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EX-31.1 - Quality Alliance Group, Inc | v166674_ex31-1.htm |
EX-32.1 - Quality Alliance Group, Inc | v166674_ex32-1.htm |
U.S.
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: September 30,
2009
o
|
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: 000-53544
QUALITY ALLIANCE GROUP,
INC.
(Name of
Small Business Issuer in its charter)
Nevada
|
26-2718129
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
13406 Sir Britton Court,
Chesterfield, Virginia 28832
(Address
of principal executive offices)
(804)
608-0208
Issuer’s
telephone number
________________________________________________
(Former
name, former address and former
fiscal
year, if changed since last report)
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. x
Yes o
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).
o Yes
o No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-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 o
|
Accelerated
filer o
|
Non-accelerated
filer o (Do
not check if a smaller reporting company)
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
x Yes o No
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. o Yes o No
APPLICABLE
ONLY TO CORPORATE ISSUERS
State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: At November 16, 2009 there were
1,000,000 shares of common stock outstanding.
PART
I — FINANCIAL INFORMATION
Item
1. Financial Statements.
Balance
Sheets as of September 30, 2009 (unaudited) and June
30, 2008 (audited)
|
F-1 | |||
Statements
of Operations for the Three Months and Nine Months Ended
September 30, 2009 and for the Period from May 7, 2008 (date
of inception) to September 30, 2009 (unaudited)
|
F-2 | |||
Statement
of Stockholder’s Deficit as of September 30, 2009
(unaudited)
|
F-3 | |||
Statements
of Cash Flows for the three months Ended September 30, 2009
and 2008 and for the period from May 7, 2008 (date of inception) to
September
30, 2009 (unaudited)
|
F-4 | |||
Notes
to Financial Statements
|
F-5 |
1
QUALITY
ALLIANCE GROUP, INC.
FINANCIAL
STATEMENTS
SEPTEMBER
30, 2009
QUALITY
ALLIANCE GROUP, INC.
TABLE
OF CONTENTS
SEPTEMBER
30, 2009
F-1 | ||||
Statements
of Operations for the Three Months Ended September 30, 2009 and 2008 and
for the Period from May 7, 2008 (date of inception) to September 30,
2009
|
F-2 | |||
Statement
of Stockholder’s Deficit as of September 30, 2009
|
F-3 | |||
Statements
of Cash Flows for the Three Months Ended September 30, 2009 and 2008 and
for the Period from May 7, 2008 (date of inception) to September 30,
2009
|
F-4 | |||
Notes
to Financial Statements
|
F-5
to F-7
|
QUALITY
ALLIANCE GROUP, INC.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEETS
As
of September 30, 2009 and June 30, 2009
ASSETS
|
September
30,
2009
|
June
30,
2009
|
||||||
(unaudited)
|
(audited)
|
|||||||
Current
Assets
|
||||||||
Cash
and equivalents
|
$ | 265 | $ | 265 | ||||
TOTAL
ASSETS
|
$ | 265 | $ | 265 | ||||
LIABILITIES
AND STOCKHOLDER’S DEFICIT
|
||||||||
Current
Liabilities
|
||||||||
Accrued
expenses and interest
|
$ | 4,131 | $ | 3,362 | ||||
Notes
payable – related party
|
13,439 | 13,439 | ||||||
Total
current liabilities
|
17,570 | 16,801 | ||||||
Stockholder’s
Deficit
|
||||||||
Common
Stock, $.0001 par value, 100,000,000 shares authorized, 1,000,000 shares
issued and outstanding
|
100 | 100 | ||||||
Additional
paid-in capital
|
-0- | -0- | ||||||
Deficit
accumulated during the development stage
|
(17,405 | ) | (16,636 | ) | ||||
Total
stockholder’s deficit
|
(17,305 | ) | (16,536 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDER’S DEFICIT
|
$ | 265 | $ | 265 |
See
accompanying notes to financial statements.
F-1
QUALITY
ALLIANCE GROUP, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF OPERATIONS (UNAUDITED)
For
the three months ended September 30, 2009 and 2008
Period
from May 7, 2008 (inception) to September 30, 2009
Three
months
ended
September
30,
2009
|
Three
months
ended
September
30,
2008
|
Period
from
May
7, 2008
(inception)
to
September
30,
2009
|
||||||||||
Revenues:
|
$ | -0- | $ | -0- | $ | -0- | ||||||
Expenses:
|
||||||||||||
Professional
fees
|
500 | 500 | 16,255 | |||||||||
Interest
expense
|
269 | 215 | 1,150 | |||||||||
Total
expenses
|
769 | 715 | 17,405 | |||||||||
Net
Loss
|
$ | (769 | ) | $ | (715 | ) | $ | (17,405 | ) | |||
Net
loss per share:
|
||||||||||||
Basic
and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
Weighted
average shares outstanding:
|
||||||||||||
Basic
and diluted
|
1,000,000 | 1,000,000 |
See
accompanying notes to financial statements.
