U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[x] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the six months period ended September 30, 2008
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[ ] Transition Report under Section 13 or 15(d)of the Exchange Act For the
Transition Period from ________ to ___________
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Commission File Number: 000-52185
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DALIAN CAPITAL GROUP, INC.
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(Name of small business issuer in its charter)
Delaware none
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
900 - 850 West Hastings Street, Vancouver, B.C. V6C 1E1 Canada
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(Address of principal executive officers, including Zip Code)
1-604-801-5022
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(Issuer's Telephone Number)
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
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 [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer, or a small reporting
company. See definitions of "large accelerated filer,""accelerated filer,"
and "small reporting company" in Rule 12B-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [X]
Non-accelerated filer [ ] Smaller reporting company [ ]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 13b-2 of the Exchange Act) Yes [X] No [ ]
As of September 30, 2008, 1,390,000 shares of the registrant's common stock
were outstanding.
DALIAN CAPITAL GROUP, INC.
FORM 10-Q
TABLE OF CONTENTS
PART 1 - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
Balance Sheet as at September 30, 2008 and
December 31, 2007 1
Statement of Operations for 9 months ended
September 30, 2008 and 2007 2
Statement of Cash Flows for 9 months ended
September 30, 2008 and 2007 3
Notes to the Financial Statements 4-5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation 6-7
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 7
Item 4. Controls and Procedures 7-8
PART 2 - OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 1A. Risk Factors 8
Item 2. Unregistered Sales of Equity Securities and Use
Of Proceeds 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits, Signatures and Certification 9
CERTIFICATION 10-13
PART 1. FINANCIAL INFORMATION
These financial statements have not been reviewed or audited by our
independent auditors
DALIAN CAPITAL GROUP, INC.
(A development stage company)
BALANCE SHEETS AS AT SEPTEMBER 30, 2008
(U.S. Dollars)
(Unaudited)
Balance Sheet
As at As at
Sep-30 Dec-31
2008 2007
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Assets
Current Assets
Cash 132 -
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Total Assets $ 132 -
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Liabilities
Current Liabilities
Advances from related parties 14,196 -
Shareholders loan 75,000 -
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Total liabilities $ 89,196 -
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Stockholders' Equity
Preferred stock, $0.0001 par
value, Authorized
20,000,000 shares
No shares issued and outstanding
Common stock, $0.0001 par value
Authorized 100,000,000 shares
Issued 1,390,000 shares $ 139 139
Deficit accumulated during the development stage (89,203) (139)
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Total stockholders' equity $ (89,064) -
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Total Liabilities and
Stockholders' Equity $ 132 -
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The accompanying notes are an integral part of the financial statements.
1
DALIAN CAPITAL GROUP, INC.
(A development stage company)
STATEMENTS OF OPERATIONS
For the 9 months period ended September 30, 2008
(U.S. Dollars)
(Unaudited)
Statements of Operations
3 Months Ended 9 Months Ended
September 30, September 30,
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2008 2007 2008 2007
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Revenue $ - - - -
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Expenses
Consultation and
reorganization fees - - 75,000 -
Exchange gain/loss 5 9 -
Filing expenses 326 - 13,996 -
Bank service charges 35 59 -
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Total $ 366 - 89,064 -
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Operating loss $ (366) - (89,064) -
================================================= ==========================
Net loss per Common
Shares - Basic and
Diluted (0.00) 0.00 (0.06) 0.00
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Weighted average number
of shares outstanding 1,390,000 1,390,000 1,390,000 1,390,000
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The accompanying notes are an integral part of the financial statements.
2
DALIAN CAPITAL GROUP, INC.
(A development stage company)
STATEMENTS OF CASH FLOWS
For the 9 months period ended September 30, 2008
(U.S. Dollars)
(Unaudited)
Statements of Cash Flows
9 Months Ended
September 30
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2008 2007
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Cash Flows from Operating Activities
Net loss for the period $ (89,064) -
Accounts payable to related party 14,196 -
Shareholders loan 75,000
Cash flows from Investing Activities - -
Cash flows from Financing Activities - -
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Net increase in cash and cash equivalents 132 -
Cash and cash equivalents - beginning of period - -
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Cash and cash equivalents - end of period $ 132 -
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The accompanying notes are an integral part of the financial statements.
3
DALIAN CAPITAL GROUP, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
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1. Nature Of Operations And Going Concern
Dalian Capital Group, Inc. was incorporated in the State of Delaware on
May 31, 2006 and has been inactive since inception. The Company
intends to serve as a vehicle to effect an asset acquisition, merger,
exchange of capital stock or other business combination with a domestic
or foreign business.
These financial statements have been prepared in accordance
with the accounting principles generally accepted in the United
States applicable to a going concern which assumes that the Company
will realize its assets and discharge its liabilities in the
normal course of business. Realization values may be substantially
different from carrying values, as shown in the financial statements,
should the Company be unable to continue as a going concern.
