DALIAN CAPITAL GROUP, INC.
FORM 10-Q
(Quarterly Report)
Filed April 29, 2010 for the period ending 03/31/10
Address 900-850 West Hastings Street,
Vancouver,
BC V6C 1E1 Canada
Telephone 604 - 801-5022
CIK 0001368568
Fiscal Year 12/31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the quarterly period
ended March 31, 2010.
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)
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 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 ( )
At April 28, 2010, the Company had outstanding of 1,390,000
shares of Common Stock, $0.0001 par value per share.
DALIAN CAPITAL GROUP, INC.
FORM 10-Q
For the Period Ended March 31, 2010
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION Pages
Item 1. Financial Statements... 1 - 12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations... 13-17
Item 3. Quantitative and Qualitative Disclosures
About Market Risk... 17
Item 4T.Controls and Procedures... 17
PART II
Item 1. Legal Proceedings... 18
Item 1A.Risk Factors... 18
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds... 18
Item 3. Defaults Upon Senior Securities........ 18
Item 4. Submission of Matters to a Vote of Security Holders... 18
Item 5. Other Information... 18
Item 6. Exhibits and Certifications... 19
Part 1. Item 1. Financial Statements
DALIAN CAPITAL GROUP, INC.
Page No.
Balance Sheets... 1
Statements of Operations... 2
Statements of Cash... 3
Notes to Financial Statements... 4 - 12
DALIAN CAPITAL GROUP, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
March 31, 2010
(Expressed in US Dollars)
(Unaudited)
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
(U.S. Dollars)
(Unaudited)
Mar 31, Dec 31,
2010 2009
Assets
Current Assets
Cash $ 94 $ 130
____________________
Total Assets $ 94 $ 130
____________________
Liabilities
Current Liabilities
Related party accounts $ 90,049 $ 89,799
____________________
Total liabilities 90,049 89,799
____________________
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 (90,094) (89,808)
____________________
Total stockholders' deficit (89,955) (89,669)
____________________
Total Liabilities and Stockholders' Deficit $ 94 $ 130
____________________
The accompanying notes are an integral part of the financial statements.
1
DALIAN CAPITAL GROUP, INC.
(A development stage company)
STATEMENTS OF OPERATIONS
(U.S. Dollars)
(Unaudited)
Inception
May 31,
For the 3 Months 2006 to
ended March 31, March 31,
2010 2009 2010
Revenue $ - $ - $ -
________________________________
Expenses
General and administrative 286 259 14,955
Consultation and reorganization fees - - 75,139
________________________________
Total operating expenses $ 286 $ 259 $ 90,094
________________________________
Net loss $ (286) $ (259) $ (90,094)
________________________________
Net loss per common shares
- Basic and Diluted $ (0.00) $ (0.00)
Weighted average number
of shares outstanding 1,390,000 1,390,000
The accompanying notes are an integral part of the financial statements.
2
DALIAN CAPITAL GROUP, INC.
(A development stage company)
STATEMENTS OF CASH FLOWS
(U.S. Dollars)
(Unaudited)
Inception
May 31,
For the 3 Months 2006 to
ended March 31, March 31,
2010 2009 2010
Cash Flows Provided By (Used In):
Operating activities
Net loss for the period $ (286) $ (259) $ (90,094)
Adjustments to reconcile net income
to net cash used in operating
activities:
Accounts payable to related parties 250 100 90,188
__________________________________
Net cash used in operating activities (36) (159) 94
Cash flows from Investing activities - - -
Cash flows from Financing activities - - -
__________________________________
Net increase (decrease) in cash $ (36) $ (159) $ 94
Cash - beginning of period 130 390 -
__________________________________
Cash - end of period $ 94 $ 231 $ 94
__________________________________
Supplemental disclosure of cash flow information:
Interest paid $ - $ - $ -
Income tax paid $ - $ - $ -
The accompanying notes are an integral part of the financial statements.
3
DALIAN CAPITAL GROUP, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2010
(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 $90,094
since inception. At March 31, 2010, the Company had $94
cash and $90,049 in current liabilities. For the three
months period ended March 31, 2010, the Company had net
loss of $286. 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.
4
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.
5
(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
6
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.
7
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
8
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
9
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
10
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
11
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 March 31, 2010, 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 April 28, 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 March 31, 2010, $90,049 was due to the director and
several corporations related to the Company. These amounts
bear no interest and are due on demand; the Company
recorded no imputed interest on these borrowings.
Note 5 - Subsequent Events
The Company has evaluated subsequent events through April
28, 2010 and has determined that there were no additional
subsequent events to recognize or disclose in these
financial statements.
12
PART I
This Interim Report on Form 10-Q 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-Q.
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 Interim Report
on Form 10-Q. 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.
13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
General
The Company has been in the process of identifying and
discussing a strategic merger or acquisitions but will
need to raise substantial additional capital to fund
this strategy.
The Company does not currently have any employees.
