SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
  FORM 10-K/A
 (Amendment No. 2)




(Mark One)


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




For the fiscal year ended September 30, 2013




OR




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




Commission file number: 000-52883




CREATIVE LEARNING CORPORATION


(Exact name of registrant as specified in its charter)




Delaware

20-445603(State or other jurisdiction ofincorporation or organization)

(I.R.S Employer Identification No.)701 Market, Suite 113, St. Augustine, FL

32095(Address of principal executive offices)

(Zip Code)




(904) 824-3133




Securities registered pursuant to Section 12(b) of the Act: None




Securities registered pursuant to Section 12(g) of the Act: Common Stock




Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o




Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o




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




Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations 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 filing). Yes x No o




Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x




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




Large accelerated filer
o
Accelerated filer
oNon-accelerated filer
o
Smaller reporting company
x(Do not check if a smaller reporting company)




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




The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of the registrant’s common stock on March 31, 2013, as quoted on the OTC Bulletin Board, was approximately $6,421,000.




As of January 9, 2014, the Registrant had 11,809,409 issued and outstanding shares of common stock.




Documents Incorporated by Reference: None







Explanatory Note
  This Amendment No. 2 to the Creative Learning Corporation Annual Report on Form 10-K for the year ended September 30, 2013 reflects changes made to section 9A of the Report.
  Except as described above, this amendment does not revise or restate the financial statements or other disclosures included in the 10-K report.  This amendment does not reflect events occurring after the filing of the original Form 10-K or modify or update disclosures related to subsequent events.  Accordingly, this amendment should be read in conjunction with our filings with the SEC subsequent to the filing of the 10-K report.
  1




PART I




Cautionary Statement Concerning Forward-Looking Statements




This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management and information currently available to management. The use of words such as “believes”, “expects”, “anticipates”, “intends”, “plans”, “estimates”, “should”, “likely” or similar expressions, indicates a forward-looking statement.




The identification in this report of factors that may affect the Company’s future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.




ITEM 1. BUSINESS




BUSINESS




The Company was formed in March 2006 under the name B2 Health, Inc. to design, manufacture and sell chiropractic tables and beds. The Company generated only limited revenue and essentially abandoned its business plan in March 2008.




On July 2, 2010 the Company acquired BFK Franchise Company, LLC (“BFK”), a Nevada limited liability company formed in May 2009, under a Stock Exchange Agreement with the members of BFK for 9,000,000 shares of the Company’s common stock.




On July 7, 2010, shareholders holding a majority of the Company’s outstanding common stock approved an amendment to the Company’s Articles of Incorporation changing the name of the Company from B2 Health, Inc. to Creative Learning Corporation (“CLC”).




At the time BFK was acquired, BFK had a 50% ownership in a company called BFK Development Company LLC (“BFKD”), and on October 3, 2010 BFK acquired the remaining 50% interest in BFKD. Immediately following the acquisition of the non-controlling interest, BFKF transferred its 100% interest in BFKD to the Company.




BFKD was initially used to develop and test the brick and mortar model of the BRICKS 4 KIDS®concept as a Corporate Creativity Center.




On September 14, 2012, the Company also formed CI Franchise Company LLC (“CI”) as a wholly owned subsidiary for purpose of operating a second franchise concept known as Challenge Island®,a service business within a defined exclusive territory, providing unique challenge-based programs designed to foster critical and creative thinking skills, problem solving methodology, and core STEM (Science, Technology, Engineering, Mathematics) principles in children ages 3-13+. CI began selling franchises during the 2013 fiscal year.




On January 8, 2013 the Company also formed Sew Fun Franchise Company LLC (“SF”) as a wholly owned subsidiary for the purpose of operating a third franchise concept known as Sew Fun. Sew Fun is a brick and mortar business featuring stores/studios located in strip malls and offering after-school classes, camps and birthday parties for children ages 8-13+, as well as adult classes, in fashion design.




Unless otherwise indicated, all references to the Company include the operations of BFK, BFKD, CI and SF.




