DALIAN CAPITAL GROUP, INC.
FORM 10-K
(Annual Report)
Filed 03/09/10 for the Period Ending 12/31/09
Address 900 - 850 West Hastings Street
Vancouver, BC V6C 1E1
Canada
Telephone 604-801-5022
Fiscal Year 12/31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended
December 31, 2009.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the transition
period from __________ to ___________
Commission File Number : 000-52185
Dalian Capital Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware N/A
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
850 West Hastings Street, Suite 900,
Vancouver, BC V6C 1E1, Canada
(Address of principal executive offices,
including zip code)
604-801-5022
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b)
of the Act: None
Securities registered pursuant to Section 12(g)
of the Act: Common Stock, $0.0001 par value
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ( ) No ( X )
Indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes ( ) No ( X )
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 ( X ) 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 ( 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 ( ) No ( )
Indicate by check if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K 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-K or any amendment to this Form 10-K. ( X )
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a not-accelerated
filer, or a smaller reporting company. See the definitions
of "large accelerated filer," "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 ( X )
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Act).
Yes ( X ) No ( )
The aggregate market value of the voting and non-voting
common equity held by non-affiliates as of issuer cannot be
determined as the shares are not quoted in any exchange.
At March 5, 2010, the Company had issued and outstanding of
1,390,000 shares of Common Stock, $0.0001 par value per
share.
DALIAN CAPITAL GROUP, INC.
FORM 10-K
For the Fiscal Year Ended December 31, 2009
TABLE OF CONTENTS
PART I Page
Item 1 Business 2
Item 1A Risk Factors 3
Item 1B Unresolved Staff Comments 3
Item 2 Properties 3
Item 3 Legal Proceedings 3
Item 4 Submission of Matters to a Vote of 3
Security Holders
PART II
Item 5 Market for Registrant's Common Equity, Related
Stockholder Matters and Issuer Purchases of
Equity Securities 4
Item 6 Selected Financial Data 4
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations 4-6
Item 7A Quantitative and Qualitative Disclosures About
Market Risk 6
Item 8 Financial Statements and Supplementary Data 6
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 7-20
Item 9A Controls and Procedures 21
Item 9B Other Information 21
PART III
Item 10 Directors, Executive Officers and Corporate Governance 22
Item 11 Executive Compensation 22
Item 12 Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 23
Item 13 Certain Relationships and Related Transactions, and
Director Independence 23
Item 14 Principal Accounting Fees and Services 23
PART IV
Item 15 Exhibits, Financial Statement Schedules 24
Signatures
PART I
This Annual Report on Form 10-K contains forward-looking
statements that have been made pursuant to the provisions
of Section 27A of the Securities Act of 1933, Section 21E
of the Securities Exchange Act of 1934, and the Private
Securities Litigation Reform Act of 1995 and concern
matters that involve risks and uncertainties that could
cause actual results to differ materially from historical
results or from those projected in the forward-looking
statements. Discussions containing forward-looking
statements may be found in the material set forth under
"Business," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and in other
sections of this Form 10-K. Words such as "may," "will,"
"should," "could," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential," "continue"
or similar words are intended to identify forward-looking
statements, although not all forward-looking statements
contain these words. Although we believe that our opinions
and expectations reflected in the forward-looking
statements are reasonable as of the date of this Report, we
cannot guarantee future results, levels of activity,
performance or achievements, and our actual results may
differ substantially from the views and expectations set
forth in this Annual Report on Form 10-K. We expressly
disclaim any intent or obligation to update any forward-
looking statements after the date hereof to conform such
statements to actual results or to changes in our opinions
or expectations.
Readers should carefully review and consider the various
disclosures made by us in this Report, set forth in detail
in Part I, under the heading "Risk Factors," as well as
those additional risks described in other documents we file
from time to time with the Securities and Exchange
Commission, which attempt to advise interested parties of
the risks, uncertainties, and other factors that affect our
business. We undertake no obligation to publicly release
the results of any revisions to any forward-looking
statements to reflect anticipated or unanticipated events
or circumstances occurring after the date of such
statements.