F-2
QUALITY
ALLIANCE GROUP, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF STOCKHOLDER’S DEFICIT (UNAUDITED)
Period
from May 7, 2008 (Inception) to September 30, 2009
Common
stock
|
Additional
paid-in
|
Deficit
accumulated
during
the
development
|
||||||||||||||||||
Shares
|
Amount
|
capital
|
stage
|
Total
|
||||||||||||||||
Issuance
of common stock for
cash @ $.0001
|
1,000,000 | $ | 100 | $ | -0- | $ | - | $ | 100 | |||||||||||
Net
loss for the period
|
- | - | - | (9,029 | ) | (9,029 | ) | |||||||||||||
Balance,
June 30, 2008
|
1,000,000 | $ | 100 | $ | -0- | $ | (9,029 | ) | $ | (8,929 | ) | |||||||||
Net
loss for the period
|
- | - | - | (7,607 | ) | (7,607 | ) | |||||||||||||
Balance,
June 30, 2009
|
1,000,000 | $ | 100 | $ | -0- | $ | (16,636 | ) | $ | (16,536 | ) | |||||||||
Net
loss for the period
|
- | - | - | (769 | ) | (769 | ) | |||||||||||||
Balance,
September 30, 2009
|
1,000,000 | $ | 100 | $ | -0- | $ | (17,405 | ) | $ | (17,305 | ) |
See
accompanying notes to financial statements.
F-3
QUALITY
ALLIANCE GROUP, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF CASH FLOWS (UNAUDITED)
For
the three months ended September 30, 2009 and 2008
Period
from May 7, 2008 (Inception) to September 30, 2009
Three
months
ended
September
30,
2009
|
Three
months
ended
September
30,
2008
|
Period
from
May
7, 2008
(inception)
to
September
30,
2009
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
loss for the period
|
$ | (769 | ) | $ | (715 | ) | $ | (17,405 | ) | |||
Change
in non-cash working capital items:
|
-0- | -0- | -0- | |||||||||
Increase
(decrease) in accrued expenses and interest
|
769 | (1,785 | ) | 4,131 | ||||||||
NET
CASH (USED IN) OPERATING ACTIVITIES
|
-0- | (2,500 | ) | (13,274 | ) | |||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds
from note payable
|
-0- | 3,500 | 13,439 | |||||||||
Proceeds
from sales of common stock
|
-0- | -0- | 100 | |||||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
-0- | 3,500 | 13,539 | |||||||||
NET
INCREASE IN CASH
|
-0- | 1,000 | 265 | |||||||||
CASH,
BEGINNING OF PERIOD
|
265 | 100 | -0- | |||||||||
CASH,
END OF PERIOD
|
$ | 265 | $ | 1,100 | $ | 265 | ||||||
SUPPLEMENTAL
CASH FLOW INFORMATION
|
||||||||||||
Interest
paid
|
$ | -0- | $ | -0- | $ | -0- | ||||||
Income
taxes paid
|
$ | -0- | $ | -0- | $ | -0- |
See
accompanying notes to financial statements.
F-4
QUALITY
ALLIANCE GROUP, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
September
30, 2009
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES
Nature of
Business
Quality
Alliance Group, Inc. is a development stage company and was incorporated in
Nevada on May 7, 2008. The Company’s objective is to acquire or merge with
a target business or company in a business combination.
Development Stage
Company
The
accompanying financial statements have been prepared in accordance with
accounting principles related to development stage companies. A
development stage company is one in which planned principal operations have not
commenced or if its operations have commenced, there has been no significant
revenues there from.
Cash and Cash
Equivalents
The
Company considers all highly liquid investments with maturities of three months
or less to be cash equivalents. At September 30, 2009 and June 30,
2009 the Company had $265 of unrestricted cash.
Fair Value of Financial
Instruments
The
Company’s financial instruments consist of cash and cash equivalents, accrued
expenses, and a note payable to a related party. The carrying amount of these
financial instruments approximates fair value due either to length of maturity
or interest rates that approximate prevailing market rates unless otherwise
disclosed in these financial statements.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the
asset and liability method, deferred income tax assets and liabilities are
determined based on the differences between the financial reporting and tax
bases of assets and liabilities and are measured using the currently enacted tax
rates and laws. A valuation allowance is provided for the amount of
deferred tax assets that, based on available evidence, are not expected to be
realized.
