DKG Capital (DKGH) 10-Q 2016 Q3 Quarterly report

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, 2016

OR

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

Commission file number 000-1592411

STAR ALLY INC.

(Exact name of registrant as specified in its charter)

NEVADA	46-3787845
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1980 Festival Plaza Drive Suite 530

Las Vegas, Nevada 89135

(Address of principal executive offices, including zip code.)

(702) 463-8880

(Telephone number, including area code)

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 last 90 days.  YES ☒     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 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. See the definitions of "large accelerated filer, "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐NO ☒

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 17,376,000 shares of common stock as of November 14, 2016. 

STAR ALLY INC.

(formerly Reraise Gaming Corporation)

FINANCIAL STATEMENTS

September 30, 2016

TABLE OF CONTENTS

 

PART I  FINANCIAL INFORMATION
	Page
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets (Unaudited) at September 30, 2016 and December 31, 2015	3
Statements of Operations (Unaudited) for the three and nine months ended September 30, 2016 and 2015	4
Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2016 and 2015	5
Notes to the Financial Statements (Unaudited)	6
ITEM 2. Management's Discussion and Analysis and Plan of Operation	9
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	11
ITEM 4. Controls and Procedures	11
PART II  OTHER INFORMATION
ITEM 1A. Risk Factors	12
ITEM 6. Exhibits	13
INDEX TO EXHIBITS	13
SIGNATURES	14

Star Ally Inc.

(formerly Reraise Gaming Corporation)

Balance Sheets(unaudited)

	September 30			December 31
	2016			2015
ASSETS
Current assets
Cash	$	-		$	11,651
Related party receivable		-			1,351
Total current assets		-			13,002
Long term assets
Intangible asset, less accumulated amortization
of $4,792 and $3,192  respectively		1,608			3,208
Total long term assets		1,608			3,208
Total assets	$	1,608		$	16,210
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	5,000		$	9,158
Amount due to director		2,306			-
Loan payable - related party		-			30,000
Notes payable - related parties		-			50,000
Total current liabilities		7,306			89,158
Stockholders' deficit
Common stock, 100,000,000 shares authorized, at
$0.001 par value, 17,376,000 and 17,376,000 shares
outstanding, respectively		17,376			17,376
Additional paid-in capital		2,776,138			2,682,623
Accumulated deficit		(2,799,212	)		(2,772,947	)
Total stockholders' deficit		(5,698	)		(72,948	)
Total liabilities and stockholders' deficit	$	1,608		$	16,210

The accompanying notes are an integral part of these unaudited financial statements

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Star Ally Inc.

(formerly Reraise Gaming Corporation)

Statements of Operations(unaudited)

	For the Three Months ended						For the Nine Months ended
	September 30,						September 30,
	2016			2015			2016			2015
Revenue	$	-		$	-		$	-		$	-
Operating expenses
General and administrative		8,225			10,142			25,765			33,158
Product endorsement		-			-			-			27,500
Professional fees		-			6,874			-			12,900
Total operating expenses		8,225			17,016			25,765			73,558
Loss from operations		(8,225	)		(17,016	)		(25,765	)		(73,558	)
Other expenses
Interest expense		-			107			500			631
Total other expenses		-			107			500			631
Net loss	$	(8,225	)	$	(17,123	)	$	(26,265	)	$	(74,189	)
Basic and diluted net loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average common shares outstanding
Basic and diluted		17,376,000			17,376,000			17,376,000			17,344,571

The accompanying notes are an integral part of these unaudited financial statements

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Star Ally Inc.

(formerly Reraise Gaming Corporation)

Statements of Cash Flow

(unaudited)

	For the Nine Months ended September 30,
	2016			2015
Cash flow from operating activities
Net loss	$	(26,265	)	$	(74,189	)
Adjustment to reconcile net loss to cash used in operating activities
Stock based compensation		-			27,500
Amortization		1,600			1,600
Change in assets and liabilities-
Increase (decrease) in accounts payables and accruals		3,804			(1,119	)
Net cash used in operating activities		(20,861	)		(46,208	)
Cash flows from financing activities
Net proceeds from note payable-related party		9,210			-
Loan from former related party		-			25,000
Common stock issued for cash		-			25,000
Net cash provided by financing activities		9,210			50,000
(Decrease) increase in cash		(11,651	)		3,792
Cash, beginning		11,651			21,113
Cash, ending	$	-		$	24,905
Supplementary information
Cash paid:
Interest	$	-		$	-
Income taxes	$	-		$	-
Non-cash financing and investing activities
Former related party notes and payables forgiven	$	93,515		$	-
Due to related party for payment of expenses on behalf of the company	$	2,306		$	-

The accompanying notes are an integral part of these unaudited financial statements

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Star Ally Inc.