2
 
  BFK Operations
  BFK, which conducts business under the trade name, BRICKS 4 KIDS®, offers programs designed to teach principles of engineering, architecture and physics to children ages 3-12+ using LEGO® bricks. BFK provides classes (both in school and after school), special events programs and day camps that are designed to enhance and enrich the traditional school curriculum, trigger young children’s lively imaginations and build self-confidence. BFK’s programs foster creativity and provide a unique atmosphere for students to develop problem solving and critical thinking skills by designing and building machines, catapults, pyramids, race cars, buildings and numerous other systems and devices using LEGO® bricks.
  Current Programs Offered by BFK
  In-school field trips. One-hour classes during school hours. Classes are correlated to the science for a particular grade level. Teacher guides, student worksheets, and step-by-step instruction are provided. Recommended fees: $5-$8 per student.
  After-school classes. One hour, one day a week class held after school. Recommended fees: $10-$15 per class per child, minimum commitment is usually 4 classes.
  Pre-school classes. Classes can be held in pre-schools for children of pre-school ages. Recommended fees; $5-$7 per child.
  Classes for home-schooled children. Classes can be held in the home of one of the parents of a home-schooled child. Recommended fees: $8-$10 per child.
  Camps. Normally 3 hours per day for 5 days. Camps can take place at schools or at other child-related venues. Children use LEGO® bricks to explore various science and math concepts while working in an open, friendly environment. The material covered each session varies depending on students’ ages, experience, and skill level. A new project is built each week. Architectural concepts are taught while assembling buildings, castles and other structures. Instructional content includes concepts of friction, gravity and torque, scale, gears, axles and beams. The curriculum can include the construction of a scaled model of the children’s school or the school mascot. The children work and play with programmable LEGO® bricks along with electric motors, sensors, system bricks, and LEGO® Technic pieces (i.e. gears, axles, and beams). Recommended fees: $125-$150/child. Children go home with a small LEGO® project (cost about $5/child)
  Birthday Parties. In the home of the birthday child. Recommended fees: $150 per party up to 10 children. If over 10 children the fee is $10/child.
  Special Events. Activities with LEGO® bricks can be held in various locations including church centers, lodges, child-related venues, private schools, pre-schools, etc. Program can include parents, grandparents and all children in the family. Recommended fees: $5 per family.
  3
  BFK Operating Units
  BFK franchises are primarily mobile models, with activities scheduled in the schools or other venues, but also can be operated through a store-front location called a Creativity Center.
  As of January 9, 2014 BFK had 440 franchises operating in 40 states, the District of Columbia, and 20 foreign countries, with two Corporate owned franchise territories and one Corporate owned Creativity Center.
  BFK Franchise Program
  BFK sells franchises both domestically and internationally.  International sales can be a single franchise or a Master Franchise, where the Master Franchisee operates a franchise, but is also able to develop, sell and manage sub-franchises.
  A franchisee pays a one-time, non-refundable franchise fee upon the execution of the franchise agreement. Domestically, there can be variations on the franchise fees depending on the size or territories being purchased, and other factors of the territory. The typical sized, domestic, single territory franchise fee is $25,900.  If the franchisee buys more than one franchise at the time the initial franchise is purchased, the fee for the other territory is approximately $10,000 to $12,000.
  International franchise fees vary and are set relative to the potential of the franchised territories.  During the year ended September 30, 3013, BFK sold three Master Franchises at an average price of $81,667.  In the case of a Master Franchise, BFK receives a percentage of the franchise fee paid to the Master Franchisee by any sub-franchisee.
  Domestic and international franchisees are required to pay BFK a royalty fee of 7%.  BFK also receives a percentage of royalty payments received by Master Franchisees from their sub-franchisees.
  BFK administers a Marketing Fund for domestic and Canadian franchisees with the purpose of building national brand awareness.  The Marketing Fund expenditures are funded with BFK collecting a 2 % marketing fee from domestic and Canadian franchisees.  These marketing fees and expenses are accounted for separately and are not reported as revenue or expenses for BFK.
  The franchisee is granted an exclusive territory and a license to use the “Bricks 4 Kidz®” name and trademarks in the franchised territory. The franchisee is required to conform to certain standards of business practices. Each franchise is run as an independent business and, as such, is responsible for its operation, including employment of adequate staff. A franchisee can also purchase additional territories.
  Franchisees are permitted to assign their franchise provided that BFK receives advance notice of the proposed assignment, the transferee assumes the obligations under the franchise agreement, the transferee meets certain conditions and qualifications, and BFK receives a transfer fee based on a percentage of the current Franchise Fee rate for a single territory.
  The term of the franchise is for ten years. BFK has the right to terminate any franchisee in the event of the franchisee’s bankruptcy, a default under the franchise agreement, or other events. The franchisee has the right to renew the franchise for an additional ten years if, at the time of renewal, the franchisee is in good standing and pays a renewal fee in the amount of $5,000.
  In addition to the franchise fee, a franchisee is advised that an additional investment of between $8,000 and $23,000 for the mobile model will be required for such things as equipment and supplies, insurance, marketing and working capital during the start-up phase of the business.
  BFK Competition
  To the best of BFK’s knowledge, although BFK pioneered the Lego modeling based curriculum for after school programs, there are now at least two other companies franchising a model similar to that of Bricks 4 Kidz®, Engineering 4 Kids and Snapology. However, Play-Well Teknologies, with offices in San Anselmo and Pleasanton, California, offers after-school classes, camps and birthday parties using LEGO® bricks. Vision Education and Media offers after school classes using LEGO®bricks in its office in New York City, NY. In addition, several other small businesses around the country offer after-school classes and vacation camps using LEGO® bricks. These classes and camps are typically held in elementary schools, middle schools and community colleges.
  CI Operations
  CI, which conducts business under the trade name, Challenge Island®, provides unique challenge-based programs designed to foster critical and creative thinking skills, problem solving methodology, and core STEM (Science, Technology, Engineering, Mathematics) principles in children ages 3-13+.
  4
  Current Programs Offered by CI
  CI has the same event types, possible venues and programs as BFK above.
  CI Operating Units
  CI franchises are mobile models, with activities which can be offered in a variety of venues and event types, including after-school programs. However, and in contrast to BFK, the CI franchise program does not have a store-front Center model available.
  CI began selling franchises in the 2013 fiscal year and as of January 9, 2014 CI had 15 franchises operating in 8 states.
  CI Franchise Program
  CI sells franchises both domestically and internationally.  International sales can be individual, international franchises, or where warranted, they could be sold as Master License agreement where the Master Licensee can operate a franchise, but also develops, sells and manages sub-franchisees.
    Domestic and international franchisees are required to pay CI a royalty fee of 7%.  CI also could receive a percentage of royalty payments received by Master licensees from their sub-franchisees.
  CI administers a Marketing Fund for domestic and Canadian franchisees with the purpose of building national brand awareness.  The Marketing Fund expenditures are funded with CI collecting a 2 % marketing fee from domestic and Canadian franchisees.  These marketing fees and expenses are accounted for separately and are not reported as revenue or expenses for CI.
 The franchisee is granted an exclusive territory and a license to use the “Challenge Island®” name and trademarks in the franchised territory. The franchisee is required to conform to certain standards of business practices. Each franchise is run as an independent business and, as such, is responsible for its operation, including employment of adequate staff. A franchisee can also purchase additional territories.
  Franchisees are permitted to assign their franchise provided that CI receives advance notice of the proposed assignment, the transferee assumes the obligations under the franchise agreement, the transferee meets certain conditions and qualifications, and CI receives a transfer fee based on a percentage of the current Franchise Fee rate for a single territory.
  The term of the franchise is for ten years. CI has the right to terminate any franchisee in the event of the franchisee’s bankruptcy, a default under the franchise agreement, or other events. The franchisee has the right to renew the franchise for an additional ten years if, at the time of renewal, the franchisee is in good standing and pays a renewal fee in the amount of $5,000.
  In addition to the franchise fee, a franchisee is advised that an additional investment of between $8,000 and $23,000 will be required for such things as equipment and supplies, insurance, marketing and working capital during the start-up phase of the business.
  CI Competition
  To the best of CI’s knowledge, there are no companies franchising a model similar to that of Challenge Island®. However, in the after-school program market, there are many different concepts that vie for this time slot.
  5
  SF Operations
  SF, known as Sew Fun, is just completing its development stage and will begin state required registrations. Franchises sold under this third franchise concept will operate brick and mortar businesses featuring stores/studios located in strip malls and offering after-school classes, camps and birthday parties for children ages 8-13+, as well as adult classes, in fashion design. As of January 9, 2014, SF has not offered these franchises for sale and has not sold any franchises.
  Government Regulation
  The offer and sale of franchises, and the operations of franchises in some respects, are regulated by the Federal Trade Commission and some state governments.
  In 1979 the Federal Trade Commission promulgated what became known as the FTC Franchise Rule. The FTC Franchise Rule requires detailed disclosure of a wide variety of information as a condition to selling a franchise, but the rule does not regulate the franchise relationship or require any filing or registration on the part of a franchisor. The FTC Franchise Rule requires that the franchisor provide a disclosure statement or prospectus to each prospective buyer prior to execution of a contract or payment of money relating to the franchise relationship.
  However, the FTC Franchise Rule is narrow and does not preempt state law, which often is stricter than the FTC Franchise Rule. As such, numerous states require franchise disclosure documents to be registered with the state authorities, and numerous states regulate the franchise relationship itself.
  California, Florida, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin all have franchise statues and regulations which typically require a franchisor to file or register its offering with the state government and to provide all prospective franchisees with the disclosure document.
  In these so called “registration states”, state regulatory agencies review the franchisor’s registration application, the franchise disclosure document, the proposed franchise agreement and any other agreements franchisees must sign. State regulators also review the financial condition of the franchisor, the background of the franchisor’s executives and sales agents and provisions regarding the rights and remedies of the franchisor and the franchise as provided in the franchise agreement. These state agencies can deny registration if they believe that the sale of the franchise would be deceptive in any way.
  Numerous other states have laws regulating various facets of the relationship between the franchisee and franchisor. These “relationship laws” typically regulate the franchisor’s ability to terminate or refuse renewal of a franchise, contain provisions requiring that a franchisor have “good cause” before terminating or refusing to renew a franchise and may also address other issues such as the right of a deceased franchisee’s heirs to continue the franchise after the original investor’s death. Some laws require a franchisor to buy back excess inventory from the franchisee in the even of termination. Some state laws make it illegal for a franchisor to demand a general release from a franchisee as a condition of renewing or entering into a new agreement.
  Under the FTC Franchise Rule, the FTC has the authority to seek civil penalties against a franchisor for violations of the FTC Franchise Rule. Each of the “registration states” has similar authority to seek penalties for violations of their requirements. Violations may include the offer or sale of an unregistered franchise, failing to timely provide the disclosure document to a prospective franchisee or making misrepresentations in the franchise disclosure documents. Additionally, officers of the franchisor may have personal liability if they had knowledge of or participated in the violations.
  Individuals cannot sue a franchisor for a violation of the FTC Franchise Rule. However, most of the pre-sale disclosure states grant a private right of action for violation of the state statue and have remedies that typically include damages, rescission of the franchise agreement and attorneys’ fees.
  6
  General
  The Company’s offices, consisting of approximately 3,500 square feet, are located in an office/condo complex at 701 Market, Suite 113, St. Augustine, FL 32095. The Company owns three of the office condominiums and rents a fourth unit.
  As of December 31, 2013 the Company employed fourteen persons on a full time basis.
  The Company’s website is www.bricks4kidz.com.
  LEGO® is a registered trademark of the LEGO® Group of companies which do not sponsor, authorize or endorse BFK’s programs or its website.
  ITEM 1A. RISK FACTORS
  Not applicable.
  ITEM 1B. UNRESOLVED STAFF COMMENTS
  Not applicable.
  ITEM 2. PROPERTIES
  See Item 1 of this report.
  ITEM 3. LEGAL PROCEEDINGS
  None.
  ITEM 4. MINE SAFETY DISCLOSURE
  Not Applicable.
  7
  ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
  On November 7, 2008, the Company’s common stock began trading on the OTC Bulletin Board under the symbol “BTWO.” On February 27, 2012 the Company’s trading symbol was changed to “CLCN.” Prior to that date, there was no established trading market for the Company’s common stock.
  Shown below is the range of high and low quotations for the Company’s common stock for the periods indicated as reported by the OTC Bulletin Board. The market quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions and may not necessarily represent actual transactions.
  Quarter Ending

