UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

AND EXCHANGE ACT OF 1934

THE ANDINA GROUP, INC.

(Name of Small Business Issuer in its Charter)


Nevada	333-148967	20-1445018
(State or jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

179 South 1950 East, Layton UT 84040

(Address number principal executive offices)

((801) 558-2110

(Issuer’s telephone number)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes £ No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:


Large accelerated filer £	Accelerated filed £	Non-accelerated filer £	Smaller reporting company R

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

As of January 10, 2010, the registrant had 6,146,600 shares of common stock outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition - Plan of Operation

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4T. Controls and Procedures

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Item 1A. Risk Factors

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

Item 3. Defaults Upon Senior Securities

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

Item 5. Other Information.

Item 6. Exhibits.

SIGNATURES

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

UNAUDITED FINANCIAL STATEMENTS

September 30, 2009

Balance Sheets

Statements of Operations for the Three Months ended September 30, 2009 and 2008

and for the period June 17, 2004 (Inception) to September 31, 2009

Statements of Cash Flows for the Three Months Ended September 30, 2009 and 2008

and for the period June 17, 2004 (Inception) to September 30, 2009

Notes to Financial Statements

THE ANDINA GROUP, INC.

(A Development Stage Company)

BALANCE SHEETS


		September 30, 2009		June 30, 2009
		(Unaudited)		(Audited)
ASSETS
CURRENT ASSETS
Cash	$	10,740	$	960
Accounts Receivable		5,000		5,000
Total Current Assets		15,740		5,960
Total Assets	$	15,740	$	5,960

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable	$	15,503	$	12,178
Total Current Liabilities		15,503		12,178
Total Liabilities		15,503		12,178

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock
10,000,000 shares authorized at $.001 par value; none outstanding		-		-
Common Stock
50,000,000 shares authorized at $.001 par value; 6,146,600
issued and outstanding		6,147		6,147
Capital in excess of par value		106,110		106,110
Accumulated Deficit		(112,020)		(118,475)
Total Stockholders' Equity (Deficit)		237		(6,218)

Total Liabilities and Stockholders' Equity	$	15,740	$	5,960

The accompanying notes are an integral part of these financial statements

THE ANDINA GROUP, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

For the Three Months Ended September 30, 2009 and 2008 and the

Period June 17, 2004 (Inception) to September 30, 2009

(Unaudited)


						From
						June 17, 2004
		Three Months Ended				(Inception)
		Sept.30,		Sept. 30,		to Sept. 30,
		2009		2008		2009

REVENUES
Services revenue	$	15,050	$	8,800		73,010
Service-revenue from related parties		-		-		33,275
Total revenue		15,050		8,800		106,285

EXPENSES
Sales and administrative		8,595		14,239		218,305

NET INCOME/(LOSS)	$	6,455	$	(5,439)	$	(112,020)

NET LOSS PER COMMON SHARE
Basic and dilutive	$	0.00	$	(0.00)

AVERAGE OUTSTANDING SHARES
(stated in 1,000's)
Basic		6,147		6,147
Dilutive		6,147		6,147

The accompanying notes are an integral part of these financial statements

THE ANDINA GROUP, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

For the Three Months Ended September 30, 2009 and 2008 and the

Period June 17, 2004 (Inception) to September 30, 2009

(Unaudited)


						From
						June 17,2004
						(Date of
		For the Three Months Ended				Inception) to
		Sept. 30,		Sept. 30,		Sept. 30,
		2009		2008		2009

Cash Flows from Operating Activities:
Net Income/(Loss)	$	6,455	$	(5,439)	$	(112,020)
Adjustments to reconcile net income/ (loss) to net cash
provided (used) by operating activities
Capital stock issued for services		-		-		2,000
(Increase) decrease in accounts receivable		-		-		(5,000)
Increase (decrease) in accounts payable		3,325		(343)		15,503
Net Cash Provided by (Used in) Operating Activities		9,780		(5,782)		(99,517)

Cash Flows from Investing Activities:		-		-		-

Cash Flows from Financing Activities:
Contributions to capital		-		-		10,657
Proceeds from sale of common stock		-		-		99,600
Net Cash Provided by Financing Activities		-		-		110,257

Net Increase (Decrease) in Cash		9,780		(5,782)		10,740
Cash at Beginning of Period		960		5,932		-
Cash at End of Period	$	10,740	$	150	$	10,740


Non Cash Flows
Issuance 6,010,000 common shares for services 2004-2005						2,000

The accompanying notes are an integral part of these financial

THE ANDINA GROUP, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

September 30, 2009

ORGANIZATION

The Company was incorporated under the laws of the state of Nevada on June 17, 2004 with authorized common stock of 50,000,000 shares with a par value of $.001 and 10,000,000 preferred shares with a par value of $.001. None of the preferred shares have been issued and the terms have not been established.

