UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





(Mark
One)





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





For the
quarterly period ended     September
30, 2010





 ̈
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
  ACT





For the
transition period from _________ to _________





Commission
file number    000-52634





OAK
TREE EDUCATIONAL PARTNERS, INC.


(Exact
name of registrant as specified in its charter)





Delaware
              20-2329345(State
      or other jurisdiction of incorporation or organization)
              (IRS
      Employee Identification No.)





845
Third Avenue, 6th Floor,
New York, New York 10022


(Address
of principal executive offices)





(646) 290-5290


(Registrant's
telephone number, including area code)





Florham
Consulting Corp.


(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 the filing requirements for
the past 90 days.


Yes 
x No   ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes 
 ̈ No   ̈





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





Large
      accelerated filer  ̈
              Accelerated
      filer  ̈Non-accelerated
      filer  ̈
              Smaller
      reporting company x





Indicate
by check mark whether registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act)


Yes 
 ̈
    No  x





Number of
outstanding shares of the registrant's par value $0.0001 common stock, as of
November 4, 2010: 19,850,989, of which 179,641 shares are held in escrow subject
to future earnings attainment.





Oak
Tree Educational Partners, Inc.


Quarterly
Report on Form 10-Q




Table
of Contents





PAGEPART I
                                          FINANCIAL
      INFORMATIONItem
      1.
                                          Consolidated
      Balance Sheets at September 30, 2010 (unaudited) and December 31, 2009
      (audited).
                                          
                                          F-1Consolidated
      Statements of Operations (unaudited) for the three and nine month periods
      ended September 30, 2010 and for the period from July 20, 2009 (Inception)
      through September 30, 2009.
                                          
                                          F-2Consolidated
      Statement of Changes in Shareholders' Equity (unaudited) for the nine
      month period ended September 30, 2010.
                                          
                                          F-3Consolidated
      Statements of Cash Flows (unaudited) for the nine month period ended
      September 30, 2010 and for the period from July 20, 2009 (Inception)
      through September 30, 2009.
                                          
                                          F-4Notes
      to Consolidated Financial Statements (unaudited).
                                          
                                          F-6Item
      2.
                                          Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.
                                          
                                          5Item
      3.
                                          Quantitative
      and Qualitative Disclosures About Market Risk.
                                          
                                          9Item
      4.
                                          Controls
      and Procedures.
                                          
                                          10PART II
                                          OTHER
      INFORMATIONItem
      1.
                                          Legal
      Proceedings.
                                          
                                          10Item
      1A.
                                          Risk
      Factors.
                                          
                                          10Item
      2.
                                          Unregistered
      Sales of Equity Securities and Use of Proceeds.
                                          
                                          10Item
      3.
                                          Defaults
      Upon Senior Securities.
                                          
                                          11Item
      4.
                                          (Removed
      and Reserved).
                                          
                                          11Item
      5.
                                          Other
      Information.
                                          
                                          11Item
      6.
                                          Exhibits.
                                          
                                          11Signatures
                                          
                                          12


2


Cautionary
Statement Concerning Forward-Looking Statements





Our representatives and we may from
time to time make written or oral statements that are "forward-looking,"
including statements contained in this Quarterly Report on Form 10-Q and other
filings with the Securities and Exchange Commission, reports to our stockholders
and news releases. All statements that express expectations, estimates,
forecasts or projections are forward-looking statements within the meaning of
the Act. In addition, other written or oral statements which constitute
forward-looking statements may be made by us or on our behalf. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
"projects," "forecasts," "may," "should," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve risks,
uncertainties and assumptions which are difficult to predict. These risks may
relate to, without limitation:





·
            if
      we are not able to continue to successfully recruit and retain our
      students, we will not be able to sustain our revenue growth
      rate;


·
            we
      are subject to risks relating to tuition pricing, which could have a
      material adverse affect on our financial
  results;


·
            our
      financial performance depends, in part, on our ability to keep pace with
      changing market needs and technology; if we fail to keep pace or fail in
      implementing or adapting to new technologies, our business may be
      adversely affected;


·
            we
      are subject to risks relating to our information technology, system
      applications and security systems, which could have a material adverse
      affect on our financial results;


·
            future
      acquisitions may have an adverse effect on our ability to manage our
      business;


·
            if
      regulators do not approve our domestic acquisitions, the acquired schools’
      state licenses, accreditation, and ability to participate in Title IV
      programs (if applicable) may be
impaired;


·
            if
      regulators do not approve or delay their approval of transactions
      involving a change of control of our company, our state licenses and
      accreditation may be impaired;


·
            if
      any regulatory audit, investigation or other proceeding finds us not in
      compliance with the numerous laws and regulations applicable to the
      postsecondary education industry, we may not be able to successfully
      challenge such finding and our business could
  suffer;


·
            if
      we fail to maintain any of our state authorizations, we would lose our
      ability to operate in that state;


·
            government
      regulations relating to the Internet could increase our cost of doing
      business, affect our ability to grow or otherwise have a material adverse
      effect on our business, financial condition, results of operations and
      cash flows;


·
            our
      success depends on attracting and retaining qualified
      personnel;


·
            we
      may not be able to adequately protect our intellectual property, and we
      may be exposed to infringement claims by third
  parties;


·
            we
      may be subject to infringement and misappropriation claims in the future,
      which may cause us to incur significant expenses, pay substantial damages
      and be prevented from providing our
services;


·
            our
      limited operating history and the unproven long-term potential of our
      business model make evaluating our business and prospects
      difficult;


·
            we
      may not be able to complete our proposed acquisition of 100% of the equity
      interests of Educational Training Institute, Inc., Culinary Tech Center,
      LLC and Professional Culinary Institute LLC (collectively, the “Culinary
      Group”);


·
            we
      need additional capital to support our operations and to complete our
      acquisition of the Culinary Group and we may not be able to obtain such
      capital on acceptable terms;


·
            our
      business may be adversely affected by a further economic slowdown in the
      U.S. or abroad or by an economic recovery in the
  U.S.;


·
            we
      may not be able to sustain our recent growth rate or profitability, and we
      may not be able to manage future growth
  effectively;


·
            insiders
      have substantial control over us, and they could delay or prevent a change
      in our corporate control even if our other stockholders wanted it to
      occur;


·
            there
      may not be sufficient liquidity in the market for our securities in order
      for investors to sell their
securities;


·
            the
      market price of our common stock may be
  volatile;


3


·
            our
      outstanding convertible securities may adversely affect us in the future
      and cause dilution to existing
shareholders;


·
            our
      common stock may be considered a “penny stock” and may be difficult to
      sell; and


·
            we
      have not paid dividends in the past and do not expect to pay dividends in
      the future, and any return on investment may be limited to the value of
      our stock.





Therefore,
actual outcomes and results may differ materially from what is expressed or
forecasted in or suggested by such forward-looking statements. We undertake no
obligation to publicly revise these forward-looking statements to reflect events
or circumstances that arise after the date hereof. Readers should carefully
review the factors described herein and in other documents we file from time to
time with the Securities and Exchange Commission, including our Quarterly
Reports on Form 10-Q, Annual Reports on Form 10-K, and any Current Reports on
Form 8-K filed by us.


