UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Nevada, D.C. 20549
FORM 1O-Q
QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the three month period ended June 30, 2011
Commission file number: 0-25997
China Holdings Group, Inc.
(Exact Name of Registrant as Specified in its Charter)
Nevada 91-1939533
______________________ _______________
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
73726 Alessandro Drive, Suite 103
Palm Desert, CA 92260
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (760) 776-8899
Securities registered pursuant to Section 12(b) of the Act: None
Common Stock, $0.001 par value
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
Yes * NoS
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes * No S
Indicate by check mark 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 S No*
Indicate by check 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 S No*
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q. S
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See the definitions of "large accelerated filer," "acceleratedfiler" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer* Accelerated Filer*
Non-accelerated filer* Smaller reporting companyS
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes S No*
As of June 30, 2011, there was no active trading market for the issuer's common stock, $.001 par value and therefore the value of shares held by affiliates cannot be ascertained.
The number of shares outstanding of the issuer's common stock, $0.001 par value, as of June 30, 2011 was 3,190,400 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None.
China Holdings Group, Inc.
Form 10-Q Quarterly Report
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements 4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 10
Item 4. Controls and Procedures 10
PART II – OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 1A. Risk Factors 11
Item 2. Sales of Unregistered Securities and Use of Proceeds 12
Item 3 Defaults Upon Senior Securities . 12
Item 4. Removed and Reserved 12
Item 5. Other Information 12
Item 6. Exhibits 12
PART 1
ITEM 1. FINANCIAL STATEMENTS
Financial Statements for the 3 month period ended June 30, 2011 have been prepared by the Management Group of China Holdings Group, Inc.
CHINA HOLDINGS GROUP, INC.
(A Development Stage Enterprise)
Unaudited Financial Statements
For the Three Months Ended June 30, 2011, the Six Months Ended June 30, 2011, and the Period of April 28, 1994 (Since inception) to June 30, 2011.
| |
China Holdings Group, Inc. (A Development Stage Enterprise) |
Balance Sheets |
| | | June 30 December 31 |
| | | 2011 | | 2010 |
ASSETS |
| | | | | | | |
Current assets | | | | | |
| | Cash | $ | 217 | | $ | 235 |
Total current assets | | 217 | | | 235 |
| | | | | | | |
Total assets | $ | 217 | | $ | 235 |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY |
| | | | | | | |
Current liabilities | | | | | |
| | Accounts payable | $ | - | | $ | 3,500 |
| | Accrued Interest | | 483 | | | 305 |
| | Due to related party | | 59,600 | | | 57,600 |
Total current liabilities | | 60,083 | | | 59,905 |
| | | | | | | |
Long term liabilities | | | | | |
| | Notes Payable | | 0 | | | 0 |
Total long term liabilities | | 0 | | | 0 |
Total liabilities | | 60,083 | | | 59,905 |
| | | | | | | |
Stockholders' (Deficit) Equity | | | | | |
| |
Preferred stock, par value $0.001; 10,000 shares authorized; No share issued and outstanding on June 30, 2011 and December 31, 2010.
Common stock, no par value; 100,000,000 shares authorized, 142,894 shares issued and outstanding at June 30, 2011 and December 31, 2010 | | 3,190 | | | 3,190 |
| | Additional paid in capital | | - | | | - |
| | Retained Earnings (Accumulated Deficit) | | (63,056) | | | (62,860) |
Total stockholders' (deficit) equity | | (59,866) | | | (59,670) |
| | | | | | | |
Total liabilities and stockholders' (deficit) equity | $ | 217 | | $ | 235 |
| | | | | | | |
See accompanying notes to financial statements
|
China Holdings Group, Inc.
