SPECTRAL CAPITAL Corp - Quarter Report: 2009 September (Form 10-Q)

fsac10q20090930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 000-50274

FUSA Capital Corporation

(Exact name of Registrant as specified in its charter)

Nevada	510520296
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)


701 Fifth Avenue, Suite 4200, Seattle, WA	98104
(Address of principal executive offices)	(Zip/Postal Code)


(206) 274-5107
(Telephone Number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] YES [ ] NO

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

Large Accelerated Filer [ ]	Accelerated Filer [ ]
Non Accelerated Filer [ ] (Do not check if smaller reporting company)	Smaller Reporting Company [ X ]

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

As of October 31, 2009, there are issued and outstanding only common equity shares in the amount of 46,631 shares, par value $0.0001, of which there is only a single class.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements:

	InConsolidated Balance Sheets as of September 30, 2009 (unaudited) and December 31, 2008 (audited)	4

	Consolidated Statements of Operations for the three months and nine months ended September 30, 2009 and September 30, 2008 and cumulative from inception on February 9, 2005 through September 30, 2009 (unaudited)	5

	Consolidated Statement of Stockholders’ Equity from inception on February 9, 2005 through September 30, 2009 (unaudited)	6

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and September 30, 2008 and cumulative from inception on February 9, 2005 through September 30, 2009 (unaudited)	9

	Notes to Financial Statements	10

Item 2.	Plan of Operation	16

Item 3.	Quantitative and Qualitative Disclosures about market risk	22

Item 4.	Controls and Procedures	22

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Submission of Matters to a Vote of Security Holders.	23

Item 5.	Other Information	23

Item 6.	Exhibits & Signature	23

FORWARD-LOOKING STATEMENTS

In addition to historical information, this Report contains forward-looking statements. Such forward-looking statements are generally accompanied by words such as "intends," "projects," "strategies," "believes," "anticipates," "plans," and similar terms that convey the uncertainty of future events or outcomes. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in ITEM 2 of this Report, the section entitled "MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof and are in all cases subject to the Company's ability to cure its current liquidity problems. There is no assurance that the Company will be able to generate sufficient revenues from its current business activities to meet day-to-day operation liabilities or to pursue the business objectives discussed herein.

The forward-looking statements contained in this Report also may be impacted by future economic conditions. Any adverse effect on general economic conditions and consumer confidence may adversely affect the business of the Company.

FUSA Capital Corporation undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission.

FUSA CAPITAL CORPORATION

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2009 AND DECEMBER 31, 2008

	September 30			December 31
	2009			2008
	(unaudited)			(audited)
ASSETS

CURRENT ASSETS
Cash	$	7,201		$	14,366
Restricted cash-Note 2		-			11,500
Accounts receivable		-			280

Prepaid expenses		1,127			500

Total Current Assets		8,328			26,648

Property and equipment-Note 5		9,766			14,654

Total Assets	$	18,094		$	41,300

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	36,502			38,113
Promissory note payable		50,000			-

Total Current Liabilities		86,502			38,113

STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $.0001 par value, 5,000,000 Shares authorized, none issued		-			-
Common stock, par value $.0001, 333,333 Shares authorized, 46,631 issued and outstanding (2008-46,631 issued and outstanding, as adjusted for reverse split)		5			5
Paid in capital		5,556,987			5,556,987
Deficit accumulated during the development stage		(5,625,400	)		(5,553,805	)

Total Stockholders’ Equity (Deficit)		(68,408	)		3,187

Total Liabilities and Stockholders’ Equity (Deficit)	$	18,094		$	41,300

The accompanying condensed footnotes are an integral part of these consolidated financial statements

FUSA CAPITAL CORPORATION

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

for the three months and nine months ended September 30, 2009 and September 30, 2008

for the period February 9, 2005 (Inception) to September 30, 2009

	Three months			Three months			Nine months			Nine months			February 9, 2005
	ended			ended			ended			ended			(Inception) to
	September 30, 2009			September 30, 2008			September 30, 2009			September 30, 2008			September 30, 2009

REVENUE
Sales	$	7,718		$	19,684		$	17,270		$	48,492		$	118,549


EXPENSES
Selling, general and administrative		12,722			23,615			43,906			82,969			2,455,678
Wages and benefits		-			40,397			20,090			120,523			744,991
Legal fees		1,550			16,948			17,483			29,510			278,987
Research and development-Note 4		118			15,695			118			52,744			1,991,313
Beneficial conversion expense		-			-			-			-			230,900
Interest		1,250			-			2,917			-			4,548
Loss on disposal of property and equipment		-			-			-			-			1,393
Foreign exchange loss		-			-			-			-			4,047
Depreciation and amortization		1,630			2,358			4,888			7,053			35,190