High


Low12/31/10

$
1.50


$
1.0503/31/11

$
1.59


$
1.4506/30/11

$
1.65


$
0.9509/30/11

$
1.10


$
0.5112/31/11

$
0.65


$
0.5003/31/12

$
0.60


$
0.4006/30/12

$
0.80


$
0.5509/30/12

$
0.75


$
0.6312/31/12

$
0.75


$
0.5003/31/13

$
0.85


$
0.5006/30/13

$
0.65


$
0.5509/30/13

$
1.95


$
0.60
  As of January 9, 2014, the Company had 11,809,409 outstanding shares of common stock and 209 shareholders of record.
  Holders of common stock are entitled to receive dividends as may be declared by the Board of Directors. The Company’s Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend. No dividends have ever been declared and it is not anticipated that dividends will ever be paid.
  The Company’s Articles of Incorporation authorize its Board of Directors to issue up to 10,000,000 shares of preferred stock. The provisions in the Articles of Incorporation relating to the preferred stock allow the Company’s directors to issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of the Company’s common stock. The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by the Company’s management.
  See Note 9 to the financial statements included with this report for information concerning shares of the Company’s common stock which have been issued or sold during the three years ended September 30, 2013.
  8
  The Company has relied upon the exemption provided by Section 4(2) of the Securities Act of 1933 with respect to the sale or issuance of the shares of its common stock. The persons who acquired these securities were sophisticated investors and were provided full information regarding the Company’s business and operations. There was no general solicitation in connection with the offer or sale of these securities. The persons who acquired these securities acquired them for their own accounts. The certificates representing these securities bear a restricted legend providing that they cannot be sold unless pursuant to an effective registration statement or an exemption form registration.
  ITEM 6. SELECTED FINANCIAL DATA
  Not applicable.
  ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion and analysis should be read in conjunction with the audited financial statements and notes thereto contained in this report.
  Results of Operations
  The Company sold 190 domestic and international franchises in the fiscal year 2013 compared to 137 in 2012.  The average fee the Company received for a franchise in 2013 was approximately $19,500 compared to approximately $20,300 in 2012.  The slight decline in the average fee was due to the fact that during 2013 the Company sold 72 multiple BFK franchises at a discount to the typical franchise fee of $25,900 and sold 15 CI franchises. The slight decline was offset by the sale of three Master Franchises at an average price of $81,667.
  Although, the typical BFK franchise fee is $25,900  if a franchisee buys more than one franchise at the time the initial franchise is purchased, the fee for the other territory is approximately $10,000 to $12,000.
  The fee for a CI franchise is $17,500 compared to a fee of approximately $25,900 for a BFK franchise.  The Company expects that its franchise fee revenue will continue to increase during the fiscal year ending September 30, 2014 as additional franchises are sold.
  Royalty fees increased by $516,040 in the fiscal year 2013 from 2012, with an increase of $402,189 collected from franchisees that have been in the system one year or longer, and $113,851 from new franchisees that entered the system this year.  The Company expects Royalty fees will continue to grow with the increase in the number of franchisees and the increase in the amount of time franchisees have been in the system.
  Material changes of other items in the Company’s Statement of Operations for the year ended September 30, 2013 as compared to the same period in the prior year are discussed below.
  Item

Increase (I) or Decrease (D)

ReasonFranchise consulting and commissions

I

Increased sales of franchisesFranchise training and expenses

I

Increase in size of training classesSalaries and payroll taxes

I

Increase in staff to support the growth of the businessAdvertising

I

Increased expenditures to grow the businessProfessional fees

D

Eliminated temporary SEC accounting help and reduction in Corporate legal feesStock-based compensation

I

Issuance of stock for stock options, consulting expense and correction for stock issuances valuation (see notes to Financials)Other general and administrative expenses

I

Overhead and administrative increases to support the growth of the businessOther income (expense)

I

Forgiveness of debt and corrections for stock issuances valuation (see notes to Financials)
  The Company does not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on the Company’s revenues or expenses.
  Liquidity and Capital Resources
  Sources and (uses) of funds for the years ended September 30, 2013 and 2012 are shown below:
  Year Ended September 30,2013


2012Cash provided by operations

$
1,115,952


$
621,885Purchase of property and equipment


(25,991
)


(144,429
)Purchase of intangible assets (CI and SF conceptual rights and trademarks, repurchase of territories)


(56,800
)


(7,000
)Loans (repayment of loans)


(70,000
)


10,000
  9
  The financial statements which are included as part of this report, and in particular the Statement of Stockholders Equity, reflect the issuance of shares when certificates representing the shares are issued by the Company’s transfer agent. In contrast, in the text of this report shares are considered to be issued and outstanding when the Company’s board of directors has authorized the issuance of the shares and the consideration for the shares has been received.
  As of January 9, 2014 the Company’s operating cash requirements were approximately $315,000 per month.
  The Company anticipates that its capital requirements for the twelve-month period ending December 31, 2014 will be as follows and will be funded from operations:
  General and administrative expenses

$
1,300,000Marketing

$
450,000Business development

$
2,065,000
  As of January 9, 2014 the Company’s liabilities consisted primarily of trade payables and the franchisee funded Marketing Fund. The Company collects 2% of the franchisee gross revenues for a marketing fund, managed by the Company, to allocate towards national branding of the Company’s concepts to benefit the franchisees. The marketing fund amounts are accounted for as a liability on the balance sheet and the actual collections are deposited into a marketing fund bank account. Expenses pertaining to marketing activities are paid from the marketing fund and reduce the liability account. The amount of the Marketing Fund liability is equal to the amount of cash in the Marketing Fund bank account.
  Contractual Obligations
  The Company owns its corporate headquarters, but leases an additional office suite. The following table summarizes the Company’s contractual lease obligations as of September 30, 2013:
 2014


2015


2016


2017


TotalOffice lease

$
10,800


$
10,800


$
10,800


$
--


$
32,400Notes payables

$
3,560


$
4,640


$
657


$
--


$
8,857
  Off-Balance Sheet Arrangements
  The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity or capital resources.
  Outlook
  The Company saw another year of significant growth in the sales of franchises in fiscal year 2013, expanding from 210 to 395 franchises sold with its two brands in operation, resulting in increased revenues from franchise fees, including international growth and exposure. In addition, with franchisees being in the system longer, there were significant increases in royalty fees.
  As a result of this growth, the Company experienced a significant increase in liquidity and expects all of these trends to continue into the next fiscal year.
  Other than as disclosed above, the Company does not know of any:
  ·
trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, any material increase or decrease in liquidity; or  ·
significant changes in expected sources and uses of cash.
  10
  Critical Accounting Policies and Recent Accounting Pronouncements
  See Note 1 to the Company’s financial statements included as part of this report for a discussion of the Company’s critical accounting policies and recent accounting pronouncements, the adoption of which may have a material effect on the Company’s financial statements.
  ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
 Not applicable.
  ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  See the financial statements and accompanying notes included as part of this report.
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  None.
 ITEM 9A. CONTROLS AND PROCEDURES
  An evaluation was carried out under the supervision and with the participation of management, including the Company’s Principal Financial Officer and Principal Executive Officer, of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report on Form 10-K. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to management, including the Company’s Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, management concluded that, as of September 30, 2013, the Company’s disclosure controls and procedures were not  effective since the Company’s internal control over financial reporting was not effective as of September 30, 2013.
  Management’s Report on Internal Control Over Financial Reporting
  Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of the Company’s principal executive officer and principal financial officer and implemented by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles.
  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
  Brian Pappas, the Company’s Principal Executive and Financial Officer, evaluated the effectiveness of the Company's internal control over financial reporting as of September 30, 2013 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO Framework. Management’s assessment included an evaluation of the design of the Company’s internal control over financial reporting and testing of the operational effectiveness of those controls.
 Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of September 30, 2013. The Company's revenue recognition policy was not in accordance with Generally Accepted Accounting Principles, although management has determined that the recognized revenue during prior periods was materially correct. The Company did not maintain adequate supporting documentation for certain operational expenditures, and the Company did not properly record the amount or value of certain common shares that were issued and outstanding.
  There was no change in internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Subsequent to the balance sheet date reported on in this 10-K, management has determined that all of the above weaknesses have been corrected.
  11
  ITEM 9B. OTHER INFORMATION
  None.
  ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  The Company’s officers and directors are listed below. Directors are generally elected at the annual shareholders' meeting and hold office until the next annual shareholders' meeting or until their successors are elected and qualified. Executive officers are elected by Directors and serve at their discretion.
  Name

