U.S.
SECURITIES AND EXCHANGE COMMISSION
 
 Washington,
D.C. 20549
 
 FORM
10Q-SB/A
 (Mark
One)
 
 (x)
Quarterly Report under section 13 or 15(d) of the Securities Exchange Act of
1934
 for the
quarterly period ended March 31, 2004.
 
 ( )
Transition report under section 13 or 15(d) of the Securities Exchange Act of
1934
 for the
transition period from _____________ to _____________.
 
 
 Commission
File Number: 000-29449
 
 CIPHER
HOLDING CORPORATION
 (FORMERLY
KNOWN AS)
 
 MOMENTUM
HOLDINGS CORPORATION
 
 (Name of
small business in its charter)
 
 Delaware
    13-4099008(State
      or other Jurisdiction of Incorporation)
    (IRS
      Employer Identification No.)
 
 3801 N.
Washington St. Oak Brook, IL 60523
 (Address
of Principal executive Offices including Zip Code)
 
 (630)
371-5583
 
 (Registrant's
Telephone Number)
 
 Indicate
by check mark whether Registrant (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act during the preceeding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days: Yes [ X ] No [ ]
 
 State the
number of shares outstanding of each of the issuer's classes of common
 equity,
as of the latest practicable date:
 
 Shares of
Common Stock outstanding at March 31, 2004: 17,652,811 shares
 
 Documents
incorporated by reference: None
 
 Transitional
Small Business Disclosure Format (check one): Yes [ X ] No [ ]
 
 
  
  
 CIPHER
HOLDING CORPORATION
 FORM
10-QSB - QUARTER ENDED MARCH 31, 2004
 
 INDEX
 
 PART
      I
    FINANCIAL
      INFORMATIONItem
      1.
    Restated
      Financial StatementsBalance
      Sheets at March 31, 2004 and December 31, 2003Statements
      of Operations for the Three Months endedMarch
      31, 2004, and Three Months ended March 31, 2003Statement
      of Shareholders' Equity (Deficiency) for the PeriodJanuary
      1, 2002 through March 31, 2004Statements
      of Cash Flows for the Three Months EndedMarch
      31, 2004, and March 31, 2003Notes
      to Financial StatementsItem
      2.
    Management's
      Discussion and AnalysisItem
      3.
    Controls
      and ProceduresPART
      II
    OTHER
      INFORMATIONItem
      6.
    Exhibits
      and Reports on Form 8-KSIGNATURESEXHIBITS
 
  
  
 PART I -
FINANCIAL INFORMATION
 
 ITEM 1.
FINANCIAL STATEMENTS
 
 The
unaudited balance sheet of the Registrant as of March 31, 2004, the audited
balance sheet at December 31, 2003, and the unaudited statements of operations
for the three months ended March 31, 2004 and March 31, 2003, follow. The
unaudited financial statements reflect all adjustments that are, in the opinion
of management, necessary to a fair statement of the results for the interim
periods presented.
 
 EXPLANATORY
NOTE
 
 This Form
10-QSB/A amends and restates the original Form 10-QSB, which was filed with the
Securities and Exchange Commission on May 24, 2004, including the restatement of
the Company's financial statements for the three ended March 31, 2004 and from
inception on September 13, 2002 to March 31, 2004. See Note (2) to the
Consolidated Financial Statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations - Restatements
  
  
 CIPHER
      HOLDING CORPORATION(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      BALANCE SHEETSMARCH
      31,
    
    DECEMBER
      31,2004
    
    2003(UNAUDITED)
    
    AUDITEDASSETSCash
    
    $
    313
    
    $
    230Total
      Current Assets
    
    
    313
    
    $
    230LIABILITIES
      AND STOCKHOLDERS' (DEFICIT)Accounts
      payable
    
    $
    --
    
    $
    1,455Notes
      payable to shareholders'
    
    
    197,948
    
    
    177,825Notes
      payable - Other
    
    
    125,000
    
    
    125,000Interest
      Payable
    
    
    7,374
    
    
    4,500Total
      Current Liabilities
    
    
    330,322
    
    
    308,780Commitments
      and contingencies
      Stockholders'
      (Deficit):Preferred
      Stock, 5,000,000 share
      Authorized,
      no shares issued and
      OutstandingCommon
      stock, $0.001 par value;
      95,000,000
      shares authorized and 17,652,811shares issued and outstanding, on March
      31, 2004 and December 31, 2003.
    