Total Expenses		17,270			99,013			89,402			292,799			5,747,047

NET LOSS BEFORE OTHER INCOME		(9,552	)		(79,329	)		(72,132	)		(244,307	)		(5,628,498	)

OTHER INCOME
Interest and other income		489			-			537			-			3,098
NET LOSS	$	(9,063	)	$	(79,329	)	$	(71,595	)	$	(244,307	)	$	(5,625,400	)

NET LOSS PER COMMON SHARE, BASIC	$	(0.19	)	$	(1.70	)	$	(1.53	)	$	(5.28	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		46,631			46,631			46,631			46,244

The accompanying condensed footnotes are an integral part of these consolidated financial statements

FUSA CAPITAL CORPORATION

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

									Deficit
	Common Stock								Accumulated
									During			Total
						Paid-in			Development			Stockholders’
	Shares			Amount		Capital			Stage			Equity

Inception, Feb 9, 2005, Stock issued for
services @ $.0001 per share		18,000		$	2	$	8,998		$	-		$	9,000
Net (Loss), for the period ended March 6, 2005										(11,605	)		(11,605	)
Balances, March 6, 2005		18,000			2		8,998			(11,605	)		(2,605	)
Restated Recapitalization
March 7, 2005		18,298			2		(101,959	)		(101,957	)
Shares issued for cash in a private
Placement
March 9, 2005 Stock issued for cash
@ $500 per share		200			0		100,000						100,000
March 31, 2005 Stock issued for cash
@ $500 per share		260			0		130,000						130,000
April 5, 2005 Stock issued for cash
@ $500 per share		40			0		20,000						20,000
April 15, 2005 Stock issued for cash
$500 per share		80			0		40,000						40,000
April 21, 2005 Stock issued for cash
@ $500 per share		40			0		20,000						20,000
Offering costs		(4,000	)				(4,000	)
Beneficial conversion feature-
620 warrants issued in above PPM							230,900						230,900
Shares issued as compensation
June 15, 2005 Stock issued @ FMV of
$1,333 per share		800			0		1,066,500						1,066,500
July 29, 2005 Stock issued @ FMV of
$1,530 per share		600			0		918,000						918,000
September 21, 2005 Stock issued
@ FMV of $1,830 per share		400			0		732,000						732,000
September 22, 2005 Stock issued
@ FMV of $1,815 per share		33			0		60,500						60,500
October 26, 2005 Stock issued
@ FMV of $1,785 per share		17			0		29,750						29,750
November 10, 2005 Stock issued
@ FMV of $1,635 per share		33			0		54,500						54,500
Stock options issued for
Compensation to non-employees
April 18, 2005 80 options vested
@ FMV of $480 per share							38,298						38,298
April 18, 2005 15 options vested
@ FMV of $600 per share							8,643						8,643
Loss for the period from March 6, 2005
to March 31, 2006										(4,079,552	)		(4,079,552	)
Balances, December 31, 2005		38,802		$	4	$	3,352,131		$	(4,091,157	)	$	(739,022	)

Stock options issued for
Compensation to non-employees
January 1, 2006 5 options vested
@ FMV $615 per share				2,996				2,996
April 7, 2006, 15 options vested @
FMV of $600 per share				8,728				8,728
Shares issued for services to non-
employees
May 24, 2006, stock issued for FMV of $2,100	7		0	14,000				14,000
December 11, 2006, stock issued for FMV of $1,440	17		0	24,000				24,000
Shares issued for cash in a private
placement
February 16, 2006 Stock issued for cash
@ $1,500 per share	267		0	400,000				400,000
May 24, 2006 Stock issued for cash
@ $1,125 per share	133		0	150,000				150,000
June 5, 2006 Stock issued for cash
@ $1,125 per share	89		0	100,000				100,000
August 16, 2006 Stock issued for cash
@ $1,125 per share	28		0	32,000				32,000
August 23, 2006 Stock issued for cash
@ $1,125 per share	62		0	70,000				70,000
October 20, 2006 Stock issued for cash
@$1,125 per share	89		0	100,000				100,000
December 18,2006 Stock issued for cash
@$1,125 per share	89		0	100,000				100,000
Shares exchanged for debt
February 2, 2006 Stock issued for cash
@ $1,377 per share	716		0	985,133				985,133
Cancellation of share issued as
compensation to employees	(400	)	0	(732,000	)			(732,000	)
Loss for the period ended
December 31, 2006						(435,407	)	(435,407	)
Balances, December 31, 2006	39,898		4	4,606,988		(4,526,564	)	80,428