The Company is in the business of offering integrated multi-media promotional services to small network marketing organizations and other small businesses to promote sales of their products or services. The Company assists them in using marketing tools such as public relations as well as developing and utilizing such services as advertising, direct mail, electronic communication, and promotions to increase product and service awareness. The Company offers quality marketing strategies and services for their business along with marketing support services, such as ad design, ad placement strategies, advertising sales, website development, marketing plans, focus groups, and media buying

The company has not reached full operations and is in the development stage.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

On September 30, 2009 Company had a net operating loss available for carry forward of $112,020. The income tax benefit of approximately $33,000 from the carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful since the Company has been unable to project a reliable estimated net income for the future. The net operating loss will expire starting in 2024 through 2030.

THE ANDINA GROUP, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

September 30, 2009

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial and Concentrations Risk

The Company does not have any concentration or related financial credit risk.

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report.

Statement of Cash Flows

For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

Revenue Recognition

Revenue is recognized on the sale and delivery of a product or the completion of a service provided. Through December 31, 2007, the Company’s revenues were derived from a related party, KAATN of Wyoming, a company controlled by the Company’s sole officer/director, Burke Green. The Company is paid for each service it provides to KAATN at a rate that is usual in the industry and the same as what the Company charges its other clients. During the year ended June 30, 2008, KAATN was responsible for 32% of the Company’s revenues. During the year ended June 30, 2009 and the three months ended September 30, 2009 no revenues were derived from KAATN.

Advertising and Market Development

The company expenses advertising and market development costs as incurred.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.

THE ANDINA GROUP, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS (Continued)

September 30, 2009

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial Instruments

The carrying amounts of financial instruments are considered by management to be their estimated fair values due to their short-term maturities.

Recent Accounting Pronouncements

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

3. CAPITAL STOCK

From its inception the Company has issued 6,010,000 private placement common shares for services valued at $2,000 and 136,600 private placement common shares for cash of $99,600.

4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

Officer/directors own 81% of the outstanding common capital stock and have made contributions to capital of $10,657.

5. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company does not have sufficient working capital for its planned activity, and to service its debt, which raises substantial doubt about its ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective, through short term related party loans, long term financing, and additional equity funding, which will enable the Company to operate for the coming year. In addition, Mr. Burke Green, the Company’s sole officer/director has indicated his willingness to contribute funds, if necessary to support operations, if not available from another source.

NOTE 6 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through January 20, 2010 .

Item 2. Management’s Discussion and Analysis of Financial Condition - Plan of Operation

Executive Overview

We were founded in 2004. We have had only limited revenues and have operated at a loss. We provide multi-media marketing services to small business and network marketing groups. Management intends to focus on this relatively small market in hopes our business will grow as this particular segment grows. We will continue to provide services for other small businesses when and if the opportunity arises.

Market Focus

The determination to concentrate our business on network marketers was based on Management’s belief this focus could ultimately result in more and regular clients if we can manage to grow with the respective distributor networks. We also considered that our president has experience in that industry as a former network marketer making him better qualified to serve that market segment as well as other network marketers, rather than small businesses in general. A third factor in this decision is Management’s belief that competition will be less intense than for business in the broader small business arena if we specialize in and capture this relatively small market niche where we will be able to rely more heavily on referrals, reputation, and word-of-mouth to increase business. However, Management also provides marketing services to small businesses as the opportunity arises and will remain flexible and open to all small business marketing opportunities.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates, based on historical experience, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

First Quarter Results of Operations - Three Months Ended September 30, 2009 and 2008

The following discussions are based on the unaudited financial statements for the three months ended September 30, 2009 (“SEP2009”) and September 30, 2008 (“SEP2008”). The discussions are summary and should be read in conjunction with the financial statements and notes included in this report.

