CAPC 10-Q Quarter ended Sept. 30, 2011

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2011

o 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: 000-28831

CHDT CORPORATION

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

Florida	84-1047159
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

350 Jim Moran Boulevard, Suite 120, Deerfield Beach, Florida  33442

(Address of principal executive offices)

(954) 252-3440

(Issuer’s Telephone Number)

Indicate by check mark whether the issuer (1) has 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 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. x Yes o No

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a 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).

o Yes x No

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 practical date.  As of  September  30, 2011, there were 649,510,532 shares of the issuer's $.0001 par value common stock issued and outstanding.

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

General – CHDT Corporation, a Florida corporation, (“CHDT,” “Company,” “we,” or “our”) is a public holding company with its Common Stock, $0.0001 par value per share, (“Common Stock”) quoted on the OTCQB system of The OTC Markets, Inc. under the trading symbol “CHDO.”  Prior to February 23, 2011, the Common Stock was quoted on the Bulletin Board of the Over-the-Counter quotation system under the trading symbol “CHDO.OB.”  This discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's annual report on Form 10-K for the year ended December 31, 2010.

Forward Looking Statements

Management’s Discussion and Analysis contains “forward-looking” statements within the meaning of Private Securities Litigation Reform Act of 1995, as amended, as well as historical information. The expectations reflected in these forward-looking statements may prove to be incorrect or could change with changing circumstances. Our actual results could differ materially from those anticipated in forward-looking statements as a result of certain factors – many of those factors being beyond our control or ability to predict. Forward-looking statements include those that use forward-looking terminology, such as the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” “plan,” “will,” “shall,” “should,” and similar expressions, including when used in the negative. Although we believe that the expectations reflected in these forward-looking statements are reasonable and achievable at the time made, these statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.  Actual results may differ significantly from anticipated business and financial results.  The Company is a “penny stock” under Commission rules and the public stock market price for its Common Stock has been depressed for several consecutive fiscal quarters.  The Company’s Common Stock lacks sufficient or active market maker and institutional investor support in the public market and this lack of support, coupled with successive fiscal quarters of financial losses, means that any increase in the per share price of our Common Stock in the public market is usually eliminated by selling pressure from profit taking by investors.  As of October 14, 2011, the Common Stock was trading at above one cent on the Bid, but has consistently traded below one cent for most of fiscal year 2011 to the date of this Report.  Investment in our Common Stock is highly risky and should only be considered by investors who can afford to lose their investment and do not require liquidity.  Investors should consider risk factors in this Report and other SEC filings of the Company.

All forward-looking statements attributable to us are expressly qualified in their entirety by the above and all other applicable factors. We undertake no obligation to update or revise these forward-looking statements, except as required by law, whether to reflect events or circumstances after the date initially filed or published, to reflect the occurrence of unanticipated events or otherwise.

Introduction

The following discussion and analysis summarizes the significant factors affecting: (i) our consolidated results of operations for the three months and year to date ended September 30, 2011 compared to the three months and year to date ended September 30, 2010; and (ii) financial liquidity and capital resources.

Through our operating subsidiaries, we are a developer and manufacturer of niche consumer products selling to distributors and retailers in the United States. Our Capstone subsidiary currently operates in five primary business segments: (1) Portable booklights and multi-task lights. (2) eReader lights. (3) Eco-i-Lite power failure lights and night lights (4) Wireless motion sensor lights (5) Light Ringers® collection of desk lamps and utility lamps.

Our growth strategy has six main elements:

1.

Repurpose through packaging and feature set enhancements, our product lines to meet the needs of departments which we do not currently serve within our existing customer base and

2.

Continue to expand retail distribution and develop lighting products purposed towards distribution channels which we have not heretofore served; and

3.

Explore new technologies that can be applied to products that would expand existing categories and our presence at retail channels; and

4.

Acquiring businesses that have innovative products that would complement our existing marketing strategies or allow the company to diversify into other markets; and

5.

Acquiring businesses that would allow us to diversify into direct consumer or commercial industrial channels; and

6.

