Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 2006

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

For the transition period from _______ to ______

Commission File Number 000-51140

ROCKY MOUNTAIN FUDGE COMPANY, INC.

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

NEVADA	16-1734022
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

4596 Russell Street, Salt Lake City, Utah 84117

(Address of principal executive offices)

(801) 230-1807 (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 9 days. Yes [X] No [ ]

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

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

Class	Outstanding as of September 30, 2006
Common Stock, $.001 par value	6,250,000

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Balance Sheets - September 30, 2006 (unaudited) and December 31, 2005	4

	Statements of Operations - three and nine months ended September 30, 2006
	and 2005 (unaudited)	5

	Statements of Cash Flows - three and nine months ended September 30, 2006
	and 2005 (unaudited)	6

	Notes to Financial Statements	7

Item 2.	Management's Discussion and Analysis or Plan of Operations	8

Item 3.	Controls and Procedures	10


PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	11

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	11

Item 3.	Defaults Upon Senior Securities	11

Item 4.	Submission of Matters to a Vote of Securities Holders	11

Item 5.	Other Information	11

Item 6.	Exhibits and Reports on Form 8-K	12

	Signatures	13

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying Balance Sheets of Rocky Mountain Fudge Company, Inc. at September 30, 2006 and December 31, 2005, related Statements of Operations for the three and nine months ended September 30, 2006 and 2005, and Statements of Cash Flows for the three and nine months ended September 30, 2006 and 2005, have been prepared by management in conformity with United States generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the period ended September 30, 2006, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2006.

ROCKY MOUNTAIN FUDGE COMPANY, INC.

FINANCIAL STATEMENTS

September 30, 2006 and December 31, 2005

ROCKY MOUNTAIN FUDGE COMPANY, INC.

(A Development Stage Company)

Balance Sheets

ASSETS

		September 30,			December 31,
		2006			2005
		(Unaudited)

CURRENT ASSETS

Cash	$	32,694		$	32,248
Accounts receivable		-			52

Total Current Assets		32,694			32,300

TOTAL ASSETS	$	32,694		$	32,300



LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


CURRENT LIABILITIES

Accounts payable	$	1,375		$	1,845
Note payable - related party		25,000			-

Total Current Liabilities		26,375			1,845


STOCKHOLDERS' EQUITY (DEFICIT)

Common stock; 50,000,000 shares authorized,
at $0.001 par value, 6,250,000 shares issued and
outstanding, respectively		6,250			6,250
Additional paid-in capital		89,450			87,950
Accumulated deficit		(89,381	)		(63,745	)

Total Stockholders' Equity (Deficit)		6,319			30,455

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)	$	32,694		$	32,300

The accompanying notes are an integral part of these financial statements.

ROCKY MOUNTAIN FUDGE COMPANY, INC.

(A Development Stage Company)

Statements of Operations (Unaudited)

		For the Three						For the Nine						on January 4,
		Months Ended						Months Ended						1990 through
		September 30,						September 30,						September 30,
		2006			2005			2006			2005			2006


REVENUES	$	-		$	-		$	-		$	-		$	135,835

COST OF SALES		-			-			-			-			44,709

GROSS PROFIT		-			-			-			-			91,126

EXPENSES

General and Administrative		5,041			7,432			25,636			7,432			184,865

Total Expenses		5,041			7,432			25,636			7,432			184,865

OPERATING LOSS		(5,041	)		(7,432	)		(25,636	)		(7,432	)		(93,739	)

OTHER INCOME (EXPENSES)

Interest income		-			-			-			-			4,437
Interest expense		-			-			-			-			(79	)

Total Other Income
(Expenses)		-			-			-			-			4,358


NET LOSS	$	(5,041	)	$	(7,432	)	$	(25,636	)	$	(7,432	)	$	(89,381	)

BASIC LOSS
PER SHARE	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)


WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING		6,250,000			6,250,000			6,250,000			6,250,000

The accompanying notes are an integral part of these financial statements.

ROCKY MOUNTAIN FUDGE COMPANY, INC.