Age

PositionBrian Pappas

62

President, Principal Financial Officer, Principal Accounting Officer, Secretary and DirectorMichelle Cote

45

Founder and a DirectorDan O’Donnell

45

Vice President of Operations and a Director
  Brian Pappashas been a Managing Member of BFK since its inception in May 2009 and became the Chief Executive Officer and a director of the parent company, Creative Learning Corporation when it acquired BFK in 2010 . Mr. Pappas graduated from Colgate University in 1973 with a Bachelor of Arts degree in mathematics and music. Between 1981 and 1998 Brian Pappas owned and operated (with his brother Jeff), Together Development Corporation, which sold franchises under the trade name “Together Dating Service.” Mr. Pappas and his brother grew Together Development Corporation from 12 franchises to over 175 franchises which were located throughout the US, Canada, England, Netherlands and Germany. After Mr. Pappas sold Together Development Corporation in 1998 he opened Skater Paradise, Inc, which operated a chain of indoor skate parks in Massachusetts. After selling Skater Paradise, Inc in 2004 Mr. Pappas, until April, 2009, provided consulting services, and in some instances acted as the franchise development director for Zen Massage Center, WeekDay Gourmet, Shape up Sisters, Digicom Specialties, The Online Outpost, and Auction-It-Today. Between 1981 and 1998 Mr. Pappas also co-owned and operated two advertising agencies, Cushing & Pappas and The Thought Process. In the spring of 2009, Mr. Pappas met with Michelle Cote, the founder of Bricks 4 Kidz®, and together they formed BFK in May 2009. Under Brian’s direction and leadership, the Company has grown to 440 franchises operating in the US and internationally, and is expanding with the acquisition of two additional concepts and brands, Challenge Island® and Sew Fun®.
  Dan O’Donnellhas been an officer and Vice President of Operations of CLC since April 15, 2010. Between October 2009 and his association with CLC, Mr. O’Donnell developed the Franchise Marketing Tool (FMT) for BFK, which is an essential component of the Bricks 4 Kidz® franchise model. The FMT has expanded with versions for each international franchise sold, as well as tailored to the two additional brands, Challenge Island® and Sew Fun®. Mr. O’Donnell attended the University of Pittsburgh at Titusville between August 1987 and May 1988 and Richard Bland College between August 1988 and May 1990. He began his career in 1994 when he developed and launched a computer education program for children called Computer Kids Unlimited in Pittsburgh. Between May 2000 and October 2009 Mr. O’Donnell was the Director of Franchise Operations for The Whole Child Learning Company, a franchisor of children’s educational services, where he was responsible for the oversight of all daily operational activities, franchisee training and ongoing franchisee support. In addition to him bringing the FMT to CLC, his success and experience in building, marketing and operating his own after school, education based program, as well as turning it into, and operating as a franchisor has been one of the foundations that have allowed CLC to grow this quickly.
  Michelle Cotefounded Bricks 4 Kidz® in June, 2008 after developing curriculum and running after-school classes, camps and birthday parties using LEGO® since early 2008. She teamed with Brian Pappas in May of 2009 and co-founded BFK. She became a director of CLC when it acquired BFK in July 2010. In her capacity as “founder”, Ms. Cote advises the BFK operations in the areas of creative development and new programs. Prior to that time Ms. Cote worked for an architectural firm in St. Augustine, FL. Ms. Cote received her B.A. degree from Flagler College in St. Augustine in 1991 with a major in Spanish/Latin American studies and graduated Cum Laude.
  12
  Brian Pappas, Michele Cote and Dan O’Donnell’s longstanding relationship with the Company benefits the Company and its shareholders and qualifies them to be directors.
  The Company does not have a compensation committee. The Company’s directors serve as its audit committee.
  The Company’s directors are not independent directors as that term is defined in section 803 of the listing standards of the NYSE AMEX. No director is a “financial expert” as that term is defined in the regulations of the Securities and Exchange Commission. The Company does not believe a financial expert is necessary since its revenues for the year ended September 30, 2013 were less than $5,000,000.
  The Company has not adopted a Code of Ethics applicable to its principal executive, financial, and accounting officers and persons performing similar functions. The Company does not believe a Code of Ethics is needed at this time since the Company has only three officers.
  ITEM 11. EXECUTIVE COMPENSATION
  The following table shows the compensation paid or accrued to the Company’s executive officers during the years ended September 30, 2013 and 2012.
  Stock


Option


All OtherName and

PrincipalPosition

Fiscal

Year

Salary

(1)


Bonus

(2)


Awards

(3)


Awards

(4)


Compensation

(5)


TotalBrian Pappas,

2013

$
60,000



--



--



--


$
248,127


$
308,127Principal Executive,

2012

$
60,000



--



--



--


$
120,892


$
240,892Financial andAccounting OfficerMichelle Cote,

2013


--



--



--



--


$
137,000


$
137,000Founder

2012


--



--



--



--


$
158,720


$
158,720Dan O’Donnell,

2013

$
60,000



--



--


$
3,306


$
108,000


$
171,306Vice President of

2012

$
56,000



--



--



--


$
78,396


$
134,396Operations
  (1)
The dollar value of base salary (cash and non-cash) earned.
 (2)
The dollar value of bonus (cash and non-cash) earned.
 (3)
The fair value of stock issued for services computed in accordance with ASC 718 on the date of grant.
 (4)
The fair value of options granted computed in accordance with ASC 718 on the date of grant.
 (5)
All other compensation received that we could not properly report in any other column of the table, including consulting and commissions.
  13
  Stock Options
  During the year ended September 30, 2013, the Company granted options to the persons named below.
 Employee Stock Options GrantedExerciseGrant

Options


Price Per

ExpirationName

Date

Granted (#)


Share

DateDan O’Donnell

July 1, 2013


25,000


$
0.60

December 31, 2015Richard Nickelson

July 1, 2013


25,000


$
0.60

December 31, 2015
 The terms of outstanding options granted held by our officers directors are shown below:
  Name

Option Price


No. of Options

Expiration DateDan O’Donnell. VP of Operations

$
0.60



25,000

December 31, 2015
  The following table shows the weighted average exercise price of the Company’s outstanding options as of December 31, 2013:
  Plan Category

Number of Securities to be Issued Upon Exercise of Outstanding Options,

Warrants and Rights


Weighted-Average

Exercise Price of

Outstanding Options,

Warrants and Rights


Number of Securities

Remaining Available for

Future Issuance Under

Equity Compensation

Plans (Excluding Securities Reflected in Column (a))(a)


(b)


(c)Stock Options


50,000


$
0.60



--
  Long-Term Incentive Plans. The Company does not provide its officers or employees with pension, stock appreciation rights, long-term incentive or other plans.
  Employee Pension, Profit Sharing or other Retirement Plans. The Company does not have a defined benefit, pension plan, profit sharing or other retirement plan, although it may adopt one or more of such plans in the future.
  Compensation of Directors During Year Ended September 30, 2013. The Company does not compensate its directors for acting as such.
  Compensation Committee Interlocks and Insider Participation.
  The Company’s directors act as its compensation committee. During the year ended September 30, 2013 each director participated in deliberations concerning executive officer compensation.
  During the year ended September 30, 2013, none of the Company’s officers was a member of the compensation committee or a director of another entity, which other entity had one of its executive officers serving as one of the Company’s directors.
  ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  The following table shows, as of December 31, 2013, information with respect to those persons owning beneficially 5% or more of the Company’s common stock and the number and percentage of outstanding shares owned by each Director and officer and by all officers and directors as a group. Unless otherwise indicated, each owner has sole voting and investment powers over their shares of common stock.
  Name and Address

Shares

Owned


Percent of

Outstanding SharesBrian Pappas701 Market St., Ste. 113St. Augustine, FL  32095


2,229,000
(1)


18.9
%Michele Cote701 Market St., Ste. 113St. Augustine, FL  32095


1,400,000
(2)


11.9
%Dan O’Donnell701 Market St., Ste. 113St. Augustine, FL  32095


185,000



1.6
%(All officers and directorsas a group 3 persons)