Shares issued for cash in a private
placement
February 20, 2007 Stock issued for cash
@ $1,125 per share	133	0	150,000			150,000
May 20, 2007 Stock issued for cash
@ $900 per share	167	0	150,000			150,000
July 10, 2007 Stock issued for cash
@ $600 per share	167	0	100,000			100,000
August 22, 2007 Stock issued for cash
@ $375 per share	267	0	100,000			100,000
November 16, 2007 Stock issued for
Cash @ $150 per share	1,000	0	150,000			150,000
Loss for the year ended
December 31, 2007				(726,059	)	(726,059	)
Balances, December 31, 2007	41,631	4	5,256,988	(5,252,623	)	4,369
Shares issued for cash in a private
placement
January 15, 2008 Stock issued for cash
@ $60 per share	5,000	1	299,999			300,000
Loss for the period
December 31, 2008				(301,182	)	(301,182	)
Balances, December 31, 2008	46,631	5	5,556,987	(5,553,805	)	3,187
Loss for the period				(71,595	)	(71,595	)
Balances, September 30, 2009	46,631	5	5,556,987	(5,625,400	)	(68,408	)

The accompanying condensed footnotes are an integral part of these consolidated financial statements

FUSA CAPITAL CORPORATION

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

for the nine months ended September 30, 2009 and September 30, 2008

for the period from February 9, 2005 (Inception) to September 30, 2009

	Nine months			Nine months			February 9, 2005
	Ended			Ended			(Inception) to
	September 30, 2009			September 30, 2008			September 30, 2009

OPERATING ACTIVITIES
Net loss from operations	$	(71,595	)	$	(244,307	)	$	(5,625,400	)

Adjustments to reconcile net loss to net cash (used) by operating activities:
Common stock issued (cancelled) for compensation		-			-			2,129,250
Common stock issued for services		-			-			47,000
Stock options issued for services		-			-			55,669
Beneficial conversion feature on warrant issuance		-			-			230,900
Depreciation and amortization		4,888			7,053			35,190
Loss on disposal of property and equipment		-			-			5,879

Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses		(627	)		-			(1,127	)
Decrease (increase) in accounts payable and accrued liabilities		(1,611	)		(6,879	)		25,822
Decrease(increase) in accounts receivable		280			(280	)		-
Decrease in lease deposits		-			-			-

Total adjustments		2,930			(106	)		2,528,583

Net cash (used by) operating activities		(68,665	)		(244,413	)		(3,096,817	)

INVESTING ACTIVITIES
Proceeds on disposal of property and equipment		-			-			494
(Increase) in property and equipment		-			-			(51,327	)

Net cash (used by) investing activities		-			-			(50,833	)

FINANCING ACTIVITIES
Cash received in recapitalization of the company		-			-			184
Proceeds from issuance of common stock		300,000			2,212,000
Offering costs from issuance of stock		-			-			(4,000	)
Increase (decrease) in promissory note payable		50,000			-			946,667


Net cash provided by financing activities		50,000			300,000			3,154,851

Net increase (decrease) in cash		(18,665	)		55,587			7,201

Cash, beginning of period		25,866			34,005			-
Cash, end of period	$	7,201		$	89,592		$	7,201

Cash Summary, September 30
Cash	$	7,201		$	78,092		$	7,201
Restricted Cash		-			11,500			-

Total	$	7,201		$	89,592		$	7,201

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Non-monetary net liabilities assumed in a recapitalization of the Company on March 7, 2005:
Liabilities assumed	$	-		$	-		$	102,140
Less cash received		-			-			184
Total non-monetary net liabilities assumed	$	-		$	-		$	101,956

Interest paid	$	-		$	-		$	1,631

The accompanying condensed footnotes are an integral part of these consolidated financial statements

FUSA CAPITAL CORPORATION

(A Development Stage Company)

Notes to Financial Statements

September 30, 2009

Note 1 – Interim Reporting

The accompanying unaudited interim consolidated financial statements have been prepared by FUSA Capital Corporation (the “Company” pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for the financial statements to be not misleading have been included. Such adjustments consist of normal recurring adjustments. These interim consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the fiscal year ended December 31, 2008.