(A Development Stage Enterprise)
Statement of Operations
| | | | | | | | | | | | | | | For the period from April 28, 1994 (Since inception)) to June 30, 2011 |
| | | | | | | | | | | | | | |
| | | Three months ended June 30, | | Six months ended June 30, | |
| | | 2011 | | 2010 | | 2011 | | 2010 | |
| | | (Unaudited) | | | (Unaudited) | | (Unaudited) | | | (Unaudited) | | | |
Revenue | $ | - | | $ | - | | $ | - | | $ | - | | $ | - |
| | | | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | |
| | General & administrative | | 18 | | | 40 | | | 18 | | | 40 | | | 62,573 |
| | Professional fees | | - | | | - | | | - | | | - | | | - |
Total expenses | | 18 | | | 40 | | | 18 | | | 40 | | | 62,573 |
| | | | | | | | | | | | | | | | |
Other income / (expense) | | | | | | | | | | | | | | |
| | Interest expense | | 90 | | | - | | | 179 | | | - | | | 484 |
Total other income / (expense) | | 90 | | | - | | | 179 | | | - | | | (484) |
| | | | | | | | | | | | | | | | |
Net loss | $ | (108) | | $ | (40) | | $ | (197) | | $ | (40) | | $ | (63,057) |
| | | | | | | | | | | | | | | | |
Basic and diluted loss per common share | $ | - | | $ | - | | $ | - | | $ | - | | | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | 3,190,400 | | | 3,190,400 | | | 3,190,400 | | | 3,190,400 | | | |
| | | | | | | | | | | | | | | | |
See accompanying notes to financial statements |
China Holdings Group, Inc. |
(A Development Stage Enterprise) |
Statements of Cash Flows |
| | | | | | | | | | For the period from April 28, 1994 (Since inception) to June 30, 2011 |
| | | | | | | | | |
| | | | | | | | | |
| | | | Six months ended June 30, | |
| | | | 2011 | | 2010 | |
| | | | (Unaudited) | | | (Unaudited) | | | |
Cash flows from operating activities | | | | | | | | |
| | Net loss | $ | (197) | | $ | (40) | | $ | (63,057) |
| | Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
| | Changes in operating assets and liabilities: | | | | | | | | |
| | | Accounts payable & Accrued Expenses | | - | | | 200 | | | 2,000 |
| | Loan payable – related party | | - | | | - | | | 57,600 |
| | | Accrued Interest on Notes – related parties | | 179 | | | - | | | 484 |
| | | Issuance of securities for services rendered | | - | | | - | | | 1,136 |
Net cash used in operating activities | | (18) | | | 160 | | | (1,837) |
| | | | | | | | | | | |
Net cash from investing activities | | - | | | - | | | - |
| | | | | | | | | | | |
Cash flows from financing activities | | | | | | | | |
| | | Proceeds from related party loan | | - | | | - | | | - |
| | | Proceeds from issuance of stock | | - | | | - | | | 2,054 |
Net cash provided by financing activities | | - | | | - | | | - |
| | | | | | | | | | | |
| | | Net increase in cash | | (18) | | | 160 | | | 217 |
| | | Cash at beginning of period | | 235 | | | - | | | - |
| | | Cash at end of period | $ | 217 | | $ | 160 | | $ | 217 |
| | | | | | | | | | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | |
| | Issuance of common stock for professional and consulting services | $ | - | | $ | - | | $ | - |
| | | | | | | | | | | |
Supplemental Cash Flow Information: | | | | | | | | |
| | Cash paid for interest | $ | - | | $ | - | | $ | - |
| | Cash paid for income taxes | $ | - | | $ | - | | $ | - |
| | | | | | | | | | | |
See accompanying notes to financial statements |
CHINA HOLDINGS GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Three Months Ended June 30, 2011, the Six Months ended June 30, 2011
and for the period of April 28, 1994 (Since inception) to June 30, 2011
NOTE 1 – CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2011, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2010 audited financial statements. The results of operations for the periods ended June 30, 2011 and 2010 are not necessarily indicative of the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using 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. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
NOTE 3 – SHAREHOLDERS’ EQUITY
No additional common shares were issued for any reason during the three months ended June 30, 2011.
NOTE 4 – RELATED PARTY TRANSACTIONS
The Company issued a note payable to Dempsey Mork, a related party, on September 30, 2003 in the amount of $50,000. The note is non-interest bearing and it is due on demand. As of December 31, 2010, this note is still outstanding.
CHINA HOLDINGS GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Three Months Ended June 30, 2011, the Six Months ended June 30, 2011
and for the period of April 28, 1994 (Since inception) to June 30, 2011
The Company issued a second note payable to Mr. Mork on February 25, 2010 in the amount of $6,000. This note bears an interest of 6% per annum and it is payable with the principal on December 31, 2010, its maturity date. This note was not paid as of December 31, 2010. As a result, management has negotiated with Mr. Mork to amend the maturity date to December 31, 2011 and that interests shall be accrued on the same basis.
The Company has also issued a note payable to Mr. Mork during 2010 for his cash contribution in funding the Company’s daily operations. This note is non-interest bearing and it is due on demand. As of March 31, 2011 this note is still outstanding.