3,814,000



32.4
%
  (1)
Shares are held of record by FranVentures, LLC, a limited liability company managed by Mr. Pappas.
 (2)
Shares are held of record by Cote Trading Company, LLC, a limited liability company controlled by Ms. Cote.
  14
  ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  During the years ended September 30, 2013 and 2012, the Company paid:
  ●
$746,226 and $583,617, respectively, for franchise consulting and commissions;
  ●
$-0- and $12,400, respectively, for franchise training and expenses;
  As of September 30, 2013, the Company owed MC Logic and Franventures $5,690 for franchise commissions.
  As of September 30, 2012, the Company owed MC Logic and Franventures $16,771 for franchise commissions.
  In September 2012, the Company loaned $40,000 to MC Logic, LLC, are related party entity, for consulting services.  The loan was payable by the issuance of 40,000 shares of the Company’s common stock. As of September 30, 2013 and 2012, the balance on this loan was $20,000 and $40,000, respectively. During the year ended September 30, 2013 payment of $20,000 was satisfied with the issuance of 20,000 shares of the Company’s common stock.
  In July of 2013, the Company loaned $70,000 to AudioFlix, Inc., a related party entity.  The loan was personally guaranteed by Brian Pappas.  The loan bears interest at 6%, payable monthly and is due and payable on July 1, 2015. The unpaid balance of the loan is convertible prior to July 1, 2015 into unrestricted shares of the common stock of AudioFlix, Inc. at a price of $0.35 per share.
  ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  Borgers & Cutler served as the Company’s independent registered public accountant for the year ended September 30, 2012.
  The following table shows the aggregate fees billed by Borgers & Cutler to the Company for the period shown.
  Year Ended September 30, 2012Audit Fees

$
21,680Audit-Related Fees


--Tax Fees


--All Other Fees


--
  Audit fees represent amounts invoiced for professional services rendered for the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s Form 10-Q reports. Prior to contracting with Borgers & Cutler to render audit or non-audit services, each engagement was approved by the Company’s directors.
  Silberstein Ungar PLLC served as the Company’s independent registered public accountant for the year ended September 30, 2013.
  The following table shows the aggregate fees billed by Silberstein Ungar to the Company for the period shown.
  Year Ended September 30, 2013Audit Fees

$
24,000Audit-Related Fees


--Tax Fees


--All Other Fees


--
  Audit fees represent amounts invoiced for professional services rendered for the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s Form 10-Q reports. Prior to contracting with Silberstein Ungar PLLC to render audit or non-audit services, each engagement was approved by the Company’s directors.
  15
  ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
  Exhibits

Description

Page Number3.1.1

Certificate of Incorporation

(1)3.1.2

Amendment to Certificate of Incorporation

(3)3.1.2

Bylaws

(1)10

Agreement relating to the acquisition of BFK Franchise Company

(2)31

Rule 13a-14(a) Certifications32

Section 1350 Certification
  101.INS **

XBRL Instance Document101.SCH **

XBRL Taxonomy Extension Schema Document101.CAL **

XBRL Taxonomy Extension Calculation Linkbase Document101.DEF **

XBRL Taxonomy Extension Definition Linkbase Document101.LAB **

XBRL Taxonomy Extension Label Linkbase Document101.PRE **

XBRL Taxonomy Extension Presentation Linkbase Document
 (1)
Incorporated by reference to the same exhibit filed with the Company’s registration statement on Form SB-2, File #333-145999.(2)
Incorporated by reference to Exhibit 10.1 filed with the Company’s report on Form 8-K dated July 2, 2010.(3)
Incorporated by reference to Exhibit 3.1.2 filed with the Company’s report on Form 10-K filed on April 27, 2011.
 ** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 16
 
  Silberstein Ungar, PLLC CPAs and Business Advisors
 Phone (248) 203-0080
 Fax (248) 281-0940
 30600 Telegraph Road, Suite 2175
 Bingham Farms, MI 48025-4586
 www.sucpas.com
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Board of Directors and Stockholders
 Creative Leaning Corporation
 
 We have audited the balance sheet of  Creative Leaning Corporation as of September 30, 2013 and the related statements of operations, stockholders’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Creative Leaning Corporation as of September 30, 2012 were audited by other auditors whose report dated December 19, 2012, expressed an unqualified opinion on those statements.
 
 We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
 
 In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Creative Learning Corporation as of September 30, 2013, and the results of its operations and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
 
 /s/ Silberstein Ungar, PLLC
 Silberstein Ungar, PLLC
 
 Bingham Farms, Michigan
 January 11, 2014, except as to Note 14, as to which the date is June 4, 2014
  17
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors and Stockholders of Creative Learning Corporation:
  We have audited the accompanying consolidated balance sheet of Creative Learning Corporation (“the Company”) as of September 30, 2012 and the related statement of operations, stockholders’ equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit.
  We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.
  In our opinion, the financial statement referred to above present fairly, in all material respects, the financial position of Creative Learning Corporation, as of September 30, 2012, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles in the United States of America.
  The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company's internal control over financial reporting.  Accordingly, we express no such opinion.
  /s/ Borgers & Cutler CPA’s PLLC
  Borgers & Cutler CPA’s PLLC
 Denver, CO
 December 19, 2012
 18




CREATIVE LEARNING CORPORATION
 Consolidated Balance Sheets
  September 30,


September 30,2013


2012AssetsCurrent Assets:Cash

$
2,004,947



1,041,786Accounts receivable, less allowance for doubtful accounts of $10,000 and $12,000, respectively


310,150



195,493Prepaid expenses


826



26,334Other receivables - current portion


94,301



72,109Deferred tax asset


1,058



-Total Current Assets


2,411,282



1,366,626Note receivable from related party


70,000



-Other receivables - net of current portion


37,491



30,904Property and equipment, net of accumulated depreciation of $60,073 and $29,805, respectively


294,863



283,522Intangible assets


95,270



25,250Deposits


15,000



32,619Total Assets

$
2,923,906



1,708,017Liabilities and Stockholders’ EquityCurrent Liabilities:Accounts payable:Related parties

$
5,690



16,771Other


171,889



163,171Payroll accruals


13,105



11,878Unearned revenue


35,900



-Accrued marketing fund


100,754



90,155Customer deposits


120,001



47,500Income tax payable


13,131



-Notes Payable:Related parties


20,000



40,000Other


3,560



3,500Total Current Liabilities


484,030



372,975Other payables - net of current portion


5,297



-Total Liabilities


489,327



372,975Stockholders’ Equity:Preferred stock, $.0001 par value; 10,000,000 shares authorized;-0- and -0- shares issued and outstanding, respectively


-



-Common stock, $.0001 par value; 50,000,000 shares authorized;11,809,409 and 11,556,075 shares issued and outstanding, respectively


1,181



1,155Additional paid-in capital


2,157,673



2,006,118Retained earnings (deficit)


275,725



(672,231
)Total Stockholders’ Equity


2,434,579



1,335,042Total Liabilities and Stockholders’ Equity

$
2,923,906



1,708,017
  19
 
 CREATIVE LEARNING CORPORATION
 Consolidated Statements of Operations
  For The Fiscal Years EndedSeptember 30,


September 30,2013


2012Revenues:Initial franchise fees

$
3,700,221


$
2,793,624Royalty fees


995,900



479,860Corporate Creativity Center sales


124,598



143,7834,820,719



3,417,267Operating expenses:Franchise consulting and commissions:Related parties


746,226



583,617Other


976,776



905,031Franchise training and expenses:Related parties


-



12,400Other


272,125



124,552Salaries and payroll taxes


539,982



397,250Advertising


455,108



324,230Professional fees


97,886



161,429Office expense


158,964



137,480Depreciation


30,267



18,525Stock-based compensation


108,280



12,550Other general and administrative expenses


389,348



157,707Total operating expenses


3,774,962



2,834,771Income from operations


1,045,757



582,496Other income (expense):Interest (expense)


(4,882)



-Other income (expense)


(80,846
)


22,314Total other income (expense)


(85,728
)


22,314Income before provision forincome taxes


960,029



604,810Provision for income taxes (Note 1)


12,073



-Net Income

$
947,956


$
604,810Net Income per shareBasic

$
0.08


$
0.05Basic Weighted average number of common shares outstanding


11,675,102



11,445,492Diluted

$
0.08


$
-Diluted Weighted average number of commonshares outstanding


11,678,873



-
    20
 
  CREATIVE LEARNING CORPORATION
Consolidated Statements of Cash Flows
  For the Fiscal Years EndedSeptember 30,