The results of operations for the nine months ended September 30, 2009 are not indicative of the results that may be expected for the full year

Note 2 – General Organization and Business

Galaxy Championship Wrestling Inc., a development stage company, was incorporated on September 13, 2000 under the laws of the State of Nevada and changed its name to Fusa Capital Corporation on June 17, 2005. On March 7, 2005, the Company acquired all of the issued and outstanding shares of Fusa Technology Investments, Inc., a development stage Nevada Corporation, formed on February 9, 2005, under the laws of the State of Nevada. For accounting purposes, the transaction was accounted for as a recapitalization such that the historical transactions of the acquired company, were carried forward.

The Company is in the business of developing internet search engine technology. It has limited revenue and is considered to be in the development stage.

Note 3 – Significant accounting policies

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Restricted cash

At September 30, 2009 current assets include restricted cash of $ nil (December 31 2008-$11,500), which is held as short term, interest bearing collateral to support a bank credit facility for the Company.

Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents.

Financial instruments

The fair value of cash, accounts payable and accrued liabilities are comparable to the carrying amounts thereof given their short-term maturity.

Concentrations of credit risk

The Company is subject to concentrations of credit risk on their temporary cash investments due to the use of a limited number of banking institutions. The Company mitigates this risk by placing temporary cash investments with major financial institutions, which have all been accorded high ratings by primary rating agencies.

FUSA CAPITAL CORPORATION

(A Development Stage Company)

Notes to Financial Statements

September 30, 2009

Advertising Costs

We expense all advertising, promotion and marketing costs as they so far have not included any direct- response advertising costs requiring capitalization. Non direct and related costs incurred during the nine months ended September 30, 2009 within this category, which are included in selling, general and administrative expense, amounted to approximately $nil ( 2008-$1,287).

Stock-based compensation

As permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the Company has elected to follow Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock-based compensation to employees. Under APB No. 25, when the exercise price of the Company’s employee stock options is equal to or greater than the fair value of the underlying stock on the date of grant, no compensation expense is recognized.

In December 2004, the FASB issued SFAS 123R, Share Based Payments. SFAS 123R is applicable to transactions in which an entity exchanges its equity instruments for goods and services. It focuses primarily on transactions in which an entity obtains employee services in share-based payment transactions. SFAS No. 123R supersedes the intrinsic value method prescribed by APB No. 25, requiring that the fair value of such equity instruments be recorded as an expense as services are performed. Prior to SFAS 123R, only certain pro forma disclosures of accounting for these transactions at fair value were required. SFAS 123R will be effective for the first quarter 2007 financial statements, and permits varying transition methods including retroactive adjustment of prior periods or prospective application beginning in 2007. The Company will adopt SFAS 123R using the modified prospective method effective January 1, 2007. Under this transition method the Company began recording stock option expense prospectively, starting in first quarter 2007.

For stock based compensation to non-employees, the Company is required to follow SFAS No. 123, which requires that stock awards granted to directors, consultants and other non-employees be recorded at the fair value of the award granted.

Research and development costs

Pursuant to SFAS No. 2, "Accounting for Research and Development Costs," our research and development costs, which relate to the development of software to be used in our search engine technology, were expensed as technological feasibility of the software had not been reached as of September 30, 2009.

The cost of materials and equipment that are acquired for research and development activities and that have alternative future uses are capitalized when acquired, such as computer equipment.

FUSA CAPITAL CORPORATION

(A Development Stage Company)

Notes to Financial Statements

September 30, 2009

Property and equipment

Property and equipment are recorded at cost. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method and the half year convention. Estimated useful lives for property and equipment categories are as follows:

Furniture and fixtures	7 years
Computer systems	5 years
Leasehold improvements	Lease term

Long lived assets are tested for impairment whenever events or changes in circumstances indicate their carrying amount may not be recoverable. The determination of any impairment loss includes a comparison of estimated undiscounted future cash flows anticipated to be generated during the remaining life of the asset or group of assets to the net carrying value of the asset or group of assets. Where the net carrying amount of the asset or the group of assets is less than the undiscounted future cash flows, an impairment loss is recognized.

