UNITED STATESSECURITIES 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 March 31, 2017
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 000-1592411
DKG CAPITAL, INC.
(FORMERLY KNOWN AS 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, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ | | Accelerated filer ☐ |
Non-accelerated filer ☐ | | Smaller reporting company ☒ |
| (Do not check if smaller reporting company) | | Emerging growth company ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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: 521,280,000 shares of common stock as of May 15, 2017.
DKG CAPITAL, INC.
(FORMERLY KNOWN AS STAR ALLY, INC.)
FINANCIAL STATEMENTS
March 31, 2017
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION | | |
| | | Page |
ITEM 1. FINANCIAL STATEMENTS | | |
| | | |
| Balance Sheets (Unaudited) at March 31, 2017 and December 31, 2016 | | 3 |
| | | |
| Statements of Operations (Unaudited) for the three months ended March 31, 2017 and 2016 | | 4 |
| | | |
| Statements of Cash Flows (Unaudited) for the three months ended March 31, 2017 and 2016 | | 5 |
| | | |
| Notes to the Financial Statements (Unaudited) | | 6 |
| | | |
ITEM 2. Management's Discussion and Analysis and Plan of Operation | | 8 |
| | | |
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk | | 10 |
| | | |
ITEM 4. Controls and Procedures | | 10 |
| | | |
| PART II OTHER INFORMATION | | |
| | | |
ITEM 1A. Risk Factors | | 11 |
| | | |
ITEM 6. Exhibits | | 11 |
| | | |
| INDEX TO EXHIBITS | | 11 |
| | | |
| SIGNATURES | | 11 |
DKG Capital, Inc.
Balance Sheets
(unaudited)
| | | March 31, | | | December 31, | |
| | | 2017 | | | 2016 | |
| | | | | | | |
| ASSETS | | | | | | |
| | | | | | | | | |
| Current assets | | $ | - | | | $ | - | |
| Total current assets | | | - | | | | - | |
| | | | | | | | | |
| Total assets | | $ | - | | | $ | - | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 8,500 | | | $ | 8,500 | |
| Amount due to former director | | | 2,306 | | | | 2,306 | |
| Amount due to shareholder | | | 9,148 | | | | - | |
| Total current liabilities | | | 19,954 | | | | 10,806 | |
| | | | | | | | | |
| Stockholders' deficit | | | | | | | | |
Common stock, 5,000,000,000 shares authorized, at $0.001 par value, 521,280,000 shares issued and outstanding, respectively | | | 521,280 | | | | 521,280 | |
| Additional paid-in capital | | | 2,276,234 | | | | 2,276,234 | |
| Accumulated deficit | | | (2,817,468 | ) | | | (2,808,320 | ) |
| Total stockholders' deficit | | | (19,954 | ) | | | (10,806 | ) |
| | | | | | | | | |
| Total liabilities and stockholders' deficit | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these unaudited financial statements
DKG Capital, Inc.
Statements of Operations
(unaudited)
| | | For the Three Months ended | |
| | | March 31, | |
| | | 2017 | | | 2016 | |
| | | | | | | |
| Operating expenses | | | | | | | | |
| General and administrative | | | 9,148 | | | | 7,373 | |
| Total operating expenses | | | 9,148 | | | | 7,373 | |
| | | | | | | | | |
| Loss from operations | | | (9,148 | ) | | | (7,373 | ) |
| | | | | | | | | |
| Other expenses | | | | | | | | |
| Interest expense | | | - | | | | (500 | ) |
| Total other expenses | | | - | | | | (500 | ) |
| | | | | | | | | |
| Loss before provision for income taxes | | | (9,148 | ) | | | (7,873 | ) |
| | | | | | | | | |
| Net loss | | $ | (9,148 | ) | | $ | (7,873 | ) |
| | | | | | | | | |
| Basic and diluted net loss per common share | | $ | (0.00 | ) | | $ | (0.00 | ) |
| | | | | | | | | |
| Weighted average common shares outstanding | | | | | | | | |
| Basic and diluted | | | 521,280,000 | | | | 521,280,000 | |
The accompanying notes are an integral part of these unaudited financial statements
DKG Capital, Inc.
Statements of Cash Flow
(unaudited)
| | | For the Three Months ended | |
| March 31, |
| | | 2017 | | | 2016 | |
| Cash flow from operating activities | | | | | | |
| Net loss | | $ | (9,148 | ) | | $ | (7,873 | ) |
| Adjustment to reconcile net loss to cash used in operating activities | | | | | | | | |
| Amortization of intangible asset | | | - | | | | 533 | |
| Change in assets and liabilities | | | | | | | | |
| Increase in accounts payables and accruals | | | 9,148 | | | | 500 | |
| | | | | | | | | |
| Net cash used in operating activities | | | - | | | | (6,840 | ) |
| | | | | | | | | |
| Net decrease in cash | | | - | | | | (6,840 | ) |
| Cash, beginning | | | - | | | | 11,651 | |
| Cash, ending | | $ | | | | $ | 4,811 | |
| | | | | | | | | |
| Supplementary information | | | | | | | | |
| Cash paid: | | | | | | | | |
| Interest | | $ | - | | | $ | - | |
| Income taxes | | $ | - | | | $ | - | |
| | | | | | | | | |
| Non-cash Investing and Financing Activities: | | | | | | | | |
| Due to shareholder for payment of expenses on behalf of the Company | | $ | 9,148 | | | $ | - | |
The accompanying notes are an integral part of these unaudited financial statements
DKG Capital, Inc.
