Quarterly Report (10-q)

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 September 30, 2017

☐

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

Commission file number 000-1592411

DKG CAPITAL, INC.

(Exact name of registrant as specified in its charter)


NEVADA	46-3787845
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1980 Festival Plaza Drive Suite 530

Las Vegas, Nevada 89135

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

(702) 463-8880

(Telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES ☒ 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 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 non-accelerated filer, or a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth 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 smaller reporting company)	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO ☒

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 14,893,714 shares of common stock as of November 14, 2017.

DKG CAPITAL, INC.

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2017

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
	Page
ITEM 1. FINANCIAL STATEMENTS

Consolidated Balance Sheets (Unaudited) at September 30, 2017 and December 31, 2016	3

Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2017 and 2016	4

Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2017 and 2016	5

Notes to the consolidated Financial Statements (Unaudited)	6

ITEM 2 . Management's Discussion and Analysis and Plan of Operation	8

ITEM 3 . Quantitative and Qualitative Disclosures About Market Risk	10

ITEM 4. Controls and Procedures	10

PART II OTHER INFORMATION

ITEM 1A . Risk Factors	11

ITEM 6. Exhibits	11

INDEX TO EXHIBITS	11

SIGNATURES	11

DKG Capital, Inc.

Consolidated Balance Sheets
(unaudited)

	September 30,			December 31,
	2017			2016
ASSETS


Total assets	$	-		$	-

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable and accrued liabilities	$	2,500		$	8,500
Amount due to former director		2,306			2,306
Amount due to shareholder		21,218			-
Total current liabilities		26,024			10,806

Stockholders' deficit

Common stock, 5,000,000,000 shares authorized, at $0.001 par value, 14,893,714 shares issued and outstanding, respectively		14,894			14,894

Additional paid-in capital		2,782,620			2,782,620
Accumulated deficit		(2,823,538	)		(2,808,320	)
Total stockholders' deficit		(26,024	)		(10,806	)

Total liabilities and stockholders' deficit	$	-		$	-

The accompanying notes are an integral part of these unaudited consolidated financial statements

DKG Capital, Inc.

Consolidated Statements of Operations
(unaudited)

	For the Three Months ended						For the Nine Months ended
	September 30,						September 30,
	2017			2016			2017			2016

Operating expenses
General and administrative	$	4,570		$	8,225		$	15,218		$	25,765
Total operating expenses		4,570			8,225			15,218			25,765

Loss from operations		(4,570	)		(8,225	)		(15,218	)		(25,765	)

Other expenses
Interest expense		-			-			-			(500	)
Total other expenses		-			-			-			(500	)

Loss before provision for income taxes		(4,570	)		(8,225	)		(15,218	)		(26,265	)

Net loss	$	(4,570	)	$	(8,225	)	$	(15,218	)	$	(26,265	)

Basic and diluted net loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average common shares outstanding
Basic and diluted		14,893,714			14,893,714			14,893,714			14,893,714

The accompanying notes are an integral part of these unaudited consolidated financial statements

DKG Capital, Inc.

Consolidated Statements of Cash Flow

(unaudited)

	For the Nine Months ended
	September 30,
	2017			2016
Cash flow from operating activities
Net loss	$	(15,218	)	$	(26,265	)
Adjustment to reconcile net loss to cash used in operating activities
Amortization of intangible asset		-			1,600
Change in assets and liabilities
Increase in accounts payables and accruals		15,218			3,804
Net cash used in operating activities		-			(20,861	)

Cash flows from financing activities
Net proceeds from note payable-related party		-			9,210
Net cash provided by financing activities		-			9,210

Net decrease in cash		-			(11,651	)
Cash, beginning		-			11,651
Cash, ending	$	-		$	-

Supplementary information
Cash paid:
Interest	$	-		$	-
Income taxes	$	-		$	-

Non-cash Investing and Financing Activities:
Former related party notes and payables forgiven	$	-		$	93,515
Due to shareholder for payment of expenses on behalf of the Company		21,218			2,306

The accompanying notes are an integral part of these unaudited consolidated financial statements

DKG Capital, Inc.

Notes to Consolidated Financial Statements

For the Nine Months Ended September 30, 2017 and 2016

(unaudited)

NOTE 1 - ORGANIZATION AND OPERATIONS

DKG Capital, Inc. (“we”, “our”, the “Company”), located in Las Vegas, Nevada, was incorporated on October 2, 2013, in the State of Nevada.