Seek to expand retail distribution into overseas distribution channels, particularly in South America, Western Europe and Asia.

Capstone Lighting products specialize in low cost, innovative portable lighting products that we believe can continue to win a profitable niche and market share without high market penetration costs.  Capstone sells booklights, multi-task lights, induction charged power failure lights and nightlights, motion sensor lights, desk lamps, eReader lights and also offers “Private Label” programs marketed to major retailers.  “Private Label” is the manufacture of products that are branded and sold under a proprietary name or trade name owned by a specific retailer, manufacturer or distributor.

Current Products. Capstone is engaged in the business of producing the following consumer products, which are, unless indicated otherwise, manufactured for and under the trade name of “Capstone” by contract manufacturers in China, distributed by us and sold through regional and national retailers and distributors in the United States, including online e-commerce resellers:

(1) Portable book lights and Task lights. In March 2009 the Company launched an expanded new line of booklights and multi-task lights, under the name PATHWAY LIGHTS®. This program included the following named products: Mini Taskbright, Multi Taskbright, Poser Taskbright, Pawprint Taskbright, Compact 1 Brightbook, Compact 2 Brightbook, Britespot 2 Brightbook, Britespot 3 Brightbook, and Multipose Brightbook.  In March 2010 at the International Housewares Show, the PATHWAY LIGHTS® program was further expanded with the launch of the Retro Taskbright and the Minipose Taskbright   with additional trendy colors offered in our established line. These LED booklights are small, lightweight and portable and attach to reading materials and illuminate the area of text. They are powered by batteries which are typically included in our product offerings. In March 2011, at the International Housewares Show, the PATHWAY LIGHTS® program was further expanded with additional trendy colors and new designs.

(2) In July 2010, we developed the eReader-Lite and the eBook-Lite products and presented to only a few retailers as it was late in the buying season. This new category has been specifically designed to provide lighting for the new trendy eReader products segment. The eGrip design allows it to adjust to all eReader designs.  In March 2011, at the International Housewares Show, the Company officially launched the line and introduced additional trendy colors and a rechargeable eReader-Lite.

(3) In 2009, the Company also launched the Eco-i-Lite and Mini Eco-i-Lite Power Failure Lights. Both use induction charge technologies and function as a power failure light, hand held flashlight, and night light. Capstone pioneered this technology for these applications and gained attention of the North American markets. Each product uses an encased lithium ion battery that when fully charged provides 7 + hours of battery life and LED light bulbs that last 100,000 hours. In March 2010, at the International Housewares Show, the Company continued to expand the programs by adding the Midi Eco-i-Light and the Pawprint Line in Full size, Midi and Mini, specifically developed for the dog walking consumers, demonstrating the Company’s ability to expand these programs through minimal design treatments. In March 2011, at the International Housewares Show, the Company introduced Mini Eco-i-Lite version marketed to senior citizens. The Company also introduced a new Eco-Headlite.

(4). In March 2010, at the International Housewares Show, the Company launched its new C-Lite Wireless Motion Sensor light. This is offered in a 12 LED full size and a 6 LED Mini Size and is powered by AA batteries. These lights provide lighting for dark areas without having to install electrical wiring. The bulb housing rotates 360 degrees to allow for light to be directed where needed. Both versions have a Motion Sensor Circuitry that activates the lights when movement is detected within 13 feet of the C-Lite. Both versions have a Hi and Lo light brightness setting to conserve the batteries. The full size also has a period selector (60 seconds, 90 seconds or 120 seconds) which presets the time period that a light should turn off after the last motion has been detected. Both come with a unique slide and snap bracket that allows for the product to be installed on a wall.  (5) In March 2010, the Company officially launched its new line of Light Ringers® Lamps. This offer includes the 12 LED Battery Operated Lamp, 12 LED Rechargeable Lamp, 12 LED Solar Lamp and 12 LED AC Lamp also the 20 LED Rechargeable Lamp, 20 LED AC Lamp, 20 LED Metal Lamp and 20 LED Utility Lamp. These products are all offered in trendy colors and unique packaging. This line became available for delivery in early 2011.