1
Item 1. Description of Business
General Description and Development of Business
Dalian Capital Group, Inc. (the "Company") was incorporated
in the State of Delaware on May 31, 2006. Since inception,
the Company has been engaged in organizational efforts in
obtaining initial financing. The Company was formed as a
vehicle to pursue a business combination and has made
efforts to identify a possible business combination. We are
a start-up, Development Stage Corporation and have not yet
generated or realized any revenues from our business
activities.
The Company was organized as a vehicle to investigate and,
if such investigation warrants, acquire a target company or
business seeking the perceived advantages of being a public
held corporation. The Company's principal business
objective for the next 12 months and beyond such time will
be to achieve long-term growth potential through a
combination with a business rather than immediate, short-
term earnings. The Company will not restrict its potential
candidate target companies to any specific business,
industry or geographical location and, thus, may acquire
any type of business.
Liquidity and Financial Resources
The Company is in the development stage and has not
generated any revenues and has incurred losses of $89,808
since inception. At December 31, 2009, the Company had $130
cash and $89,799 in current liabilities. Further, the
Company incurred a loss of $360 during the year ended
December 31, 2009. In view of these conditions, the ability
of the Company to continue as a going concern is in
substantial doubt and dependent upon achieving a profitable
level of operations and on the ability of the Company to
obtain necessary financing to fund ongoing operations. To
meet these objectives, the Company continues to seek other
sources of financing in order to support existing
operations and expand the range and scope of its business.
However, there are no assurances that any such financing
can be obtained on acceptable terms, if at all. These
financial statements do not give effect to any adjustments
which would be necessary should the Company be unable to
continue as a going concern.
2
Item 1A. Risk Factors
As the Company has no recent operating history or revenue
and only minimal assets, there is a risk that we will be
unable to continue as a going concern and consummate a
business combination. We have no significant assets or
financial resources. We will, in all likelihood, sustain
operating expenses without corresponding revenues, at
least until the consummation of a business combination.
This may result in our incurring a net operating loss
that will increase continuously until we can consummate a
business combination with a profitable business
opportunity. We cannot assure you that we can identify a
suitable business opportunity and consummate a business
combination.
FUTURE SUCCESS IS HIGHLY DEPENDENT ON THE ABILITY OF
MANAGEMENT TO LOCATE AND ATTRACT A SUITABLE ACQUISITION.
Item 1B. Unresolved Staff Comments
None
Item 2. Properties
The Company neither rents nor owns any properties. The
Company currently has no policy with respect to investments
or interests in real estate, real estate mortgages or
securities of, or interests in, persons primarily engaged
in real estate activities.
Item 3. Legal Proceedings
There are not presently any material pending legal
proceedings to which the Company is a party or as to which
any of its property is subject, and no such proceedings are
known to the Company to be threatened or contemplated
against it.
Item 4. Submission of Matters to a Vote of Security
Holders
There were no matters submitted to a vote of security
holders during the fourth quarter of 2009.
3
PART II
Item 5. Market for Registrant's Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities
(a) Market Information.
The Company's common stock is not trading on any stock
exchange. There has been no market activity in its stock
since its inception through the date of this filing.
(b) Holders.
As of December 31, 2009, there is only one holder, who is
the sole director of the Company for the common stock.
(c) Dividends
The Company has not paid any dividends on our common
stock to date and do not intend to pay dividends prior to
the completion of a business combination.
Recent Sales of Unregistered Securities and Use of Proceeds
None
Item 6. Selected Financial Data.
Not applicable
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The following discussion of our financial condition and
results of operations should be read in conjunction with
the financial statements and notes thereto and the other
financial information included elsewhere in this report.
Certain statements contained in this report, including,
without limitation, statements containing the words
"believes," "anticipates," "expects" and words of similar
import, constitute "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of
4
1995. Such forward-looking statements involve known and
unknown risks and uncertainties. Our actual results may
differ materially from those anticipated in these forward-
looking statements as a result of certain factors,
including our ability to create, sustain, manage or
forecast our growth; our ability to attract and retain key
personnel; changes in our business strategy or development
plans; competition; business disruptions; adverse
publicity; and international, national and local general
economic and market conditions.