4


PART
I. FINANCIAL INFORMATION





ITEM
1.  FINANCIAL STATEMENTS




OAK TREE EDUCATIONAL PARTNERS, INC. AND
SUBSIDIARIES





Consolidated
Balance Sheets





As ofSeptember 30, 2010
                                
                                
                                As of(Unaudited)
                                
                                
                                December31,2009ASSETSCurrent
      AssetsCash
                                
                                $
                                451,170
                                
                                
                                $
                                560,497Accounts
      receivable, net of allowance for uncollectable accounts of $10,048 as of
      September 30, 2010 and $12,688 as of December 31, 2009
                                
                                
                                163,098
                                
                                
                                
                                177,237Inventory
                                
                                
                                22,162
                                
                                
                                
                                43,836Other
      current assets
                                
                                
                                241,928
                                
                                
                                
                                41,197878,358
                                
                                
                                
                                822,767Fixed
      AssetsFurniture
      and equipment
                                
                                
                                153,951
                                
                                
                                
                                96,797Leasehold
      improvements
                                
                                
                                76,172
                                
                                
                                
                                73,575230,123
                                
                                
                                
                                170,372Accumulated
      Depreciation
                                
                                
                                (22,717
                                )
                                
                                
                                (5,394
                                )207,406
                                
                                
                                
                                164,978Other
      Non-Current AssetsTradename/Trademark/content/customer
      relationships/certification and other intangibles, net of accumulated
      amortization of $407,399 as of September 30, 2010 and $114,066 as of
      December 31, 2009
                                
                                
                                3,701,601
                                
                                
                                
                                3,994,935Non-compete
      agreements, net of accumulated amortization of $84,935 as of September 30,
      2010 and $25,595 as of December 31, 2009
                                
                                
                                172,065
                                
                                
                                
                                231,405Deferred
      tax asset
                                
                                
                                19,245
                                
                                
                                
                                19,245Goodwill
                                
                                
                                323,296
                                
                                
                                
                                323,296Other
                                
                                
                                95,409
                                
                                
                                
                                90,0134,311,616
                                
                                
                                
                                4,658,894$
                                5,397,380
                                
                                
                                $
                                5,646,639LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      LiabilitiesCurrent
      maturities of other liabilities
                                
                                $
                                339,124
                                
                                
                                $
                                78,743Accounts
      payable
                                
                                
                                159,495
                                
                                
                                
                                112,210Accrued
      liabilities
                                
                                
                                92,182
                                
                                
                                
                                68,371Income
      taxes payable
                                
                                
                                -
                                
                                
                                
                                19,245Deferred
      revenue
                                
                                
                                825,712
                                
                                
                                
                                708,5621,416,513
                                
                                
                                
                                987,131Other
      LiabilitiesNote
      payable
                                
                                
                                1,438,675
                                
                                
                                
                                1,680,037Capital
      lease obligations
                                
                                
                                15,116
                                
                                
                                
                                31,870Other
                                
                                
                                199,495
                                
                                
                                
                                199,4951,653,286
                                
                                
                                
                                1,911,4023,069,799
                                
                                
                                
                                2,898,533Shareholders'
      EquityPreferred
      stock - 2,000,000 shares authorized, $.0001 par value, 250,000 shares
      designated as Series A, issued and outstanding as of September 30, 2010
      and December 31, 2009
                                
                                
                                25
                                
                                
                                
                                25Common
      stock - 10,000,000 shares, $.0001 par value, authorized, shares issued and
      outstanding; 7,572,656 as of September 30, 2010 and 6,525,981 as of
      December 31, 2009
                                
                                
                                757
                                
                                
                                
                                653Additional
      paid In capital
                                
                                
                                4,373,670
                                
                                
                                
                                3,841,677Accumulated
      Deficit
                                
                                
                                (1,906,466
                                )
                                
                                
                                (1,073,956
                                )Shares
      held in escrow
                                
                                
                                (119,505
                                )
                                
                                
                                -Notes
      receivable
                                
                                
                                (20,900
                                )
                                
                                
                                (20,293
                                )2,327,581
                                
                                
                                
                                2,748,106$
                                5,397,380
                                
                                
                                $
                                5,646,639





See notes
to consolidated financial statements





F-1





OAK TREE EDUCATIONAL PARTNERS, INC. AND
SUBSIDIARIES





Consolidated
Statements of Operations


Three
and Nine Months Ended September 30, 2010


and
from July 20, 2009 (Inception) through September 30, 2009


(Unaudited)









Three
      Months
                              
                              
                              Nine
      Months
                              
                              
                              July
      20, 2009 (Inception)Ended
                              
                              
                              Ended
                              
                              
                              ThroughSeptember
      30, 2010
                              
                              
                              September
      30, 2010
                              
                              
                              September
      30, 2009Revenue,
      net
                              
                              $
                              733,217
                              
                              
                              $
                              2,298,840
                              
                              
                              $
                              333,765Operating
      ExpensesCost
      of revenue
                              
                              
                              288,650
                              
                              
                              
                              884,486
                              
                              
                              
                              76,104Selling
      and administrative expenses
                              
                              
                              495,644
                              
                              
                              
                              1,366,761
                              
                              
                              
                              60,423Acquisition-related
      costs
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              316,733Stock
      based compensation
                              
                              
                              86,065
                              
                              
                              
                              258,195
                              
                              
                              
                              -Depreciation
      and amortization
                              
                              
                              124,094
                              
                              
                              
                              369,996
                              
                              
                              
                              35,068994,453
                              
                              
                              
                              2,879,438
                              
                              
                              
                              488,328Loss
      from Operations
                              
                              
                              (261,236
                              )
                              
                              
                              (580,598
                              )
                              
                              
                              (154,563
                              )Other
      Income (Expense)Interest
      income
                              
                              
                              284
                              
                              
                              
                              1,004
                              
                              
                              
                              150Interest
      expense
                              
                              
                              (190,570
                              )
                              
                              
                              (252,916
                              )
                              
                              
                              (9,389
                              )(190,286
                              )
                              
                              
                              (251,912
                              )
                              
                              
                              (9,239
                              )Loss
      Before Income Taxes
                              
                              
                              (451,522
                              )
                              
                              
                              (832,510
                              )
                              
                              
                              (163,802
                              )Income
      Taxes
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      Loss
                              
                              $
                              (451,522
                              )
                              
                              $
                              (832,510
                              )
                              
                              $
                              (163,802
                              )Net
      Loss Per Common Share - basic and diluted:
                              
                              $
                              (0.06
                              )
                              
                              $
                              (0.12
                              )
                              
                              $
                              (0.01
                              )Weighted
      Average Number of Shares Oustanding -basic and
      diluted
                              
                              
                              7,389,663
                              
                              
                              
                              6,911,762
                              
                              
                              
                              16,666,667




See notes
to consolidated financial statements





F-2





OAK
TREE EDUCATIONAL PARTNERS, INC. AND SUBSIDIARIES





Consolidated
Statement of Changes in Shareholders' Equity


Nine
Months Ended September 30, 2010


(Unaudited)





CommonStock
                  
                  
                  Additional
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  TotalPreferred Stock
                  
                  
                  Common Stock
                  
                  
                  Warrants
                  
                  
                  Paid In
                  
                  
                  Accumulated
                  
                  
                  Shares Held
                  
                  
                  Notes
                  
                  
                  Shareholders'Shares
                  
                  
                  Amount
                  
                  
                  Shares
                  
                  
                  Amount
                  
                  
                  Shares
                  
                  
                  Capital
                  
                  
                  Deficit
                  
                  
                  in Escrow
                  
                  
                  Receivable
                  
                  
                  EquityBalance
      - December 31, 2009
                  
                  
                  250,000
                  
                  
                  $
                  25
                  
                  
                  
                  6,525,981
                  
                  
                  $
                  653
                  
                  
                  
                  930,000
                  
                  
                  $
                  3,841,677
                  
                  
                  $
                  (1,073,956
                  )
                  
                  $
                  -
                  
                  
                  $
                  (20,293
                  )
                  
                  $
                  2,748,106Shares
      issued into escrow
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  179,641
                  
                  
                  
                  18
                  
                  
                  
                  -
                  
                  
                  
                  119,487
                  
                  
                  
                  -
                  
                  
                  
                  (119,505
                  )
                  
                  
                  -
                  
                  
                  
                  -Stock
      based compensation
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  258,195
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  258,195Interest
      on notes receivable
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (607
                  )
                  
                  
                  (607
                  )Stock
      issued for cashless exercise of warrants
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  862,034
                  
                  
                  
                  86
                  
                  
                  
