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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2012

 

☐ 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: 333-174240

 

Development Capital Group, Inc.

(Exact name of Registrant as specified in its charter)

Florida   27-3746561
(State of incorporation)   (IRS Employer ID Number)

6029 Paseo Acampo Carlsbad, California 92009

(Address of principal executive offices)

 

(760) 840-9409

(Registrant’s telephone number)

Not Applicable

(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. Yes x 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
(Do not check if a smaller reporting company)      

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

As of December 31, 2012 there were 12,328,000 shares of common stock, par value $0.001 per share outstanding.

 

 




 

TABLE OF CONTENTS 

 

         Page  
  PART I        
Item 1. Financial Statements        
  Balance Sheets Unaudited December 31, 2012 and Audited March 31, 2012     F3  
  Statements of operations for the nine months period ended December 31,2012 and 2011      F4  
  Statements of Changes in Stockholders’ Equity for the Nine month period ended December 31, 2012 and the year ended March 31, 2012     F5  
  Statements of Cash Flows for the Nine month periods ended December 31, 2012 and 2011     F6  
  Notes to Financial Statements     F7-F8  
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations     3  
Item 3. Quantitative and Qualitative Disclosures About Market Risk     4  
Item 4. Controls and Procedures     4  
  PART II        
Item 1. Legal Proceedings     5  
Item 1A. Risk Factors     5  
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds     5  
Item 3. Defaults Upon Senior Securities     5  
Item 4. Mine Safety Disclosures     5  
Item 5. Other Information     5  
Item 6. Exhibits     5  
  Signatures     6  

 

 

 

 

 

DEVELOPMENT CAPITAL GROUP, INC. (A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AT DECEMBER 31, 2012 (unaudited) and MARCH 31, 2012 (audited)
       
   December 31, 2012  March 31, 2012
ASSETS      
Current assets:          
Cash and cash equivalents  $128   $17,545 
Deposits   —      —   
Total assets  $128   $17,545 
LIABILITIES AND STOCKHOLDERS' EQUITY     
Commitments and contingencies          
Stockholders equity:          
Common stock, $0.001 par value; 490,000,000 shares authorized; 12,328,000 shares issued and outstanding  $12,328   $11,328 
Additional paid in capital   44,880    44,880 
Deficit accumulated during the development stage  57,080    (38,671)
Total stockholders' equity  128    17,545 
Total liabilities and stockholders' equity  $128   $17,545 

 

F3
 

 

DEVELOPMENT CAPITAL GROUP, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011
 
   Three Months Ended December 31,  Nine Months Ended December 31,
   2012  2011  2012  2011
Commissions revenue  $6,300    81,568   $64,320    208,775 
Operating expenses:                    
Compensation expense   340    55,898    66,540    134,972 
Professional fees   1,800    2,819    5,841    15,897 
General and administrative   4,142    6,411    10,348    17,447 
Total operating expenses   6,282    65,129    82,729    168,316 
Net income (loss) from operations before income taxes  $18    16,440   $(18,409)   40,459 
Share-based compensation   —      —      1,000    —   
Issuance fo Stock for Services   —      100    —      100 
Income tax   —      —      —      —   
Net income (loss)  $18    16,540   $(17,409)   40,559 
Gain (loss) per common share   —      —      —      —   
Weights average of shares outstanding   12,328,000    11,320,000    12,328,000    11,320,000 

 

F4
 

 

DEVELOPMENT CAPITAL GROUP, INC. (A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF STOCKHOLDERS' EQUITY
FROM SEPTEMBER 27, 2010 (INCEPTION) TO DECEMBER 31, 2012

 

                Deficit        
                Accumulated        
          Additional     During the     Total  
    Common Stock     Paid in     Development     Stockholders'  
    Shares     Amount     Capital     Stage     Equity  
Balance, September 27, 2010 (Inception)      -      $  -      $  -      $  -      $  -  
Sale of common stock      10,208,000        10,208        10,000        -        20,208  
Share-based compensation      -        -        30,800        -        30,800  
Issuance of common stock for services      1,020,000        1,020        4,080        -        5,100  
Balance, March 31, 2011      -        -        -        (39,170)        (39,170)  
Share-based compensation      100,000       100         -        -        100  