Overview
The Company does not currently engage in any business
activities that provide cash flow. The Company is currently
in the development stage. The Company intends to serve as a
vehicle to effect an asset acquisition, merger, exchange or
capital stock or other business combination with a domestic
or foreign business.
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 acquisition. No
assurances can be given that the Company will be successful
in locating or negotiating with any target business.
Results of Operations for the Years ended December 31, 2009
and 2008
Revenue. There is no revenue for the years ended December
31, 2009 and 2008.
Operating Expenses. For the year ended December 31, 2009,
the Company total operating expenses of $360 as compared to
$89,309 for the year ended December 31, 2008.
Net Loss. The net loss for the year ended December 31, 2009
was $360 as compared to $89,309 for the year ended December
31, 2008, a decrease of $88,949.
5
Liquidity and Financial Resources
The Company remains in the development stage since
inception. Operations were financed through loans and
advances from director and related parties to cover cash
flow deficiencies. The advances have no stated repayment
terms.
The Company's financial statements are presented on a going
concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of
business. Since inception, we have no revenue and have
accumulated operating losses of $89,669. At the present
time, and over the next twelve months, our primary focus
will be to explore various methods for raising additional
funds and seeking profitable ventures.
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk.
The Company does not hold any derivatives or investments
that are subject to market risk. The carrying values of any
financial instruments, approximate fair value as of those
dates because of relatively short-term maturity of these
instruments which eliminates any potential market risk
associated with such instruments.
6
Item 8. Financial Statements and Supplementary Data
Dalian Capital Group, Inc.
Index to Financial Statements
Contents Pages
Balance Sheets as of December 31, 2009 and 2008 8
Statements of Operations for the year ended
December 31, 2009 and 2008 and for the period
May 31, 2006 (Inception) to December 31, 2009 9
Statements of Stockholders' Equity for the
Period May 31, 2006 (Inception) to December 31,
2009 10
Statements of Cash Flows for the year ended
December 31, 2009 and 2008 and for the period
May 31, 2006 (Inception) to December 31, 2009 11
Notes to Financial Statements 12 - 20
7
DALIAN CAPITAL GROUP, INC.
(A development stage company)
BALANCE SHEETS
(Expressed in U.S. Dollars)
(Unaudited)
These financial statements have not been reviewed or audited by our
independent auditors
Dec 31, Dec 31,
2009 2008
(restated)
Assets
Current Assets
Cash $ 130 $ 390
______________________
Total Assets $ 130 $ 390
______________________
Liabilities
Current Liabilities
Related party accounts (Note 4) $ 89,799 $ 89,699
______________________
Total liabilities 89,799 89,699
______________________
Stockholders' Equity
Preferred Stock, $0.0001 par value
Authorized 20,000,000 shares
Issued and outstanding, none issued - -
Common stock, $0.0001 par value
Authorized 100,000,000 shares
Issued and outstanding, 1,390,000 shares 139 139
Accumulated deficit (89,808) (89,448)
______________________
Total stockholders' deficit (89,669) (89,309)
______________________
Total Liabilities and Stockholders' Deficit $ 130 $ 390
______________________
The accompanying notes are an integral part of the financial statements.
8
DALIAN CAPITAL GROUP, INC.
(A development stage company)
STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars)
(Unaudited)
Inception
May 31,
2006 to
Years ended Dec 31, Dec 31,
2009 2008 2009
(restated) (restated)
Revenue $ - $ - $ -
Expenses
General and administrative 360 14,309 14,669
Consultation and
reorganization fees - 75,000 75,139
____________________________________
Total operating expenses $ 360 $ 89,309 $ 89,808
____________________________________
Net loss $ (360) $ (89,309) $ (89,808)
____________________________________
Net loss per common shares
- Basic and Diluted $ (0.00) $ (0.07)
Weighted average number
of common shares outstanding 1,390,000 1,390,000
The accompanying notes are an integral part of the financial statements.
