Car Monkeys Group - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - Car Monkeys Group	Financial_Report.xls
EX-31.1 - CERTIFICATION - Car Monkeys Group	dlne_ex311.htm
EX-31.2 - CERTIFICATION - Car Monkeys Group	dlne_ex312.htm
EX-32.2 - CERTIFICATION - Car Monkeys Group	dlne_ex322.htm
EX-32.1 - CERTIFICATION - Car Monkeys Group	dlne_ex321.htm

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, 2013

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

Commission file number 000-54583

Delaine Corporation

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

393 Crescent Ave, Wyckoff, NJ 07481

(Address of principal executive offices, including zip code.)

(862) 251-5912

(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 o

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-Y (§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 x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	o	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 o NO x

As of May 14, 2013, there are 64,661,250 shares of common stock outstanding.

All references in this Report on Form 10-Q to the terms “we”, “our”, “us”, the “Company”, “Delaine” and the “Registrant” refer to Delaine Corporation unless the context indicates another meaning.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the June 30, 2012 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. These unaudited financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

Delaine Corporation

(A Development Stage Company)

Index to the Financial Statements (Unaudited)

March 31, 2013 (Unaudited)

Balance Sheets as of March 31, 2013 (Unaudited) and June 30, 2012			3

Statements of Operations (Unaudited) for the nine month periods ended March 31, 2013 and 2012, and for the three month periods ended March 31, 2013 and 2012, and for the period from June 23, 2010 (Inception) to March 31, 2013			4

Statements of Cash Flows (Unaudited) for the nine month periods ended March 31, 2013 and 2012, and for the period from June 23, 2010 (Inception) to March 31, 2013			5

Notes to the Financial Statements (Unaudited)			6

Delaine Corporation

(A Development Stage Company)

Balance Sheets (Unaudited)

	March 31, 2013			June 30, 2012

ASSETS
Current assets:
Cash	$	-		$	186,602
Prepaid expenses		30,833			-
Total current assets		30,833			186,602

Property, plant and equipment, net		1,442			-

Intangible assets		353,194			353,194
Total assets	$	385,469		$	539,796

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks written in excess of cash balance	$	165		$	-
Accounts payable		19,564			4,544
Total current liabilities		19,729			4,544

Stockholder's Equity (Deficit)
Preferred stock, par value $0.001, 10,000,000 shares authorized, 400,000 shares issued and outstanding as of March 31, 2013 and June 30, 2012, respectively		400			400
Common stock, par value $0.001, 100,000,000 shares authorized, 64,505,000 and 45,980,000 issued and outstanding as of March 31, 2013 and June 30, 2012, respectively		64,505			45,980
Additional paid-in capital		665,797			567,422
Deficit accumulated during the development stage		(364,962	)		(78,550	)
Total stockholder's equity (deficit)		365,740			535,252
Total liabilities and stockholder's equity (deficit)	$	385,469		$	539,796

See accompanying notes to the financial statements (unaudited).

Delaine Corporation

(A Development Stage Company)

Statements of Operations (Unaudited)

	For the Nine Month Period Ended March 31, 2013			For the Nine Month Period Ended March 31, 2012			For the Three Month Period Ended March 31, 2013			For the Three Month Period Ended March 31, 2012			From Inception (June 23, 2010) Through March 31, 2013

Net Revenue	$	-		$	-		$	-		$	-		$	5,414
Operating expenses:
Selling, general and administrative		105,627			2,688			36,657			770			138,918
Professional fees		88,073			26,513			22,391			10,470			139,328
Stock issued for executive compensation		2,500			-			2,500			-			2,500
Stock issued for executive compensation - related party		25,000			-			25,000			-			25,000
Stock issued for consulting fees		65,000			-			65,000			-			65,000
Depreciation expense		245			-			82			-			245
Operating loss before income taxes		(286,445	)		(29,201	)		(151,630	)		(11,240	)		(365,577	)
Other income		33			581			-			-			615
Income tax (expense) benefit		-			-			-			-			-
Net loss	$	(286,412	)	$	(28,620	)	$	(151,630	)	$	(11,240	)	$	(364,962	)
Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding		58,079,145			35,045,673			63,016,056			36,480,000

See accompanying notes to the financial statements (unaudited).