The following individuals and entities are related:
§
Dempsey Mork
Sole Director, President, CEO, CFO, Treasurer, and Secretary.
§
Patricia Mork
Spouse of Dempsey Mork
§
Magellan Capital Corporation (MCC)
Wholly owned by Dempsey Mork
§
MCC Pension Benefit Plan & Trust
Sole beneficiary – Dempsey Mork
§
MCC Profit Sharing Plan & Trust
Sole beneficiary – Dempsey Mork
For the year ended December 31, 2008, the Company’s President advanced $50,000 to the Company for the working capital. In 2010, the Company’s President paid $7,600 for professional fees for filing compliance purposes. These advances will be reimbursed once the Company starts generating cash flows.
The Company’s officers and directors have resolved to provide for various expenses incurred by the Company
At June 30, 2011, the Company had accrued $483 in interest on these promissory Notes.
NOTE 5 – SUBSEQUENT EVENTS
Management has reviewed material subsequent events in accordance with FASB ASC 855 “Subsequent Events”. No additional disclosure is required.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Certain statements in this report and elsewhere (such as in other filings by the Company with the Securities and Exchange Commission ("SEC"), press releases, presentations by the Company of its management and oral statements) may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and "should," and variations of these words and similar expressions, are intended to identify these forward-looking statements. Actual results may materially differ from any forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures and constantly changing technology and market acceptance of the Company's products and services. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
China Holdings Group, Inc. was incorporated pursuant to the laws of the State of Nevada on April 28, 1994, under the name “Silver Bow Antique Aviation”. The Company was incorporated primarily to engage in the restoration and maintenance of antique aircraft.
On October 6, 2005, Silver Bow Antique Aviation, voted to change its name to China Holdings Group, Inc for the purpose of engaging in any lawful corporate business, including but not limited to, participating in mergers with and acquisitions of other companies. The Company has been in the developmental stage since inception and has no operating history other than organizational matters. Prior to 2010, the primary activity of the Company involved seeking a company or companies that it could acquire or with whom it could merge. The Company was not successful in finding a merger or acquisition candidate, and therefore reverted to its original business plan which was to create an on line antique aircraft spare parts business.
However, during the latter part of December 2010, it became apparent that the market for aircraft parts, in particular the more specialized antique aircraft parts in which we have the most expertise, had become extremely depressed due to the continuing economic downturn.
Therefore, the Company has now decided on a complete change of approach, and intends to use the Company as an operating entity for a new financial services business. In essence the Company will capitalize on the past experience of its senior management in the fields of Investment Banking, Financial Consulting and Litigation Management. The Company will seek those small businesses and individuals looking for advice on the re-structuring of their financial affairs, which might also include debt settlement and loan modification services. Although the Company will from time to time employ the services of legal counsel, it will not hold itself out as a law firm, nor will it proffer legal advice to its clients.
Since incorporation, we have financed our operations primarily through financing and through the increase in accounts payable, payments made by others for the company and by settlement of the payable amounts with shares of common stock of the Company.
To date we have not implemented our planned principal operations.
We do not expect to conduct any research and development.
We do not own any plant or equipment.
Our management does not anticipate any significant changes in the number of employees in the next 12 months. Currently, we believe the services provided by our officers and directors are sufficient at this time.
We have not paid for expenses on behalf of any director. Additionally, we believe that this practice will not materially change.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES.
Our management, with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the
effectiveness of our "disclosure controls and procedures" (as defined in the Exchange Act Rules 13a-15(e) and 15d-15
(e) as of the end of the period covered by this report (the "Evaluation Date"). Based upon that evaluation, the president
and chief financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures were
effective to ensure that information required to be disclosed by us in the reports that we file or submit under the
Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules
and forms and (ii) is accumulated and communicated to our management, including our president and chief financial
officer, as appropriate to allow timely decisions regarding required disclosure since our auditor had to make audit
adjustments.
There were no changes in our internal controls over financial reporting that occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Not applicable to smaller reporting company.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. REMOVED AND RESERVED
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
Exhibits filed herewith
Exhibit No. Description
31.1 Chief Executive and Financial Officer Certification pursuant to section 302 of the Sarbanes-Ox1ey Act of2002
32.1 Chief Executive and Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of2002.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHINA HOLDINGS GROUP, INC.
Date: August 10, 2011
By: /s/ Dempsey K. Mork
Dempsey K Mork, Chief Executive and Financial Officer
(principal financial and accounting officer and duly authorized officer)