As of September 30, 2008 the Company is considered to be in the
development stage as the Company has not generated revenues from
operations. The Company's future operations are dependent upon its
ability to obtain third party financing in the form of debt and equity and
ultimately to generate future profitable operations or income from its
operations. The Company is currently seeking additional funds through
future debt or equity financing to offset future cash flow deficiencies.
Such financing may not be available or may not be available on reasonable
terms. The resolution of this going concern issue is dependent on
the realization of management's plans. If management is unsuccessful
in raising future debt or equity financing, the Company will be
required to liquidate assets and curtail or possibly cease operations.
As of September 30, 2008 the Company had an accumulated deficit of $89,203.
The loss of $89,064 for the 9 months period ended September 30, 2008 are for
consultation, reorganization fees, filing fees and other expenses.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United
States. Because a precise determination of many assets and liabilities is
dependent upon future events the preparation of financial statements
for a period necessarily involves the use of estimates which have been made
using careful judgment.
The financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality within the framework of the
accounting policies summarized below :
(a) Cash and cash equivalents
The Company considers all short-term investments, including
investments in certificates of deposits, with a maturity date at
purchase of three months or less to be cash equivalents.
4
DALIAN CAPITAL GROUP, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
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2. Summary Of Significant Accounting Policies (Continued
(b) Foreign currencies
The functional currency of the Company is the United States dollar.
Transactions in foreign currencies are translated into United States dollars
at the rates in effect on the transaction date. Exchange gains or losses
arising on translation or settlement of foreign currency denominated
monetary items are included in the statement of operations.
(c) Income taxes
The Company follows the asset and liability method of accounting for
income taxes. Under this method, current taxes are recognized for the
estimated income taxes payable for the current period.
Deferred income taxes are provided based on the estimated future tax
effects on temporary differences between financial statement carrying
amounts of assets and liabilities and their respective tax bases as well
as the benefit of losses available to be carried forward to future years for
tax purposes.
Deferred tax assets and liabilities are measured using enacted tax
rates that are expected to apply to taxable income in the years in which
those temporary differences are expected to be covered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates
is recognized in operations in the period that includes the enactment date.
A valuation allowance is recorded for deferred tax assets when it is more
likely than not that such deferred tax assets will not be realized.
(d) Loss per share
Loss per share computations are based on the weighted average
number of common shares outstanding during the period. Common share
equivalents consisting of stock options and warrants are not considered
in the computation because their effect would be anti-dilutive.
(e) Stock-based Compensation
Effective May 31, 2006 the Company adopted the provision of
SFAS 123 recommending the fair value-based methodology for measuring
compensation costs. On May 31, 2006 (inception), the Company issued
1,390,000 shares of common stock for $139 in services by its founding
shareholder.
STOCKHOLDERS' EQUITY
On May 31, 2006 ( inception ), the Company issued 1,390,000 shares of common
stock for $139 in services by its founding shareholder.
The Company has the following classes of capital stock as of September 30,
2008.
Preferred stock - 20,000,000 shares authorized; $0.0001 par value; no shares
issued and outstanding.
Common stock - 100,000,000 shares authorized; $0.0001 par value; 1,390,000
shares issued and outstanding.
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations, as well as information contained in "Risk Factors" in
Part 2, Item 1A and elsewhere in this Quarterly Report on Form 10Q, contains
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. We intend that these forward-looking
statements be subject to the safe harbors created by those provisions.
Forward-looking statements are generally written in the future tense and/or
are preceded by words such as "will," "may," "should," "forecast," "could,"
"expect," "suggest," "believe," "anticipate," "intend," "plan," or other
similar words. These statements are not guarantees of future performance and
are subject to risks, uncertainties and other factors, many of which are
beyond our control, are difficult to predict and could cause actual results
to differ materially from those expressed or forecasted in the forward-
looking statements. These risks and uncertainties include, but are not
limited to, those described in "Risk Factors" and elsewhere in this report.
Forward-looking statements that were believed to be true at the time made may
ultimately prove to be incorrect or false.
COMPANY OVERVIEW
Dalian Capital Group, Inc. (the "Company") was organized on May 31, 2006, as
a blank check or shell company under the Laws of the State of Delaware. The
Company does not currently engage in any business activities that provide
cash flow. From inception, the primary activity of the Company has been
directed towards organization efforts, compliance matters and locating
potential merger or acquisition candidates. The Company's primary purpose is
to engage in a merger with or acquisition of one or more private domestic or
foreign companies.
BUSINESS COMBINATION
The Company's main objective is to achieve long-term growth potential through
a combination with a business. The Company will not restrict the potential
candidate target companies to any specific business, industry or geographical
location and, thus, may acquire any type of business. At present, the Company
has no business opportunities under contemplation for acquisitions. No
assurances can be given that the Company will be successful in locating or
negotiating with any target business.
