purchase assets and establish wholly owned subsidiaries in various businesses or purchase existing businesses as subsidiaries.





The Company anticipates that the selection of a business opportunity in which to participate will be complex and extremely risky.  Because of general economic conditions, rapid technological advances being made in some industries, and shortages of available capital, management believes that
there are numerous firms seeking the benefits of a publicly traded corporation.  Such perceived benefits of a publicly traded corporation may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for the principals of a business, creating a means for providing incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all shareholders, and other factors.  Potentially available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.





As part of any transaction, the acquired company may require that management or other stockholders of the Company sell all or a portion of their shares to the acquired company, or to the principals of the acquired company.  It is anticipated that the sales price of such shares
will be lower than the current market price or anticipated market price of the Company’s Common Stock.  The Company’s funds are not expected to be used for purposes of any stock purchase from insiders.  The Company shareholders will not be provided the opportunity to approve or consent to such sale.  The opportunity to sell all or a portion of their shares in connection with an acquisition may influence management’s decision to enter into a specific transaction.
However, management believes that since the anticipated sales price will be less than market value, that the potential of a stock sale by management will be a material factor on their decision to enter a specific transaction.


4


The above description of potential sales of management stock is not based upon any corporate bylaw, shareholder or board resolution, or contract or agreement. No other payments of cash or property are expected to be received by management in connection with any acquisition.





The Company has not formulated any policy regarding the use of consultants or outside advisors, but does not anticipate that it will use the services of such persons.





The Company has, and will continue to have, insufficient capital with which to provide the owners of business opportunities with any significant cash or other assets.  However, management believes the Company will offer owners of business opportunities the opportunity to acquire a controlling ownership interest in a public company
at substantially less cost than is required to conduct an initial public offering.  The owners of the business opportunities will, however, incur significant post-merger or acquisition registration costs in the event they wish to register a portion of their shares for subsequent sale. The Company will also incur significant legal and accounting costs in connection with the acquisition of a business opportunity including the costs of preparing post-effective amendments, Forms 8-K, agreements and
related reports and  documents  nevertheless,  the officers and directors of the Company have not conducted  market research and are not aware of statistical  data which would support the perceived benefits of a merger or acquisition  transaction for the owners of a business opportunity.





The Company does not intend to make any loans to any prospective merger or acquisition candidates or to unaffiliated third parties.





Sources of Opportunities





The Company anticipates that business opportunities for possible acquisition will be referred by various sources, including its officers and directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others who may present
unsolicited proposals.





The Company will seek a potential business opportunity from all known sources, but will rely principally on personal contacts of its officers and directors as well as indirect associations between them and other business and professional people.  It is not presently anticipated that the Company will engage professional firms specializing
in business acquisitions or reorganizations.





The officers and directors of the Company are currently employed in other positions and will devote only a portion of their time (not more than three hours per week)  to the business affairs of the  Company, until such time as an acquisition has been determined to
be highly favorable.  In addition, in the face of competing demands for their time, the officers and directors may grant priority to their full-time positions rather than to the Company.





Evaluation of Opportunities





The analysis of new business opportunities will be undertaken by or under the supervision of the officers and directors of the Company. Management intends to concentrate on identifying prospective business opportunities which may be brought to its attention through present associations with management.  In analyzing prospective
business opportunities, management will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operation, if any; prospects for the future;  present and expected competition; the


5


quality and experience of management services which may be available and the depth of that  management; the potential for further research, development or exploration; specific risk factors not now foreseeable  but which then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services or trades; name identification; and other relevant factors.  Officers and directors of each Company will meet personally with management and key personnel of the firm sponsoring the business opportunity as part of their investigation.  To the extent possible, the Company intends to utilize
written reports and personal investigation to evaluate the above factors.  The Company will not acquire or merge with any company for which audited financial statements cannot be obtained.





The Company will not restrict its search for any specific kind of business, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its corporate life. It is currently impossible to predict the status of any business in which the Company may become  engaged,  in
that such  business may need  additional  capital, may merely desire to have its shares  publicly  traded,  or may seek other perceived advantages which the Company may offer.





Acquisition of Opportunities





In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. It may also purchase stock or assets of an existing business.  On the consummation of a transaction, it
is possible that the present management and shareholders of the Company will not be in control of the Company. In addition, a majority or all  of the Company’s officers and directors may, as part of the terms of the acquisition transaction, resign and be replaced by new officers and  directors without a vote of the Company’s shareholders.





It is anticipated that any securities issued in any such reorganization would be issued in reliance on exemptions from registration under applicable Federal and state securities laws.  In some circumstances, however, as a negotiated element of this transaction, the Company may agree to register such securities either at the time
the transaction is consummated, under certain conditions, or at specified time thereafter.  The issuance of substantial additional securities and their potential sale into any trading market which may develop in the Company’s Common Stock may have a depressive effect on such market.  While the actual terms of a transaction to which the Company may be a party cannot be predicted, it may be expected that the parties to the
business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so called “tax free” reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the “Code”). In order to obtain tax free treatment under the Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In
such event, the shareholders of the Company, including investors  in this  offering,  would  retain  less  than 20% of the  issued  and outstanding shares of the surviving  entity,  which could result in significant dilution in the equity of such shareholders.





As part of the Company’s investigation, officers and directors of the Company will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key
personnel, and take other reasonable investigative measures, to the extent of the Company’s limited financial resources and management expertise.