Distribution of Products:  Capstone distributes its products through existing national and regional distributors and retailers in the United States, including,   office-supply chains, book store chains, warehouse clubs, supermarket chains, drug chains, department stores, catalog houses, online retailers and book clubs.   Our largest distribution channels are: Target Stores, Wal-Mart/Sams Club,  Meijer Stores,  Office Depot, Barnes & Noble book stores, Brookstone, Fred Meyer-Kroger Stores, Costco Wholesale,  The  Container Store, Starcrest,  True Value  and in Central and South America with our master distributor  Avtek.   These distribution channels may sell our products through the Internet as well as through retail storefronts and catalogs/mail order.  When we launch new products, our sales team will initially introduce the new line to our existing customer base. Many of our products are multifunctional and as such can be marketed to many other departments within an existing customer. Our goal is to expand our products into other departments where the product features fill a consumer’s need.

As a small reporting company with limited resources, we leverage the engineering and manufacturing capabilities of our Chinese contract manufacturers in order to provide quality products with more functions at what we deem to be a value price which has the broadest consumer appeal. This strategy has enabled us to gain access to the most recognized retailers in USA. We face many national and regional brand-named competitors in the lighting categories. We have proven to compete successfully in our lighting programs and share shelf space with nationally branded companies.  We continue to rely on loans from members of management from time to time to finance product purchases for orders and working capital.

Prior History: Prior to the acquisition of Capstone Industries and the involvement of the new management that joined the Company at that time; the history of CHDT has been a series of failed operating subsidiaries engaged in various business lines. We believe these past failures and CHDT’s inability to attain and sustain profitability was hindered by frequent changes in management and business lines, inadequate funding, and / or inadequate management expertise in the then current business lines.

Since 2007, with the acquisition of Capstone Industries, we have sought to avoid the problems of the past and recruited an experienced management and sales team for the stated purpose to develop and expand our consumer products business.  Although these steps have resulted in losses in 2010, we believe that this investment in corporate infrastructure was necessary to lay the foundation for any hope of future success and effective business and product development.  While we are not certain that our current strategy and business lines will produce sustained future profitability or any growth, we believe that the current strategy and business line is the best approach for our current management team and available resources and, in our opinion, the most likely path to any hope of sustained future profitability or any growth. 2011 has proven to be our best performing year since 2007 and is profitable through the 3 rd quarter. Our board of directors continues to review alternate business strategies, which may include sale of an existing business line, acquisition of new product lines, and merger and/or acquisition transactions with other companies. While no board decision has been made on any of these possible corporate transactions or actions, our board continues to periodically evaluate and consider such options.

For the fiscal years ended December 31, 2010 and December 31, 2009, the Company’s revenues were derived from 4 sources: (i) the sale of our PATHWAY LIGHTS® booklight products (Capstone and its booklight product line was acquired by CHDT in September 2006); (ii) sale of Eco-i-Lite Power Failure Lights, (iii) sale of our Wireless motion sensor lights; and (iv) sale of our eReader-Lite program.