Income taxes

Deferred tax liabilities and assets are determined based on the differences between the book values and the tax bases of assets and liabilities, using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset any deferred tax asset if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Foreign currency transactions

The business of the Company from Canada involves incurring a substantial number of operational transactions in Canada for which it transacts payments in Canadian currency through a bank account maintained for that purpose. Included in such transactions are payments for salaries, rent, consulting and many other expenses. At the time of payment, each Canadian disbursement is translated into the U. S. dollar equivalent amount and an exchange gain or loss on currency is recorded at that time. During the period ended September 30, 2009, the currency exchange transactions resulted in a (loss) gain of $ (139) (2008 –$(2,025). As of September 30, 2009, the Canadian bank account balance, which was the only account balance maintained in foreign currency at that date was converted into a U. S. dollar equivalent amount.

Revenue recognition

The company recognizes revenues when products are fully delivered or services have been provided and collection is reasonably assured.

FUSA CAPITAL CORPORATION

(A Development Stage Company)

Notes to Financial Statements

September 30, 2009

Note 4 - Going concern

The Company's financial statements are prepared using the 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. However, the Company has not commenced its planned principal operations and has not generated significant revenues. It has incurred a significant operating loss as of September 30, 2009.

The Company is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful. Without sufficient financing, completion of the technology and achievement of profitable operations thereby, it would be unlikely for the Company to continue as a going concern. Management’s plan is to complete the development of its video and audio search engine technology and to utilize it as an internet service for profit.

Note 5 – Related party transactions

During the period ended September 30, in lieu of paying its technology officer his earned compensation directly of $8,001 (2008- $19,942), it paid it to a consulting company owned by the Officer. This amount relates principally to his efforts through September 30, 2009, in furthering the development of the Company’s video and audio search engine technology, accordingly, the entire amount was included in research and development expense.

Note 6 - Property and equipment

A summary of property and equipment as of September 30, 2009 and December 31, 2008 follows:

					Accumulated Net
					Book Value
	Cost		Depreciation		2009		2008

Furniture and fixtures	$	8,228	$	5,104	$	3,124	$	4,005
Computer systems		26,713		20,071		6,642		10,649
Leasehold improvements		8,621		8,621		-		-
	$	43,562	$	33,796	$	9,766	$	14,654

FUSA CAPITAL CORPORATION

(A Development Stage Company)

Notes to Financial Statements

September 30, 2009

Note 7 – Promissory Note Payable

The promissory note payable bears interest at 10% per annum and is due December 31, 2009. At the option of the note holder, the promissory note payable balance outstanding, with any accrued interest, may be converted into common shares of the company. The number of shares issued will calculated at a per share conversion of $.005.

Note 8 – Issuance of Common Stock

On September 30, 2009, the company amended its Articles of Incorporation to decrease the number of authorized shares of common stock from 500,000,000 to 333,333 shares and the Board of Directors affirmed a reverse split of one thousand and five hundred shares to one share of currently issued common stock. The reverse split has been accounted for retroactively.

In February 2006, all of the advances included as debt on the December 31, 2005 consolidated balance totaling $985,133 were converted to equity through the issuance of a total of 715 shares of restricted common stock.

During the year ended December 31, 2007, the company issued 2 (2006-1) shares of common stock for proceeds of $ 650,000 (2006-$952,000).

During the year ended December 31, 2007, the company issued nil (2006-nil) shares of common stock for services rendered. The resulting value of stock compensation of $ nil (2006-$14,000) has been included in selling, general and administrative expenses and also included as a component of shareholders’ equity as at December 31, 2007.

During the year ended December 31, 2007, the company issued nil (2006-nil) shares of common stock to a director of the company for services rendered. The resulting value of stock compensation of nil (2006-$24,000) has been included in selling, general and administrative expenses and also included as a component of shareholders’ equity as at December 31, 2007.

In addition during the year ended December 31, 2007, the company cancelled nil (2006-400) shares of common stock which had previously been issued for services rendered. The previously recorded value of stock compensation of nil (2006-$722,000) has been credited to research and development expenses and included as a component of shareholders’ equity as at December 31, 2007.

During the year ended December 31, 2008 the company issued 5,000 shares of common stock for cash consideration of $300,000.

Note 9 - Technology License Agreement

During the year ended December 31, 2008, the company entered into a technology license agreement with Minerva Technologies Pvt. Ltd. to acquire a perpetual, fully-paid, royalty free exclusive license to technology Minerva has related to the Argon Search Engine Software. As consideration for the license, the company has agreed to pay Minerva a one-time license fee of 15,333 shares of common stock of the company. To September 30, 2009, the shares have not yet been issued. In August, 2009, we agreed with Minerva that, due to their failure to deliver the product in a timely fashion, we would terminate the agreement with no further liability to us.