(formerly Reraise Gaming Corporation)

Notes to Unaudited Financial Statements

For the Nine Months Ended September 30, 2016 and 2015

NOTE 1 - ORGANIZATION AND OPERATIONS

Star Ally Inc. (formerly known as Reraise Gaming Corporation), (the “Company”) located in Las Vegas, Nevada, was incorporated on October 2, 2013, in the State of Nevada. As of September 30, 2016 the Company has acquired a variety of poker games, some with patents and some with patents pending, in addition to those we are developing. Each of the games has been acquired or is being developed for different segments of the poker market, namely video poker, brick and mortar, as well as online poker. Several of the games are available on line, at no charge, to test their viability.

Our former director Mr. Ron Camacho resigned as President and Chief Executive Officer, Secretary and Treasurer of our Company. On July 8, 2016 and Mr. Andy Kim was appointed as President and Chief Executive Officer, Secretary and Treasurer on the same date. Mr. Kim expressed that he will end the development and distribution of poker game and will shift focus to develop the binary option software, a financial software for the trading of binary option. A binary option, or asset-or-nothing option, is type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition, hence “binary”.  Our detailed plan of operation consists of developing the software, applying for patents and trademarks, apply for international patents and trademarks and market the software to the binary option industry.

On August 15, 2016, the Board of Directors appointed Mr. Jung Choung Hun to a vacant position on the Company’s Board of Directors. Jun Choung Hun was also appointed to the position of President, Chief Executive Officer (CEO), Secretary, Treasurer and Executive Director, replacing Andy Kim, who resigned as President, CEO, Secretary and Treasurer. There was no disagreement between the Company and Andy Kim, and Mr. Kim retains his position as Director of the Company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the years ended December 31, 2015 and 2014, contained in the Company's Form 10K, originally filed with the Securities and Exchange Commission on March 30, 2016.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. 

NOTE 3 - GOING CONCERN

The accompanying interim financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business, The Company has been engaged substantially in financing activities and developing its business plan and marketing. As a result, the Company incurred an accumulated deficit of $2,799,212. As of September 30, 2016, the Company has a working capital deficit. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The Company's development activities since inception have been financially sustained through the sale of capital stock and capital contributions from a note holder.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock or through debt financing and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

NOTE 4 – COMMITMENT

On May 21, 2014 the Company entered into an agreement with Chris Moneymaker, an individual to use his name and likeness alongside a brief positive quote on the Company's website, paraphernalia or literature. In exchange, the Company will compensate Chris Moneymaker the following:

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Star Ally Inc.

(formerly Reraise Gaming Corporation)

Notes to Financial Statements

For the Nine Months Ended September 30, 2016 and 2015

NOTE 4 – COMMITMENT (Continued)

☐ $10,000 signing bonus

☐ $1,000 per month – 24 months consulting contract after we have raised $1,000,000 from the time this contract is initiated.

☐ Additional $500 per month – 24 month consulting contract for every $1,000,000 thereafter that is raised. The above consulting terms are concurrent, meaning, the 2nd contract will be added to the first contract and every other contract thereafter.

NOTE 5 – INTANGIBLE ASSETS

During the year ended December 31, 2014, and as part of its marketing strategy to acquaint users with its product, the Company has undertaken to build its own interactive website. The Company capitalized website development costs of $6,400 for the period from January 1, 2014 through website launch on September 1, 2014. The Company's capitalized website amortization is included in general and administrative expenses in the Company's statements of operations, and totaled $1,600 and $1,600 for the nine months ended September 30, 2016 and 2015, respectively. Intangible assets consist of the unamortized portion of capitalized website development costs.  