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Basic loss per
share
Basic
loss per share has been calculated based on the weighted average number of
shares of common stock outstanding during the period.
F-5
QUALITY
ALLIANCE GROUP, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
September
30, 2009
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES (continued)
Recent Accounting
Pronouncements
The
Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company’s results of
operations, financial position or cash flow.
NOTE
2 – ACCRUED EXPENSES AND INTEREST
Accrued
expenses and interest consisted of the following at September 30, 2009 and June
30, 2009:
September
30,
2009
|
June
30,
2009
|
|||||||
Accrued
professional fees
|
$ | 3,000 | $ | 2,500 | ||||
Accrued
interest- related party
|
1,131 | 862 | ||||||
Total
accrued expenses and interest
|
$ | 4,131 | $ | 3,362 |
The
accrued interest – related party is owed to Ray Cene Investments,
LLC. See Note 3.
NOTE
3 – NOTE PAYABLE
The
Company received a $6,500 note payable from Ray Cene Investments, LLC on June
11, 2008. The Company also signed an additional $3,500 note payable
on June 18, 2008 and received the funds on July 15,
2008. Additionally, the Company was loaned funds during the year
ended June 30, 2009 totaling $3,439. All notes are due on demand and
bear 8% interest. Ray Cene Investments, LLC is the owner of 100% of
the outstanding common stock of the Company. The total note payable
at September 30, 2009 to Ray Cene Investments, LLC is $13,439.
NOTE
4 – INCOME TAXES
For the
periods ended September 30, 2009, the Company has incurred net losses and,
therefore, has no tax liability. The net deferred tax asset generated
by the loss carry-forward has been fully reserved. The cumulative net
operating loss carry-forward is approximately $17,400 at September 30, 2009, and
will expire beginning in the year 2028.
The
cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
2009
|
||||
Deferred
tax asset attributable to:
|
||||
Net
operating loss carryover
|
$ | 5,916 | ||
Valuation
allowance
|
(5,916 | ) | ||
Net
deferred tax asset
|
$ | - |
F-6
QUALITY
ALLIANCE GROUP, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
September
30, 2009
NOTE
5 – LIQUIDITY AND GOING CONCERN
Quality
Alliance Group has negative working capital, has incurred operating losses since
inception, and has not yet received revenues from sales of products or
services. These factors create substantial doubt about the Company’s
ability to continue as a going concern. The financial statements do
not include any adjustment that might be necessary if the Company is unable to
continue as a going concern.
The
ability of the Company to continue as a going concern is dependent on the
Company generating cash from the sale of its common stock and/or obtaining debt
financing and attaining future profitable operations. Management’s
plans include selling its equity securities and obtaining debt financing to fund
its capital requirement and ongoing operations; however, there can be no
assurance the Company will be successful in these efforts.
NOTE
6 – SUBSEQUENT EVENTS
The
Company has analyzed its operations subsequent to September 30, 2009 through
November 16, 2009 and has determined that it does not have any material
subsequent events to disclose in these financial statements.
F-7
Item 2. Management’s Discussion and Analysis or Plan of Operation.
Overview.
Quality
Alliance Group, Inc. (“we”, “us”, the “Company” or like terms) was incorporated
in the State of Nevada on May 7, 2008. We are a developmental stage
company and have not generated any revenues to date. We were
organized to serve as a vehicle to acquire, through a reverse acquisition,
merger, capital stock exchange, asset acquisition or other similar business
combination (“Business Combination”), an operating or development stage business
("Target Business") which desires to utilize our status as a reporting
corporation under the Securities Exchange Act of 1934. We are
currently in the process of identifying and evaluating targets for a Business
Combination. We are not presently engaged in, and will not engage in,
any substantive commercial business operations unless and until we consummate a
Business Combination.
Our
management has broad discretion with respect to identifying and selecting a
prospective Target Business. We have not established any specific
attributes or criteria (financial or otherwise) for prospective Target
Businesses. Our sole officer and director has never served as an
officer or director of a development stage public company with the business
purpose of acquiring a Target Business. Accordingly, he may not
successfully identify a Target Business or conclude a Business
Combination. To the extent we affect a Business Combination
with a financially unstable company or an entity in its early stage of
development or growth, including entities without established records of sales
or earnings, we may be affected by numerous risks inherent in the business and
operations of financially unstable and early stage or potential emerging growth
companies. If we consummate a Business Combination with a foreign
entity, we will be subject to all of the risks attendant to foreign
operations. Although our management will endeavor to evaluate the
risks inherent in a particular Target Business, we cannot assure you that we
will properly ascertain or assess all significant risk factors.