In fiscal year 2010 and through 2011 to date, we continued our historical reliance on raising working capital for operations, business and product development, by receiving loans or investments from members of management or their affiliates.  We were able to obtain an increase in our factoring credit line to help support Capstone’s operations and working capital needs, however we may have to continue to raise working capital for CHDT and working capital for Capstone business and product development (as well as any possible mergers and acquisitions of other companies or their products) by selling our securities in private placements to investors and/or loans or investments by our management and their affiliates. This reliance on private placements of securities and insider loans or investments adds to the number of outstanding shares of Common Stock, dilutes our shareholders and further weakens our ability to attract primary market makers and institutional investor support for our Common Stock as a publicly traded security and also adversely impacts on our ability to do mergers and acquisitions, attract traditional bank funding or raise working capital by public offerings of our securities. The market price of our Common Stock, prior to this year, has consistently trended downward or remained just above or below one cent. Our lack of primary market makers and institutional investor support of our Common Stock also contributes to our burden in achieving sustained, profitable business lines. These problems stem from the manner in which CHDT was taken public and developed a public market for the Common Stock in 1989. CHDT did not initiate an underwritten initial public offering and produce a national network of broker-dealers and institutional investors interested in long-term investment in CHDT and stability in the market price for the Common Stock. As a result, we have had difficulty in sustaining any increases in the market price of the Common Stock or maintaining stability in the market for our Common Stock.  When the market price of the Common Stock enjoys any significant percentage increase, shareholders tend to sell the Common Stock to reap any gains from the market price increase and the selling causes the market price of the Common Stock to fall back.  Since there are no primary market makers or institutional investors supporting the Common Stock, there are a few investors effectively countering the impact of the selling pressure on the market price for the Common Stock. The low market price and lack of support for our Common Stock means that we are hampered in our ability to resort to the public markets to raise working capital because of the low stock market price. As such, we do not readily enjoy one of the principal benefits of being a public company: ready access to the public securities markets for working capital.

We have attempted to address and intend to continue to address the above problems in public and market maker support for our Common Stock by: (1)  posting growth  in consecutive fiscal quarters   in  our current consumer product business lines in order to further demonstrate that current management has a sound business line and business strategy. (2) upon establishing a record of profitability, members of management and agents will solicit support from institutional investors, asset managers, market makers and others to provide long-term investors in the Common Stock and stability in the public market for the Common Stock; (3) seek investment banker assistance in developing a strategic plan, including an acquisition plan, to dramatically grow our core product line or another non retail product line that offers entry into a new distribution channel or niche market. (4) When cash flow permits, the board will contemplate a stock direct buyback program in an effort to demonstrate director’s and management’s confidence, while reducing the issued and outstanding share count.  We can make no assurances that we shall succeed in this effort or that we will undertake or pursue any of the above actions, which are dependent on our financial performance.

We intend to remain focused on niche products for the time being that we believe can attain a profitable market niche with minimal market penetration costs and is attractive to our existing distribution channel of regional and national retailers and distributors. We also recognize that the traditional brick-and-mortar retail distribution has been negatively impacted by the ongoing economic recession and the growing use of online shopping. Subject to continued adequate funding, we intend to continue to develop new products by internal efforts as well as acquire new products by mergers and acquisitions or asset purchase, but we will also look for opportunities by merger and acquisition that would allow us to diversify into non –retail distribution channels and business lines that may have faster and more robust growth potential than the current business line.    The Company is considering a number of options to enhance shareholder value, including without limitation, divesting one or more existing business lines, and mergers and acquisitions.

Results of Operations – Comparing 2011 to 2010

Net Sales : For the three months ended September 30, 2011, increased by approximately $1,618,000 or 53.6% up to $4,631,900 compared to $3,013,900 in the same prior year period. This was a record third quarter revenue for the Company.

Net Sales for the nine months ended September 30, 2011 increased by  approximately $4,179,671 or 105.3% up to $8,149,200 compared to $3,969,500 in the same prior year period. This also represents a record third quarter year to date revenue.

All of the revenue was generated by the Company’s subsidiary, Capstone Industries. The increase in net sales was due to increased demand for the Induction Charged Power Failure Lights, expanded distribution into existing retailers and expansion into new retail distribution.

Cost of Sales: For the three months ended September 30, 2011 and September 30, 2010 Cost of Sales, were approximately $3,579,000 and $2,126,400, respectively. The increase cost of approximately $1,452,600 is primarily due to the increase in sales volume.