    
    17,653
    
    
    17,653Additional
      paid-in capital (restated, Note 2)
    
    
    254,514
    
    
    254,514(Deficit)
      accumulated during
      the
      development stage
    
    
    (602,176
    )
    
    (580,717
    )Total
      Stockholders' (Deficit) restated, Note 2)
    
    
    (330,009
    )
    
    (308,550
    )Total
      Liabilities and Stockholders' (Deficit)
    
    $
    313
    
    $
    230The
      accompanying notes are an integral part of the financial
      statements.
 
 
 
  
  
 CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
STATEMENT OF OPERATIONS
 FOR THE
THREE MONTH PERIOD ENDED MARCH 31, 2004 AND 2003 AND
 THE
PERIOD FROM SEPTEMBER 13, 2002 (INCEPTION) TO MARCH 31, 2004
 
 
 InceptionSeptember
      19,2002
      toMarch
      31,
    
    March
      31,
    
    March
      31,2004
    
    2003
    
    2004Revenues:
    
    $
    170
    
    $
    --
    
    $
    170Total
      revenues
    
    
    170
    
    
    --
    
    
    170Operating
      expenses:Professional
      fees
    
    
    11,800
    
    
    65,590
    
    
    416,295Marketing,
      general, and administrative
    
    
    5,088
    
    
    43,497
    
    
    89,262Total
      operating expenses
    
    
    16,888
    
    
    109,087
    
    
    505,557Other
      expensesInterest
      expense
    
    
    (
      4,741
    )
    
    --
    
    
    (
      96,789
    )Total
      other expenses
    
    
    (
      4,741
    )
    
    --
    
    
    (
      96,789
    )Net
      income(Loss)
    
    
    (21,459
    )
    
    (109,087
    )
    
    (602,176
    )Provision
      for income taxes:Tax
      benefit of loss carryforward
    
    
    --
    
    
    --
    
    
    --Net
      income (Loss)
    
    $
    (21,459
    )
    $
    (109,087
    )
    $
    (602,176
    )Per
      share amounts:Loss
      per share
    
    
    (0.00
    )
    
    (0.01
    )
    
    --Weighted
      average common Shares
    
    
    17,652,811
    
    
    8,135,928
    
    
    14,278,788The
      accompanying notes are an integral part of the financial
      statements.
 
 
 
  
  
 CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
STATEMENT OF CASH FLOWS
 FOR THE
THREE MONTH PERIOD ENDED MARCH 31, 2004 AND 2003 AND
 THE
PERIOD FROM SEPTEMBER 13, 2002 (INCEPTION) TO MARCH 31, 2004
 
 InceptionSeptember
      19,Three
      months ended
    
    2002
      toMarch
      31,
    
    March
      31,
    
    March
      31,2004
    
    2003
    
    2004Cash
      Flows From Operating Activities:Net
      (loss)(Restated, Note 2)
    
    $
    (21,459
    )
    $
    (109,087
    )
    $
    (
      602,176
    )Adjustments
      to Reconcile Net (Loss)
      to
      Net Cash (Used) by Operating
      Activities:Shares
      issued for services
    
    
    --
    
    
    --
    
    
    240,000Changes
      in operating current assets and
      LiabilitiesInterest
      expense-beneficial effect
    
    
    --
    
    
    --
    
    
    84,767Interest
      payable
    
    
    --
    
    
    --
    
    
    4,500Accounts
      payable
    
    
    (
      1,455
    )
    
    --
    
    
    --Interest
      payable-loan to shareholder
    
    
    2,874
    
    
    --
    
    
    5,657Net
      Cash (Used) by Operating Activities
    
    
    (20,040
    )
    
    (109,087
    )
    
    (267,252
    )Cash
      Flows From Financing Activities:Payment
      to shareholders of Momentum Holding
    
    
    --
    
    
    --
    
    
    --Loan
      payable to shareholders'
    
    
    --
    
    
    973
    
    
    --Notes
      payable convertible
    
    
    20,123
    
    
    --
    
    
    45,165Issuance
      of common stock
    
    
    --
    
    
    110,000
    
    
    222,400Cash
      Flows Provided by Financing Activities
    
    
    20,123
    
    
    110,973
    
    
    267,565Net
      increase in cash
    
    
    83
    
    
    1,886
    
    
    313Cash
      at beginning of period
    
    
    230
    
    
    173
    
    
    --Cash
      at end of period
    
    $
    313
    
    $
    2,059
    
    $
    313The
      accompanying notes are an integral part of the financial
      statements.
 