                  (878,000
                  )
                  
                  
                  (86
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Stock
      issued for exercise of warrants
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  5,000
                  
                  
                  
                  -
                  
                  
                  
                  (5,000
                  )
                  
                  
                  250
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  250Warrants
      issued for notes payable
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  70,500
                  
                  
                  
                  154,147
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  154,147Net
      Loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (832,510
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (832,510
                  )Balance
      - September 30, 2010
                  
                  
                  250,000
                  
                  
                  $
                  25
                  
                  
                  
                  7,572,656
                  
                  
                  $
                  757
                  
                  
                  
                  117,500
                  
                  
                  $
                  4,373,670
                  
                  
                  $
                  (1,906,466
                  )
                  
                  $
                  (119,505
                  )
                  
                  $
                  (20,900
                  )
                  
                  $
                  2,327,581





See notes
to consolidated financial statements





F-3





OAK
TREE EDUCATIONAL PARTNERS, INC. AND SUBSIDIARIES





Consolidated
Statement of Cash Flows


Nine
Months Ended September 30, 2010


and
from July 20, 2009 (Inception) through September 30, 2009


(Unaudited)





Nine Months
                
                
                July 20, 2009 (Inception)Ended
                
                
                ThroughSeptember30,2010
                
                
                September30,2009Cash
      Flows Provided by (Used In) Operating ActivitiesNet
      loss
                
                $
                (832,510
                )
                
                $
                (163,802
                )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
                
                
                369,997
                
                
                
                35,068Accrued
      interest income added to note receivable
                
                
                (607
                )
                
                
                (150
                )Accrued
      interest expense added to note payable
                
                
                88,112
                
                
                
                9,389Deferred
      taxes
                
                
                -
                
                
                
                (57,000
                )Stock
      based compensation
                
                
                258,195
                
                
                
                8,000Warrant
      based interest
                
                
                154,147
                
                
                
                -(Increase)
      Decrease in:Accounts
      Receivable
                
                
                14,139
                
                
                
                (21,615
                )Inventory
                
                
                21,674
                
                
                
                -Other
      current assets
                
                
                (200,731
                )
                
                
                (3,651
                )Increase
      (Decrease) in:Accounts
      payable
                
                
                47,285
                
                
                
                11,597Accrued
      liabilities
                
                
                23,811
                
                
                
                77,186Income
      taxes payable
                
                
                (19,245
                )
                
                
                57,000Deferred
      revenue
                
                
                117,150
                
                
                
                717,560Net
      cash provided by (used in) operating activities
                
                
                41,417
                
                
                
                669,582Cash
      Flows Used In Investing ActivitiesPurchase
      of fixed assets
                
                
                (59,751
                )
                
                
                (5,509
                )Purchase
      of intangible assets
                
                
                -
                
                
                
                (1,750,000
                )Purchase
      of non-compete agreements
                
                
                -
                
                
                
                (250,000
                )Other
      Assets
                
                
                (5,396
                )
                
                
                (16,869
                )Net
      cash used in investing activities
                
                
                (65,147
                )
                
                
                (2,022,378
                )Cash
      Flows Provided By (Used In) Financing ActivitiesProceeds
      from exercise of warrants and sale of common stock
                
                
                250
                
                
                
                2,450,156Proceeds
      from short term notes
                
                
                150,000
                
                
                
                -Payments
      of short term notes
                
                
                (150,000
                )
                
                
                -Payments
      of note payable
                
                
                (70,990
                )
                
                
                -Payments
      of capital lease obligations
                
                
                (14,857
                )
                
                
                -Net
      cash provided by (used in) financing activities
                
                
                (85,597
                )
                
                
                2,450,156Net
      Increase (Decrease) In Cash
                
                
                (109,327
                )
                
                
                1,097,360Cash
      - beginning of period
                
                
                560,497
                
                
                
                -Cash
      Acquired
                
                
                -
                
                
                
                160,000Cash
      - end of period
                
                $
                451,170
                
                
                $
                1,257,360





F-4





OAK
TREE EDUCATIONAL PARTNERS, INC. AND SUBSIDIARIES





Consolidated
Statement of Cash Flows - Continued


Nine
Months Ended September 30, 2010


and
from July 20, 2009 (Inception) through September 30, 2009


(Unaudited)





Nine Months
                
                
                July 20, 2009 (Inception)Ended
                
                
                ThroughSeptember 30,2010
                
                
                September 30, 2009Non-Cash
      Investing and Financing ActivitiesAcquisition
      of tradename/trademarks/content and other intangible
assets
                
                
                -
                
                
                
                1,710,000Goodwill
                
                
                -
                
                
                
                183,557Note
      payable incurred
                
                
                -
                
                
                
                1,072,883Other
      long-term liabilities incurred
                
                
                -
                
                
                
                79,990Sale
      of options to officers for interest bearing notes
                
                
                -
                
                
                
                20,000Supplemental
      Disclosure of Cash Flow InformationCash
      paid during the period for:Interest
                
                $
                18,925
                
                
                $
                -Income
      taxes
                
                $
                43,985
                
                
                $
                -





See notes
to consolidated financial statements





F-5





OAK
TREE EDUCATIONAL PARTNERS, INC. AND SUBSIDIARIES





Notes
to Consolidated Financial Statements


September
30, 2010


(Unaudited)





1
-  ORGANIZATION AND NATURE OF BUSINESS





Florham
Consulting Corp. (“Florham”) was formed on February 9, 2005, as a Delaware
Corporation and has its corporate offices located in New York, NY. On October
13, 2010 Florham amended its Certificate of Incorporation to, among other
things, change its name to Oak Tree Educational Partners, Inc. (“Oak Tree”). On
December 31, 2009, Oak Tree completed a reverse merger with Educational
Investors, Inc. (“EII”). Under accounting principles generally accepted in the
United States, the share exchange is considered to be an in substance capital
transaction, as opposed to a business combination.  Accordingly, the
share exchange is equivalent to the issuance of stock by Oak Tree for the net
monetary assets of EII, accompanied by a recapitalization, and is accounted for
as a change in capital structure.  Accordingly, the accounting for the
share exchange is identical to that resulting from a reverse acquisition, with
no goodwill being recorded.  Under reverse takeover accounting, the
post reverse acquisition fiscal 2009 historical financial statements of the
legal acquirer, Oak Tree, are those of the legal acquiree which is considered to
be the accounting acquirer, EII.  Shares and per share amounts
reported have been adjusted to reflect the recapitalization resulting from the
reverse merger.





Educational
Investors, Inc. was incorporated on July 20, 2009 in Delaware and has its
corporate offices located in New York, NY.  The Company’s wholly-owned
subsidiary, Valley Anesthesia, Inc. (“Valley”), was incorporated in Delaware and
has its corporate offices located in New York, NY. EII’s wholly-owned
subsidiary, Training Direct, LLC (“Training Direct”) was formed as a limited
liability company in Connecticut on January 7, 2004 and has its corporate
offices located in Bridgeport, CT.  The above entities are
collectively referred to as Oak Tree Educational Partners, Inc. and Subsidiaries
(collectively the “Company”).





Effective
August 20, 2009, Valley purchased certain assets and assumed certain liabilities
and operations of Valley Anesthesia Educational Programs, Inc. The Company
through Valley provides comprehensive review and update courses and study
materials to Student Registered Nurse Anesthetists in preparation for the
National Certifying Exam throughout the continental United States.





Effective
December 31, 2009, EII acquired all of the membership interests in Training
Direct.  The Company through Training Direct, a state licensed
vocational training school, provides “distance learning” and “residential
training” educational programs for students to become eligible for entry-level
employment in a variety of fields and industries.