9
DALIAN CAPITAL GROUP, INC.
(A development stage company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the period May 31, 2006 (inception) through December 31, 2009
(US Dollars)
(Unaudited)
(restated)
Deficit
Accumulated
Additional During Total
Paid-In Development Stockholders'
Shares Amount Capital Stage Equity
May 31, 2006
( inception ) 1,390,000 $ 139 - 139
Shares issued
for services
Net loss for
the period (139) (139)
______________________________________________________
Bal Dec 31, 2007 1,390,000 139 - (139) -
Net loss for
the year (89,309) (89,309)
_______________________________________________________
Bal Dec 31, 2008 1,390,000 139 - (89,448) (89,309)
Net loss for
the year (360) (360)
______________________________________________________
Bal Dec 31, 2009 1,390,000 $ 139 - (89,808) (89,669)
______________________________________________________
The accompanying notes are an integral part of the financial statements
10
DALIAN CAPITAL GROUP, INC.
(A development stage company)
STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
(Unaudited)
Inception
May 31,
Years ended 2006 to
December 31, Dec. 31,
2009 2008 2009
(restated) (restated)
Cash Flows (Used In) Provided By :
Operating Activities
Net loss $ (360) $ (89,309) $ (89,808)
Adjustments to reconcile
net income to net cash used
in operating activities:
Related party accounts 100 89,699 89,938
__________________________________
Net cash used in operating activities (260) 390 130
__________________________________
Net cash used in investing activities - - -
Net cash provided by financing
activities - - -
__________________________________
Increase/(Decrease) in Cash (260) 390 130
Cash - beginning of year 390 - -
__________________________________
Cash - end of year $ 130 $ 390 $ 130
__________________________________
Supplemental disclosure of cash flow
information:
Interest paid $ - $ - $ -
Income tax paid $ - $ - $ -
The accompanying notes are an integral part of the financial statements.
11
DALIAN CAPITAL GROUP, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended December 31, 2009 and 2008
(Expressed in US Dollars)
Note 1 - Organization and Business Operations
Dalian Capital Group, Inc. (the "Company") was incorporated
in the State of Delaware on May 31, 2006. Since inception,
the Company has been engaged in organizational efforts in
obtaining initial financing. The Company was formed as a
vehicle to pursue a business combination and has made
efforts to identify a possible business combination. We are
a start-up, Development Stage Corporation and have not yet
generated or realized any revenues from our business
activities.
The Company was organized as a vehicle to investigate and,
if such investigation warrants, acquire a target company or
business seeking the perceived advantages of being a public
held corporation. The Company's principal business
objective for the next 12 months and beyond such time will
be to achieve long-term growth potential through a
combination with a business rather than immediate, short-
term earnings. The Company will not restrict its potential
candidate target companies to any specific business,
industry or geographical location and, thus, may acquire
any type of business.
The Company is in the development stage and has not
generated any revenue and has incurred losses of $89,808
since inception. At December 31, 2009, the Company had $130
cash and $89,799 in current liabilities. For the years
ended December 31, 2009 and 2008, the Company had net
losses of $360 and $89,309, respectively. In view of these
conditions, the ability of the Company to continue as a
going concern is in substantial doubt and dependent upon
achieving a profitable level of operations and on the
ability of the Company to obtain necessary financing to
fund ongoing operations.
12
Note 2 - Summary of Significant Accounting Policies
These financial statements have been prepared in accordance
with generally accepted accounting principles in the United
States of America and are stated in US dollars. 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.
Actual results may differ from these estimates.
The financial statements have, in management's opinion,
been properly prepared within the framework of the
significant accounting policies summarized below :
(a) Development Stage Company
The Company is a development stage company. The Company is
devoting substantially all of its present efforts to
establish a new business and none of its planned principal
operations have commenced. All losses accumulated since
inception has been considered as part of the Company's
development stage activities.