Delaine Corporation

(A Development Stage Company)

Statements of Cash Flows (Unaudited)

	For the Nine Month Period Ended March 31, 2013			For the Nine Month Period Ended March 31, 2012			From Inception (June 23, 2010) Through March 31, 2013

Cash flows from operating activities:
Net loss	$	(286,412	)	$	(28,620	)	$	(364,962	)
Loss on asset disposition		-			-			6,485
Depreciation expense		245			-			245
Stock issued for executive compensation		2,500			-			2,500
Stock issued for executive compensation - related party		25,000			-			25,000
Stock issued for consulting fees		65,000			-			65,000
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts payable		15,020			17,677			19,564
Prepaid expenses		(30,833	)		-			(30,833	)
Net cash used in operating activities		(209,480	)		(10,943	)		(277,001	)

Cash flows from investing activities:		(1,687	)		-			(8,172	)
Net cash used in investing activities		(1,687	)		-			(8,172	)

Cash flows from financing activities:
Checks written in excess of cash balance		165			-			165
Contributed capital		14,400			-			20,400
Issuance of common stock for cash		10,000			10,300			264,608
Net cash provided by financing activities		24,565			10,300			285,173

Net increase in cash		(186,602	)		(643	)		-
Cash at beginning of period		186,602			3,697			-
Cash at end of period	$	-		$	3,054		$	-

Supplemental Information and Non-Monetary Transactions:
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-
3,456,960 common shares issued for proprietary technology	$	-		$	-		$	208,466
400,000 preferred shares issued for proprietary technology	$	-		$	-		$	144,728

See accompanying notes to the financial statements (unaudited).

Delaine Corporation

(A Development Stage Company)

Notes to the Financial Statements (Unaudited)

1) BASIS FOR FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2012 audited financial statements as reported in Form 10-K. The results of operations for the period ended March 31, 2013 are not necessarily indicative of the operating results for the full year ended June 30, 2013.

2) GOING CONCERN AND LIQUIDITY CONSIDERATIONS

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2013 and June 30, 2012, the Company has an accumulated deficit of $364,962 and $78,550, respectively. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.

3) STOCKHOLDERS’ EQUITY

SHARE ISSUANCES

In January, 2013, the Company issued 10,000,000 common shares of common stock for consulting services rendered to the Company valued at $50,000. The value of the shares issued was determined to be $0.1655 per share or $1,655,000. The excess of the value of the shares issued over the value of the services received is $1,605,000 and has been recorded as a reduction of additional paid-in capital.

In January, 2013, the Company issued 3,000,000 common shares of common stock for consulting services rendered to the Company valued at $15,000. The value of the shares issued was determined to be $0.1655 per share or $496,500. The excess of the value of the shares issued over the value of the services received is $481,500 and has been recorded as a reduction of additional paid-in capital.

In January, 2013, the Company issued 25,000 common shares, par value $0.001 per share to one investor in exchange for $10,000 cash, or $0.40 per share.

In March, 2013, the Company issued 5,000,000 common shares of common stock as compensation to its Chief Financial Officer (“CFO”) for services rendered to the Company valued at $25,000 (see Note 4). The value of the shares issued was determined to be $0.1655 per share or $827,500. The excess of the value of the shares issued over the value of the services received is $802,500 and has been recorded as a reduction of additional paid-in capital.

In March, 2013, the Company issued 500,000 common shares of common stock as compensation to its Chief Technology Officer for services rendered to the Company valued at $2,500. The value of the shares issued was determined to be $0.1655 per share or $82,750. The excess of the value of the shares issued over the value of the services received is $80,250 and has been recorded as a reduction of additional paid-in capital.