6





The manner in which each company participates in an opportunity will depend on the nature of the opportunity, the respective needs and desires of the company and other parties, and the relative negotiating strength of the company and its management.





With respect to any mergers or acquisitions, negotiations with target company management will be expected to focus on the percentage of the Company which target company shareholders would acquire in exchange for their shareholdings in the target company.  Depending upon, among other things, the target company’s assets and
liabilities, the Company’s shareholders will in all likelihood hold a lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires a target company with substantial assets.  Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company’s shareholders.





The Company will not have sufficient funds (unless it is able to raise funds in a private placement) to undertake any significant development, marketing and manufacturing of any products which may be acquired.





Accordingly, following the acquisition of any such product, the Company will, in all likelihood, be required to either seek debt or equity financing or obtain funding from third parties, in exchange for which the Company would probably be required to give up a substantial portion of its interest in
any acquired product.  There is no assurance that the Company will be able either to obtain additional financing or interest third parties in providing funding for the further development, marketing and manufacturing of any products acquired.





It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys
and others.  If a decision is made not to participate in a specific business opportunity the costs therefore incurred in the related investigation would not be recoverable.





Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss of the Company of the related costs incurred.





Management believes that the Company may be able to benefit from the use of “leverage” in the acquisition of a business opportunity.  Leveraging a transaction involves the acquisition of a business through incurring significant indebtedness for a large percentage of the purchase price for that business.





Through a leveraged transaction, the Company would be required to use less of its available funds for acquiring the business opportunity and, therefore, could commit those funds to the operations of the business opportunity, to acquisition of other business opportunities or to other activities.  The borrowing involved in a leveraged
transaction will ordinarily be secured by the assets of the business opportunity to be acquired. If the business opportunity acquired is not able to generate sufficient revenues to make payments on the debt incurred by the Company to acquire that business opportunity, the lender would be able to exercise the remedies provided by law or by contract.  These leveraging techniques, while reducing the amount of funds that the Company must commit to acquiring a business opportunity, may
correspondingly increase the risk of loss to


7


the Company. No assurance can be given as to the terms or the availability of financing for any acquisition by the Company.  No assurance can be given as to the terms or the availability of financing for any acquisition by the Company. During periods when interest rates are relatively high, the benefits of
leveraging are not as great as during periods of lower interest rates because the investment in the business opportunity held on a leveraged basis will only be profitable if it generates sufficient revenues to cover the related debt and other costs of the financing.  Lenders from which the Company may obtain funds for purposes of a leveraged buy-out may impose restrictions on the future borrowing, distribution, and operating policies of
the Company.  It is not possible at this time to predict the restrictions, if any, which lenders may impose or the impact thereof on the Company.





Liquidity and Capital Resources





Our balance sheet as of June 30, 2009 reflects cash in the amount of $340. Cash and cash equivalents from inception to date have been sufficient to provide the operating capital necessary to operate to date. The Company had no revenues and incurred net losses of $10,670 for the three months ended June 30, 2009, and a net loss of $67,500
for the period May 11, 2007 (inception) to June 30, 2009.  In addition, the Company had working capital and stockholders' deficiencies of $27,000 at June 30, 2009.





We do not have sufficient resources to fund our expenses over the next twelve months.  In January 2008, we issued 4,000,000 shares of common stock to 40 investors at a purchase price of $.01 per share for gross proceeds of $40,000.  There can be no assurance that additional capital will be available to the Company. The
Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.  Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.





Going Concern Consideration





The Company is a development stage company and has not commenced planned principal operations.  The Company had no revenues and incurred net losses of $10,670 for the three months ended June 30, 2009, and a net loss of $67,500 for the period May 11, 2007 (inception) to June 30, 2009.  In addition, the Company had working
capital and stockholders' deficiencies of $27,000 at June 30, 2009.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.





Off-Balance Sheet Arrangements





We have no off-balance sheet arrangements.





Item 3. Quantitative and Qualitative Disclosures About Market Risk.





Not applicable.





Item 4. Controls and Procedures.





Disclosure Controls and Procedures


8


Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission.
Our principal executive officer and principal financial officer has reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q and has concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.
There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our principal executive officer and principal financial officer.





Changes in Internal Controls over Financial Reporting





There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.





9





PART II


OTHER INFORMATION





Item 1. Legal Proceedings.





There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The
Company’s property is not the subject of any pending legal proceedings.





Item 1A. Risk Factors





Smaller reporting companies are not required to provide the information required by this item.





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





Unregistered Sales of Equity Securities





None.





Purchases of equity securities by the issuer and affiliated purchasers





None.





Use of Proceeds





None


Item 3. Defaults Upon Senior Securities.




None.


10





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





There was no matter submitted to a vote of security holders during the six months ended June 30, 2009.





Item 5. Other Information.





None





Item 6. Exhibits





Exhibit No.

Description31.1

Rule 13a-14(a)/15d-14(a) Certification of Uziel Leibowitz, the President, Chief Executive Officer, Treasurer and Director (attached hereto)32.1

Section 1350 Certification of Uziel Leibowitz, the President, Chief Executive Officer, Treasurer and Director(attached hereto)











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SIGNATURES





In accordance with to requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.








FENARIO, INC.Dated: August 13, 2009
By:
/s/ Uziel LeibowitzName:
Uziel LeibowitzTitle:
President, Chief Executive Officer,
Treasurer and Director
(Principal Executive, Financial and Accounting Officer)








By:
/s/ Nathan BirnakName:
Nathan BirnakTitle:
Secretary and Director