F-6





2
- BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





Basis
of Presentation





The
condensed consolidated financial statements included herein are
unaudited.  In addition, certain information and footnote disclosures
normally included in financial statements prepared in accordance with United
States (“U.S.”) generally accepted accounting principles (“GAAP”) have been
condensed or omitted.  The condensed consolidated financial statements
reflect all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation in
conformity with GAAP.  The condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company’s Form 10-K/A for the year ended December
31, 2009.  The results of operations for the interim period should not
be considered indicative of results to be expected for the full
year.





Summary of Significant Accounting
Policies





a.
Principles of Consolidation - The accompanying consolidated financial statements
include the accounts of Oak Tree Educational Partners, Inc. and its wholly-owned
subsidiaries.  All significant intercompany accounts and transactions
have been eliminated.





b. Cash
and Cash Equivalents - The Company considers all short-term investments, with an
original maturity of three months or less, to be cash
equivalents.  Accounts at banking institutions may at times exceed
federally insured limits.  As of September 30, 2010 and December 31,
2009, the Company had $71,180 and $331,818 over such limits,
respectively.





c.
Earnings Per Share - Basic earnings per share is computed using the weighted
average number of shares of common stock outstanding.  For purposes of
calculating basic earnings per share, awards of non-vested stock that are
subject to the satisfaction of certain conditions are excluded from the weighted
average number of common shares outstanding until all necessary conditions have
been satisfied.  Diluted earnings per share is computed using the
weighted average number of common shares and potentially dilutive common
equivalent shares outstanding, including non vested stock.





d.
Revenue Recognition - The Company derives its revenue substantially from fees
and tuition charged for courses and manuals and study guides.  The
fees are recognized as revenue at the time of the attendance at the course and
when the manuals and study guides are shipped to customers.  Fees for
courses and study guides are paid in advance and the Company refunds only a
portion of the fee upon cancellation. Deferred revenue is recorded when course
fees are received in advance of the time of the attendance at the course and
when the manuals and study guides are shipped. Deferred revenue is also recorded
for undelivered course hours in excess of tuition billed.  Tuition
billed to students is recognized as revenue, determined by the percentage of
completion method. The Company does not accept returns of manuals and study
guides.





F-7





e.
Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
(“GAAP”) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities as of the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.  Actual
results may differ from those estimates.  Estimates are used in
accounting for, among other things, useful lives for depreciation and
amortization, recording fair value of share based compensation, future cash
flows associated with impairment testing for long-lived assets, deferred tax
assets and the related valuation allowances and contingencies, including going
concern assessments.





f. Fair
Value of Financial Instruments - The Company’s financial instruments consist
primarily of cash and cash equivalents, accounts receivable, accounts payable
and deferred revenue which approximate fair value because of their short
maturities.  The Company’s notes payable (or long-term debt)
approximates the fair value of such instruments based upon management’s best
estimate of interest rates that would be available to the Company for similar
financial arrangements at September 30, 2010.





g.
Goodwill - The Company has adopted Accounting Standards Codification (“ASC”) 350
which eliminated the amortization of goodwill and substituted an annual review
of the asset for possible impairment, requiring the comparison of fair market
value to carrying value.  Fair market value is estimated using the
present value of expected future cash flows and other internally calculated
measures.





h.
Impairment of Long-Lived Assets - In the event that facts and circumstances
indicate that the carrying value of an asset may be impaired, an evaluation of
recoverability would be performed.  If an evaluation is required, the
estimated future undiscounted cash flows associated with the asset would be
compared to the asset’s carrying amount to determine if a write-down to market
value is required.  At September 30, 2010, the Company does not
believe that any impairment has occurred.





i.
Recently Issued Accounting Pronouncements - Management does not believe that any
recently issued, but not yet effective accounting pronouncements, if adopted,
would have a material effect on the accompanying financial
statements.





j. Income
Taxes - The Company utilizes the asset and liability method of accounting for
income taxes.  The asset and liability method requires that the
current or deferred tax consequences of all events recognized in the financial
statements are measured by applying the provisions of enacted tax laws to
determine the amount of taxes payable or refundable currently or in future
years.  Deferred tax assets are based on the differences in the
amortizable lives of intangible assets and goodwill, capitalization of
acquisition costs and the timing of stock based compensation deductions for
income tax and financial reporting purposes.  An allowance against
deferred tax assets is recognized when it is more likely than not that such tax
benefits will not be realized.  As of September 30, 2010 and December
31, 2009, the Company established a valuation allowance against the deferred tax
assets in the approximate amounts of $778,000 and $454,000,
respectively.  Adjustment to the deferred tax assets and liabilities
balances are recognized in income as they occur. The Company has determined that
there are no uncertain tax positions pursuant to ASC 740 and does not expect
this to change over the next twelve months.  The Company may recognize
the tax benefit from an uncertain tax position only if it is more likely than
not that the tax position will be sustained upon examination by the taxing
authorities based on the technical merits of the position.  The
Company recognizes accrued interest and penalties associated with uncertain tax
positions as part of the income tax provision.





F-8





In
addition to its Federal income tax return, the Company and its subsidiaries are
obligated to file tax returns in various states.  All periods within
the applicable jurisdictions’ statute of limitations remain open to government
audit.





k. Stock
Based Compensation - The Company recognizes the cost of directors, consultants
and employee services received in exchange for awards of equity instruments,
such as stock options, based on the fair value of those awards at the date of
grant over the requisite service period.   The fair value of the
options of $86,065 and $258,195 was charged to operations as compensation during
the three and nine months ended September 30, 2010.  At September 30,
2010, there was $201,491 of total unrecognized compensation cost related to
non-vested stock option awards which is expected to be recognized over a
weighted-average period ending December 31, 2011.  There are 622,640
options under the plan available for future grants.





3 – SHORT TERM NOTES





On June
30, 2010, the Company consummated a private offering with two lenders pursuant
to which the Company sold and issued (i) an aggregate of $150,000 of 13.5%
promissory notes due September 30, 2010; and (ii) warrants to purchase an
aggregate of 70,500 shares of common stock at an exercise price of $0.50 per
share, subject to certain adjustments as described in the warrants, beginning on
June 30, 2010 through June 30, 2015.  The fair value of the warrants
of $154,147 has been charged to operations as interest expense over the term of
the notes.  The notes and interest was paid on September 30,
2010.  The fair value of the options was determined by the
Black-Scholes option pricing model using the following assumptions; forfeiture
rate of 0%, risk free interest rate of 0.32%, volatility 85.60%, expected life 5
years, and dividend rate 0%.





4
– OTHER LIABILITIES





Included
in other liabilities is an obligation to the sellers of certain assets of Valley
Anesthesia Educational Programs, Inc. to receive 40% of the future net revenues,
as defined, from two new revenue sources for the three year periods ended
December 31, 2012.  The present value of the net revenues the sellers
are expected to receive is $79,990.





Also
included in other long-term liabilities is an obligation to the selling members
of Training Direct which provides for the issuance of 179,641 shares of the
Company’s Common Stock having a deemed value of $300,000 (the “Escrow
Shares”).  The Escrow Shares were issued on March 3, 2010 and are
being held in escrow and will be released therefrom subject to the Company
achieving certain performance targets as set for in the Interest Purchase
Agreement. The present value of the Escrow Shares the selling members are
expected to receive is $119,505 as of the acquisition date.





F-9





The
escrow shares are shown as a reduction to shareholders’ equity.





5
– CAPITAL TRANSACTIONS





On June
1, 2010, holders of warrants to purchase an aggregate of 878,000 shares of
common stock exercised such warrants on a cashless basis and an aggregate of
862,034 shares were issued to such holders.  On September 1, 2010, a
holder of warrants to purchase 5,000 shares of common stock exercised such
warrants, the Company received $250 and issued 5,000 shares.





6
– COMMITMENTS AND CONTINGENCIES





Leases





The
Company leases its Bridgeport, CT facility under a lease that expires October 8,
2019, with an option to renew for an additional five years.  Terms of
the lease require minimum monthly payments of $5,850 plus annual increases of
three percent or the CPI annual increase, if greater. The Company must pay for
repairs, maintenance and insurance under this lease.