(A Development Stage Company)

Statements of Cash Flows (Unaudited)

								From Inception
		For the Nine						on January 4,
		Months Ended						1990 through
		September 30,						September 30,
		2006			2005			2006

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss	$	(25,636	)	$	(7,432	)	$	(89,381	)
Changes in operating assets and liabilities
Increase in accounts receivable		52			-			52
Increase (decrease) in accounts payable		(470	)		-			1,323

Net Cash Used by Operating Activities		(26,054	)		(7,432	)		(88,006	)


CASH FLOWS FROM INVESTING ACTIVITIES		-			-			-


CASH FLOWS FROM FINIANCING ACTIVITIES

Contributed capital		1,500			50,000			53,900
Cash received on note payable - related		25,000			-			25,000
Sale of common stock for cash		-			-			41,800

Net Cash Provided by
Financing Activities		26,500			50,000			120,700


NET DECREASE IN CASH		446			42,568			32,694

CASH AT BEGINNING OF PERIOD		32,248			-			-

CASH AT END OF PERIOD	$	32,694		$	42,568		$	32,694


SUPPLIMENTAL DISCLOSURES OF
CASH FLOW INFORMATION

CASH PAID FOR:

Interest	$	-		$	-		$	79
Income Taxes	$	-		$	-		$	-

The accompanying notes are an integral part of these financial statements.

ROCKY MOUNTAIN FUDGE COMPANY, INC.

(A Development Stage Company)

Notes to the Financial Statements

September 30, 2006 and December 31, 2005

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2006 and 2005 and for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2005 audited financial statements. The results of operations for the periods ended September 30, 2006 and 2005 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, or, in the alternative, (2) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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

The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-QSB.

Recent Events

Our independent auditors have indicated in a footnote to our financial statements that we have not yet established an ongoing source of revenues sufficient to cover operating costs and to allow us to continue as a going concern. Our ability to continue as a going concern is dependent on us securing and maintaining adequate capital to fund operating losses until we become profitable. If we are unable to increase revenues or secure adequate financing in the near future, allowing us to implement our business plan, our ability to continue as a going concern may be compromised, and we could be forced to cease operations.

Plan of Operation

Since its creation in 1990, the Company has manufactured and marketed its candy on a seasonal basis. The Company's principal product is fudge candy, which is produced and sold to retail consumers in northern Utah and surrounding areas. The Company also produces a brittle candy. All of the Company's products are made using proprietary recipes contributed to the Company by its Secretary, Valerie Moulton. Historically, the Company has used various facilities to produce its candy.

In the past, the Company sold its products through retail booths that the Company would rent at various locations such as established crafts boutiques and at the Dickens Festival, which was held annually at the Salt Lake County fairgrounds for two weeks immediately following Thanksgiving. Typically, the Company would rent its booths for short periods of time, particularly at special events and during the holiday seasons. Management estimates that approximately 90% of the Company's revenues were historically realized during the Thanksgiving Christmas periods.

In 2000, the Dickens Festival, which had been the highest grossing location for the Company's booths, ceased operations and demand for the Company's products severely decreased. Accordingly, shortly thereafter the Company curtailed most of its operations. However, in mid-2005, the Company decided to re-established its operations and prepared to once again manufacture and market its candy products. In the fourth quarter of 2005, the Company realized nominal revenues of $3,447 from candy sales to former customers in response to unsolicited requests. During this period the Company used temporary kitchen facilities to prepare its candy and shipped the finished product directly to customers via mail.

Also in the fourth quarter of 2005, the Company began preparing sales and promotional literature and price lists and commenced development of an Internet website to ultimately be used for the promotion and sale of its products. Management anticipates that the website will eventually become the Company's primary marketing focus. The Company is also in the process of making initial contacts with former customers and potential new customers and disseminating sales materials to promote its products. Management believes that a full marketing effort will not take place until the second quarter of 2006.

Results of Operations

Three Months Ended September 30, 2006 Compared to Three Months Ended September 30, 2005

Revenues for the three-month period ended September 30, 2006 were $-0-, representing no change from the corresponding period ended September 30, 2005.

Total operating expenses for the third quarter of 2006 were $5,041, compared to $7,432 for the comparable period of 2005. This decrease was due primarily to the business coming out of inactivity and incurring increased legal and accounting fees pertaining to the Company’s December 2005 audit and related SEC filings. This is also the reason for the Company’s loss of $5,041 for the three month period ended September 30, 2006 compared to a loss of $7,432 during the comparable period of 2005.

Nine Months Ended September 30, 2006 Compared to Nine Months Ended September 30, 2005

Revenues for the nine-month period ended September 30, 2006 were $-0-, representing no change from the period ended September 30, 2005.