CAPITAL CONTRIBUTIONS

During the nine month period ended March 31, 2013 and 2012, the Company’s President and Chief Executive Officer contributed $14,400 and $0, respectively, to fund certain operating expenses of the Company. These amounts have been recorded in additional paid-in capital.

4) RELATED PARTY TRANSACTIONS

In March, 2013, the Company appointed a family member of its President and Chief Executive Officer as its CFO. In conjunction with the appointment the Company issued 5,000,000 common shares as executive compensation for services rendered to the Company valued at $25,000 (see Note 3). This amount has been expensed as stock issued for executive compensation – related party for the nine month period ended March 31, 2013.

5) SUBSEQUENT EVENTS

In April, 2013, the Company issued 156,250 common shares at $0.128 per share to two individuals for $20,000 cash.

The Company has evaluated its subsequent events from the balance sheet date through the date of this report and determined that there are no additional events to disclose.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is an overview of the important factors that management focuses on in evaluating our business; financial condition and operating performance should be read in conjunction with the financial statements included in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of any number of factors, including those set forth in the Company’s reports filed with the SEC on Form 10-K, 10-Q and 8-K as well as in this Quarterly Report on Form 10-Q. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Overview

On June 13, 2012, Delaine Corporation entered into an agreement, with our president, Mariusz Girt, whereby Girt granted to the Company sole and exclusive license, within the United States of America to the proprietary technology which is the basis for our business. Since acquiring the business, our efforts have been devoted to raising capital, developing the CarMonkeys.com website, and hiring key personnel including a chief financial officer and a chief technology officer.

Delaine Corporation is an online retailer of used auto parts under the brand name Car Monkeys. The Company utilizes proprietary algorithms developed in 2008 by Mariusz Girt, the Company’s president. The Company’s proprietary search and consolidation algorithm allows us to show our customers all parts that meet their specific needs. Far more sophisticated than normal search engines, this technology understands and accounts for the fact that many identical parts and assemblies are shared across multiple models, model years, and even across brands. Most owners are completely unaware that parts from a completely different vehicle may be an exact fit for their application. Ordinary search engines do not account for this interchangeability, and as a result, severely limit the customer’s range of choices. Working from this expanded field of prospects, a second proprietary component of our technology applies advanced AI techniques to perform a complex analysis to identify parts that are simultaneously competitively priced as well as of verifiable quality. This component allows us to assess all resultant prospects, and display those that simultaneously represent the best value to our customers, a reasonable profit margin, and, most importantly, a predictive quality metric that allows us to offer a 5-year unlimited-mileage warranty on used parts purchased from us. The technology also includes a fulfillment module, and a fulfillment follow-up module, allowing real time searching of over 157 million auto parts from a trusted network of suppliers, as well as an automated process to identify in-transit shipments, and shipment problems.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2013 and June 30, 2012, the Company has working capital of $11,104 and $182,058, respectively, and an accumulated deficit of $364,962 and $78,550, respectively. Our principal asset is the intangible asset of the proprietary technology acquired in June 2012.

In order to carry on our business, we must obtain additional capital. The Company intends to fund continuing operations through equity financing. Therefore, available capital may be insufficient to fund capital expenditures, required working capital, and other cash requirements for the next twelve months. The successful execution of our business plan requires significant cash resources. Because of our limited operating history, equity or debt financing arrangements may not be available in amounts and on terms acceptable to us, if at all. Additionally, because we intend to rely upon the sale of additional equity securities, there is a risk that your shares will suffer additional dilution. Furthermore, if we incur additional indebtedness there is a risk that increased debt service obligations will restrict our operations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders. Since we initiated our business operations in June 2012, we have been funded by the private sale of equity.