(b) Financial Instruments
The carrying values of cash, accounts receivable, accounts
payable, promissory notes payable and due to related
parties approximate fair value because of the short-term
nature of these instruments. Management is of the opinion
that the Company is not exposed to significant interest,
currency or credit risks arising from these financial
instruments.
(c) Stock Issued in Exchange for Services
The valuation of common stock issued in exchange for
services is valued at an estimated fair market value as
determined by officers and directors of the Company based
upon other sales and issuances of the Company's common
stock within the same general time period.
13
(d) Stock-based Compensation
FASB ASC (Accounting Standards Codification) 718 "Stock
Compensation" requires public companies to recognize the
cost of employee services received in exchange for equity
instruments, based on the grant-date fair value of those
instruments, with limited exceptions. FASB ASC 718 "Stock
Compensation" also affects the pattern in which
compensation cost is recognized, the accounting for
employee share purchase plans, and the accounting for
income tax effects of share-based payment transactions. For
small business filers, FASB ASC 718 "Stock Compensation" is
effective for interim or annual periods beginning after
December 15, 2005. The Company adopted the guidance in FASB
ASC 718 "Stock Compensation" on October 1, 2007.
(e) Foreign Currency Translation
The Company translates foreign currency transactions and
balances to its reporting currency, United States Dollars,
in accordance with FASB ASC 830 "Foreign Currency Matters".
Monetary assets and liabilities are translated into the
functional currency at the exchange rate in effect at the
end of the year. Non-monetary assets and liabilities are
translated at the exchange rate prevailing when the assets
were acquired or the liabilities assumed. Revenue and
expenses are translated at the rate approximating the rate
of exchange on the transaction date. All exchange gains and
losses are included in the determination of net income
(loss) for the year.
(f) Basic and Diluted Loss Per Share
The Company presents of both basic and diluted earnings per
share ("EPS") on the face of the income statement. Basic
loss per share is computed by dividing the net loss
available to common shareholders by the weighted average
number of common shares outstanding during the year.
Diluted EPS gives effect to all dilative potential common
shares outstanding during the year including stock options,
using the treasury stock method, and convertible preferred
stock, using the if-converted method. In computing diluted
EPS, the average stock price for the year is used in
determining the number of shares assumed to be purchased
from the exercise of stock options or warrants. Diluted EPS
14
excludes all dilative potential common shares if their
effect is anti dilative.
(g) Income Taxes
The Company follows FASB ASC 740 "Income Taxes", which
requires the use of the asset and liability method of
accounting for income taxes. Under the asset and liability
method, deferred tax assets and liabilities are recognized
for future tax consequences attributable to temporary
differences between the financial statements carry amounts
of existing assets and liabilities and loss carry forwards
and their respective tax rates expected to apply to taxable
income in the year in which those temporary differences are
expected to be recovered or settled.
(h) Recently Issued Accounting Pronouncements
In February 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-08
(ASU 2010-08), Technical Corrections to Various Topics.
This amendment eliminated inconsistencies and outdated
provisions and provided the needed clarifications to
various topics within Topic 815. The amendments are
effective for the first reporting period (including interim
periods) beginning after issuance (February 2, 2010),
except for certain amendments. The amendments to the
guidance on accounting for income taxes in reorganization
(Subtopic 852-740) should be applied to reorganizations for
which the date of the reorganization is on or after the
beginning of the first annual reporting period beginning on
or after December 15, 2008. For those reorganizations
reflected in interim financial statements issued before the
amendments in this Update are effective, retrospective
application is required. The clarifications of the
guidance on the embedded derivates and hedging (Subtopic
815-15) are effective for fiscal years beginning after
December 15, 2009, and should be applied to existing
contracts (hybrid instruments) containing embedded
derivative features at the date of adoption. The Company
does not expect the provisions of ASU 2010-08 to have a
material effect on the financial position, results of
operations or cash flows of the Company.