Note 10 - Subsequent Events

The Company has analyzed its operations subsequent to September 30, 2009 through November 12, 2009 and has determined that it does not have any material subsequent events to disclose in these financial statements.

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

The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements.

OVERVIEW

We are a development stage technology company focused on the refinement and marketing of a comprehensive suite of media search engine technologies. Our objective is to maintain the media search engine properties and technologies we currently have and to eventually enhance and grow those properties and technologies. We currently operate the website newstowatch.com. Newstowatch.com is a breaking news discovery service that programatically reads thousands of current news stories and intelligently categorizes, organizes and ranks the most popular stories and topics from around the web. We also operate the consumer media search websites searchforvideo.com, podanza.com and iheard.com. We hope to be able to maintain our existing suite of on-line properties and technologies through the current challenging financial environment and to eventually be able to expand and grow our web properties and technologies in the future.

CORPORATE HISTORY AND DEVELOPMENT

We were incorporated in the State of Nevada on September 13, 2000 as Galaxy Championship Wrestling, Inc., a media and entertainment company focused on developing, producing and marketing live entertainment in the professional wrestling sphere.

On March 31, 2004, unable to generate sufficient revenues to sustain our professional wrestling business, we ceased operations in this field and began exploring other business opportunities.

Also on March 31, 2004 our controlling shareholders entered into a certain private stock purchase agreement, wherein they sold an aggregate of 5,750,000 of our common shares, representing a sixty-two and seventeen twentieths percent (62.85%) controlling interest, to an unrelated third party.

By certificate of amendment filed June 17, 2004, we changed our name from Galaxy Championship Wrestling, Inc. to FUSA Capital Corporation.

During the period from March 31, 2004 until March 7, 2005 we had no meaningful operations and did not carry on any active business, focusing instead on identifying and evaluating the merits of alternative potential business and acquisition opportunities which might allow us to restart operations.

On March 7, 2005 we entered into a certain plan and agreement of reorganization with FUSA Technology Investments Corp. ("FTIC"), a Nevada corporation engaged in the emerging growth field of audio and video search engine technology, whereby we acquired all of the issued and outstanding capital stock of FTIC in addition to obtaining certain intellectual property concepts related to search engine technology as developed by FTIC and its principals.

On April 22, 2005, our board of directors declared a three-for-one common stock dividend, wherein each holder of record of our common shares as of May 3, 2005 received two additional shares for each common share then held. Unless otherwise noted, all references to the number of common shares included in this annual report on Form 10-K for the fiscal year ended December 31, 2008 are stated on a post-dividend basis. Per share amounts have also been restated to reflect the common share dividend.

Since April, 2005, we have been engaged continuously in the development and operation of consumer focused media search engine technologies and portals. During the last six months of 2008, we began to substantially curtail our operations and ongoing technology development as a consequence of (i) having completed a substantial portion of our planned principal technology development work and (ii) being unable to raise sufficient funds through revenue or sales of debt or equity securities to continue our previous levels of operation and development.

We have consistently lost money on our on-line consumer media properties due to the expenses involved in hosting, promotion, development and management of those sites. In an effort to maintain as much traffic as possible on our most popular media site, www.searchforvideo.com, which is also responsible for a large proportion of our expenses, we contracted with Brass Consulting Ltd. to maintain the site in exchange for net revenue produced from the site. This agreement is cancellable after 30 days notice. This agreement allows us to maintain www.searchforvideo.com in the absence of adequate personnel or financial resources and to preserve its value for the future when we may have sufficient resources to maintain the site ourselves and grow its user base and revenue potential.

On June 29, 2009, our Board of Directors resolved to amend the Articles of Incorporation pursuant to Nevada Revised Statues 78.207 to decrease the number of authorized shares of our common stock, par value $.0001, from 500,000,000 to 333,333 shares. Correspondingly, our Board of Directors affirmed a reverse split of one thousand and five hundred (1,500) to one (1) in which each shareholder was issued one (1) share in exchange for every one thousand and five hundred (1,500) common shares of their currently issued common stock. The record date for the reverse split was July 6, 2009. On July 23, 2009, we filed a Certificate of Change pursuant to NRS 89.209 in connection with the transaction with the Nevada Secretary of State for the decrease in authorized shares and reverse split. Under the Nevada Revised Statutes, shareholder approval was not required.

Our principal executive offices are located at 701 Fifth Avenue, Suite 4200, Seattle, Washington 98104. Our phone number is (206) 274-5107.

The Company’s fiscal year end is December 31.