For the nine months ended September 30, 2011 and September 30, 2010, costs of sales were approximately $6,195,700 and $2,777,800 respectively. The increase of approximately $3,417,900 was primarily the result of increased sales volumes.  Cost of Sales as a percentage of net sales for the three months ended September 30, 2011 and September 30, 2010 was 76% and 70% respectively.  As a percentage of total revenue, cost of sales, as compared to last year has increased by 6%.  This is because the Company has allocated funds of approximately $95,000 to support fourth quarter sales of the Power Failure Light and Nightlight programs, and other additional allowances of $171,000 for a total of $266,000 of allowances in the third quarter.  These allowances had the effect of either reducing Gross Sales or increasing Cost of Sales with the net effect of increasing the Cost of Sales percentage to Net sales by approximately 4.3%.

Gross Profit: For the three months ended September 30, 2011 and September 30, 2010, was approximately $1,052,800 and $887,600 respectively, an increase of $165,200 or 19% from the same period in 2010.  For the nine months ended September 30, 2011 and September 30, 2010, gross profit was approximately $1,953,400 and $1,191,700 respectively, an increase of $761,700 or 64%.  The large gross profit increase is attributed to significantly increased shipments in the first nine months of the year as compared to the same period last year. The lower gross profit percentage compared to the same period in 2010 was mainly the result of additional allowances provided to retailers to promote product sell through.

Total Operating Expenses for the three months ended September 30, 2011 and September 30, 2010 were approximately $431,200 and $655,700 respectively.  This was a decrease of approximately $224,500 or 34% as compared to the same period in 2010.  For the nine months ended September 30, 2011 and September 30, 2010, operating expenses were approximately $1,162,000 and $1,703,800 respectively, a decrease of $541,800 or 31.8%. This expense decrease can be attributed to various factors, further explained below. During 2010 Management initiated an expense reduction program which has continued into 2011 and the Company has totally eliminated certain expenses.

Sales and Marketing Expenses for the three months ended September 30, 2011 and September 30, 2010 were approximately $44,400 and $192,400 respectively, a decrease of approximately $148,000 or 77%. For the nine months ended September 30, 2011 and September 30, 2010 expenses were approximately $117,100 and $379,100 respectively, a decrease of $262,000 or 69% .This large expense decrease is mainly attributed to the elimination of $192,500 Royalty License payments to STP in 2011.

Compensation Expenses for the three months ended September 30, 2011 and September 30, 2010 were approximately $208,900 and $247,600 respectively.  This is a reduction of $38,700 or 15.6%.  Compensation expenses for the nine months ended September 30, 2011 and September 30, 2010 were approximately $585,600 and $755,000 respectively.  A reduction of $169,400 or 22.4% for the nine months as compared to the same prior year period.  This was achieved by a voluntary salary reduction by Executive Management and a reduction of stock based compensation.

Product Development Expenses for the three months ended September 30, 2011 and September 30, 2010 were approximately $57,700 and $44,600 respectively. For the nine months ended September 30 2011 and September 30, 2010 expenses were $140,500 and $115,300 respectively. Expenses increased by $25,200 or 21.8% which was the result of the increased revenue volume and new product development.

General Admin Expenses for the three months ended September 30, 2011 and September 30, 2010 were approximately $98,100 and $127,600 respectively.  For the nine months ended September 30, 2011 and September 30, 2010 expenses were approximately $253,100 and $344,900 respectively. This was a reduction of $91,800 or 26.6% as compared to the prior year period.

Other Income (Expense): Interest Expenses for the three months ended September 30, 2011 and September 30, 2010 were approximately $87,800 and $101,700 respectively, a decrease of $13,900 or 13.6%. For the nine months ended September 30, 2011 and September 30, 2010 interest expenses were approximately $242,300 and $183,800, an increase of $58,500 or 31.8%. Most of the expense increase was the result of additional funding for overseas Purchase Orders required to support the increased revenue.  The purchase order interest expense for the nine months ending September 30, 2011 and September 30, 2010 included in the above numbers was $110,000 and $79,500 respectively an increase of $30,500 or 38.3%.

Net Income (Loss): The Net Income for the three months ended September 30, 2011 and September 30, 2010 was approximately $533,800 and $130,200 respectively. This was an improvement of approximately $403,600 or 310% increase compared to the third quarter 2010. The Net Income for the nine months ended September 30, 2011 was approximately $548,500 as compared to a Net Loss of $695,900 respectively. This was a net improvement of approximately $1,244,400 as compared to the nine months ending September 30, 2010. These financial results reflect a record third quarter both in Net Revenue and Net Income and also a record year to date in Net Revenue and Net income.