September 30,2013


2012Cash flows from operating activities:Net income

$
947,956


$
604,810Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation


30,267



18,525Compensatory equity issuances


108,280



12,550Bad debt expense


11,036



-Write-off of note receivable


23,000



-Gain on sale of territory


(7,553
)


-Changes in operating assets and liabilities:Accounts receivable


(125,703
)


(106,488
)Accounts payable


(2,363
)


99,308Accrued liabilities


1,228



-Accrued marketing funds


10,599



145,409Customer deposits


72,501



-Deferred tax asset


(1,058
)


-Deposits


17,619



-Income tax payable


13,131



-Other receivables


(28,779
)


(125,895
)Prepaid expenses


9,890



(26,334
)Unearned revenue


35,900



-Net cash provided by operating activites


1,115,952



621,885Cash flows from investing activities:Property and equipment purchases


(25,991
)


(144,429
)Intangible asset purchases


(56,800
)


(7,000
)Note receivable from related party


(70,000
)


10,000Net cash used in investing activities


(152,791
)


(141,429
)Cash flows from financing activities:Notes payable


-



43,500Net cash provided by financing activities


-



43,500Net change in cash


963,161



523,956Cash, beginning of period


1,041,786



517,830Cash, end of period

$
2,004,947



1,041,786Supplemental disclosure of cash flow information:Cash paid during the period for:Income taxes

$
-



-Interest

$
4,882



-Supplemental non-cash investing and financing activities:Common stock issued for intangible assets

$
23,300


$
18,250Reclassification of prepaid expenses

$
15,618



-Common stock issued to settle note payable

$
20,000



-
  21
  CREATIVE LEARNING CORPORATION
 Consolidated Statement of Stockholders' Equity (Deficit)
  Additional


RetainedCommon Stock


Paid-in


EarningsShares


Par Value


Capital


(Deficit)


TotalBalance, September 30, 2011


10,288,575


$
1,029


$
1,975,445


$
(1,277,040
)

$
699,434Stock issued under exchange agreement (Note 2)


1,260,000



126



(126
)


-



0Compensatory stock issuances (Note 7)


11,000



1



8,799



-



8,800Cancellation of prior shares issued erroneously (Note 7)


(33,500
)


(3
)


3



-



-Stock issued as payment for liabilities (Note 7)


5,000



0



3,750



-



3,750Stock issued for busiess acquisition (Note 7)


25,000



2



18,248



-



18,250Net income for the year ended September 30, 2012


-



-



-



604,810



604,810Balance, September 30, 2012


11,556,075


$
1,155


$
2,006,118


$
(672,230
)

$
1,335,044Stock issued as payment on notes payables (Note 7)


10,000



1



9,999



-



10,000Stock issued as payment on notes payables (Note 7)


10,000



1



9,999



-



10,000Stock issued for business acquisition (Note 7)


35,000



3



17,497



-



17,500Stock issued for business acquisition (Note 7)


10,000



1



5,799



-



5,800Compensatory stock issuances (Note 7)


35,000



3



20,997



-



21,000Compensatory stock issuances (Note 7)


5,000



1



2,999



-



3,000Replacement of prior shares issued erroneously (Note 7)


66,667



7



38,660



-



38,667Adjustment to correct share counts (Note 7)


66,667



7



29,993



-



30,000Stock options expense (Note 9)


-



-



6,613



-



6,613Compensatory stock issuances (Note 7)


15,000



2



8,999



-



9,000Net income for the year ended September 30, 2013


-



-



-



947,955



947,955Balance, September 30, 2013


11,809,409


$
1,181


$
2,157,673


$
275,725


$
2,434,579
    22
 
  CREATIVE LEARNING CORPORATION
 Notes to Consolidated Financial Statements
  (1) Nature of Organization and Summary of Significant Accounting Policies
  Nature of Organization
  Creative Learning Corporation (“CLC” or the “Company”), formerly B2 Health, Inc., was incorporated March 8, 2006 in the State of Delaware. BFK Franchise Company LLC (“BFKF”) was formed in the State of Nevada on May 19, 2009. Effective July 2, 2010, CLC was acquired by BFKF in a transaction classified as a reverse acquisition. CLC concurrently changed its name from B2 Health, Inc. to Creative Learning Corporation. The financial statements represent the activity of BFKF from May 19, 2009 forward, and the consolidated activity of BFKF and CLC from July 2, 2010 forward. BFKF and CLC are hereinafter referred to collectively as the "Company".
  In addition to the accounts of CLC and BFKF, the accompanying consolidated financial statements include the accounts of CLC’s subsidiaries, BFK Development Company LLC (“BFKD”) from November 25, 2009 (BFKD’s inception) forward, CI Franchise Company LLC (“CI”) from September 14, 2012 (CI’s inception) forward, and Sew Fun Franchise Company LLC (SF) from January 8, 2013 (SF’s inception) forward.
  BFKF held a 50% ownership interest in BFKD from November 25, 2009 through October 2, 2010. On October 3, 2010, the BFKF acquired the 50% non-controlling interest in BFKD. Immediately following the acquisition of the non-controlling interest, BFKF transferred its 100% interest in BFKD to CLC.
 Creative Learning Corporation operates wholly owned subsidiaries BFK FRANCHISE COMPANY, LLC, CI FRANCHISE COMPANY, LLC AND SEW FUN FRANCHISE COMPANY, LLC under the trade names Bricks 4 Kidz®, Challenge Island®, and Sew Fun StudiosTM respectively, that offer children's enrichment and education franchises.
  Basis of Presentation
  The Company uses the accrual basis of accounting and is presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that the disclosures made are adequate to make the information presented not misleading. The information reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods set forth herein.
  Principles of Consolidation
  The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
  Fiscal year
  The Company operates on a September 30 fiscal year-end.
  23
  Use of Estimates
  The preparation of financial statements in accordance with generally accepted accounting principles permits management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
  Reclassifications
  Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year presentation and to correct prior year errors. The reclassifications did not have any effect on the prior year net income.
  Cash and Cash Equivalents
  The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. We had no cash equivalents at September 30, 2013 and 2012. The Company had cash of $2,004,947 and $1,041,786 as of September 30, 2013 and 2012, respectively.
  Accounts Receivable
  The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. At September 30, 2013 and 2012, the Company’s allowance for doubtful accounts totaled $10,000, and $12,000, respectively.
  Property, Equipment and Depreciation
  Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, which range from three to forty years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.
  Fair Value of Financial Instruments
  The carrying amounts of cash, accounts and notes receivable, prepaid expenses, property and equipment, intangible assets, deposits, and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments.
  24
  The FASB Accounting Standards Codification (“ASC”) clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:
 