The
Company rents office space from one of its officers on a month-to-month basis
for $725 per month.  The Company also reimburses another officer
$2,992 per month for rent of office space on a month-to-month
basis.





The
minimum payments under lease obligations are as follows:





For
      the period from October 1,through
      December 31, 20102010
                      
                      $
                      18,077For
      the years ended December 31,2011
                      
                      
                      72,8482012
                      
                      
                      75,0342013
                      
                      
                      77,2852014
                      
                      
                      79,603Thereafter
                      
                      
                      411,717Total
                      
                      $
                      734,564





Rent
expense for the three and nine months ended September 30, 2010 was $28,700 and
$86,099, respectively.




F-10




Commitment for Conference
Facilities





Certain
of the Company’s courses are presented in conference facilities located in
hotels in various cities throughout the continental United
States.  The Company enters into contracts with the various hotels
well in advance of these upcoming courses.  These contracts provide,
among other matters, that the Company guarantee a stated minimum number of
attendees and/or guest rooms, and may hold the Company to stated percentages of
the amounts in the event of course cancellation.





Employment and Consulting
Agreements





The
Company and its subsidiaries have entered into various employment contracts with
its executives and an agreement with a consultant.  In addition to
base compensation, the contracts provide for compensation adjustments, as
described in the agreements, plus stock options.  The total base
compensation commitment of the contracts is as follows:





For
      the period from October 1,through
      December 31, 2010$
                        199,645For
      the years ended December 31,2011
                        
                        
                        548,3972012
                        
                        
                        345,000





Off Balance Sheet
Arrangement





The
Company, through its bank, issued an irrevocable letter of credit in the amount
of $40,000, as required by the State of Connecticut Department of Higher
Education.  This letter of credit may not be extended beyond December
31, 2021. As collateral for the letter of credit, the Company purchased a
Certificate of Deposit with the bank in the amount of $40,000, which is included
in Other Assets.





7 – LOSS PER SHARE





For the
three and nine months ended September 30, 2010, the conversion of preferred
stock, exercise of warrants, stock options, and escrow shares issued in purchase
of subsidiary were excluded in the computations of the Company’s diluted loss
per share because the Company reported net losses. Shares excluded were as
follows:





Conversion
      of preferred stock
                  
                  
                  12,278,333Exercise
      of warrants
                  
                  
                  117,500Vested
      stock options
                  
                  
                  548,350Nonvested
      stock options
                  
                  
                  2,887,978Escrow
      shares issued in purchase of subsidiary
                  
                  
                  179,641





F-11





The
following table represents the pro forma effect on earnings per share for the
dilution resulting from the conversion of the Series A Preferred
Stock.  These preferred shares were issued because the Company did not
have sufficient authorized and unissued common shares to issue to the former EII
stockholders on the date of the merger.  On October 13,
2010,  the Company amended its Certificate of Incorporation to
increase the number of the Company’s authorized common shares to 50,000,000 and
12,278,333 common shares were issued in exchange for the Series A Preferred
Shares.





Three Months EndedSeptember30,2010AsReported
                  
                  
                  ProFormaNet
      Loss Per Common Share
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.02
                  )Weighted
      Average Number of Common Shares Outstanding
                  
                  
                  7,389,663
                  
                  
                  
                  19,667,996





Nine Months EndedSeptember30,2010AsReported
                  
                  
                  ProFormaNet
      Loss Per Common Share
                  
                  $
                  (0.12
                  )
                  
                  $
                  (0.04
                  )Weighted
      Average Number of Common Shares Outstanding
                  
                  
                  6,911,762
                  
                  
                  
                  19,190,095





8 – PROPOSED ACQUISITION





Effective
as of May 21, 2010, the Company entered into a membership interest purchase
agreement and a separate agreement and plan of merger (the “Culinary Purchase
Agreements”) with the equity owners of Culinary Tech Center LLC (“CTC”) and
Professional Culinary Institute LLC (“PCI”), both New York limited liability
companies, and Educational Training Institute, Inc., a New York corporation
(collectively, the “Culinary Group”).  Joseph Monaco, one of the
principals of the Culinary Group was a former owner of Training
Direct.   The Company is seeking to acquire the Culinary Group
for $5.5 million, consisting of $3 million cash and $2.5 million of our common
stock.  The agreements also include two earn-out provisions consisting
of (i) an additional $2.0 million of our common stock and $500,000 in cash if
the Culinary Group achieves 2010 or 2011 pre-tax income hurdles of $1.65 million
and $1.9 million, respectively, and (ii) an additional $750,000 in cash if,
among other things, the Culinary Group achieves a 2010 pre-tax income hurdle of
$2.1 million.





F-12





Under the
terms of the merger agreement, Educational Training Institute (“ETI”) will be
merged into a newly formed wholly-owned acquisition subsidiary of the Company
with ETI as the surviving corporation of the merger.  The ETI
stockholders will receive $2.5 million of our common stock to be valued at the
volume weighted average price (“VWAP”) of our common stock as traded on the
FINRA OTC Bulletin Board or other national securities exchange for the 20
trading days immediately prior to the closing date.  In addition, the
ETI stockholders are entitled to receive contingent merger consideration in the
form of $2,000,000 payable in the form of additional shares of the Company’s
common stock, based upon the Culinary Group reaching either $1.65 million or
$1.9 million of pre-tax income levels in 2010 or 2011,
respectively.  The contingent merger consideration is valued based on
the VWAP of the Company’s common stock for the 20 trading days prior to
determination of the applicable pre-tax income of the Culinary Group in fiscal
2010 or 201l.  The merger agreement also permits the ETI stockholders
to require the Company to repurchase for cash up to $500,000 of the contingent
merger consideration in the event the 2010 or 2011 target pre-tax income levels
are achieved.





Under the
terms of the membership interest purchase agreement with Messrs. Joseph Monaco
and Harold Kaplan (the sole members of CTC and PCI), immediately following
consummation of the merger referred to above, ETI (then our wholly-owned
subsidiary) will purchase from Messrs. Monaco and Kaplan 100% of the members
interests equity of each of CTC and PCI.  The purchase price for such
equity interests is $3.0 million, payable at closing in cash in equal amounts to
Messrs. Monaco and Kaplan.  The purchase agreement also provides that
in the event the Culinary Group achieves the above target pre-tax income in 2010
or fiscal 2011, the Company is obligated to pay an additional $500,000 to the
former members of CTC and PCI.  In addition, in the event that the
Culinary Group is able to obtain in 2010 an additional five year agency
agreement with New York State that provides minimum annual revenues of $1.5
million and $450,000 of incremental pre-tax profits in 2010, as a result of
which the cumulative pre-tax income of the Culinary Group shall be greater than
$2.1 million in fiscal 2010, then an additional $750,000 shall be payable in
cash to the members of CTC and PCI by not later than December 31,
2011.





At
closing of the transactions contemplated by both the merger and purchase
agreements, Joseph Monaco and Harold Kaplan will enter into employment
agreements with Oak Tree expiring December 31, 2013, pursuant to which they
shall serve as Executive Vice Presidents of the Company and the President and
Chief Operating Officer, respectively, of the Culinary Group. Such executives
shall each receive base salaries of $150,000 in 2010, increasing to $200,000 in
2011 and $250,000 in each of 2012 and 2013, and shall be entitled to
discretionary bonuses, as determined by the Oak Tree board of
directors.





Consummation
of the Culinary Group acquisition is subject to certain conditions, including,
our obtaining the requisite financing, approval by the New York State Department
of Education of the change of control of the Culinary Group, and completion of
the necessary audits of the historical financial statements of the Culinary
Group.  There can be no assurance that the Company will be able to
consummate the Culinary Group acquisition or, if consummated, that it will prove
to be beneficial to the Company.




F-13




The
Company is currently in negotiations with the Culinary Group to amend the merger
and purchase agreement.