NOTE 6 – RELATED TRANSACTIONS

During the year, December 31, 2013, the Company accrued expenses for $30,000 for the payment of services provided by an entity controlled by the Company's former sole officer and director. The loan is non-interest bearing, unsecured and has no specific repayment terms or maturity date. As of March 31, 2016, the entire $30,000 is outstanding. Pursuant to a loan waiver letter dated June 30, 2016, the entire balance forgiven during the period.

On June 2, 2014 the Company borrowed $25,000 from a former related party with interest of 5% repayable in one payment of $26,250, on June 1, 2015. In the event of default, the note is secured by not less than 2,000,000 shares of the Company's common stock. On August 14, 2015 the note was extended, with an additional interest charge of 5% or $1,322, the entire balance of $26,322, repayable on June 1, 2016. Pursuant to a loan waiver letter dated June 30, 2016, the entire balance was forgiven during the period.

On June 8, 2015 the Company borrowed $25,000 from a former related party with interest of 2% repayable in one payment of $25,042, on July 8, 2015. On August 14, 2015 the note was extended, under the same terms and conditions, until July 8, 2016, the entire balance of $25,682 payable in one lump sum. In the event of default, unless such default is cured within 10 days, holder has the option of charging the Company an additional 10% of the note amount. Pursuant to a loan waiver letter dated June 30, 2016, the entire balance was forgiven during the period.

On May 18, 2016, the Company borrowed $10,000 from a former related party and $790 was paid back on June 30, 2016. Pursuant to a loan waiver letter dated June 30, 2016, the entire remaining balance of $9,210 was forgiven during the period.

On June 30, 2016, $93,515 was the total of the above former related party loan, notes payable and accrued interest which was waived. Since this transaction was with a related party the write-off of the debt was recorded as additional paid in capital.

As of September 30, 2016, the Company was obligated to the CEO for an unsecured, non-interest demand bearing loan with a balance of 2,306.

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As of March 31, 2016, the Company had an outstanding advance to the former Company's President, in the amount of $1,351. The advance was for working capital purposes. The advance has no specific repayments terms or maturity and is non-interest bearing and unsecured. Pursuant to a waiver letter dated June 30, 2016, the entire balance was forgiven by the Company during the period.

The Company has been provided office space by its chief executive officer at no cost. Management has determined that such cost is nominal and has not recognized any rent expense in its financial statements.

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Item 2: - Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report on Form 10-Q includes statements about:

· our marketing plan;

· our plans to hire industry experts and expand our management team;

· our beliefs regarding the future of our competitors;

· our anticipated development schedule;

· the anticipated benefits of our product;

· our expectation that the demand for our products will eventually increase; and

· our expectation that we will be able to raise capital when we need it.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:

· general economic and business conditions;

· we may have product liability claims;

· we may not be successful in commercialization of our products;

· regulatory changes may hurt the market for our products;

· we may not be able to protect our intellectual property rights;

· our auditors have issued a going concern opinion regarding our company;

· competition for, among other things, capital, products and skilled personnel; and

· other factors discussed under the section entitled "Risk Factors",

any of which may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this report, the terms "we", "us" and "our" mean Star Ally Inc., a Nevada corporation. In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our unaudited interim financial statements and related notes appearing elsewhere in this Quarterly Report.

History and Overview

Star Ally Inc. was incorporated on October 2, 2013 under the laws of the State of Nevada.

Plan of Operations

We were in the business of developing software including gaming products (poker games)and after the appointment of Mr. Andy Kim as CEO of the Company on July 8, 2016, he inclined to terminate the development and distribution of poker game and will shift focus to develop the binary option software, a financial software for the trading of binary option. A binary option, or asset-or-nothing option, is type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition, hence “binary”.  Our detailed plan of operation consists of developing the software, applying for patents and trademarks, apply for international patents and trademarks and market the software to the binary option industry.

9

Results of Operations

The following is an analysis of our revenues, and analysis of components of expenses, and variances comparing the nine months ended September 30, 2016 to the nine months ended September 30, 2015.

We are in our infancy stage and have not generated any revenue from our core business model. Our total operating expenses during those periods were general and administrative expense of $25,765 for the nine months ended September 30, 2016 compared to $73,558 for the nine months ended September 30, 2015. Interest expense for the nine months ended September 30, 2016 was $500 compared to $631 for the nine months ended September 30, 2015. General and administrative expense for the nine months ended September 30, 2016 was $25,765 compared to $33,158 for the same period in 2015.