Comparison of September 30, 2009 and 2008 Operations


		Three Months Ended
		September 30,
		2009		2008
Revenues	$	15,050	$	8,800
Sales and Administrative Expenses		8,595		14,239
Operating Income (Loss)		6,455		(5,439)
Net Income (Loss)		6,455		(5,439)
Net Income (Loss) per Share		0.00		(0.00)

Revenues

Revenues are generated by marketing services provided to our clients and are recognized as earned at the time the services are provided. Services are provided, and fees negotiated on an individualized per job basis usually at prices normal and usual in the industry. We do not have service contracts with clients but perform services in accordance with the clients’ needs and budget.

We had $15,050 in revenues during our first quarter ended SEP2009 and $8,800 in revenues during our first quarter ended SEP2008. During SEP2009 all revenues were from five (5) non-related party clients; during SEP2008 all of our revenues were derived from a single non-related party client. During this first quarter nearly all of our revenues were derived from our network marketing niche.

Expenses/Net Income from Operations

Our general and administrative expenses of $8,595 during our first quarter this year are significantly lower than the $14,239 we spent in our first quarter of last year. Due to increased revenues and decreased expenses during SEP2009 we recorded net income from operations of $6,455 compared to a loss during the same period last year of $5,439; revenues last year were only a little over half of this year’s, and expenses were almost double. Expenses during our first quarter this year included marketing costs of $143 compared to over $5,200 in marketing expenses in the same period in SEP2008 which accounts for the largest difference in expenditures between the periods. Legal, accounting and professional fees mostly associated with our registration process which was still taking place during SEP2008 were approximately $5,400. This year we spent a slightly less, $4,885, in that category as we continue to comply with reporting requirements. We also had nearly identical travel expenses during the first quarter of each year of slightly over $1,000. We incurred advertising expenses in this year’s first quarter of $1,960 but none last year. However we spent almost $1,600 on office supplies and equipment in SEP2008 compared to $50 in SEP2009. Overall efforts to increase revenues and decrease expenses demonstrated some degree of success in our first quarter of the 2010 fiscal year.

Notwithstanding slightly reduced legal and accounting costs in this quarter, we expect our legal and accounting fees to remain a relatively high percentage of our cash flows now that our registration statement is effective and we continue to comply with various SEC rules and reporting requirements

Balance Sheet Information

The chart below presents a summary of our balance sheet at September 30, 2009 and June 30, 2009:


		Sept 30, 2009		June 30, 2009
Cash	$	10,740	$	960
Total Current Assets		15,740		5,960
Total Assets		15,740		5,960
Total Current Liabilities		15,503		12,178
Accumulated Deficit		(112,020)		(118,475)
Total Stockholders Equity (Deficit)		237		(6,218)

We had only $960 in cash as of June 30, 2009 and accounts receivable of $5,000. Our cash increased at the quarter ended September 30, 2009 to $10,740. Liabilities of $12,178 at our June 30, 2009 fiscal year end increased to $15,503 during this first quarter and consist of accounts payable due to professionals for legal and accounting.

Commitment and Contingencies

We have no leases in place.

Off-Balance Sheet Arrangements

None.

Liquidity and Capital Resources/ Plan of Operation for the Next Twelve Months

Cash Flows and Capital Resources

Our revenues have not reached a level to support our operations nor provide for additional business development and expansion. During our first quarter, operations provided us with $9,780 in cash; during our first quarter of our last fiscal year operations used $5,782. Our primary sources of capital during our last three years are as follows:

During our three months ended September 30, 2009, we had no financing or investing activities; increased revenues of $15,050 were sufficient to fund operations.

During our fiscal year ended June 30, 2009, we had no financing or investing activities and our expenses exceeded our revenues. Revenues of $31,980 however, along with available cash provided sufficient cash to operate the business during the year.

During our fiscal year ended June 30, 2008 we had no financing activities; cash flows from operations generated sufficient income to operate our business during the year.

During fiscal year ended June 30, 2007, operating losses of $62,616 far exceeded our cash flows from operations of $21,000. We funded our losses through a private placement of our common stock which provided us with proceeds of $62,600.

Our Plan of Operation for the Next Year

We have incurred losses since inception and have an accumulated deficit at September 30, 2009 of $112,020. We have only $9,780 in cash, $5,000 in receivables, and a small number of clients. At our current estimated burn rate of $3,000 to $4,000 per month, we do not have sufficient cash to fund our operations and pursue business development and expansion.