F-14




ITEM
2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.





WE URGE YOU TO READ THE FOLLOWING
DISCUSSION IN CONJUNCTION WITH OUR CONSOLIDATED FINANCIAL STATEMENTS AND THE
NOTES THERETO BEGINNING ON PAGE F-1. THIS DISCUSSION MAY CONTAIN
FORWARD-LOOKING STATEMENTS THAT INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED OR
IMPLIED BY THE FORWARD-LOOKING STATEMENTS AS A RESULT OF A NUMBER OF FACTORS,
INCLUDING BUT NOT LIMITED TO THE RISKS AND UNCERTAINTIES DISCUSSED UNDER THE
HEADING “RISK FACTORS” IN OUR FORM 10-K/A FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 2010 AND IN OUR OTHER FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION. IN ADDITION, SEE “CAUTIONARY
STATEMENTREGARDING
FORWARD-LOOKING STATEMENTS” SET FORTH IN THIS
REPORT.





Overview





Florham Consulting Corp. ("Florham”)
was formed on February 9, 2005 as a Delaware corporation. On October 13,
2010, Florham amended its Certificate of Incorporation to, among other
things, change its name to Oak Tree Educational Partners, Inc. (“Oak Tree” or
the “Company” or “we”). We have included elsewhere herein the condensed
consolidated financial statements of Oak Tree Educational Partners, Inc. and
Subsidiaries as of September 30, 2010 and December 31, 2009 and for the three
and nine months ended September 30, 2010, and from July 20, 2009 (Inception)
through September 30, 2009. On December 31, 2009, Oak Tree completed a reverse
merger with Educational Investors, Inc. (“EII”). Under accounting principles
generally accepted in the United States, the share exchange is considered to be
an in substance capital transaction, as opposed to a business
combination.  Accordingly, the share exchange is equivalent to the
issuance of stock by Oak Tree for the net monetary assets of EII, accompanied by
a recapitalization, and is accounted for as a change in capital
structure.  Accordingly, the accounting for the share exchange is
identical to that resulting from a reverse acquisition, with no goodwill being
recorded.  Under reverse takeover accounting, the post reverse
acquisition fiscal 2009 historical financial statements of the legal acquirer,
Oak Tree, are those of the legal acquiree which is considered to be the
accounting acquirer, EII.  Share and per share amounts reported have
been adjusted to reflect the recapitalization resulting from the reverse
merger.





EII was incorporated on July 20,
2009. EII through
its wholly-owned subsidiary, Valley Anesthesia, Inc. (“Valley”), purchased
certain assets and assumed certain liabilities of Valley Anesthesia Educational
Programs, Inc. (“VAEP”) effective August 20, 2009. EII acquired the Membership
Interests in Training Direct LLC (“Training Direct”) effective December 31,
2009.





The
following discussion and analysis of financial condition and results of
operations relates to the operations and financial condition reported in the
condensed consolidated financial statements of Oak Tree and Subsidiaries as of
September 30, 2010 and December 31, 2009 and for the three and nine months ended
September 30, 2010 and from July 20,2009 (Inception) through September, 2009,
and should be read in conjunction with such financial statements and related
notes included herein.





EII was
incorporated for the purpose of acquiring vocational, training and technical
schools, with an initial emphasis on the health care and medical
industries.  Through its Valley Anesthesia, Inc. subsidiary, EII
provides comprehensive review and update courses and study materials that aid
Student Registered Nurse Anesthetists (“SRNA”) and Graduate Registered Nurse
Anesthetists (“GRNA”) in preparation for the National Certifying Exam (“NCE”)
throughout the continental United States.  Through its Training Direct
subsidiary, EII provides “distance learning” and “residential training”
educational programs for students to become eligible for entry-level employment
in a variety of fields and industries. The Company strives to assist those who
may not have realized their full potential in the workplace in finding a new
career direction and progressing their learning skills necessary to reach their
earning and personal development possibilities and goals. Training Direct
maintains approvals from the Connecticut Commissioner of Higher Education, the
Connecticut Department of Health Services and the National Health Career
Association, and is an Eligible Training Provider under the Workforce Investment
Act. Such approvals require that the Company have a competent faculty, offer
educationally sound and up to date courses and course materials, and be subject
to inspections and approvals by outside examining committees.


5


Summary
of Significant Accounting Policies and Estimates





A
detailed discussion of the accounting policies and estimates that we believe are
most critical to our financial condition and results of operations that require
management’s most subjective and complex judgments in estimating the effect of
inherent uncertainties is included under the caption “Critical Accounting
Policies and Estimates” included in Management’s Discussion and Analysis of
Financial Condition and Results of Operations of our Annual Report on Form
10-K/A for the year ended December 31, 2009.  Note 2, “Summary of
Significant Accounting Policies”, of the notes to our audited consolidated
financial statements of our Annual Report on Form 10-K/A, for the year ended
December 31, 2009, also includes a discussion of these and other significant
accounting policies.





Liquidity
and Capital Resources





As of
September 30, 2010, we had a working capital deficit of approximately $538,000
after taking into account all current assets and all current liabilities, which
liabilities include approximately $826,000 of deferred revenue that will be
earned during the following year.




Net cash
provided by operating activities was approximately $41,000. While the Company
incurred a loss during the nine months ended September 30, 2010 in the
approximate amount of $833,000, included in expenses was approximately $370,000
of depreciation and amortization, $258,000 of stock based compensation, and
$154,000 of warrant based interest, which amounts are non-cash, and had an
increase in deferred revenue of approximately $117,000.





Net cash used in investing activities
of approximately $65,000 was primarily related to the cash used for the purchase
of fixed assets.





Net cash
used by financing activities of approximately $86,000 was primarily related to
the payments of notes and capital lease obligations.





Although
we expect that our available funds and funds to be generated from our ongoing
operations will be sufficient to meet our anticipated needs for 12 months, we
may need to obtain additional capital to continue to grow our business. Our cash
requirements may vary materially from those currently anticipated due to changes
in our operations, including the timing of our receipt of revenues.  Our
ability to obtain additional financing in the future will depend in part upon
the prevailing capital market conditions, as well as our business performance.
There can be no assurance that we will be successful in our efforts to arrange
additional financing on terms satisfactory to us or at all.





Results
of Operations




The following table shows the results
of our business for the three months ended September 30, 2010 and from July 20,
2009 (Inception) through September 30, 2009:


6





THREE MONTHS ENDED SEPTEMBER 30, 2010 AND FROM JULY 20,
2009 (INCEPTION) THROUGH SEPTEMBER 30, 2009





%
      of
                
                
                
                
                
                %
      ofRevenue
                
                
                
                
                
                Revenue2010
                
                
                2010
                
                
                2009
                
                
                2009NET
      REVENUE
                
                $
                733,217
                
                
                
                100
                %
                
                $
                333,765
                
                
                
                100
                %COST
      OF REVENUE
                
                
                288,650
                
                
                
                39
                %
                
                
                76,104
                
                
                
                23
                %SELLING
      AND ADMINISTRATIVE EXPENSES
                
                
                495,644
                
                
                
                68
                %
                
                
                60,423
                
                
                
                18
                %ACQUISITION-RELATED
      COSTS
                
                
                -
                
                
                
                0
                %
                
                
                316,733
                
                
                
                95
                %STOCK
      BASED COMPENSATION
                
                
                86,065
                
                
                
                12
                %
                
                
                -
                
                
                
                0
                %DEPRECIATION
      AND AMORTIZATION
                
                
                124,094
                
                
                
                17
                %
                
                
                35,068
                
                
                
                11
                %TOTAL
      OPERATING EXPENSES
                
                
                994,453
                
                
                
                136
                %
                
                
                488,328
                
                
                
                146
                %(LOSS)
      FROM OPERATIONS
                
                
                (261,236
                )
                
                
                -36
                %
                
                
                (154,563
                )
                