During the fiscal quarter ended March 31, 2013, the Company issued 18,500,000 shares for services. The value of the services received for the shares is based on the stated value of services stated in a consulting contract entered into during the fiscal quarter. The shares included 5,000,000 shares valued at $25,000 issued as a signing bonus to Pawel Girt, the Company’s newly appointed chief financial officer appointed in March 2013 and 500,000 shares valued at $2,500 were issued as a signing bonus to the Company’s newly engaged chief technology officer. 10,000,000 shares were issued to a business development, personnel and finance consultant whose contract states a $50,000 value for the services, equaling $0.005 per share value. 3,000,000 shares were issued to another business consultant similarly valued at $15,000.

The services received for shares during the fiscal quarter are valued at $92,500. The value of the shares issued is $3,061,750 or $0.1655 per share being the weighted average price per share in the below described contemporary cash sales of common shares. The excess of the value of the shares issued over the value of the services received is $2,969,250 and has been recorded as a reduction of additional paid in capital.

In January 2013, the Company issued 25,000 shares for $10,000 cash or $0.40 per share. In April 2013, the Company issued 156,250 common shares to two individuals in exchange for $20,000 cash or $0.128 per share.

As of March 31, 2013 and June 30, 2012, we had no material commitments for capital expenditures.

Results of Operation

Due to a lack of funds, our ability to promote our business has been limited. To date, our efforts have been devoted primarily to raising capital, borrowing funds, establishing our online catalog and the CarMonkeys brand name. Accordingly, the Company has realized $0 in revenue from December 31, 2011 through March 31, 2013, and inflation and changing prices have had no impact on the Registrant's revenues or income from continuing operations. We have completed the website development and expect to commence revenue generating operations during the current fiscal quarter provided sufficient capital is available for Google Merchant Account deposits and initial financing of inventory sufficient to meet initial fulfillment obligations on purchases. We estimate the capital requirement for the first quarter of operations to be approximately $50,000 or less.

Nine-month period ended March 31, 2013 compared to nine month period ended March 31, 2012.

As of March 31, 2013 and June 30, 2012, accounts payable totaled $19,564 and $4,544, respectively and consisted primarily of legal and accounting fees.

Selling, General and Administrative Expenses:

During the nine month period ended March 31, 2013, selling, general and administrative expenses consist of $105,627 primarily for website development. For the same period there were professional fees of $88,073 for the legal, accounting, transfer agent fees and EDGAR filing fees inherent in public company regulatory compliance compared to $2,688 and $26,513 for the nine month period ended March 31, 2012.

Operating Expenses also include executive compensation of $27,500 for the 5,500,000 shares of common stock issued to the chief financial officer and the chief technology officer hired during the fiscal quarter ended March 31, 2013. There was also $65,000 expense for the issuance of 13,000,000 shares of common stock issued to two business consultants during the fiscal quarter ended March 31, 2013. The value of the issuance of these shares is based upon the weighted average price per share of cash sales in January and April, 2013, or $0.1655 per share.

Off Balance Sheet Arrangements

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Currently we are not involved in any pending litigation or legal proceeding.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Please see Current Report on Form 8-K filed on March 26, 2013 for unregistered sales of equity securities during the fiscal quarter ended March 31, 2013. In April 2013, the Company also issued 156,250 common shares to two individuals in exchange for $20,000 or $0.128 per share. The shares were not registered under the Securities Act of 1933. The Registrant relied upon the exemption from registration set forth in Section 4(2) of the Securities Act of 1933 for the above transaction in that the shares were offered and sold without general solicitation.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

Exhibit No.		Description

31.1		Section 302 Certification of Chief Executive Officer

31.2		Section 302 Certification of Chief Financial Officer

32.1		Section 906 Certification of Chief Executive Officer

32.2		Section 906 Certification of Chief Financial Officer

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

____________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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.

	DELAINE CORPORATION

May 14, 2013	By:	/s/ Mariusz Girt
		Mariusz Girt, President

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