15
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-07
(ASU 2010-07), Not-for-Profit Entities (Topic 958): Not-
for-Profit Entities: Mergers and Acquisitions. This
amendment to Topic 958 has occurred as a result of the
issuance of FAS 164. The Company does not expect the
provisions of ASU 2010-07 to have a material effect on the
financial position, results of operations or cash flows of
the Company.
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-06
(ASU 2010-06), Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved
disclosures about fair value measurements on the basis of
input received from the users of financial statements.
This is effective for interim and annual reporting periods
beginning after December 15, 2009, except for the
disclosures about purchases, sales, issuances, and
settlements in the roll forward of activity in Level 3 fair
value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for
interim periods within those fiscal years. Early adoption
is permitted. The Company does not expect the provisions
of ASU 2010-06 to have a material effect on the financial
position, results of operations or cash flows of the
Company.
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-05
(ASU 2010-05), Compensation - Stock Compensation (Topic
718). This standard codifies EITF Topic D-110 Escrowed
Share Arrangements and the Presumption of Compensation.
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-04
(ASU 2010-04), Accounting for Various Topics-Technical
Corrections to SEC Paragraphs.
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-03
(ASU 2010-03), Extractive Activities-Oil and Gas (Topic
932): Oil and Gas Reserve Estimation and Disclosures. This
amendment to Topic 932 has improved the reserve estimation
16
and disclosure requirements by (1) updating the reserve
estimation requirements for changes in practice and
technology that have occurred over the last several decades
and (2) expanding the disclosure requirements for equity
method investments. This is effective for annual reporting
periods ending on or after December 31, 2009. However, an
entity that becomes subject to the disclosures because of
the change to the definition oil- and gas- producing
activities may elect to provide those disclosures in annual
periods beginning after December 31, 2009. Early adoption
is not permitted. The Company does not expect the
provisions of ASU 2010-03 to have a material effect on the
financial position, results of operations or cash flows of
the Company.
In January 2010, the FASB issued Accounting Standards
Update 2010-02, Consolidation (Topic 810): Accounting and
Reporting for Decreases in Ownership of a Subsidiary. This
amendment to Topic 810 clarifies, but does not change, the
scope of current US GAAP. It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the
potential conflict between guidance in that Subtopic and
asset derecognition and gain or loss recognition guidance
that may exist in other US GAAP. An entity will be
required to follow the amended guidance beginning in the
period that it first adopts FAS 160 (now included in
Subtopic 810-10). For those entities that have already
adopted FAS 160, the amendments are effective at the
beginning of the first interim or annual reporting period
ending on or after December 15, 2009. The amendments should
be applied retrospectively to the first period that an
entity adopted FAS 160. The Company does not expect the
provisions of ASU 2010-02 to have a material effect on the
financial position, results of operations or cash flows of
the Company.
In January 2010, the FASB issued Accounting Standards
Update 2010-01, Equity (Topic 505): Accounting for
Distributions to Shareholders with Components of Stock and
Cash (A Consensus of the FASB Emerging Issues Task Force).
This amendment to Topic 505 clarifies the stock portion of
a distribution to shareholders that allows them to elect to
receive cash or stock with a limit on the amount of cash
that will be distributed is not a stock dividend for
purposes of applying Topics 505 and 260. Effective for
17
interim and annual periods ending on or after December 15,
2009, and would be applied on a retrospective basis. The
Company does not expect the provisions of ASU 2010-01 to
have a material effect on the financial position, results
of operations or cash flows of the Company.
In December 2009, the FASB issued Accounting Standards
Update 2009-17, Consolidations (Topic 810): Improvements to
Financial Reporting by Enterprises Involved with Variable
Interest Entities. This Accounting Standards Update amends
the FASB Accounting Standards Codification for Statement
167. (See FAS 167 effective date below)
In December 2009, the FASB issued Accounting Standards
Update 2009-16, Transfers and Servicing (Topic 860):
Accounting for Transfers of Financial Assets. This
Accounting Standards Update amends the FASB Accounting
Standards Codification for Statement 166. (See FAS 166
effective date below)
In October 2009, the FASB issued Accounting Standards
Update 2009-15, Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance
or Other Financing. This Accounting Standards Update
amends the FASB Accounting Standard Codification for EITF
09-1. (See EITF 09-1 effective date below)
In October 2009, the FASB issued Accounting Standards
Update 2009-14, Software (Topic 985): Certain Revenue
Arrangements That Include Software Elements. This update
changed the accounting model for revenue arrangements that
include both tangible products and software elements.