                
                -46
                %INTEREST
      EXPENSE
                
                
                (190,570
                )
                
                
                -26
                %
                
                
                (9,389
                )
                
                
                -3
                %INTEREST
      INCOME
                
                
                284
                
                
                
                0
                %
                
                
                150
                
                
                
                0
                %TOTAL
      OTHER EXPENSE
                
                
                (190,286
                )
                
                
                -26
                %
                
                
                (9,239
                )
                
                
                -3
                %(LOSS)
      FROM OPERATIONS BEFORE INCOME TAXES
                
                
                (451,522
                )
                
                
                -62
                %
                
                
                (163,802
                )
                
                
                -49
                %INCOME
      TAXES
                
                
                -
                
                
                
                0
                %
                
                
                -
                
                
                
                0
                %NET
      (LOSS)
                
                $
                (451,522
                )
                
                
                -62
                %
                
                $
                (163,802
                )
                
                
                -49
                %





Revenue.  Net revenue for the
three months ended September 30, 2010 was approximately $733,000, compared to
$334,000 for the period from July 20, 2009 (Inception) through September 30,
2009. For the three months ended September 30, 2010, revenue from distance
learning and residential training educational programs was approximately 37%,
revenue from review and update courses was approximately 12%, and revenue from
the sale of manuals and Memory MasterTM study
guides was approximately 51%.  For the period from July 20, 2009
(Inception) through September 30, 2009, revenue from review and update courses
was approximately 26% and revenue from the sale of manuals and Memory MasterTM
study guides was approximately 74%.  Revenue from distance learning
and residential training education programs are the results of operations of
Training Direct, which was acquired on December 31, 2009.





Cost of
Revenue.  Cost of revenue for the three months ended September
30, 2010 was approximately $289,000, which included costs associated with
distance learning and residential training courses of approximately 61%, the
cost of conference facilities for review and update courses of approximately 5%,
the cost of printing and shipping of manuals of 27% and other costs
7%.  Cost of revenue for the period from July 20, 2009 (Inception)
through September 30, 2009 was approximately $76,000, which included the cost of
conference facilities for review and update courses of approximately 21%, the
cost of printing and shipping of manuals of 41% and other costs of
38%.





Selling and Administrative
Expenses.
Selling and administrative expenses for the three months ended September 30,
2010 were approximately $496,000, and includes salaries, payroll taxes and
benefits in the approximate amount of $277,000, costs associated with public
company reporting in the approximate amount of $116,000, and other expenses of
approximately $103,000.  For the period from July 20, 2009 (Inception)
through September 30, 2009, selling and administrative expenses were
approximately $60,000 and consist primarily of salaries, payroll taxes and
benefits.





Acquisition-Related
Costs.The Company incurred approximately $317,000 of costs
related to the purchase of certain assets and assumption of certain liabilities
of Valley Anesthesia Educational Programs, Inc. during the period from July 20,
2009 (Inception) through September 30, 2009.





Stock Based
Compensation.  The Company recorded
stock based compensation in the amount of approximately $86,000 for the three
months ended September 30, 2010 primarily as the result of the Company granting
329,010 options to management in December 2009.


7


Depreciation and
Amortization.  Depreciation and amortization was approximately
$124,000 for the three months ended September 30, 2010 compared to approximately
$35,000 for the period from July 20, 2009 (Inception) through September 30,
2009.  The amount for the three months ended September 30, 2010 is
substantially attributable to the amortization of intangible assets allocated in
the purchase of certain assets and assumption of certain liabilities from Valley
Anesthesia Educational Programs, Inc. and allocated in the purchase of Training
Direct. The amount for the period from July 20, 2009 (Inception) through
September 30, 2009 is substantially attributable to the amortization of
intangible assets allocated in the purchase of certain assets and assumption of
certain liabilities from Valley Anesthesia Educational Programs,
Inc.





Interest
expense.  Interest expense during the three months ended
September 30, 2010 in the amount of approximately $191,000 primarily relates to
the note issued to sellers in connection with the purchase of certain assets and
assumption of certain liabilities from Valley Anesthesia Educational Programs,
Inc. in the amount of $30,000 and warrant based interest in the approximate
amount of $154,000 related to the issuance of 70,500 warrants in connection with
the borrowing of $150,000 during the three month period.  The fair
value of the warrants was determined by the Black-Scholes option pricing
model.  Interest expense during the period from July 20, 2009
(Inception) through September 30, 2009 primarily relates to the note issued to
sellers in connection with the purchase of certain assets and assumption of
certain liabilities from Valley Anesthesia Educational Programs,
Inc.





Income taxes.  The
Company incurred losses for the three month period ended September 30, 2010 and
for the period from July 20, 2009 (Inception) through September 30, 2009, and
therefore has not provided current income tax expense or deferred tax benefit
since the Company cannot be assured that it is more likely than not that any
such benefit would be fully utilized in the future.





The
following table shows the results of our business for the nine months ended
September 30, 2010 and from July 20, 2009 (Inception) through September 30,
2009:





NINE
MONTHS ENDED SEPTEMBER 30, 2010 AND FROM JULY 20, 2009 (INCEPTION) THROUGH
SEPTEMBER 30, 2009





%
      of
                
                
                
                
                
                %
      ofRevenue
                
                
                
                
                
                Revenue2010
                
                
                2010
                
                
                2009
                
                
                2009NET
      REVENUE
                
                $
                2,298,840
                
                
                
                100
                %
                
                $
                333,765
                
                
                
                100
                %COST
      OF REVENUE
                
                
                884,486
                
                
                
                38
                %
                
                
                76,104
                
                
                
                23
                %SELLING
      AND ADMINISTRATIVE EXPENSES
                
                
                1,366,761
                
                
                
                59
                %
                
                
                60,423
                
                
                
                18
                %ACQUISITION-RELATED
      COSTS
                
                
                -
                
                
                
                0
                %
                
                
                316,733
                
                
                
                95
                %STOCK
      BASED COMPENSATION
                
                
                258,195
                
                
                
                11
                %
                
                
                -
                
                
                
                0
                %DEPRECIATION
      AND AMORTIZATION
                
                
                369,996
                
                
                
                16
                %
                
                
                35,068
                
                
                
                11
                %TOTAL
      OPERATING EXPENSES
                
                
                2,879,438
                
                
                
                125
                %
                
                
                488,328
                
                
                
                123
                %(LOSS)
      FROM OPERATIONS
                
                
                (580,598
                )
                
                
                -25
                %
                
                
                (154,563
                )
                
                
                -46
                %INTEREST
      EXPENSE
                
                
                (252,916
                )
                
                
                -11
                %
                
                
                (9,389
                )
                
                
                -3
                %INTEREST
      INCOME
                
                
                1,004
                
                
                
                0
                %
                
                
                150
                
                
                
                0
                %TOTAL
      OTHER EXPENSE
                
                
                (251,912
                )
                
                
                -11
                %
                
                
                (9,239
                )
                
                
                -3
                %(LOSS)
      FROM OPERATIONS BEFORE INCOME TAXES
                
                
                (832,510
                )
                
                
                -36
                %
                
                
                (163,802
                )
                
                
                -49
                %INCOME
      TAXES
                
                
                -
                
                
                
                0
                %
                
                
                -
                
                
                
                0
                %NET
      (LOSS)
                
                $
                (832,510
                )
                
                
                -36
                %
                
                $
                (163,802
                )
                
                
                -49
                %





Revenue. Net revenue for the
nine months ended September 30, 2010 was approximately $2,299,000 compared to
$334,000 for the period from July 20, 2009 (Inception) through September 30,
2009. For the nine months ended September 30, 2010, revenue from distance
learning and residential training educational programs was approximately 38%,
revenue from review and update courses was approximately 33%, and revenue from
the sale of manuals and Memory MasterTM study
guides was approximately 29%.  For the period from July 20, 2009
(Inception) through September 30, 2009, revenue from review and update courses
was approximately 26% and revenue from the sale of manuals and Memory MasterTM
study guides was approximately 74%.  Revenue from distance learning
and residential training education programs are the results of operations of
Training Direct, which was acquired on December 31, 2009.