RESULTS OF OPERATIONS

Financial Condition and Liquidity

Overview

Our financial statements contained herein have been prepared on a going concern basis, which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business. We have limited capital resources. In the period from February 9, 2005 (Date of Inception) to September 30, 2009, the Company generated $118,549 in revenues and posted a net loss of $5,625,400 resulting from costs of general and administrative expenses, website development stock compensation and interest expenses. The Company is considered a development stage company.

Cash and Working Capital

The Company's cash balance as of September 30, 2009 was $7,201, as compared to the cash balance of $14,366 as of December 31, 2008.

Three Month and Nine Month Period Ending September 30, 2009

Operating expenses for the three month period ended September 30, 2009 totaled $17,270 and from inception to the period ended September 30, 2009 totaled $5,747,047. The company experienced a net loss of $9,063 and $5,625,400 for the three month period ended September 30, 2009 and from inception to period ended September 30, 2009, respectively, against $7,718 in revenues from operations and $489 in interest and other income for the three month period and $118,549 in revenue from operations and $3,098 in interest and other income from the period since inception. Operating expenses during the nine month period ended September 30, 2009 totaled $89,402 and net losses for the period totaled $72,132. Operating expenses for the nine month period ended September 30, 2008 totaled $292,799 and net losses for the period totaled $244,307. The major expenses during this three month period and the nine month period were for general and administrative expenses, legal and accounting fees. Salaries went down significantly with salaries for the nine month period ending September 30, 2009 at $20,090 as compared to $120,523 in the prior period. Research and development expenditures also dropped significantly, with $118 spent in the nine month period ending September 30, 2009 and $52,744 being spent in the nine month period ending September 30, 2008. These decreased expenses are a result of our completion of principal development on our sites and the reductions in our personnel due to lack of funding.

Revenues decreased during the period as compared with comparable periods in 2008. We believe this was due to a lack of funds to pay for marketing to support traffic to our Internet websites. Less traffic leads to less revenue from advertising on our sites.

The earnings per share (fully diluted -- weighted average) consisted of a net loss of $0.19 for the three month period ended September 30, 2009, which reflects our 1500 to 1 reverse split as of the record date of July 6, 2009.

Liquidity and Capital Resources

For the nine month period ended September 30, 2009, net cash used in operating activities, consisting mostly of loss from operations was $68,665. For the period from inception to September 30, 2009, net cash used in operating activities, consisting mostly of loss from operations was $3,096,817. For the nine month period ending September 30, 2008, net cash used in operating actvities, consisting mostly of loss from operations was $244,413. Therefore, net cash used in operating activities decreased by $175,748 from the 2008 period to the 2009 period. This was a result of a significantly smaller net loss from operating activites, in fact the decrease in net loss from operating activities during the comparable periods was $172,712, accounting for nearly all of the decrease in net cash used in operating activities.

For the period from inception to September 30, 2009, net cash resulting from financing activities was in the amount of $3,154,851. Cash proceeds from the sale of convertible promissory notes during the nine month period ending September 30, 2009 were $50,000.

Our capital resources have been limited. We have not yet generated sufficient revenues to cover our expenses, and to date have relied on the sale of equity and related party loans for cash required for our activities. No investment banking agreements are in place and there is no guarantee that the company will be able to raise capital in the future should that become necessary.

Future Financings

We anticipate that if we pursue any additional financing, the financing would be an equity financing achieved through the sale of our common stock. We do not have any arrangement in place for any debt or equity financing. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our company.

Off Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Significant Contingencies

Our financial statements have been prepared assuming we will continue as a going concern. Our independent auditors have made reference to the substantial doubt about our ability to continue as a going concern in their report of independent registered public accounting firm on our audited financial statements for the year ended December 31, 2008. Our continuation is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern.

PLAN OF OPERATION

Over the next six to twelve months we intend to maintain our current web properties and make whatever modest efforts we are capable of, given our limited resources, to slow the deterioration of user traffic on these properties while we search for additional financing to allow us to promote and update our properties. We believe our sites, www.newstowatch.com, www.searchforvideo.com, www.iheard.com and www.podanza.com, will continue to deteriorate in spite of consumers recognizing the unique content, ease-of-use, speed of search tools and quality of indexed content due to lack of promotion and updating of the properties. We will not be able to expand our participatory media offerings over the course of the year due to lack of resources. It is believed that the combination of the growth of our participatory media website, www.Newstowatch.com and the organic growth of our other consumer portals could increase the company’s overall value by increasing its assets and marketability if we had the resources to promote and update our properties. In the absence of additional resources, our properties are likely to continue to have their user traffic deteriorate.