Liquidity and Capital Resources

LIQUIDITY

The Company believes that its cash and cash equivalents, cash generated from operations, the availability under the expanded factoring agreement and the purchase order financing agreements as of September 30,2011 provide sufficient liquidity to support working capital requirements, planned capital expenditures and debt obligations.

Cash Flows from Operating Activities.

For the nine months ended September 30, 2011 net cash used in operating activities was approximately $1,031,000. Most of the cash was used to fund the significant increase in Accounts Receivables in the period due to the higher sales volume.

Cash Flows from Investing Activities .

Net cash used in investing activities was approximately $46,000 for the nine months ended September 30, 2011. This was the result of investing in new product tooling.

Cash Flows from Financing Activities .

For the nine months ended September 30, 2011 net cash provided by financing activities was approximately $1,028,200.  Funds have been advanced by Sterling Capital Funding as part of our factoring credit line, which was increased in the third quarter 2011 up to $4,000,000 availability and some of our Directors who have provided loans to fund the purchase of product overseas to support the fulfillment of customer’s orders. These sources of funds have been instrumental in allowing CHDT’s subsidiary, Capstone Industries to fund its revenue growth.

Directors & Officers Insurance : We currently operate with directors’ and officers’ insurance and we believe our coverage is adequate to cover likely liabilities under such a policy.

Impact of Inflation: Our major expenses have been the cost of selling and marketing product lines to customers in North America.  That effort involves mostly sales staff traveling to make direct marketing and sales pitches to customers and potential customers trade shows around North America and visiting China to maintain and seek to expand distribution and manufacturing relationships and channels.  As a result of world economic conditions and the current price of world oil and resulting increased material costs, there are now pressures from Chinese Manufacturers to increase costs. We generally have been able to reduce cost increases by strong negotiating or re-engineering products, but may have to increase the price of our products in fiscal year 2011 in response to such inflationary pressures.  Since we operate in industries where the consumer tends to be price sensitive, any such increase in the prices of our products may adversely impact our sales and financial results in fiscal year 2011.

Country Risks .  Almost all of our contract manufacturing operations and sources of products are located in Peoples’ Republic of China or “China.”  We are dependent on China for almost all of the design and production of our consumer products.  As such, we are subject to significant risks not typically faced by companies operating in or obtaining products from North America and Western Europe manufacturing sources.  Political,  economic and trade  conflicts  between the United  States and China,  including  possible conflict over North  Korea's  nuclear  weapons  program or the  independence  of Taiwan,  could severely hinder the ability of  CHDT to obtain products and fill customer orders from our current Chinese  manufacturing  sources. Further, Chinese commercial law is still evolving to accommodate increasing capitalism in Chinese society, especially in terms of commercial relationships and dealings with foreign companies, and can be unpredictable in application or principal.  The same unpredictability exists with respect to the central Chinese government,  which can  unilaterally and without prior warning impose new legal, economic  and  commercial  laws,  policies  and  procedures.   This element of unpredictability heightens the risk of doing business in China.  While dramatic anti-trade shift in Chinese policy or laws would seem to be clearly against the best interests of China and its current economic trends, China has a central government with the authority to make such changes and an incentive to take actions designed to reaffirm the control of the central government over the economy and society.

China has been under ongoing international pressure to value its currency in a manner that would increase the value of Chinese currency in respect of other world currencies and thereby increase the cost of Chinese goods in the world market.  Such a revaluation of Chinese currency could adversely impact business by increasing costs to consumers, but this cost impact would also affect our competitors with products produced in China.  China adopted a 2% revaluation of its currency in 2005 and the U.S. Dollar declined slightly in response to this revaluation.  While under international pressure to value the Chinese currency in a manner that more realistically reflects the strength and value of the Chinese currency, China may continue to keep Chinese currency at a level that some regard as below its perceived, true value.  The currency issue may produce a conflict between the U.S. and China that affects trade or commerce between those nations and may affect us as well.