We have an immediate need for cash to fund operations. During the next twelve months we must find ways to reduce our operating expenses and increase cash flows. Outside accounting services are responsible for reviewing and analyzing the completeness of the accounting information provided by our CFO and then compiling it into a financial statement prior to submission to our independent public accountant for review. We anticipate professional fees will cost us approximately $5,000 - $7,000 per quarter. In addition, these increased fees have not been relieved now that we are public because we continue to require assistance to comply with our reporting obligations under the 1934 Act.

Management has not pursued its business plan aggressively to date. And, even though revenues have now increased due to Management’s recent efforts to secure new clients, and expenses have decreased during this first quarter, historically we have operated at a loss. We recorded net income of $6,455 during the recent quarter ended September 30, 2009. Management has an immediate need for cash and must increase cash flows from operations significantly. We must pursue our niche market more aggressively while at the same time pursuing other small business marketing opportunities. In light of our deteriorating financial condition, Management has determined that it is critical that we:

Increase cash flows by increasing our client base - we began this effort in the quarter ended March 31, 2008 and will continue this throughout the next 12 months

Analyze the effectiveness of the various marketing services performed for KAATN, our sole client through December 2007 and utilize results, if positive, to (1) attract additional network marketing clients; and (2) adjust services offered this niche market based on the results – we have begun this process and will implement our findings during the next three months;

Expand our market to include more small businesses as the opportunity allows; we began this in the quarter ended March 31, 2008 and will continue this more aggressively during the next 12 months;

Develop more long term and/or repeat relationships with clients;

Analyze results of operations quarterly to compare revenues from multi-level marketing clients to revenues from general small business clients and adjust our marketing strategy accordingly; and

Reduce operating expenses where possible

Management does not know if it will be successful in these efforts especially in light of the current economic slowdown. And, as a result, Management cannot say if it will be successful in generating sufficient cash flows to support its operations over the next 12 months. Therefore, we may seek other means of funding our operations although management has not determined at this time how much money it will need to raise. We could attempt to receive loans from either related parties such as shareholders or directors, or we could receive loans from unrelated third parties. However, there are no written agreements with any party regarding loans or advances. If these parties do provide loans or advances, we may repay them, or we may convert them into common stock. We do not, however, have any commitments or specific understandings from any of the parties or from any individual, in writing or otherwise, regarding any loans or advances or the amounts.

Management also anticipates that additional capital may also be provided by private placements of our common stock. We would issue such stock pursuant to exemptions provided by federal and state securities laws. The purchasers and manner of issuance would be determined according to our financial needs and the available exemptions. We do not intend to do a private placement of our common stock at this time.

At this time, we have no commitments from anyone for financing of any type nor have we had any discussions with any party regarding the same nor have we planned any private placement or public offering of our common stock. Mr. Burke Green, our sole officer/director has indicated his willingness to contribute funds, if necessary to support operations, if not available from another source; however, there is no formal written agreement with Mr. Green regarding any such contribution nor is there any specific amount that he is obligated or willing to provide.

We have not, however, as of this date, made any significant effort to investigate or secure additional sources of financing.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable

Item 4T. Controls and Procedures

(a)

Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls as of the end of the period covered by this report, September 30, 2009. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Mr. Burke Green, (the “Certifying Officer”). Based upon that evaluation, our Certifying Officer concluded that as of the end of the period covered by this report, September 30, 2009, our disclosure controls and procedures are effective in timely alerting management to material information relating to us and required to be included in our periodic filings with the Securities and Exchange Commission (the “Commission”).

Our officer further concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by the issuer in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and are also effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow time for decisions regarding required disclosure.

(b)

Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer, 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.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors

Not applicable.

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

During the period covered by this report, no unregistered securities were sold

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information.

Our Form S-1 Registration Statement was declared effective by the U.S. Securities and Exchange Commission on April 8, 2009.

Item 6. Exhibits.

Exhibit No. Description

3.1

Amended Restated Articles, filed on January 28, 2008 with the State of Nevada(1)

3.2

By-laws (1)

31.1

Certification

32.1

Certification

(1)

Filed with FORM SB-2 on January 31, 2008.

SIGNATURES

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.

THE ANDINA GROUP, INC.

(Registrant)

Dated: January 20, 2010

By: /s/ Burke Green

Burke Green

President, Chief Executive and Financial Officer

Director

Andina Group Inc. 10-Q