Total operating expenses for the first nine months of 2006 were $25,636 compared to $7,432 for the comparable period of 2005. This increase was due primarily to the business coming out if inactivity and incurring increased legal and accounting fees pertaining to the Company’s December 2005 audit and related SEC filings. This is also the reason for the Company’s loss of $25,636 for the nine month period ended September 30, 2006 compared to a loss of $7,432 during the comparable period of 2005.

Liquidity and Capital Resources

At September 30, 2006, we had cash on hand of $32,694 compared to $32,248 as of December 31, 2005. The Increase in cash is attributed primarily to our receipt of a $25,000 loan from an officer, offset by our net loss for the period.

We estimate our cash requirements for the next 12 months to be approximately $25,000. We do not feel that current cash on hand will be sufficient to satisfy our cash requirements and, if we are unable to develop and implement a profitable business plan, we will be required to seek additional avenues to obtain the necessary funds. We have no agreements with anyone to provide future capital for the Company. If our directors are unable to provide future funding, if the need arises, we may have to look at alternative sources of funding. We do not have any firm plans as to the source of this alternative funding and there is no assurance that such funds will be available or, that even if they are available, that they will be available on terms that will be acceptable to us. In the event we are unable to secure necessary future funding, we may have to curtail our business or cease operations completely.

At September 30, 2006, we had total assets of $32,694 and stockholders' equity of $6,319, compared to total assets of $32,300 and a total stockholders' equity of $30,455 at December 31, 2005.

Net Operating Loss

We have accumulated approximately $22,000 of net operating loss carryforwards through December 31, 2005, which may be offset against taxable income and income taxes in future years. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. The carry-forwards expire in the year 2025. In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforwards which can be used. No tax benefit has been reported in the financial statements for the year ended December 31, 2005 because there is a 50% or greater chance that the carryforward will not be used. Accordingly, the potential tax benefit of the loss carryforward is offset by a valuation allowance of the same amount.

Forward Looking and Cautionary Statements

This report, including the section entitled "Management's Discussion and Analysis or Plan of Operations" contains forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks and uncertainties. These factors may cause the Company's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward- looking statements. These risks and other factors include those listed under "Risk Factors" and elsewhere in this report. In some cases, you can identify forward-looking statements by terminology such as "may," "will" "should," "expects," "intends," "plans," anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology.

You should be aware that a variety of factors could cause actual results to differ materially from the anticipated results or other matters expressed in forward-looking statements. These risks and uncertainties, many of which are beyond our control, include:

• our ability to search for and identify an appropriate business opportunity and to subsequently merge with or acquire such entity;

• our ability to meet our cash and working capital needs;

• our ability to maintain our corporate existence as a viable entity;

• other risks detailed in our periodic report filings with the SEC; and,

• general economic conditions.

You are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Actual results may differ materially from those included within the forward-looking statements as a result of various factors. Cautionary statements in the risk factors section and elsewhere in this report identify important risks and uncertainties affecting our future, which could cause actual results to differ materially from the forward-looking statements made in this report.

Item 3. Controls and Procedures

We maintain disclosure controls and procedures that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon that evaluation, management concluded that our disclosure controls and procedures are effective to cause the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods prescribed by SEC, and that such information is accumulated and communicated to management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There was no change in our internal controls over financial reporting identified in connection with the requisite evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which we are a party or to which any of our property is subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.

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

This item is not applicable.

Item 3. Defaults Upon Senior Securities

This Item is not applicable.

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

This item is not applicable.

Item 5. Other Information

This item is not applicable.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

	Exhibit 31.1	Certification of C.E.O. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


	Exhibit 31.2	Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


	Exhibit 32.1	Certification of C.E.O. Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


	Exhibit 32.2	Certification of Principal Accounting Officer Pursuant to 18 U.S.C. Section 13 50, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

Not applicable.

[SIGNATURES FOLLOW ON NEXT PAGE.]

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ROCKY MOUNTAIN FUDGE COMPANY, INC.

Date: November 10, 2006	By: /s/ Ronald Moulton
	Ronald Moulton,
	President, Chief Executive Officer and Director




Date: November 10, 2006	By: /s/ STEVEN D. MOULTON
	Steven D. Moulton
	Vice President and Director
	Principal Accounting Officer