 Level 1:
Quoted prices in active markets for identical assets or liabilities.Level 2:
Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.Level 3:
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
  The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
  Long-Lived Assets
  In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.
  Revenue Recognition
  Revenue is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed or determinable, and collectability is reasonably assured.
  Since these franchises are primarily a mobile concept and do not require finding locations or construction, the franchisees can begin operations as soon as they leave training. The franchise fees are fully collectible and nonrefundable as of the date of the signing of the franchise agreement, but the franchise fees are not recognized as revenue until initial training has been completed and when substantially all of the services required by the franchise agreement have been fulfilled by the Company in accordance with GAAP. Royalty fees are recognized as earned.
 As of September 30, 2013 the Company had $35,900 in unearned revenue for franchise fees collected but not yet earned per the revenue recognition policy.
  As of September 30, 2012 the Company had $-0- in unearned revenue for franchise fees collected but not yet earned per the revenue recognition policy.
  Advertising Costs
  Advertising costs are expensed as incurred. The Company incurred advertising costs for the years ended September 30, 2013 and 2012 of $455,108 and $324,230, respectively.
  25
  Income Taxes
  The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
  Net earnings (loss) per share
  ASC 260-10-45, “Earnings Per Share”, requires presentation of "basic" and "diluted" earnings per share on the face of the statements of operations for all entities with complex capital structures. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. When the company is in loss position, no dilutive effect is considered.
  Stock-based compensation
  The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable.
  Recent accounting pronouncements
  The Company does not expect recently issued accounting standards or interpretations to have a material impact on the Company’s financial position, results of operations, cash flows or financial statement disclosures.
  (2) Reverse Acquisition
  On July 2, 2010 Creative Learning Corporation entered into an agreement to exchange securities (the "Agreement") with BFK Franchise Company LLC, acquiring 100% of the outstanding membership interests of BFK Franchise Company LLC through the Agreement calling for the issuance of 9,000,000 shares of its common stock. During the years ended September 30, 2011 and 2010, 5,240,000 and 1,557,000 shares were issued under the Agreement, with 2,203,000 shares remaining to be issued as of September 30, 2011 and -0- shares remaining at September 30, 2012. The transaction was accounted for as a reverse acquisition as the members of BFK Franchise Company LLC retained the majority of the outstanding common stock of Creative Learning Corporation after the share exchange. Effective with the Agreement, the Company's stockholders' equity was retroactively recapitalized as that of BFK Franchise Company LLC, while 100% of the net liabilities of Creative Learning Corporation valued at $200,330 consisting of accounts payable of $26,330 and stock subscriptions payable $174,000, were recorded as being acquired in the reverse acquisition for its 713,000 outstanding common shares. The net liabilities acquired of $200,330 combined with the stock value of $962,500 based on market price on the acquisition date led to the Company recognizing goodwill on the transaction of $1,162,880, which was immediately written off. Subsequent to the July 2, 2010 recapitalization, Creative Learning Corporation and BFK Franchise Company LLC remain separate legal entities (with Creative Learning Corporation as the parent of BFK Franchise Company LLC). The accompanying consolidated financial statements exclude the financial position, results of operations and cash flows of Creative Learning Corporation prior to the July 2, 2010. Creative Learning Corporation concurrent with the transaction changed its name from B2 Health, Inc. to Creative Learning Corporation.  Effective with the July 2, 2010 Agreement the Company sold its 100% owned subsidiary Back 2 Health, Ltd. to a company related by common control for a nominal fee.
  26
  (3) Related Party Transactions
  During the years ended September 30, 2013 and 2012, the Company paid related parties (companies related by common control) for the following expenses:
  ●
$746,226 and $583,617, respectively, for franchise consulting and commissions;
 ●
$-0- and $12,400, respectively, for franchise training and expenses;
  As of September 30, 2013, the Company owed related parties $5,690 for franchise commissions. This liability is reported in the accompanying consolidated financial statements as Accounts payable, related party.
  As of September 30, 2012, the Company owed related parties $16,771 for franchise commissions and other charges. This liability is reported in the accompanying consolidated financial statements as Accounts payable, related party.
  In September of 2012,the Company issued a non-interest bearing promissory note of $40,000 to a related party for consulting services payable by issuance of 40,000 shares of the Company’s common stock. As of September 30, 2013 and 2012, the remaining balance on this promissory note was $20,000 and $40,000, respectively. During the year ended September 30, 2013, payment of $20,000 was satisfied with the issuance of 20,000 shares. This liability is reported in the accompanying financial statements as Notes Payable - related parties, and the remaining balance will be paid with the issuance of 20,000 common shares in Fiscal year 2014.
 In June of 2013, the Company issued50,000 stock options (25,000 each to an officer/director and an employee) at an option price of $0.60 per share, with an expiration date of December 31, 2015, resulting in a $6,612 stock option expense to the Company using the Black Scholes model. See note 11.
  In July of 2013, the Company issued a $70,000 loan to a related party company, personally guaranteed by the related party, at 6% interest, monthly interest only payments and fully due and payable by July 1, 2015. The Note is convertible up to the maturity date to unrestricted shares in the related party company for any unpaid balance at $0.35 per share.
  (4) Property and Equipment
  Property and equipment consisted of the following:
  September 30,2013


2012Software

$
30,558


$
-Furniture and Fixtures


57,654



54,435Equipment


33,109



29,857Real Property


233,615



229,035354,936



313,327Less accumulated depreciation


(60,073
)


(29,805
)$
294,863


$
283,522
 Depreciation expense totaled $30,267 and $18,525, respectively, for the years ended September 30, 2013 and 2012.
 27
  (5) Intangible Assets
  As of September 30, 2013, the Company had $95,270 of intangible assets, consisting of a second and a third franchise concept and trademarks for $25,250 and $23,300, respectively, under newly created subsidiaries called CI Franchise Company LLC (Challenge Island) and Sew Fun Franchise Company LLC, a $40,000 purchase of a Franchisee territory in Denver, and $6,720 for the purchase of a partial Franchisee Territory in Texas.
  As of September 30, 2012, the Company had $25,250 of intangible assets for a second concept and trademarks under the newly created subsidiary called CI Franchise Company LLC (Challenge Island).
  (6) Notes and Other Receivables
  In July of 2013, the Company issued a $70,000 loan to a related party company, personally guaranteed by the related party, at 6% interest, monthly interest only payments and fully due and payable by July 1, 2015. The Note is convertible up to the maturity date to unrestricted shares in the related party company for any unpaid balance at $0.35 per share.
  At September 30, 2012, the Company had notes receivables from related parties of $-0-.
  At September 30, 2013 the Company held certain notes and other receivables totaling $131,792, $128,332 for extended payment terms of franchise fees, generally non-interest bearing notes with monthly payments, payable within one to two years, and Foreign Tax Credits of $3,460.
  2014


2015


2016


TotalPayment schedules for Notes And Other Receivables

$
94,301


$
31,711


$
5,780


$
131,792
  During the year ended September 2013, the Company agreed to a restructuring of a territory with a franchisee and wrote off a $23,000 franchise fee, extended term note receivable as forgiveness of debt.
 At September 30, 2012, the Company had notes and other receivables of $103,013.
  (7) Accrued Marketing Fund
  Per the terms of the franchise agreements, the Company collects 2% of franchisee’s gross revenues for a marketing fund, managed by the Company, to allocate towards national branding of the Company’s concepts to benefit the franchisees.
  The marketing fund amounts are accounted for as a liability on the balance sheet and the actual collections are deposited into a marketing fund bank account. Expenses pertaining to the marketing fund activities are paid from the marketing fund and reduce the liability account.
  As of September 30, 2013 and 2012, the accrued marketing fund liability balances were $100,754 and $90,155 respectively.
  28
  (8) Notes Payable
  In September of 2012, the Company issued a non-interest bearing promissory note of $40,000 to a related party for consulting services payable by issuance of 40,000 shares of the Company’s common stock. As of September 30, 2013 and 2012, the remaining balance on this promissory note was $20,000 and $40,000, respectively. During the year ended September 30, 2013, payments of $20,000 were made with the issuance of common stock. This liability is reported in the accompanying financial statements as Notes Payable, related party, and the remaining balance will be paid with the issuance of 20,000 common shares in fiscal year 2014.
  As of September 30, 2013, the Company owed $8,857 in deferred commission payments, non-interest bearing, payable in monthly payments, on deferred payment schedules related to extended payment terms of Franchise Fees.
  2014