We expect
that in connection with any Business Combination, we will issue a significant
number of shares of our common stock (equal to at least 80% of the total number
of shares outstanding after giving effect to the transaction and likely a
significantly higher percentage) in order to ensure that the Business
Combination qualifies as a “tax free” transaction under federal tax
laws. The issuance of additional shares of our capital stock
will:
|
·
|
significantly
reduce the equity interest of our stockholders;
and
|
|
·
|
cause
a change in likely result in the resignation or removal of one or more of
our present officers and directors.
|
Our
management anticipates that the Company likely will affect only one Business
Combination, due primarily to our financial resources and the dilution of
interest for present and prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a Target
Business in order to achieve a tax-free reorganization. This lack of
diversification should be considered a substantial risk in investing in us
because it will not permit us to offset potential losses from one venture
against potential gains from another.
Liquidity and Capital
Resources.
At
September 30, 2009, we had cash on hand of $265. We do not expect
that these funds will be sufficient to cover our operating costs and
expenses. During the next twelve months we anticipate that we will
incur costs and expenses in connection with the preparation and filing of
reports under the Securities Exchange Act and the identification and evaluation
of targets for a Business Combination. Management expects to fund
additional costs and expenses which may be incurred through loans or further
investment in the Company, as and when necessary. We cannot provide
investors with any assurance that we will have sufficient capital resources to
identify a suitable Target Business, to conduct effective due diligence as to
any Target Business or to consummate a Business Combination. As a
result of our negative working capital, our losses since inception and our
failure to generate revenues from operations, our financial statements include a
note in which our auditor has expressed doubt about our ability to continue as a
"going concern."
2
Results of
Operations.
Since our inception, we have not
generated any revenues. We reported a net loss for the three months
ended September 30, 2009 of $769 and a net loss since inception of
$17,405.
We do not
expect to engage in any activities, other than seeking to identify a Target
Business, unless and until such time as we enter into a Business Combination
with a Target Business, if ever. We cannot provide investors with any
assessment as to the nature of a Target Business’s operations or speculate as to
the status of its products or operations, whether at the time of the Business
Combination it will be generating revenues or its future prospects.
Item
3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item
4(T). Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
As of
September 30, 2009, the Company’s management carried out an evaluation, under
the supervision and with the participation of the Company’s Chief Executive
Officer, who is the Company’s principal executive officer and principal
financial officer, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures (as defined in Rules 13a-15 and
15d-15 under the Exchange Act), pursuant to Exchange Act Rule 13a-15. Based on
such evaluation, the Company’s Chief Executive Officer has concluded that the
Company's disclosure controls and procedures were effective.
Changes
in Internal Controls
There
have been no changes in the Company’s internal control over financial reporting
(as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three
months ended September 30, 2009 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial
reporting.
PART
II — OTHER INFORMATION
Item
1. Legal Proceedings.
The
Company is not a party to any legal proceeding or litigation.
Item
1A. Risk Factors.
Smaller
reporting companies are not required to provide the information required by this
item.
3
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
(a) During
the three months ended September 30, 2009, the Company did not issue any
securities.
(b) Not
applicable.
(c)
During the three months ended September 30, 2009, neither the issuer nor any
"affiliated purchaser," as defined in Rule 10b-18(a)(13), purchased any shares
or other units of any class of the issuer's equity securities.
Item
3. Defaults Upon Senior Securities.
None.
Item
4. Submission of Matters to a Vote of Security Holders.
None.
Item
5. Other Information.
None.
Item
6. Exhibits.
Index to
Exhibits
Exhibit
|
Description
|
|
31.1
|
Certification
of the Company’s Principal Executive Officer and Principal Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
respect to the registrant’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2009.
|
|
|
||
32.1*
|
Certification
of the Company’s Principal Executive Officer and Principal Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes Oxley Act of
2002.
|
* Pursuant to Commission Release
No. 33-8238, this certification will be treated as “accompanying” this
Quarterly Report on Form 10-Q and not “filed” as part of such report for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or otherwise subject to the liability of Section 18 of the Securities
Exchange Act of 1934, as amended, and this certification will not be deemed to
be incorporated by reference into any filing under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the registrant specifically incorporates it by
reference.
4
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.
QUALITY
ALLIANCE GROUP, INC.
|
|||
Dated:
November 16, 2009
|
By:
|
/s/
Adam Wimmer
|
|
Name: Adam Wimmer | |||
Title:
President,
Principal Executive Officer and
Principal
Financial Officer
|
5