DALIAN CAPITAL GROUP, INC.
FORM 10-Q
(Quarterly Report)
Filed August 20, 2010 for the period ending 06/30/10
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 June 30, 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 August 18, 2010, the Company had outstanding of
41,389,994 shares of Common Stock, $0.0001 par value per
share.
DALIAN CAPITAL GROUP, INC.
FORM 10-Q
For the Period Ended June 30, 2010
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION Pages
Item 1. Consolidated Financial Statements 1 - 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-12
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 12
Item 4T.Controls and Procedures 12-13
PART II
Item 1. Legal Proceedings 13
Item 1A.Risk Factors 13
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Certifications 14
Part 1. Item 1. Consolidated Financial Statements
DALIAN CAPITAL GROUP, INC.
Page No.
Consolidated Balance Sheets 1
Consolidated Statements of Operations 2
Consolidated Statements of Stockholders' Equity 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5 - 9
DALIAN CAPITAL GROUP, INC.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2010
(Expressed in US Dollars)
(Unaudited)
PART 1. FINANCIAL INFORMATION
DALIAN CAPITAL GROUP, INC.
(A development stage company)
CONSOLIDATED BALANCE SHEETS
(U.S. Dollars)
(Unaudited)
June 30, Dec 31,
2010 2009
Assets
Current Assets
Cash $ 58 $ 130
_________________________
Total current assets 58 130
Goodwill 3,000 -
_________________________
Total Assets $ 3,058 $ 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, 41,389,994 shares 4,139 139
Additional paid-in capital 9,000 -
Subscription notes receivable (10,000) -
Accumulated deficit (90,130) (89,808)
_________________________
Total stockholders' deficit (86,991) (89,669)
_________________________
Total Liabilities and Stockholders'
Deficit $ 3,058 $ 130
_________________________
The accompanying notes are an integral part of the financial statements.
DALIAN CAPITAL GROUP, INC.
(A development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. Dollars)
(Unaudited)
Inception
May 31,
For the 3 Months For the 6 Months 2006 to
ended June 30, ended June 30, June 30,
2010 2009 2010 2009 2010
Revenue $ - $ - $ - $ - $ -
____________________________________________________
Expenses
General and
administrative 35 31 322 290 14,991
Consultation and
reorganization fees - - - - 75,139
____________________________________________________
Total operating
expenses $ 35 $ 31 $ 322 $ 290 $ 90,130
____________________________________________________
Net loss $ (35) $ (31) $ (322) $ (290) $ (90,130)
____________________________________________________
Net loss per
common shares
- Basic and
Diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted average
number of shares
outstanding 6,115,274 1,390,000 3,765,690 1,390,000
The accompanying notes are an integral part of the financial statements.
DALIAN CAPITAL GROUP, INC.
(A development stage company)
Statement of Stockholders' Equity (Deficiency)
for the period May 31, 2006 (Inception) to June 30, 2010
(U.S. Dollars)
Additional Total
Common Stock Paid-In Accum. Stockholders'
Shares Amount Capital Deficit Equity
____________________________________________________________________________
Bal, May 31, 2006 - $ - - - -
Shares issued for
service 1,390,000 139 - - 139
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)
Shares issued
for cash 10,000,000 1,000 9,000 10,000
Shares issued for
exchange 29,999,994 3,000 3,000
Subscription
notes receivable (1,000) (9,000) (10,000)
Net loss for
the period (322) (322)
____________________________________________________________________________
Bal, June 30, 2010 41,389,994 3,139 - (90,130) (86,991)
____________________________________________________________________________
The accompanying notes are an integral part of the financial statements.
DALIAN CAPITAL GROUP, INC.
(A development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. Dollars)
(Unaudited)
Inception
May 31,
For the 6 Months 2006 to
ended June 30, June 30,
2010 2009 2010
_________________________________________________________________________
Cash Flows Provided By (Used In):
Operating activities
Net loss for the period $ (322) $ (290) $ (90,130)
Adjustments to reconcile
net income to net cash used
in operating activities:
Goodwill (3,000) - (3,000)
Accounts payable to
related parties 250 100 90,188
_________________________________________________________________________
Net cash used in operating
activities (3,072) (190) (2,942)
_________________________________________________________________________
Cash flows from investing activities
Issued of common shares 3,000 - 3,000
_________________________________________________________________________
Net cash used in investing
activities 3,000 - 3,000
_________________________________________________________________________
Cash flows from Financing activities
Issued of common shares 10,000 - 10,000
Subscription notes receivable (10,000) - (10,000)
_________________________________________________________________________
Net cash provided by financing
activities - - -
_________________________________________________________________________
Net increase (decrease) in cash $ (72) $ (190) $ 58
Cash - beginning of period 130 390 -
_________________________________________________________________________
Cash - end of period $ 58 $ 200 $ 58
_________________________________________________________________________
Supplemental disclosure of cash
flow information:
Interest paid $ - $ - $ -
Income tax paid $ - $ - $ -
The accompanying notes are an integral part of the financial statements.
DALIAN CAPITAL GROUP, INC.
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 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.
On June 22, 2010, the Company acquired 100% of Cyenergx
Power Corporation through the exchange of shares as per the
Share Exchange Agreement. Cyenergx Power Corporation was
incorporate in the State of Delaware on May 6, 2010.
The Company is in the development stage and has not
generated any revenue and has incurred losses of $90,130
since inception. At June 30, 2010, the Company had $58 cash
and $90,049 in current liabilities. For the three months
period ended June 30, 2010, the Company had net loss of
$35. 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.
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.
(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
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.
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 June 30, 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.
On June 15, 2010, the Company issued 10,000,000 restricted
common shares to a company for cash as per subscription
agreement.
On June 22, 2010, the Company issued 29,999,994 common
shares in exchange for 10,900,000 common shares equivalent
to 100% of the outstanding shares of Cyenergx Power
Corporation. Cyenergx Power Corporation becomes a wholly
own subsidiary of the Company.
As of August 18, 2010, the Company had issued and
outstanding of 41,389,994 shares of Common Stock with par
value of $0.0001 per share.
Note 4 - Related Party Accounts
As at June 30, 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 August
18, 2010 and has determined that there were no additional
subsequent events to recognize or disclose in these
financial statements.
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.
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.
On June 22, 2010, the Company acquired 100% of Cyenergx
Power Corporation through the exchange of shares as per
the Share Exchange Agreement. Cyenergx Power Corporation
was incorporate in the State of Delaware on May 6, 2010.
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 June 30, 2010 was $35
compared to $31 for the three months period ended June
30, 2009.
Liquidity and Financial Resources
The Company has minimal cash reserves and a working
capital deficit of $86,991 as of June 30, 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 June 30, 2010, the Company
has been unsuccessful in its efforts to raise additional
capital to meet management's plan of operations.
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.
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 second
quarter of our 2010 fiscal year that have materially
affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
PART II
Item 1. Legal Proceedings.
None
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds.
On June 15, 2010, the Company issued 10,000,000 restricted
common shares to a company for cash as per subscription
agreement.
On June 22, 2010, the Company issued 29,999,994 common
shares in exchange for 10,900,000 common shares equivalent
to 100% of the outstanding shares of Cyenergx Power
Corporation. Cyenergx Power Corporation becomes a wholly
own subsidiary of the Company.
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
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: August 20, 2010
Dalian Capital Group, Inc.
By: /S/ Erwin Liem
Erwin Liem
Chief Executive Officer
& Director