Net income 

     -        -        -        507        507  
Balance, March 31, 2012      11,328,000        11,328        44,880        (38,663)        17,545  
Share-based compensation      1,000,000        1,000        -        -        1,000  
Net income (loss)      -        -        -        (18,417)        (18,417)  
Balance, December 31, 2012      12,328,000        12,328        44,880        (57,080)        128  

 

F5
 

 

DEVELOPMENT CAPITAL GROUP, INC. (A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOW For the      
Nine MONTHS ENDED December 31, 2012 and December 31, 2011   
       
   Nine Months Ended December 31, 2012  Nine Months Ended December 31, 2011
Cash flows from operating activities:          
Net income (loss)  $18   $40,459 
Adjustments to reconcile net income (loss) to          
Net cash provided by (used in) operating activities          
Issuance of stock for services   —     100 
Share-based compensation   1,000    —   
Increase in deposits   —      —   
Net cash provided by operating activities   1,018    40,559 
Cash flows from investing activities:   —      —   
Cash flows from financing activities:          
Proceeds from sale of common stock   —      —   
Net cash provided by financing activities   —      —   
Net increase in cash and cash equivalents   1,018    40,559 
Cash and cash equivalents, beginning of period   110    16,930 
Cash and cash equivalents, end of period  $128   $57,489 
Supplemental disclosure of cash flow information:          
Cash paid for interest  $—     $—   
Cash paid for taxes  $—     $—   
   $(0)  $(0)

 

F6
 

DEVELOPMENT CAPITAL GROUP, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS 

 

NOTE 1 - DESCRIPTION OF BUSINESS 

 

Development Capital Group, Inc. (the “Company”) was incorporated under the laws of the State of Florida on September 27, 2010. The Company provides transportation and logistics services for a wide range of manufacturing, industrial and retail costumers. The Company is a development-stage enterprise company and its planned principal activities are to provide freight, logistics, truckload and other services for investors and truck owners.

 

As a development-stage enterprise, the Company had limited operating revenues through December 31, 2012. Recorded revenues were generated from the service and commissions earned through contracted freight services. The Company is currently devoting substantially all of its present efforts to securing and establishing a new business.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates.

 

Revenue recognition

The Company recognizes revenue when it is realized or realizable and earned. Revenue is considered realized and earned when persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; fees to the customer are fixed or determinable; and collection of the resulting receivable is reasonably assured.

 

Cash equivalents

The Company considers all highly liquid instruments purchased with maturity of three months or less from the time of purchase to be cash equivalents.

 

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the recorded book basis and tax basis of assets and liabilities for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settle. Deferred taxes are also recognized for operating losses that are available to offset future taxable income and tax credits that are available to offset future taxable income and tax credits that are available to offset future federal income taxes.

 

Long-Lived Assets

The Company will review its long-lived assets and certain identifiable intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management will perform an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company will recognized an impairment loss if the carrying value of the asset exceeds the expected future cash flows.

 

Revenues

Revenue from inception to December 31, 2012 is $340,825.

F7
 

NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The carrying amounts of cash and cash equivalents approximate their fair values due to their short-term nature.

 

NOTE 4 - CONCENTRATION OF CREDIT RISK

 

The Company maintains cash balances at a financial institution in Florida. The balance, at any given time, may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits of $250,000 per institution. The Company’s cash balances at December 31, 2012 were within FDIC insured limits.

 

NOTE 5 - COMMITMENTS AND CONTINGENCIES

 

From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of its business. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any other pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

 

NOTE 6 - STOCKHOLDERS’ EQUITY

 

From the Company’s inception on September 27, 2010 through December 31, 2012, the Company has issued 12, 328,000 shares of common stock with a $0.001 par value, inclusive of 9,000,000 shares issued to the Company founders and 1,120,000 shares isued to third parties for services. The financial statements include total stockholder equity $128.00.

 

F8
 

  

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

As used in this Form 10-Q, references to the Company,” “we,” “our” or “us” refer to Development Capital Group, Inc. a Florida Corporation unless the context otherwise indicates.