The decrease in operating expenses, for the nine months ended September 30, 2016, compared to the nine months ended September 30, 2015, excluding the stock based compensation paid in 2015, is due, primarily, to reduced professional fees.

Liquidity and Capital Resources

During the nine months ended September 30, 2016, we utilized cash in the amount of $20,861 to pay for operating activities compared to $46,208 for the nine months ended September 30, 2015. Cash used in operating activities during the nine months ended September 30, 2016 included a net loss of $26,265 compared to a net loss of $74,189 for the nine months ended September 30, 2015. The net loss for the nine months ended September 30, 2016 included amortization of intangible asset in the amount of $1,600 and a non-cash written back of loan and other payables, compared to amortization of $1,600 and a non-cash stock based compensation expense of $27,500, for the same nine months in 2015. Accounts and other payable increased and provided cash of $3,804 for the nine months ended September 30, 2016 compared to cash utilized of $1,119 for the nine months ended September 30, 2015.

Investing Activities

We did not use any cash resources for investing activities during the nine month periods ended September 30, 2016 and 2015

Financing Activities

We generate $9,210 from financing activities during the nine month period ended September 30, 2016 compared to cash generated from a related party loan and sale of common stock of $50,000 during the nine month period ended September 30, 2015.

Working Capital Needs:

As of September 30, 2016, we had a working capital deficit of $7,306. Over the next 12 months, we will require approximately $75,000 to sustain our working capital needs as a public reporting company and to further develop our web and bricks and mortar products.

Sources of Capital:

We expect to obtain financing through the sale of restricted common shares, shareholder loans, and a potential line of credit. The sale of common shares will be priced based on current market activity. Shareholder loans, depending on circumstances, may be without stated terms of repayment or interest. Because a line of credit is not currently being investigated, its terms will depend on the lender at the time of commitment. We have no formal agreement that ensures that we will receive such loans. We may exhaust this source of funding at any time.

10

Plan of Operations:

We are in the infancy stage of developing our products. The Company was incorporated in the State of Nevada on October 2, 2013, to engage in the development and distribution of poker games. We have generated no revenues from business operations. Our independent registered public accounting firm has issued a going concern opinion. This means there is substantial doubt that we can continue as an on-going business unless we obtain additional capital to pay our ongoing operational costs. Accordingly, we must locate sources of capital to pay our operational costs.

Our former director Mr. Ron Camacho resigned as President and Chief Executive Officer, Secretary and Treasurer of our Company. On July 8, 2016 and Mr. Andy Kim was appointed as President and Chief Executive Officer, Secretary and Treasurer on the same date. Mr. Kim expressed that he will end the development and distribution of poker game and will shift focus to develop the binary option software, a financial software for the trading of binary option. A binary option, or asset-or-nothing option, is type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition, hence “binary”.  Our detailed plan of operation consists of developing the software, applying for patents and trademarks, apply for international patents and trademarks and market the software to the binary option industry.

On August 15, 2016, the Board of Directors appointed Mr. Jung Choung Hun to a vacant position on the Company’s Board of Directors. Jun Choung Hun was also appointed to the position of President, Chief Executive Officer (CEO), Secretary, Treasurer and Executive Director, replacing Andy Kim, who resigned as President, CEO, Secretary and Treasurer. There was no disagreement between the Company and Andy Kim, and Mr. Kim retains his position as Director of the Company.

Material Commitments

We do not have any material commitments for capital expenditures.

Seasonal Aspects

Management is not currently aware of any seasonal aspects which would affect the results of our operations during any particular time of year.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

Going Concern

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.         CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2016.

There were no changes in our internal control over financial reporting during the nine month period ended September 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  OTHER INFORMATION

ITEM 1A.         RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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ITEM 6.            EXHIBITS.

The following documents are included herein:

EXHIBIT
NUMBER	DOCUMENT DESCRIPTION
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 16^th day of November, 2016.

STAR ALLY INC.
BY:	Jung Choung Hun
/s/	Jung Choung Hun
	Principal Executive Officer
	Principal Financial Officer and
	Principal Accounting Officer

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