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(unaudited)
NOTE 1 - ORGANIZATION AND OPERATIONS
DKG Capital, Inc. (“we”, “our”, the “Company”), located in Las Vegas, Nevada, was incorporated on October 2, 2013, in the State of Nevada.
Mr. Andy Kim resigned as President and Chief Executive Officer, Secretary and Treasurer of our Company on January 11, 2017 and Mr. Tesheb Casimir became the President and Chief Executive Officer, Secretary and Treasurer. Mr. Tesheb Casimir ended the binary option software development. Mr. Tesheb Casimir’s new business focuses are: 1. Mobile application development; 2. Provision of online marketing services; 3. Operation of self-developed social media platform; and 4. Provision of various leisure services to high net worth clients who are users of our social media platform.
On January 11, 2017 our Board of Directors and a majority of our shareholders’ voting power approved (1) a corporate name change to “DKG Capital, Inc.”, (2) an increase in our authorized shares of common stock to 5,000,000,000 shares from 100,000,000 shares and (3) a 30:1 forward split of our common stock. These corporate actions are now effective. All share and per share amounts herein have been retroactively restated to reflect the split.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim financial statements of DKG Capital, Inc. 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, 2016 and 2015, contained in the Company's Form 10K, originally filed with the Securities and Exchange Commission on April 7, 2017. 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 unaudited 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. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and marketing. As a result, the Company has incurred net recurring losses and an accumulated deficit. As of March 31, 2017, 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 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 – RELATED PARTY TRANSACTIONS
As of March 31, 2017 and December 31, 2016, the Company was obligated to a former director for an unsecured, non-interest demand bearing loan with a balance of $2,306.
As of March 31, 2017, the Company was obligated to Mr. Tesheb Casimir, CEO for an unsecured, non-interest demand bearing loan with a balance of $9,148, for the Company’s business expenses paid directly by the CEO on behalf of the Company.
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.
NOTE 5 – STOCKHOLDERS’ EQUITY
On January 11, 2017 our Board of Directors and a majority of our shareholders’ voting power approved an increase in our authorized shares of common stock to 5,000,000,000 shares from 100,000,000 shares and a 30:1 forward split of our common stock. These corporate actions are now effective. All share and per share amounts herein have been retroactively restated to reflect the split.
The total number of common shares authorized that may be issued by the Company is 5,000,000,000 shares with a par value of $0.001 per share (100,000,000 shares with a par value of $0.001 per share prior to forward split). There are no preferred shares authorized to be issued. There were 521,280,000 shares (17,376,000 shares prior to forward split) of common stock issued and outstanding at March 31, 2017.
NOTE 6 – SUBSEQUENT EVENTS
Subsequent to March 31, 2017, certain expenses were paid by Tesheb Casimir, the major shareholder and sole director of the Company.
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 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 DKG Capital, Inc. (formerly known as 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
DKG Capital, Inc. (formerly known as Star Ally, Inc.) was incorporated on October 2, 2013 under the laws of the State of Nevada.
Plan of Operations
After the appointment of Mr. Tesheb Casimir as CEO of the Company on January 11, 2017, the Company were in new business focuses: 1. Mobile application development; 2. Provision of online marketing services; 3. Operation of self-developed social media platform; and 4. Provision of various leisure services to high net worth clients who are users of our social media platform.
Results of Operations
The following is an analysis of components of expenses, and variances comparing the three months ended March 31, 2017 to the three months ended March 31, 2016.
We did not generate any revenue during the three months ended March 31, 2017 and 2016. During this stage, we built our web site and were primarily focused on acquiring, developing and testing products. Our total operating expenses during those periods were general and administrative expense of $9,148 for the three months ended March 31, 2017 compared to $7,373. Interest expense for the three months ended March 31, 2017 was $0 compared to $500 for the three months ended March 31, 2016. General and administrative expense for the three months ended March 31, 2017 was $9,148 compared to $7,373 for the same period in 2016.
The increase in operating expenses, for the three months ended March 31, 2017, compared to the three months ended March 31, 2016, is due, primarily, to the increased professional fees.
Liquidity and Capital Resources
During the three months ended March 31, 2017, we utilized cash in the amount of $0 to pay for operating activities compared to $6,840 for the three months ended March 31, 2016. Cash used in operating activities during the three months ended March 31, 2017 included a net loss of $9,148 compared to a net loss of $7,873 for the three months ended March 31, 2016.
Investing Activities
We did not use any cash resources for investing activities during the three month periods ended March 31, 2017 and 2016.
Financing Activities
We did not generate any funds from financing activities during the three month periods ended March 31, 2017 and 2016.
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 do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs).
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 during the three month period ended March 31, 2017.
There were no changes in our internal control over financial reporting during the three month period ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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.
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* |
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 May 16, 2017.
| | DKG CAPITAL INC. |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | BY: | Tesheb Casimir |
| | | |
| | /s/ | Tesheb Casimir |
| | | Principal Executive Officer |
| | | Principal Financial Officer and |
| | | Principal Accounting Officer |
11