 

Forward-Looking Statements

 

The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

For a description of such risks and uncertainties, refer to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on August 29, 2011, and declared effective on September 2, 2011. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States,we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Business Overview

 

We are a liaison between our customers who are in need of transportation services for their cargo and transportation needs and providers who will deliver our customers’ cargo. We match our customers with transportation providers who provide shipping by truckload and less than truckload within the United States based upon delivery requirements, transportation routes, type of shipment, equipment requirements, shipment size and price. Our prices are determined on a shipment-by-shipment basis to accommodate our customers’ needs based on the transportation provider selection, size and type of shipment, distance and route. We do not own transportation vehicles or equipment used to transport freight, including trucks and trailers.

 

Results of Operations For the Nine months ending December 31, 2012 compared to the Nine months ending December 31, 2011.

 

Revenues

Since our September 27, 2010 inception through December 31, 2012, we generated revenues $340,825. We generated revenues for the nine month period ending December 31, 2012 of $64,320 and $208,775 for the nine month periods ending December 31, 2011.

 

3
 

Total operating expenses

During the nine month periods ending December 31, 2012 and December 31, 2011, total operating expenses were $82,729 and $168,316. From our September 27, 2010 inception through December 31, 2012, our operating expenses were $355,999 include share-based compensation $31,900. We decreased the general and administrative expenses for nine month ended December 31, 2012 to $10,348. In a previous year 2011 for the same period these expenses were $17,447. Also we decreased our compensation expense from $ 134,972 for the 9 month 2011 to $ 66,540 for the 9 month 2012. Since our inception through December 31, 2012 our compensation expense was $287,012.

 

Net Profit/Loss

During the nine month periods ending December 31, 2012 we had a lost $18,409 and December 31, 2011 we had profit $40,459.

 

Going Concern Consideration

 

Our auditor's report consolidated financial statements for third quarter ending December 31, 2012 expressed an opinion that our capital resources were insufficient to sustain operations. Our last nine months reflect net loss and our capital resources are reduced.

 

Liquidity and Capital Resources

 

As of December 31, 2012 and December 31, 2011, we had cash of $128 and $57,489 respectively. Cash provided by financing activities for the nine month periods ending December 31, 2012 and December 31, 2011.

 

Off Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures.

 

As of the end of the period covered by this Report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in reports that we file or submit under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

 

Changes in Internal Control Over Financial Reporting.

 

There have been no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 240.15d-15 that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonable likely to materially affect, the Company internal control over financial reporting.

 

4
 


 

 

PART II

 

OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

There are no pending legal proceedings in which we are a party or in which any of our directors, officers or affiliates, any owner of record or beneficiary of more than 5% of any class of our voting securities is a party adverse to us or has a material interest adverse to us. Our property is not the subject of any pending legal proceedings.

 

Item 1A. Risk Factors

 

Because we are classified as a Smaller Reporting Company under the federal securities laws, we are not required to include risk factors in this Form 10-Q; however, please note risk factors included in our S-1 Registration Statement.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

We did not issue unregistered securities during the quarter ending December 31, 2012.

 

Purchases of equity securities by the issuer and affiliated purchasers

 

During the quarter ending December 31, 2012, there were no purchases of equity securities by us or affiliated purchasers.

 

Use of Proceeds

 

None

 

Item 3. Defaults Upon Senior Securities.

 

We have no senior securities outstanding.

 

Item 4. Mine Safety Disclosures.

 

Not Applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits

 

Exhibit No.   Description
1.4   Rule 13a-14(a)/15d14(a) Certifications of Andriy Korobkin, the President, Chief Executive Officer and Director (attached hereto)
1.5   Rule 13a-14(a)/15d14(a) Certifications of Viktoriya Korobkin, the Chief Financial Officer (attached hereto)
1.6   Section 1350 Certifications of Andriy Korobkin, the President, Chief Executive Officer and Director(attached hereto)
1.7   Section 1350 Certifications of Vikoriya Korobkin Chief Financial Officer, (attached hereto)

 

5
 

 SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  Development Capital Group, Inc.  
       
Dated: February 5 , 2013 By:  

 

 

 

 

 

 

Andriy Korobkin,

President, CEO

 
       

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