 
 
 
  
  
 CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 CONSOLIDATED
STATEMENT OF CASH FLOWS
 FOR THE
THREE MONTH PERIOD ENDED MARCH 31, 2004 AND 2003 AND
 THE
PERIOD FROM SEPTEMBER 13, 2002 (INCEPTION) TO MARCH 31, 2004
 
 (CONTINUED)
 
 
 SUPPLEMENTARY
SCHEDULE OF NONCASH TRANSACTIONS
 
 
 2003
 
 In August
2003, Cipher entered a reverse merger agreement with the majority shareholders
of Momentum. Under the agreement Cipher purchased 1,900,000 shares of Momentum
for $150,000 cash and two notes payable in the amounts of $60,000, and $65,000
each. Also, Momentum issued 14,052,800 new shares in exchange for all issued and
outstanding shares of common stock of Cipher. The majority shareholder of Cipher
loaned $150,000 to Cipher.
 
 At the
time of acquisition Momentum did not have any assets and the only liability of
Momentum was to Brentwood Capital Corp., a selling shareholder, who had waived
the liability prior to the exchange. Cipher wrote off the acquired goodwill of
$250,000 in Momentum because of uncertain future cash flow projections from the
acquisition.
 
 The
accompanying notes are an integral part of the financial
statements.
 
  
  
 CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 
 NOTE 1 -
BASIS OF PRESENTATION
 
 The
interim financial statements included herein are presented in accordance with
United States generally accepted accounting principles and have been prepared by
us, without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC"). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although we believe that the disclosures are adequate to
make the information presented not misleading.
 
 These
statements reflect all adjustments, consisting of normal recurring adjustments,
which, in the opinion of management, are necessary for fair presentation of the
information contained therein. It is suggested that these interim financial
statements be read in conjunction with our audited financial statements and
notes thereto included in its Form 10-KSB for the fiscal year ended December 31,
2003. Results of operations for the interim periods are not indicative of annual
results.
 
 
 NOTE 2.
BUSINESS ORGANIZATION
 
 Cipher
Holding Corporation ("Cipher", "the Company"), a development stage company, was
incorporated under the laws of the State of Illinois on September 13, 2002. We
commenced our operations upon incorporation and has been in the development
stage since then and have had very little revenue.
 
 Cipher
Holding Corporation is a digital distribution solution and marketing company
which secures and allows access to digital content through proprietary encoding,
encryption and authorization technology. Cipher's technology and services allow
publishers and distributors to distribute digital content in a secure format to
mass markets. Secured video and software content is distributed through new and
existing commercial product offerings and distribution channels.
 
 Reverse
Merger
 
 On August
19, 2003, Momentum Holdings Corporation (the "Company", Midwest Merger
Management, LLC, a Kentucky limited liability Company and Brentwood Capital
Corp., a New York Corporation (collectively, the "Selling Shareholders"),
consummated the terms of a Stock Purchase Agreement (the "Agreement") with
Cipher Multimedia, Inc., a privately-owned, Illinois corporation ("Cipher").
Pursuant to the terms of the Agreement, Cipher purchased an aggregate of
1,900,000 shares of the 2,100,011 issued and outstanding shares of our common
Stock, par value $.001 per share, from the Selling shareholders for the purchase
price of $275,000 of cash and debt. Cipher delivered the sum of $150,000 by wire
transfer and executed promissory notes in the amount of $60,000 due on September
6, 2003 and a second promissory note in the amount of $65,000 due on December 5,
2003. The notes are presently in default.
 
 Also,
under the terms of the exchange agreement, Momentum exchanged 14,052,800
newly-issued shares of common stock for all of the issued and outstanding shares
of common stock of Cipher, amounting to 100% of Cipher's outstanding capital
stock after the Exchange, leaving 16,152,811 shares of the Company's stock
issued and outstanding.
 
 As a
result of reverse merger agreement, Cipher acquired voting control of Momentum
on August 19, 2003 and became Momentum's majority shareholder.
 
