Washington, D.C. 20549

FORM 10-QSB

(Mark One)

ý                                 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT 0F 1934

For the period ended: January 31, 2005

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

For the transition period from

Commission File Number 0-30432

ARBOR ENTECH CORPORATION

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

Issuer’s Telephone Number, including Area Code:   (570) 376-2217

(Former name, former address and former fiscal year, if changed since last report)

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 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.

ý   Yes     o   No

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

Transitional Small Business Format (check one):  Yes   o     No   ý

ARBOR ENTECH CORPORATION

CONDENSED BALANCE SHEET

JANUARY 31, 2005

(Unaudited)

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

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ARBOR ENTECH CORPORATION

CONDENSED STATEMENT OF OPERATIONS

(Unaudited)

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

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ARBOR ENTECH CORPORATION

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)

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

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ARBOR ENTECH CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2005

(Unaudited)

NOTE 1 -                Unaudited Interim Financial Statement

                                In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein.  These financial statements are condensed and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

                                Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.

NOTE 2 -                Property and Equipment

                                Depreciation amounted to $862 and $4,201 for the nine months ended January 31, 2005 and 2004, respectively.

                                The land and building are collateralized by a mortgage held by the Company’s Secretary/Treasurer (see Note 3).

NOTE 3 -                Commitments and Contingencies

                                Line of Credit

                                The Company has a revolving credit facility with its Secretary/Treasurer, secured by a mortgage of the Company’s real property located in Tioga County, Pennsylvania.  This revolving line of credit provides for the extension of credit in the aggregate principal amount of $100,000 with interest at 11% per annum.  Principal and interest are payable on demand.  There was no balance due at January 31, 2005 on this credit facility.

NOTE 4 -                Notes Receivable — Related Party

                                Notes receivable in the amount of $1,019,850 were paid in full in May 2004.

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ARBOR ENTECH CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2005

(Unaudited)

NOTE 5 -                Dividends

                                On May 1, 2004, the board of directors paid a dividend of $.15 per share for a total of $1,057,581 to each shareholder of record as of March 22, 2004.

NOTE 6 -                Discontinued Operations

                                On September 2, 2003, the Company informed The Home Depot, Inc., the customer that purchased more than 99 percent of the Company’s wood products, that the Company would no longer do business with Home Depot due to increased difficulties in transacting business with Home Depot on a profitable basis.  The Company stated to Home Depot that these difficulties included Home Depot’s prohibition against price increases despite increases in the Company’s increased costs of production, a diminution in Home Depot territories the Company was allowed to sell products to, and Home Depot’s demands regarding returns of ordered products that the Company was unwilling to accede to for economic reasons.

The Financial Accounting Standards Board’s SFAS No. 144, “Accounting for the Impairment or disposal of Long-Lived Assets”, addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed of.  SFAS No. 144 supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of,” retains the fundamental provisions of Statements 121 for (a) recognition and measurement of the impairment of long-lived assets to be held and used and (b) measurement of long-lived assets to be disposed of by sale.  SFAS 144 also supersedes the accounting and reporting provisions of APB Opinion No. 30, “Reporting and Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transaction,” for segments of a business to be disposed of, but retains the requirement of Opinion 30 to report discontinued operations separately from continuing operations and extends that reporting to a component of an entity that either has been disposed of (by sale, by abandonment, or in a distribution to owners) or is classified as held for sale.

                                The Company has discontinued its wood products business.  Consequently, the accompanying financial statements reflect the wood products business as discontinued operations in accordance with SFAS No. 144.

                                Summarized below are the results of discontinued operations:

                                The Company is seeking other business opportunities, but there can be no assurance that such opportunities will be identified, engaged in, or result in any profits.

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

                                Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

                                The statements contained in this report which are not historical fact are “forward-looking statements” that involve various important assumptions, risks, uncertainties and other factors which could cause the Company’s actual results for 2005 and beyond to differ materially from those expressed in such forward-looking statements.  These important factors include, without limitation, competitive factors and pricing pressures, changes in legal and regulatory requirements, technological change or difficulties, product development risks, commercialization and trade difficulties and general economic conditions, as well as other risks previously disclosed in the Company’s securities filings and press releases.