Operations
The Company has not been active since 2006. The net loss
for the three months period ended March 31, 2010 was
$286 compared to $259 for the three months period ended
March 31, 2009.
Liquidity and Financial Resources
The Company has minimal cash reserves and a working
capital deficit of $89,955 as of March 31, 2010.
Accordingly, the Company's ability to sustain operations
and pursue its plan of operations is contingent on the
ability to obtain funding. The Company is seeking such
additional funds through private equity or debt
financing. Regardless, there can be no assurance that
such funding will be available on acceptable terms.
The Company remains in the development stage. Operations
were financed through advances and loans from directors
and related parties. The directors and related parties
have also advanced funds into the Company to cover cash
flow deficiencies. These advances have no stated
interest or 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. At March 31, 2010, the
Company has been unsuccessful in its efforts to raise
additional capital to meet management's plan of
operations.
14
The Company's continued existence as a going concern is
ultimately dependent upon its ability to secure
additional funding.
Critical Accounting Policies
The Company's discussion and analysis of its financial
condition and results of operations are based upon the
Company's financial statements, which have been prepared
in accordance with accounting principles generally
accepted in the United States of America.
The preparation of the financial statements requires the
Company to make estimates and judgments that affect the
reported amount of assets, liabilities, and expenses, and
related disclosures of contingent assets and liabilities.
On an on-going basis, the Company evaluates its estimates,
including those related to intangible assets, income taxes
and contingencies and litigation. The Company bases its
estimates on historical experience and on various
assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for
making judgments about carrying values of assets and
liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates
under different assumptions or conditions.
NEW ACCOUNTING PRONOUNCEMENTS
On June 30, 2009, the Financial Accounting Standards Board
(FASB) issued FASB Statement No. 168, The FASB Accounting
Standards Codification(tm) and the Hierarchy of Generally
Accepted Accounting Principles-a replacement of FASB
Statement No. 162. On the effective date of this
statement, FASB Accounting Standards Codification(tm) (ASC)
becomes the source of authoritative U.S. accounting and
reporting standards for nongovernmental entities, in
addition to guidance issued by the Securities and Exchange
Commission (SEC). At that time, FASB ASC will supersede
all then-existing, non-SEC accounting and reporting
standards for nongovernmental entities. Once effective,
all other nongrandfathered, non-SEC accounting literature
not included in FASB ASC will become nonauthoritative.
15
Under ASC 815, the Company discloses derivative
instruments and hedging activities, which requires
entities to provide enhanced disclosures about (a) how and
why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are
accounted for under ASC 815 and its related
interpretations and (c) how derivative instruments and
related hedged items affect an entity's financial
position, financial performance and cash flows.
Under ASC 805, "Business Combinations", the Company uses
the acquisition method of accounting for all business
combinations and for an acquirer to be identified for each
business combination. Under ASC 805, the Company is also
required to recognize the assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree
at the acquisition date, measured at their fair values as
of that date, with limited exceptions specified in ASC
805. In addition, acquisition costs and restructuring
costs that the acquirer expected but was not obligated to
incur to be recognized separately from the business
combination, therefore, expensed instead of part of the
purchase price allocation. ASC 805 will be applied
prospectively to business combinations for which the
acquisition date is on or after the beginning of the first
annual reporting period beginning on or after December 15,
2008. Early adoption is prohibited.
The Company follows ASC 825-10 in measuring the fair value
of options for financial assets and liabilities. The
Company is permitted to irrevocably elect fair value on a
contract-by-contract basis as the initial and subsequent
measurement attribute for many financial assets and
liabilities and certain other items including insurance
contracts. Entities electing the fair value option would
be required to recognize changes in fair value in earnings
and to expense upfront cost and fees associated with the
item for which the fair value option is elected. ASC 825-
10 is effective for fiscal years beginning after November
15, 2007. Early adoption is permitted as of the beginning
of a fiscal year that begins on or before November 15,
2007, provided the entity also elects to apply the
provisions of ASC 825-10, Fair Value Measurements.
16
Item 3. Quantitative 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 4T. Controls and Procedures.
The Company's Chief Executive Officer and its Chief
Financial Officer are primarily responsible for the
accuracy of the financial information that is presented
in this quarterly Report. These officers have as of the
close of the period covered by this Quarterly Report,
evaluated the Company's disclosure controls and
procedures (as defined in Rules 13a-4c and 15d-14c
promulgated under the Securities Exchange Act of 1934 and
determined that such controls and procedures were not
effective in ensuring that material information relating
to the Company was made known to them during the period
covered by this Quarterly Report.
There have been 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 first
quarter of our 2010 fiscal year that have materially
affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
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PART II
Item 1. Legal Proceedings.
None
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security
Holders.
Not Applicable.
Item 5. Other Information.
None
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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: April 29, 2010
Dalian Capital Group, Inc.
By: /S/ Erwin Liem
Erwin Liem
Chief Executive Officer
& Director
By: /S/ Michael Lee
Michael Lee
Chief Accounting Officer
19