 Also on
August 19, 2003, Anthony R. Russo and Danny L. Pixler resigned as the sole
officers and directors of the Company. Patrick Rooney was elected as the
Company's President and Chairman of the Board of Directors and Corey Conn was
elected as the Company's Chief Financial Officer, Secretary and
Director.
  
  
 CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE 1.
BUSINESS ORGANIZATION (Continued)
 
 Going
Concern
 
 These
financial statements have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and the satisfaction of liabilities and commitments in the
normal course of business. The Company has sustained losses since inception and
has accumulated losses of $602,176 as of March 31, 2004. The Company's ability
to continue as a going concern is dependent upon the successful completion of
additional financing arrangements and its ability to develop and sell its
services. Management plans to raise equity capital to finance the operating and
capital requirements of the Company. While we are expending our best efforts to
achieve the above plans, there is no assurance that such activity will generate
sufficient funds to accomplish its business purpose, or that our business plan
will be successful.
 
 
 NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Principles
of Consolidation and Nature of Operations
 
 For the
period ended March 31, 2004 and March 31, 2003 and from inception, September 19,
2002 to March 31, 2004, the financial statements only include the transactions
of Cipher Holding Corporation and not that of Momentum Holdings
Corp.
 
 Cash and
Cash Equivalents
 
 The
Company considers all highly liquid instruments with original maturities of
three months or less to be cash equivalents.
 
 Income
Taxes: The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under Statement No.
109, the asset and liability method is used in accounting for income taxes.
Deferred taxes are recognized for temporary differences between the bases of
assets and liabilities for financial statement and income tax purposes. The
temporary differences relate primarily to net operating loss carryforwards. A
valuation allowance is recorded for deferred tax assets when it is more likely
than not that some or all of the deferred tax assets will not be realized
through future operations.
 
  
  
 CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Loss Per
Share
 
 Loss per
share is computed based on the weighted average number of shares of common stock
outstanding. All per share data retroactively reflects the effect of the reverse
acquisition.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
 
 New
Accounting Pronouncements
 
 In
November 2002, the EITF finalized its consensus on EITF Issue 00-21, "Revenue
Arrangements with Multiple Deliverables, " which provides guidance on the method
of revenue recognition for sales arrangements that include the delivery of more
than one product or service. EITF 00-21 is effective prospectively for
arrangements entered into in fiscal periods beginning after June 15, 2003. Under
EITF 00-21, revenue must be allocated to all deliverables regardless of whether
an individual element is incidental or perfunctory. The adoption of EITF 00-21
did not have a material impact on the Company's results of operations or
financial position. In January 2003, the FASB issued FASB Interpretation No. 46
("FIN 46"), "Consolidation of Variable Interest Entities." FIN 46 clarifies the
application of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements," to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 applies immediately to
variable interest entities ("VIE's") created after January 31, 2003, and to
VIE's in which an enterprise obtains an interest after that date. On October 9,
2003 the FASB issued FASB Staff Position No. FIN 46-6 "Effective Date of FASB
Interpretation No.46 Consolidation of Variable Interest Entities," which defers
the implementation date for public entities that hold an interest in a variable
interest entity or potential variable interest entity from the first fiscal year
or interim period beginning after June 15, 2003 to the end of the first interim
or annual period ending after December 15, 2003.
 
 This
deferral applies only if 1) the variable interest entity was created before
February 1, 2003 and 2) the public entity has not issued financial statements
reporting that variable interest entity in accordance with FIN 46, other than
disclosures required by paragraph 26 of FIN 46. The adoption of FIN 46 did not
have a material impact on the Company's financial position, liquidity or results
of operations.
 
 In May
2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities." This Statement amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under FASB Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 149 is
effective for contracts entered into or modified after June 30, 2003, and for
hedging relationships designated after June 30, 2003. The adoption of SFAS No.
149 did not materially impact the Company's financial position or results of
operations.
 