2015


2016


TotalPayment schedules for Deferred Commissions

$
3,560


$
4,640


$
657


$
8,857
 At September 30, 2012, the Company owed $40,000 on notes payable to related parties and $3,500 in other notes payables.
  (9) Common Stock Issuances
  During the year ended September 30, 2012, the Company issued 1,260,000 shares of its common stock as the final fulfillment of all commitments pursuant to the July 2, 2010 Securities Exchange Agreement (see Note 2).
  During the year ended September 30, 2012, the Company issued 11,000 shares of its common stock in exchange for consulting services valued at $8,800 or $0.80 per share.
  During the year ended September 30, 2012, the Company issued 5,000 shares of its common stock to fulfill a prior commitment related to a late, loan interest payment valued at $3,750 or $0.75 per share.
  During the year ended September 30, 2012, the Company issued 25,000 shares of its common stock related to the acquisition of a second Franchise concept valued at $18,250 or $0.73 per share.
  During the year ended September 30, 2012, the Company canceled 33,500 of prior shares of its common stock previously issued in error.
  During the year ended September 30, 2013, the Company issued 20,000 shares of its common stock for partial payment of a promissory note to a related party at the stated price valued at $20,000 at the stated price in the promissory note of $1.00 per share. See note 3.
  During the year ended September 30, 2013, the Company had two issuances of 35,000 and 10,000 shares of its common stock related to the acquisition of a third Franchise concept valued at $17,500 or $0.50 per share and $5,800 or $0.58 per share, respectively. See note 5.
  During the year ended September 30, 2013, the Company had three issuances of 35,000, 5,000 and 15,000 shares of its common stock in exchange for consulting services, valued at $21,000, $3,000 and $9,000, respectively, or at $0.60 per share.
  29
  During the year ended September 30, 2013, the Company, as a gesture of good will, issued 66,667 shares of its common stock to an individual investor who had purchased stock in a prior year in a pass through arrangement with a third party company that did not fulfill their commitment to transfer the stock. It was determined there was no recourse with the third party company, and the shares were issued at a Fair Market Value of $38,667 or $0.58 per share. Related to this transaction, an adjustment was made to the Company issued share count of an additional 66,667 shares that were also issued to the third party company in the prior year in error. The Company was awaiting their return and cancellation. Without recourse with the third party company, these 66,667 shares were recorded at a fair value of $30,000 or $0.45 per share based on the value on the date of the original issue.
 (10) Common Stock Commitments
  In September of 2012, the Company issued a non-interest bearing promissory note of $40,000 to a related party for consulting services payable by issuance of 40,000 shares of the Company’s common stock. As of September 30, 2013 and 2012, the remaining balance on this promissory note was $20,000 and $40,000, respectively. During the year ended September 30, 2013, payments of $20,000 were made through the issuance of 20,000 shares of common stock. This liability is reported in the accompanying financial statements as Notes Payable, related party, and will be paid with the issuance of 20,000 common shares in fiscal year 2014.
  (11) Stock Options and Warrants
  Non-employee stock options
  The Company accounts for non-employee stock options under ASC 718, whereby option costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Unless otherwise provided for, the Company covers option exercises by issuing new shares.
  In fiscal year 2010 the Company issued 31,067 common stock purchase warrants as part of $3.00 units sold in an ongoing private placement offering that commenced in July 2010. Each unit contains four shares of common stock and one common stock purchase warrant, with each warrant allowing the holder to purchase one share of common stock, exercisable anytime at the holder’s election at $3.00 per share, through a term expiring July 31, 2013. The value of the sold units has been allocated to the common shares as the warrants were not in the money on the date of sale.
  Employee stock options
  The Company accounts for non-employee stock options under ASC 718, whereby option costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Unless otherwise provided for, the Company covers option exercises by issuing new shares.
  On July 1, 2013, the Company issued 50,000 common stock purchase options (25,000 each to an employee and to an officer/director), allowing the holders to purchase one share of common stock per option, exercisable at $.60 per share with an expiration date of December 31, 2015. At September 30, 2013 these share options were still outstanding. The fair value of the option grants were estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 2.72%, dividend yield of 0%, expected lives estimated at two years, cumulative volatility of 50.22%.
  There were 50,000 shares of stock options issued and outstanding in 2013 and -0- shares of stock optionsin 2012.
  30
  (12) Franchise Operations
  The Company currently supports independently owned franchises located in 39 states, 4 Canadian provinces and 13 other countries. Following is a summary of the annual franchise activity:
  BFK Franchise Company LLC

September 30,2013



2012



2011Franchises in operation - beginning of year


210



75



36Franchises sold during the year


175



137



42Franchises cancelled, terminated or repurchased during the year


(5
)


(2
)


(3
)Franchises in operation - end of year


380



210



75
  CI Franchise Company LLC

September 30,2013



2012



2011Franchises in operation - beginning of year


0



0



0Franchises sold during the year


15



0



0Franchises cancelled, terminated or repurchased during the year


0



0



0Franchises in operation - end of year


15



0



0
  Franchises are required to pay the Company an initial franchise fee, royalty fees and a marketing fee. The marketing fee is 2% of gross sales, and the current royalty fee is 7% of gross sales. A limited number of earlier agreements set the royalty fee at 5% if they opened a Creativity Center, but is not in the current agreements.
  (13) Commitments and Contingencies
  Lease Commitments
  The following table summarizes the Company’s contractual lease obligations as of September 30, 2013:
  2014


2015


2016


TotalLease of office space

$
10,800


$
10,800


$
10,800


$
32,400
  Rent expense was $49,131 and $64,296, respectively, for the years ended September 30, 2013 and 2012.
  31
  Contingencies
  On September 27, 2013, BFK Franchise Company LLC was named as a co-defendant in a Complaint filed by a Franchisee in Nevada who had purchased three existing Las Vegas territories from other Franchisees. In December of 2013, without any further legal process, BFK Franchise Company LLC entered into a settlement with the Nevada Franchisee to purchase the three Las Vegas territories for $95,000.
  (14) Income Taxes
  Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses and other items. Loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.
  The Company follows Financial Accounting Standards Board Statement Accounting Standards Codification No. 740, “Accounting for Income Taxes”, which requires, among other things, an asset and liability approach to calculating deferred income taxes. The components of the deferred income tax assets and liabilities arising under ASC No. 740 were as follows:
  September 30,


September 30,2013


2012Deferred tax assets:Short-term

$
1,058


$
-0-Long-term


-0-



-0-Total deferred tax asset

$
1,058


$
-0-Deferred tax liabilities:Short-term

$
-0-


$
-0-Long-term


-0-



-0-Total deferred tax liabilities

$
-0-


$
-0-Total deferred tax assets


-0-



-0-Net deferred tax liability

$
-0-


$
-0-
  The types of temporary differences between the tax basis of assets and their financial reporting amounts that give rise to a significant portion of the deferred assets and liabilities are as follows:
  September 30, 2013


September 30, 2012Temporary


Tax


Temporary


TaxDifference


Effect


Difference


EffectDeferred tax assets:Depreciation timing difference

$
3,084


$
1,058


$
-0-


$
-0-Net operating loss


-0-



-0-



251,549



94,658Valuation allowance


-0-



-0-



-251,549



-94,658Total deferred tax asset


3,084



1,058



-0-



-0-Deferred tax liabilities:


-0-



-0-



-0-



-0-Total deferred liability


-0-



-0-



-0-



-0-Net deferred tax asset

$
3,084


$
1,058


$
-0-


$
-0-
 The net change in deferred tax liabilities as of September 30, 2013 and 2012 were $(94,658) and -0-, respectively.
  32
  Current taxes due for September 30, 2013 are as follows:
  September 30,


September 30,2013


2012Federal:

$
10,844


$
-0-Florida:


2,247



-0-Total current taxes payable

$
13,131


$
-0-
  A reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows:
  September 30,

2013


September 30,

2012U.S. Federal statutory graduated rate


16.24
%


34.00
%State income tax rate, net of federal benefit


4.73
%


3.63
%Net rate


20.97
%


37.63
%Net operating loss used


-19.66
%


0.00
%Net operating loss for which no tax benefit is currently available


0.00
%


-37.63
%Effective tax rate


1.31
%


--
  At September 30, 2013 and 2012, the Company had available net loss carryovers of $-0- and $906,760, respectively.
  (15) Subsequent Events
  On September 27, 2013, BFK Franchise Company LLC was named as a co-defendant in a Complaint filed by a Franchisee in Nevada who had purchased three existing Las Vegas territories from other Franchisees. In December of 2013, without any further legal process, BFK Franchise Company LLC entered into a settlement with the Nevada Franchisee to purchase the three Las Vegas territories for $95,000.
  At December 31, 2013, the Company has completed a record quarter in revenue of $1,865,000, including increasing royalty fees and 61 new territories, including England, the Czech Republic, Romania, Nigeria, Egypt, and master agreements in Indonesia and Thailand.
  We have evaluated the effects of all subsequent events from October 1, 2013 through the date the accompanying consolidated financial statements were available to be issued. Other than those set out above, there have been no subsequent events after September 30, 2013 for which disclosure is required.
  33
 
 SIGNATURES
 In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the  22nd day of  September 2014.
  CREATIVE LEARNING CORPORATIONBy:
/s/ Brian PappasBrian Pappas,Chief Executive Officer
  Pursuant to the requirements of the Securities Exchange Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
  Signature

Title

Date/s/ Brian Pappas

Principal Executive Officer and a Director

September 22, 2014Brian Pappas/s/ Richard Nickelson

Principal Financial and Accounting Officer

September 30, 2014Richard Nickelson/s/ Michelle Cote

Director

September 22, 2014Michelle Cote/s/ Dan O’Donnell

Director

September 22, 2014Dan O’Donnell