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

Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These statements include those concerning the following: Our intentions, beliefs and expectations regarding the fair value of all assets and liabilities recorded; our strategies; growth opportunities; product development and introduction relating to new and existing products; the enterprise market and related opportunities; competition and competitive advantages and disadvantages; industry standards and compatibility of our products; relationships with our employees; our facilities, operating lease and our ability to secure additional space; cash dividends; excess inventory, our expenses; interest and other income; our beliefs and expectations about our future success and results; our operating results; our belief that our cash and cash equivalents will be sufficient to satisfy our anticipated cash requirements; our expectations regarding our revenues and customers; investments and interest rates. These statements are subject to risk and uncertainties that could cause actual results and events to differ materially.

Creative Beauty Supply of New Jersey Corporation ("Creative NJ" or the "Company") undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q.

Critical Accounting Policies
The financial statements and accompanying footnotes included in this report have been prepared in accordance with accounting principles generally accepted in the United States with certain amounts based on management's best estimates and judgments. To determine appropriate carrying values of assets and liabilities that are not readily available from other sources, management uses assumptions based on historical results and other factors that they believe are reasonable. Actual results could differ from those estimates.

Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2008. There have been no material changes to our critical accounting policies as of and for the nine months ended September 30, 2009.

Trends and Uncertainties
There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on our limited operations. There are no known causes for any material changes from period to period in one or more line items of Creative NJ's financial statements.

Liquidity and Capital Resources
At September 30, 2009, Creative NJ had a cash balance of $178,280, which represents a $21,895 decrease from the $200,175 balance at December 31, 2008. This decrease was primarily the result of cash used to satisfy the requirements of a reporting company.

10 The focus of Creative NJ's efforts is to acquire or develop an operating business. Despite no active operations at this time, management intends to continue in business and has no intention to liquidate Creative NJ. Creative NJ has considered various business alternatives including the possible acquisition of an existing business, but to date has found possible opportunities unsuitable or excessively priced. Creative NJ does not contemplate limiting the scope of its search to any particular industry. Management has considered the risk of possible opportunities as well as their potential rewards. Management has invested time evaluating several proposals for possible acquisition or combination; however, none of these opportunities were pursued. Creative NJ presently owns no real property and at this time has no intention of acquiring any such property. Creative NJ's sole expected expenses are comprised of professional fees primarily incident to its reporting requirements.

Discontinued Operations
On November 30, 2007, Creative NJ's Board of Directors approved a plan to dispose of its wholesale and retail beauty supply business. The Board recognized that this operation has never realized a profit and that sales volumes have been declining each year. Creative NJ contacted its suppliers and returned as much of the inventory as possible and sold the remaining balance to its customers. Creative NJ's objective was to cease all operations by December 31, 2007 and vacate the facility it leased by January 31, 2008. Creative NJ completed its plan on January 1, 2009.

Results of Operations for the Three Months Ended September 30, 2009 compared to the Three Months Ended September 30, 2008.

Creative NJ incurred a net loss of $5,268 in the current period versus a net loss of $9,045 in the prior period. Operating expenses were incurred primarily to enable Creative NJ to satisfy the requirements of a reporting company. For the three months ended September 30, 2009 and 2008, professional fees necessary to remain a reporting company were $5,828 and $8,379, respectively. For the three months ended September 30, 2009 and 2008, Creative NJ incurred losses from discontinued operations of $0 and $2,305, respectively.

Results of Operations for the Nine Months Ended September 30, 2009 compared to the Nine Months Ended September 30, 2008.

Creative NJ incurred a net loss of $20,746 in the current period versus a net loss of $35,930 in the prior period. Operating expenses were incurred primarily to enable Creative NJ to satisfy the requirements of a reporting company. For the nine months ended September 30, 2009 and 2008, professional fees necessary to remain a reporting company were $22,733 and $20,240, respectively. For the nine months ended September 30, 2009 and 2008, Creative NJ incurred losses from discontinued operations of $0 and $21,870, respectively.

During the current and prior period, Creative NJ did not record an income tax benefit due to the uncertainty associated with Creative NJ's ability to merge with an operating company, which might permit Creative NJ to avail itself of those advantages.

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