 
 
  
 CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 
 
 NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 New
Accounting Pronouncements (Continued)
 
 In May
2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." The statement
requires that an issuer classify financial instruments that are within its scope
as a liability. Many of those instruments were classified as equity under
previous guidance. SFAS No. 150 is effective for all financial instruments
entered into or modified after May 31, 2003. Otherwise, it is effective on July
1, 2003 except for mandatory redeemable non controlling (minority) interest
which, on October 29, 2003, the FASB decided to defer indefinitely. The adoption
of SFAS No. 150 did not materially impact the Company's financial position or
results of operations
 
 In
December 2003, the SEC issued Staff Accounting Bulletin ("SAB") No. 104,
"Revenue Recognition," which supercedes SAB No. 101, "Revenue Recognition in
Financial Statements." SAB No. 104 rescinds accounting guidance in SAB No. 101
related to multiple element arrangements, which was previously superceded by
EITF 00-21 (see above). The adoption of SAB No. 104 did not have a material
impact on the Company's results of operations or financial
position.
 
 Restatement
of financial statements
 
 The
Company adopted recapitalization accounting for the reverse merger and restated
the financial statements and eliminated the recognition and immediate write off
of $275,000 of goodwill. The additional paid in capital was reduced by $275,000
for the liabilities incurred to acquire Momentum Holding
Corporation.
 
 Although
the restatement did not change the total stockholders' equity. The net loss,
accumulated deficit, and additional paid in capital were each reduced by
$275,000. The net loss per share before and after restatement are as
follows:
 
 
 From
      Inception toDecember
      31,2003Net
      loss per shareAfter
      Restatement
    
    $
    0.03Before
      restatement
    
    
    0.04
 
 
 
  
  CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 
 
 NOTE 3.
NOTES PAYABLE
 
 Notes
Payable Other
 
 Cipher in
consideration for the purchase of the shares of Momentum paid the sellers
$150,000 and issued two promissory notes in the amounts of $60,000 and $65,000.
The $60,000 and $65,000 notes bear 9% interest and are payable within 30 and 120
days, respectively. The notes are secured by the personal guarantees of Mr.
Patrick Rooney a principal shareholder and officer of the Company.
 
 As of
March 31, 2004 we have not paid the principal or interest of the notes. The note
holders have agreed to extend the notes. Note 9. Subsequent Events
 
 Notes
Payable Shareholder
 
 1. Our
principal shareholder loaned $150,000 to Cipher to provide for a part of the
acquisition cost of Momentum. The unsecured note is a demand note and is payable
no later than December 31, 2004. The interest on the note is the prime
rate.
 
 2. The
principal shareholder has advanced funds to finance our working capital
requirements. The advances are made against a demand note that is payable by
December 31, 2004. Interest on the amounts advanced is computed at prime rate.
The note may be converted to common stock at a rate of $0.01 per
share.
 
 ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
 Results
of Operations
 
 We have
been at a development stage since the inception of our operations on September
13, 2002 and have had no substantial revenues to date.
 
 Total
operating expenses for 1Q04, 1Q03 and from inception were $16,888, $109,087 and
$505,057, respectively. Of the operating expenses professional fees were
$11,800(70%), $65,590(60%) and $416,295(82%), respectively. Marketing, general
and administrative expenses were $5,088(30%), $43,497(40%) and $89,262(18%),
respectively. There were no research and development costs from inception to
March 31, 2004.
 
 We
restated our financial statements and reclassified the amount of $275,000,
previously recorded and written off as goodwill from the acquisition of the
shares of Momentum, as a reduction in the additional paid in
capital.
 
 Based on
the limited operating background of the company and uncertainty of future cash
flows from operations, we determined that the goodwill resulting from the
acquisition of Momentum Holding Corp. was impaired and we wrote it off. The
write off contributed $275,000 or 35% of our total loss of $21,459, from
inception. The total loss from inception to March 31, 2004 was
$602,176.
 
 Financial
Condition
 
 The
Company had no substantial revenues or operating cash inflows since inception of
operations. The net cash used by operations were $20,040, 109,087, and 267,252,
1Q04, 1Q03 and from inception on September 13, 2002, respectively. The Company
also expended $150,000 for the acquisition of Momentum Holding
Corp.
 
  
  CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION(Continued)
 
 The
principal source of cash inflows since inception was notes payable to a
Shareholder of $20,123.
 
 On March
31, 2004, we had net working capital deficiency and total stockholders' deficit
of $330,009.
 