Effective prospectively for revenue arrangements entered
into or materially modified in fiscal years beginning on or
after June 15, 2010. Early adoption is permitted. The
Company does not expect the provisions of ASU 2009-14 to
have a material effect on the financial position, results
of operations or cash flows of the Company.
In October 2009, the FASB issued Accounting Standards
Update 2009-13, Revenue Recognition (Topic 605): Multiple-
Deliverable Revenue Arrangements. This update addressed
the accounting for multiple-deliverable arrangements to
enable vendors to account for products or services
(deliverables) separately rather than a combined unit and
will be separated in more circumstances that under existing
18
US GAAP. This amendment has eliminated that residual
method of allocation. Effective prospectively for revenue
arrangements entered into or materially modified in fiscal
years beginning on or after June 15, 2010. Early adoption
is permitted. The Company does not expect the provisions of
ASU 2009-13 to have a material effect on the financial
position, results of operations or cash flows of the
Company.
In September 2009, the FASB issued Accounting Standards
Update 2009-12, Fair Value Measurements and Disclosures
(Topic 820): Investments in Certain Entities That Calculate
Net Asset Value per Share (or Its Equivalent). This update
provides amendments to Topic 820 for the fair value
measurement of investments in certain entities that
calculate net asset value per share (or its equivalent).
It is effective for interim and annual periods ending after
December 15, 2009. Early application is permitted in
financial statements for earlier interim and annual periods
that have not been issued. The Company does not expect the
provisions of ASU 2009-12 to have a material effect on the
financial position, results of operations or cash flows of
the Company.
In July 2009, the FASB ratified the consensus reached by
EITF (Emerging Issues Task Force) issued EITF No. 09-1,
(ASC Topic 470) "Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance"
("EITF 09-1"). The provisions of EITF 09-1, clarifies the
accounting treatment and disclosure of share-lending
arrangements that are classified as equity in the financial
statements of the share lender. An example of a share-
lending arrangement is an agreement between the Company
(share lender) and an investment bank (share borrower)
which allows the investment bank to use the loaned shares
to enter into equity derivative contracts with investors.
EITF 09-1 is effective for fiscal years that beginning on
or after December 15, 2009 and requires retrospective
application for all arrangements outstanding as of the
beginning of fiscal years beginning on or after December
15, 2009. Share-lending arrangements that have been
terminated as a result of counterparty default prior to
December 15, 2009, but for which the entity has not reached
a final settlement as of December 15, 2009 are within the
scope. Effective for share-lending arrangements entered
19
into on or after the beginning of the first reporting
period that begins on or after June 15, 2009. The Company
does not expect the provisions of EITF 09-1 to have a
material effect on the financial position, results of
operations or cash flows of the Company.
Note 3 - Shareholder's Equity
On May 31, 2006 (inception), the Company issued 1,390,000
shares of common stock for $139 in services by its founding
shareholder.
Preferred Stock
The Company's board of directors has the authority to
establish and fix designation, powers, or preferences of
preferred shares without further vote by the shareholders.
Authorized Share Capital
As of December 31, 2009, the Company has:
Authorized Preferred Stock of 20,000,000 shares at $0.0001
par value and authorized Common Stock of 100,000,000 shares
at $0.0001 par value.
As of March 5, 2010, the Company had issued and outstanding
of 1,390,000 shares of Common Stock with par value of
$0.0001 per share.
Note 4 - Related Party Accounts
As at December 31, 2009, $89,799 was due to the director
and corporations related to the Company. These amounts bear
no interest and are due on demand; the Company recorded no
imputed interest on these borrowings.
20
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
Not applicable
Item 9A (T). Controls and Procedures.