                                General

                                We were a wood products Company which has been in business since 1980.  Our business has fluctuated over the years.  We were almost wholly dependent on sales to Home Depot.

                                On September 2, 2003, the Company informed The Home Depot, Inc., the customer that purchased more than 99 percent of the Company’s wood products, that the Company would no longer do business with Home Deport due to increased difficulties in transacting business with Home Depot on a profitable basis.  The Company stated to Home Depot that these difficulties included Home Depot’s prohibition against price increases despite increases in the Company’s increased costs of production, a diminution in the Home Depot territories the Company was allowed to sell product to, and Home Depot’s demands regarding returns of ordered products that the Company was unwilling to accede to for economic reasons.

                                The Company has discontinued its wood products business.  The Company intends to seek other business opportunities, but there can be no assurance that such opportunities will be identified, engaged in, or result in any profits.

                                Results of operations

                                Quarter ended January 31, 2005 compared to the quarter ended January 31, 2004.

                                Since the Company discontinued its wood products business there were no sales from continuing operations during the quarters ended January 31, 2005 and 2004.

                                Selling, general and administrative expenses were approximately $6,000 for the quarter ended January 31, 2005, a decrease of approximately $13,000 or 68% over selling, general and administrative expenses of approximately $19,000 for the quarter ended January 31, 2004.  This decrease is a direct result of the Company’s discontinued operations and curtailment of virtually all operating expenses.

                                Arbor’s net loss decreased from approximately $65,000 for the quarter ended January 31, 2004 to a net loss of approximately $6,000 for the quarter ended January 31, 2005.  This was a decrease of approximately $59,000 or 91%.

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                                Nine months ended January 31, 2005 compared to the nine months ended January 31, 2004

                                Since the Company discontinued its wood products business there were no sales from continuing operations during the nine months ended January 31, 2005 and 2004.

                                Selling, general and administrative expenses were approximately $26,000 for the nine months ended January 31, 2005, a decrease of approximately $121,000 or 82% over selling, general and administrative expenses of approximately $147,000 for the nine months ended January 31, 2004.  This decrease is a direct result of the Company’s discontinued operations and curtailment of virtually all operating expenses.

                                Arbor’s net loss decreased from approximately $269,000 for the nine months ended January 31, 2004 to approximately $25,000 for the nine months ended January 31, 2005.  This was a decrease of approximately $244,000 or 91%.

                                Discontinued Operations

                                On September 2, 2003, the Company informed The Home Depot, Inc., the customer that purchased more than 99 percent of the Company’s wood products, that the Company would no longer do business with Home Depot due to increased difficulties in transacting business with Home Depot on a profitable basis.  The Company stated to Home Depot that these difficulties included Home Depot’s prohibition against price increases despite increases in the Company’s increased costs of production, a diminution in the Home Depot territories the Company was allowed to sell product to, and Home Depot’s demands regarding returns of ordered products that the Company was unwilling to accede to for economic reasons.

                                Net sales of the wood products business were $0 and $0 for the quarters ended January 31, 2005 and 2004, respectively.  The net loss from discontinued operations was $0 and $56,000 for the quarters ended January 31, 2005 and 2004, respectively.

                                Liquidity and capital resources

                                In prior years, Arbor’s working capital requirements have been met primarily from sales generated by its discontinued wood products business.  At January 31, 2005 we had working capital of approximately $286,000.

                                As at January 31, 2005, we had cash and cash equivalents of approximately $290,000, which represented 91% of total assets.  Arbor believes it has adequate working capital to fund its operations for at least the next 12 months.

                                Net cash used in operating activities amounted to approximately $37,000 for the nine months ended January 31, 2005.  Loss from continuing operations of $25,000 for the nine months ended January 31, 2005 was increased by decreases in accounts payable of $13,000.

                                Net cash used in financing activities was approximately $38,000 for the nine months ended January 31, 2005 as a result of related party loan repayments of $1,020,000 offset by dividend payments of $1,058,000.

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Item 3 Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15a-15(e) of the Exchange Act) as of the end of the period covered by this report.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a) The following exhibits are filed with this report:

(b) None

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.

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