 Effects
of Inflation
 
 The
Registrant believes that the relatively moderate rate of inflation over the past
few years has not had a significant impact on the Registrant's financial
position or operating results. Future Plans Our Digital Rights Management
technology allows publishers and distributors to mass distribute, full-feature
video and/or software in a secure format. Secured digital content is delivered
in the form of CD/DVD's, PC disk drives, and Internet download. Once received,
the consumer has the ability to view a trailer of the video or demo the software
before the decision to purchase and unlock the full product for immediate use on
PC. The purchase and delivery transactions are immediate and facilitated though
our transaction processing service. Our technology protects publisher's content
from copyright infringement. This delivery of secure content enables publishers
and distributors to gain exposure through mass distribution, create and
immediately fulfill demand for digital product. We develop unique and cost
effective distribution campaigns for software and video content publishers. We
enable publisher's exposure and delivery to the end consumer on a massive scale.
Utilizing our technology and services, publishers produce multimedia CD's that
introduce, promote and sell digital content for immediate use on customer's PC.
Publishers can also offer an additional up sell opportunity to customers by
offering an additional feature on the unused portion of their own DVD's that can
be purchased and immediately used by the consumer on their PC. Our distribution
solution focus is the development of campaigns that assist our clients with
greater reach and increased sales of products. Our services benefit the
following; major and independent film studios, software publishers, monthly
magazine and catalog companies, retail stores, Internet retailers, computer
manufacturers, Internet Service Providers and digital content direct marketing
companies. These companies represent substantial distribution opportunities of
CD's, DVD's, PC hard drives and Internet downloads per year.
 
 Forward
Looking Statements
 
 This
report includes "Forward-Looking Statements" within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. Any statements that
express or involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as "expects" or
"does not expect", "is expected", "anticipates" or "does not anticipate",
"plans", "estimates" or "intends", or stating that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be
achieved) are not statements of historical fact and may be considered "forward
looking statements". Such statements are included, among other places in this
registration statement, in the sections entitled "Management's Discussion and
Analysis or Plan of Operation," "Description of Business" and "Description of
Property." Forward-looking statements are based on expectations, estimates and
projections at the time the statements are made that involve a number of risks
and uncertainties which could cause actual results or events to differ
materially from those presently anticipated. Although we believe that the
expectations reflected in such forward-looking statements are reasonable, the
Registrant can give no assurance that such expectations will prove to have been
correct.
 
  
  CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 
 ITEM 3.
CONTROLS AND PROCEDURES
 
 (a)
Evaluation of disclosure controls and procedures
 
 For
purposes of rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934
("Exchange Act") the term "disclosure controls and procedures" refers to the
controls and other procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files
under the Exchange Act is recorded, processed, summarized and reported within
required time periods. Within 90 days prior to the date of this report
("Evaluation Date"), Cipher carried out an evaluation under the supervision and
with the participation of Cipher's Chief Executive Officer and its Chief
Financial Officer of the effectiveness of the design and operation of its
disclosure controls and procedures. Based on that evaluation, Chief Executive
Officer and Chief Financial Officer have concluded that, as of the Evaluation
Date, such controls and procedures were effective at ensuring that required
information will be disclosed on a timely basis in our periodic reports filed
under and pursuant to the Exchange Act.
 
 (b)
Changes in internal controls
 
 There
were no significant changes to our internal controls or in other factors that
could significantly affect our internal controls subsequent to the Evaluation
Date.
 
 
 PART II.
OTHER INFORMATION
 
 ITEM 1.
Legal Proceedings
 
 None
 
 ITEM 2.
Changes in Securities
 
 There
have been no changes in the instruments defining the rights or rights evidenced
by any class of registered securities.
 
 There
have been no dividends declared.
 
 ITEM 3.
Defaults Upon Senior Securities
 
 None
 
 ITEM 4.
Submission of Matters to Vote of Security Holders
 
 None
 
 ITEM 5.
Other Information
 
 None
 
  
  CIPHER
HOLDING CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 
 
 ITEM 6.
Exhibits and Reports on Form 8-K
 
 (a)
Exhibits
 
 (a)
Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
 (b)
Certification pursuant to Section 906 of Sarbanes-Oxley Act of
2002.
 
 (b)
Reports on Form 8-K
 
 1. There
were no reports filed on a Form 8-K for the first quarter ended March 31,
2004.
 
 
 SIGNATURES
 
 Pursuant
to the requirements of the 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, in the City of New York, State of
New York on October 19, 2005.
 
 Cipher
Holding Corporation
 
 
 By: /s/
Patrick Rooney
 
 Patrick
Rooney
 Chairman
of the Board President