We currently produce a small amount of advertising revenue that we have derived during the principal development phase of our various consumer portals. Not only will this revenue not be enough to make us cash flow positive, we have also signed an agreement where virtually all of our small revenues will go to Brass Consulting Ltd. in exchange for maintaining www.searchforvideo.com. Of course, we can cancel this agreement at any time and we hope to do so, as soon as financing and market conditions improve and we can raise the resources necessary to service, promote and update our sites. There can be no assurance such resources will be forthcoming and we have no understandings with any potential investors or partners regarding the same.

We also anticipate spending much less on operations and salaries and costs related to marketing and no money related to research and development over the course of the next twelve months now that principal development on our consumer portals has been completed and we lack the resources to improve or promote our properties . We anticipate our largest expenses will be hosting, administrative, legal and accounting expenses, payments of our www.searchforvideo.com and the salary of our chief executive officer, Jenifer Osterwalder. We are currently unable to pay the salary of our chief executive officer, who has nevertheless continued to serve in that capacity.

Our twelve-month plan requires us to accomplish the following steps:

Minimizing the deterioration of user traffic on our websites;

Raise additional funds in order to promote and improve our sites;

Compile usage statistics for our websites;

Raise funds to enhance our participatory media capabilities and to promote the associated community of www.Newstowatch.com;

Develop rapport with likely strategic partners ; and

Terminate our consulting arrangement with Brass Consulting Ltd. and take back the operation of www.searchforvideo.com as soon as we have sufficient resources.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency and Credit Risk. The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company’s reporting currency is the US Dollar. We do undertake software development expenses in Canada which must be paid in Canadian dollars and are subject to cost variations based in currency rate fluctuations.

Fair Value of Financial Instruments. The carrying value of the Company's financial instruments, including prepaid expenses, related party receivables, accounts payable and accrued liabilities at September 30, 2009 and September 30, 2008 approximates their fair values due to the short-term nature of these financial instruments.

ITEM 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). As a result of this evaluation, we identified material weaknesses in our internal control over financial reporting as of December 31, 2008. Accordingly, we concluded that our disclosure controls and procedures were not effective as of December 31, 2008.

As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer has concluded that our disclosure controls and procedures are not effective in timely alerting them to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of the deficiency in our internal control over financial reporting discussed below.

The material weakness identified in our annual report on Form 10-K for the year ended December 31, 2008 was related to a lack of an accounting staff resulting in a lack of segregation of duties and accounting technical expertise necessary for an effective system of internal control.

(b) Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

Not Applicable

Item 2. Unregistered Sales of Securities and Use of Proceeds

During the nine month period ending September 30, 2009, the Company borrowed $50,000 from various shareholders at 10% annual interest. The debt is convertible at the option of the holder into the Company’s common stock at the per share price of the Company’s next financing or at 30 day average closing price of the Company’s stock, whichever is lower. The debt is due by December 31, 2009. The Company has received indications from the holders that they are willing to convert the debt if the Company does not have the funds to pay the debt by the due date.

Item 3. Defaults Upon Senior Securities

Not Applicable

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

Not Applicable

Item 5. Other Information

The Company filed a report on Form 8K dated July 29, 2008, in which it disclosed the reverse split transaction described in the immediately preceding paragraph. The 8K mistakenly refered to the Company’s common stock has having a par value of $0.001 when the stock has a par value of $0.0001.

On August 3, 2009, Board of Directors of the Registrant dismissed Moore & Associates Chartered, its independent registered public account firm. On the same date, August 3, 2009, the accounting firm of Seale and Beers, CPAs was engaged as the Registrant's new independent registered public account firm.

On September 22, 2009, Board of Directors of the Registrant dismissed Seale and Beers, CPAs, its independent registered public account firm. On the same date, September 22, 2009, the accounting firm of Maddox Ungar Silberstein, PLLC was appointed by the board as the Company's independent auditors.

Item 6. Exhibits

EXHIBITS

List of Exhibits
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed as an Exhibit to this Quarterly Report on Form 10-Q.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed as an Exhibit to this Quarterly Report on Form 10-Q.

SIGNATURE

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

	FUSA Capital Corporation

	/s/ Jenifer Osterwalder
	Jenifer Osterwalder
	Chief Executive Officer
	(Duly Authorized Officer and Principal
	Financial and Accounting Officer)

Dated: November 12, 2009