As supervised by our board of directors and our principal
executive and principal financial officers, management has
established a system of disclosure controls and procedures
and has evaluated the effectiveness of that system. The
system and its evaluation are reported on in the below
Management's Annual Report on Internal Control over
Financial Reporting. Our principal executive and
financial officer has concluded that our disclosure
controls and procedures (as defined in the 1934 Securities
Exchange Act Rule 13a-15(e)) as of December 31, 2009, are
effective, based on the evaluation of these controls and
procedures required by paragraph (b) of Rule 13a-15.
Management's Annual Report on Internal Control over
Financial Reporting
Management is responsible for establishing and maintaining
adequate internal control over financial reporting, as
such term is defined in Rule 13a-15(f) of the Securities
Exchange Act of 1934 (the "Exchange Act"). Internal
control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial
statements for external purposes in accordance with U.S.
generally accepted accounting principles.
Management assessed the effectiveness of internal control
over financial reporting as of December 31, 2009. We
carried out this assessment using the criteria of the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated
Framework.
This annual report does not include an attestation report
of our registered public accounting firm regarding
internal control over financial reporting. Management's
report was not subject to attestation by our registered
21
public accounting firm, pursuant to temporary rules of the
Securities and Exchange Commission that permit us to
provide only management's report in this annual report.
Management concluded in this assessment that as of
December 31, 2009, our internal control over financial
reporting is effective.
There have been no changes in our internal control over
financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the fourth
quarter of our 2009 fiscal year that have materially
affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
Item 9B. Other Information.
None.
PART III
Item 10. Directors, Executive Officers, Promoters,
Control Persons and Corporate Governance.
(a) Identification of directors.
The following table furnishes the information concerning
Company directors and officers as of the date of this
report. The directors of the Registrant are elected every
year and serve until their successors are elected and
qualify. They are:
Name Age Title Term
Erwin Liem 49 President and Annual
Director
Erwin Liem acts as President, Secretary, Treasurer and
Director for the Company. Mr. Liem has served as an
officer and Director of the Company since October 2006.
ITEM 11. Executive Compensation
None
22
ITEM 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters
The following table sets forth, as of December 31, 2008,
the number of shares of common stock owned of record and
beneficially by executive officers, directors and persons
who hold 5% or more of the outstanding common stock of the
Company. Also included are the shares held by all executive
officers and directors as a group.
Amount and Nature
Of Beneficial Percentage
Name and Address Ownership of Class
Erwin Liem 1,390,000 100%
Ste. 900,
850 West Hastings St.
Vancouver, BC V6C 1E1
Canada
ITEM 13. Certain Relationships and Related Transactions,
and Director Independence
A total of $75,000 for consultation and reorganization
expenses was charged by related company for the year ended
December 31, 2008. Except as otherwise indicated herein,
there have been no other related party transactions, of any
other transactions or relationships required to be
disclosed pursuant to Item 404 of Regulation S-B.
ITEM 14. Principal Accountant Fees and Services
The firm Malone & Bailey, P.C. acts as our principal
accountant. Our former sole officer and director paid
$1,500 on our behalf to Malone & Bailey, P.C. during the
period from May 31, 2006 (inception) to June 30, 2006, for
its audit of our financial statements which were included
in our Form 10SB12G filed with the Securities and Exchange
Commission on August 15, 2006. We have not paid Malone &
Bailey, P.C. any fees for the fiscal year ending December
31, 2009, for audit related or tax fees, or for any other
services.
23
Item 6. Exhibits
31.1 Certification of the Chief Executive Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.
31.2 Certification of the Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.
32.1 Certification of the Chief Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
32.1 Certification of the Chief Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
SIGNATURES
In accordance with the Securities Exchange Act of 1934,
this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on
the dates indicated.
Dated: March 9, 2010
DALIAN CAPITAL GROUP, INC.
By: /S/ Erwin Liem
Erwin Liem
Chief Executive Officer
& Director
By: /S/ Michael Lee
Michael Lee
Chief Accounting Officer
24