The Company may consider a business which has recently commenced operations,
is a developing company in need of additional funds for expansion into new
products or markets, is seeking to develop a new product or service, or is
established business which may be experiencing financial or operating
difficulties and is in need of additional capital. In the alternative, a
business combination may involve the acquisition of, or merger with, a
company which does not need substantial additional capital, but which desires
to establish a public trading market for its shares, while avoiding, among
other things, the time delays, significant expense, and loss of voting
control which may occur in a public offering.
Any target business that is selected may be a financially unstable company or
an entity in its early stages of development or growth, including entities
without established records of sales or earnings. In that event, we will be
subject to numerous risks inherent in the business and operations of
financially unstable and early stage or potential emerging growth companies.
In addition, we may effect a business combination with an entity in an
industry characterized by a high level of risk, and, although our management
will endeavor to evaluate the risks inherent in a particular target business,
there can be no assurance that we will properly ascertain or assess all
significant risks.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Our management anticipates that it will likely be able to effect only one
business combination, due primarily to our limited financing, and the
dilution of interest for present and prospective stockholders, which is
likely to occur as a result of our management's plan to offer a controlling
interest to a target business in order to achieve a tax free reorganization.
This lack of diversification should be considered a substantial risk in
investing in us, because it will not permit us to offset potential losses
from one venture against gains from another.
The Company anticipates that the selection of a business combination will be
complex and extremely risky. Because of general economic conditions, rapid
technological advances being made in some industries and shortages of
available capital, our management believes that there are numerous firms
seeking even the limited additional capital which we will have and / or the
perceived benefits of becoming a publicly traded corporation. Such perceived
benefits of becoming a publicly traded corporation include, among other
things, facilitating or improving the terms on which additional equity
financing may be obtained, providing liquidity for the principals of and
investors in a business, creating a means for providing incentive stock
options or similar benefits to key employees, and offering greater
flexibility in structuring acquisitions, joint ventures and the like through
the issuance of stock. Potentially available business combinations may occur
in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
We do not currently intend to retain any entity to act as a " finder " to
identify and analyze the merits of potential target businesses.
OPERATION
The Company has not been active since May 2006 ( inception ). The losses for
the 9 months period ended September 30, 2008 was $89,064 for consultation,
reorganization, filing fees and other expenses. There was no revenue for the
period stated above.
ITEM 3 - QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company at present does not engage in any business activities thus will
not be subjected to any quantitative or qualitative influences to market
risk.
ITEM 4 - CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange
Act reports is recorded, processed and summarized and is reported within the
time periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to the Company's management,
including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. In
designing and evaluating the disclosure control procedures, no matter how
well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship
of possible controls and procedures.
7
ITEM 4 - CONTROLS AND PROCEDURES (continued)
As of the date of this report, the Company's management, including the
President ( principal executive officer ) and Chief Financial Officer,
carried out an evaluation of the effectiveness of the design and operation of
the Company's disclosure controls and procedures pursuant to Exchange Act
Rule 13a - 14. Based upon the evaluation, the Company's President ( principal
executive officer ) and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information required to be included in the Company's periodic SEC
filings. There have been no significant changes in the Company's disclosure
controls and procedures or in other factors, which could significantly affect
disclosure controls subsequent to the date the Company's management carried
out its evaluation. During the period covered by this quarterly report on
Form 10Q, there was no change in our internal control over financial
reporting ( as defined in Rule 13a - 15(f) under the Exchange Act ) that
materially affected, or is reasonably likely materially affect, our internal
control over financial reporting.
PART 2. - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Neither the Company nor any of its officers, directors or greater than 10%
beneficial shareholders are involved in any litigation or legal proceedings
involving the business of the Company.
ITEM 1A - RISK FACTORS
The Company at present does not engage in any business activities thus will
not be subjected to any risk.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
No unregistered securities were issued during the period covered by this
report.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
None
8
ITEM 6 - EXHIBITS
Exhibit Number Exhibit Description
31.01 Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
of the Securities Exchange Act and Section 302 of the Sarbanes-Oxley
Act of 2002.
31.02 Certification of Chief Accounting Officer pursuant to Rule 13a-14(a)
of the Securities Exchange Act and Section 302 of the Sarbanes-Oxley
Act of 2002.
32.01 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.*
32.02 Certification of Chief Accounting Officer pursuant to 18 U.S.C.
Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.*
* These certificates accompany Dalian Capital Group's Quarterly Report
on Form 10-Q; they are not deemed "filed" with the Securities and Exchange
Commission and are not to be incorporated by reference in any filing of
Dalian Capital Group under the Securities Act of 1933, or the Securities
Exchange Act of 1934, whether made before or after the date hereof and
irrespective of any general incorporation language in any filings.
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
October 16, 2008
Dalian Capital Group, Inc.
/s/ Erwin Liem
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Erwin Liem
Director and Chief Executive Officer
/s/ Michael Lee
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Michael Lee
Chief Accounting Officer
9