8


Cost of
Revenue.  Cost of revenue for the nine months ended September
30, 2010 was approximately $884,000, which included costs associated with
distance learning and residential training courses of approximately 59%, the
cost of conference facilities for review and update courses of approximately
14%, the costs of printing and shipping of manuals of approximately 16% and
other costs of approximately 11%.  Cost of revenue for the period from
July 20, 2009 (Inception) through September 30, 2009 was approximately $76,000,
which included the cost of conference facilities for review and update courses
of approximately 21%, the cost of printing and shipping of manuals of 41% and
other costs of 38%.





Selling and Administrative
Expenses.
Selling and administrative expenses for the nine months ended September 30, 2010
were approximately $1,367,000, and include salaries, payroll taxes and benefits
in the approximate amount of $803,000, costs associated with public company
reporting in the approximate amount of $184,000, and other expenses of
approximately $380,000. For the period from July 20, 2009 (Inception) through
September 30, 2009, selling and administrative expenses were approximately
$60,000 and consist primarily of salaries, payroll taxes and
benefits.





Acquisition-Related
Costs.The Company incurred approximately $317,000 of costs
related to the purchase of certain assets and assumption of certain liabilities
of Valley Anesthesia Educational Programs, Inc. during the period from July 20,
2009 (Inception) through September 30, 2009.





Stock Based Compensation. The Company
recorded stock based compensation in the amount of approximately $258,000 for
the nine months ended September 30, 2010 primarily as the result of the Company
granting 329,010 options to management in December 2009.





Depreciation and
Amortization.  Depreciation and amortization was approximately
$370,000 for the nine months ended September 30, 2010 compared to approximately
$35,000 for the period from July 20, 2009 (Inception) through September 30,
2009.  The amount for the nine months ended September 30, 2010 is
substantially attributable to the amortization of intangible assets allocated in
the purchase of certain assets and assumption of certain liabilities from Valley
Anesthesia Educational Programs, Inc. and allocated in the purchase of Training
Direct. The amount for the period from July 20, 2009 (Inception) through
September 30, 2009 is substantially attributable to the amortization of
intangible assets allocated in the purchase of certain assets and assumption of
certain liabilities from Valley Anesthesia Educational Programs,
Inc.





Interest
expense.  Interest expense during the nine months ended
September 30, 2010 in the amount of approximately $253,000 primarily relates to
the note issued to sellers in connection with the purchase of certain assets and
assumption of certain liabilities from Valley Anesthesia Educational Programs,
Inc. in the approximate amount of $88,000 and warrant based interest in the
approximate amount of $154,000 related to the issuance of 70,500 warrants in
connection with the borrowing of $150,000 during the nine month
period.  The fair value of the warrants was determined by the
Black-Scholes option pricing model.  Interest expense during the
period from July 20, 2009 (Inception) through September 30, 2009 primarily
relates to the note issued to sellers in connection with the purchase of certain
assets and assumption of certain liabilities from Valley Anesthesia Educational
Programs, Inc.





Income taxes.  The
Company incurred losses for the nine month period ended September 30, 2010 and
for the period from July 20, 2009 (Inception) through September 30, 2009, and
therefore has not provided current income tax expense or deferred tax benefit
since the Company cannot be assured that it is more likely than not that any
such benefit would be fully utilized in the future.





ITEM
3.         
   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.





Not
applicable.


9


ITEM
4.             CONTROLS
AND PROCEDURES.





(a) Disclosure
Controls and Procedures.





As of the end of the period covered by
this report, management performed an evaluation, with the participation of our
Chief Executive Officer and Chief Financial Officer, of the effectiveness of
ourdisclosure
controls and procedures (as defined in rules 13a-15(e) or 15d-15(e) under the
Securities Exchange Act of 1934, as amended).  Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures are effective.




(b) Internal Controls
over Financial Reporting.





There
have been no changes in our internal control over financial reporting that
occurred during the period covered by this report that we believe have
materially affected or are reasonably likely to materially affect, our internal
control over financial reporting.





PART
II - OTHER INFORMATION





ITEM
1.             LEGAL
PROCEEDINGS.





We are not a party to, nor is any of
our property the subject of, any legal proceedings other than ordinary routine
litigation incidental to their respective businesses.  There are no
proceedings pending in which any of our officers, directors or 5% shareholders
are adverse to us or any of our subsidiaries or in which they are taking a
position or have a material interest that is adverse to us or any of our
subsidiaries.





Neither we nor any of our subsidiaries
is a party to any administrative or judicial proceeding arising under federal,
state or local environmental laws.





From time to time, we may be involved
in litigation relating to claims arising out of our operations in the normal
course of business.





ITEM
1A.           RISK
FACTORS.





There have been no material changes to
the risks to our business described in our Annual Report on Form-10-K/A for the
year ended December 31, 2009 filed with the Securities and Exchange Commission
on July 28, 2010.





ITEM
2.            
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.





On September 28, 2010, we issued 5,000
shares of our common stock to the holder of our January 2009 warrant upon
exercise of such warrant in full by the holder at an exercise price of $0.05 per
share.





On October 13, 2010, we issued an
aggregate of 12,278,333 shares of common stock to the holders of our 250,000
shares of Series A Preferred Stock which automatically converted into such
shares of common stock at a conversion ratio equal to 49.11333 shares of common
stock for each share of Series A Preferred Stock upon the filing by us on
October 13, 2010 of an amendment to our certificate of incorporation which
increases the authorized shares of our common stock to 50,000,000
shares.





We believe that all of the offerings
and sales were deemed to be exempt under Section 4(2) of the Securities Act of
1933, as amended. No advertising or general solicitation was employed in
offering the securities. The offerings and sales were made to a limited number
of persons, all of whom were accredited investors, business associates of the
Company or executive officers of the Company, and transfer was restricted by the
Company in accordance with the requirements of the Securities Act of 1933. In
addition to representations by the above-referenced persons, we have made
independent determinations that all of the above-referenced persons were
accredited or sophisticated investors, and that they were capable of analyzing
the merits and risks of their investment, and that they understood the
speculative nature of their investment. Furthermore, all of the above-referenced
persons were provided with access to our Securities and Exchange Commission
filings.


10


ITEM
3.            
 DEFAULTS UPON SENIOR SECURITIES.





None.





ITEM
4.           
  (REMOVED AND RESERVED).





ITEM
5.         
    OTHER INFORMATION.





None.





ITEM
6.      
       EXHIBITS.





The
exhibits listed below are required by Item 601 of Regulation
S-K.  Each management contract or compensatory plan or
arrangement required to be filed as an exhibit to this Form 10-Q has been
identified.





Exhibit No.
              
              Exhibit Name31.1
              
              Certification
      of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange
      Act, as enacted by Section 302 of the Sarbanes-Oxley Act of
      2002.31.2
              
              Certification
      of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange
      Act, as enacted by Section 302 of the Sarbanes-Oxley Act of
      2002.32.1
              
              Certification
      of Chief Executive Officer pursuant to 18 United States Code Section
      1350,  as enacted by Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
              
              Certification
      of Chief Financial Officer pursuant to 18 United States Code Section 1350,
      as enacted by Section 906 of the Sarbanes-Oxley Act of
    2002.


11


SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.





OAK
      TREE EDUCATIONAL PARTNERS, INC.By:
                    /s/ Joseph J. BiancoJoseph
      J. BiancoChief
      Executive Officer (PrincipalExecutive
      Officer)Date:
      November 12, 2010By:
                    /s/ Kellis VeachKellis
      VeachChief
      Financial Officer (PrincipalFinancial
      and Accounting Officer)Date:
      November 12, 2010


12