Currency . The U.S. dollar is the currency used in all of our commercial transactions and our property and business is conducted in North America. As a result, the effect of the fluctuations of exchange rates is considered minimal to our business operations.

Interest Rate Risk . We do not have significant interest rate risk during the fiscal quarter ending September 30, 2011.

Credit Risk . We have not experienced significant credit risk, as most of our customers are long-term customers with superior payment records. Our managers monitor our receivables regularly and our Direct Import Programs are shipped to only the most financially stable customers or advance payments before shipment are required for those accounts less financially secured.

Off-Balance Sheet Arrangements. We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures. We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

Our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2011 and concluded that the disclosure controls and procedures were effective under Rules 13a-15(e) and 15d-15(e) under the Exchange Act and as of September 30, 2011, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Commission regulations and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Item 4(T). Controls and Procedures.

Changes in internal controls. There were no changes in our internal control over financial reporting that occurred during the six months covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The certifications of our chief executive officer and chief financial officers attached as Exhibits 31.1 and  to this Report include information concerning our disclosure controls and procedures and internal control over financial reporting. Such certifications should be read in conjunction with the information contained in this Item 4, including the information incorporated by reference to our annual report on Form 10-K for the year ended December 31, 2010, for a more complete understanding of the matters covered by such certifications.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

Other than as set forth below,  we are not a party  to any  material  pending or threatened  legal  proceedings  and,  to the  best  our  knowledge,  no such action by or against us has been  threatened.  From time to time, we are subject to legal proceedings and claims that arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur in such routine lawsuits, we believe that the final disposition of such routine lawsuits will not have material adverse effect on its financial position, results of operations or status as a going concern.

Other Legal Matters . To the best of our knowledge, none of our directors, officers or owners of record of more than five percent (5%) of the  securities of the Company,  or any associate of any such director, officer or security holder is a party adverse to us or has a material interest adverse to us in reference to pending litigation.

We are not currently a party to any other legal proceedings not disclosed above that we believe will have a material adverse effect on our financial condition or operations of the Company.

Item 1A. Risk Factors.

During the nine months ended September 30, 2011, there were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010.

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

There were no unregistered issuances of Company securities in the quarter ending September 30, 2011.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to Vote of Security Holders

As of September 30, 2011, the following proposals were approved by the written consent of holders of the Common Stock, as of the record date of September 30. 2011. There were 649,510,532 shares of Common Stock outstanding and 1,000 shares of Series C Preferred Stock of the Company outstanding as of September 30, 2011.

	For	Against	Withheld
Ratify the appointment of Robison Hill & Co. as auditors for fiscal year 2011	7	0	0
Approve election of following nominees as directors to the Board of Directors – all being incumbents: 1. Stewart Wallach 2. Jeffrey Postal 3. Jeffrey Guzy 4. Larry Sloven 5. Laurie Holtz 6. Gerry McClinton	6	0	0

Item 5.  Other Information

None.

Item 6.  Exhibits

EXHIBIT #	DESCRIPTION OF EXHIBIT
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Stewart Wallach, Chief Executive Officer^
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Gerry McClinton, Chief  Financial Officer and Chief Operating Officer^
32.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Stewart Wallach, Chief Executive Officer. ^
32.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Gerry McClinton, Chief Financial Officer and Chief Operating Officer^

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^ Filed herein.

SIGNATURES

In accordance with Section13 or 15(d) of the Securities Exchange Act of 1934, CHDT Corporation has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Broward County, Florida on this 24 day of October, 2011.

CHDT CORPORATION

Dated:  October 24, 2011

/s/Stewart Wallach Stewart Wallach Principal Executive Officer		Chief Executive Officer
/s/Gerry McClinton Gerry McClinton Principal Operations Executive		Chief Financial Officer  and Chief Operating Officer

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