Mr. Andy Kim resigned as President and Chief Executive Officer, Secretary and Treasurer of our Company on January 11, 2017 and Mr. Tesheb Casimir became the President and Chief Executive Officer, Secretary and Treasurer. Mr. Tesheb Casimir ended the binary option software development. Mr. Tesheb Casimir’s new business focuses are: 1. Mobile application development; 2. Provision of online marketing services; 3. Operation of self-developed social media platform; and 4. Provision of various leisure services to high net worth clients who are users of our social media platform.

On January 11, 2017 our Board of Directors and a majority of our shareholders’ voting power approved (1) a corporate name change to “DKG Capital, Inc.”, (2) an increase in our authorized shares of common stock to 5,000,000,000 shares from 100,000,000 shares and (3) a 30:1 forward split of our common stock. These corporate actions are now effective. All share and per share amounts herein have been retroactively restated to reflect the split.

On July 6, 2017, the Company’s Board of Directors approved a merger with DKG Mobilepay Inc., a wholly owned subsidiary incorporated in the State of Nevada. The Merger is related to the Company’s revised business plan and the Company will be the surviving company of the Merger. The plan of merger provides for an exchange ratio of 1:35 for the common stock of both constituent corporations, which has the practical effect of a 1 for 35 reverse split of the Company’s common stock, with fractional shares to be rounded up to the nearest whole number of shares. This corporate action was approved by the Company’s Board of Directors as authorized by Nevada corporate law. The 1 for 35 reverse stock split effected by the Merger was effective on August 4, 2017. All share and per share amounts herein have been retroactively restated to reflect the reverse stock split.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of DKG Capital, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the years ended December 31, 2016 and 2015, contained in the Company's Form 10K, originally filed with the Securities and Exchange Commission on April 7, 2017. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

Principle of Consolidation

The consolidated financial statements of the Company include the Company and its wholly-owned subsidiary DKG Mobilepay Inc. All material intercompany balances and transactions have been eliminated.

NOTE 3 - GOING CONCERN

The accompanying unaudited interim financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and marketing. As a result, the Company has incurred net recurring losses and an accumulated deficit. As of September 30, 2017, the Company has a working capital deficit. These conditions raise substantial doubt as to the Company's ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock or through debt financing and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

NOTE 4 – RELATED PARTY TRANSACTIONS

As of September 30, 2017 and December 31, 2016, the Company was obligated to a former director for an unsecured, non-interest demand bearing loan with a balance of $2,306.

As of September 30, 2017, the Company was obligated to Mr. Tesheb Casimir, CEO for an unsecured, non-interest demand bearing loan with a balance of $21,218, for the Company’s business expenses paid directly by the CEO on behalf of the Company.

The Company has been provided office space by its chief executive officer at no cost. Management has determined that such cost is nominal and has not recognized any rent expense in its financial statements.

NOTE 5 – STOCKHOLDERS’ EQUITY

On January 11, 2017 our Board of Directors and a majority of our shareholders’ voting power approved an increase in our authorized shares of common stock to 5,000,000,000 shares from 100,000,000 shares and a 30:1 forward split of our common stock. These corporate actions are now effective. All share and per share amounts herein have been retroactively restated to reflect the split.

On July 6, 2017, the Company’s Board of Directors approved a 1 for 35 reverse split of our common stock. These corporate actions are now effective. All share and per share amounts herein have been retroactively restated to reflect the split.

The total number of common shares authorized that may be issued by the Company is 5,000,000,000 shares with a par value of $0.001 per share (100,000,000 shares with a par value of $0.001 per share prior to forward split). There are no preferred shares authorized to be issued. There were 14,893,714 shares (17,376,000 shares prior to forward split) of common stock issued and outstanding at September 30, 2017.

NOTE 6 –SUBSEQUENT EVENTS

Subsequent to September 30, 2017, certain expenses amounting to $2,995 were paid by Tesheb Casimir, the major shareholder and sole director of the Company. The borrowings are due on demand and non-interest bearing. On August 1, 2017, Mr. Tesheb Casimir incorporated a new company in Malaysia Ongraph Holdings Sdn Bhd. This is authorized and approved by a board resolution on November 1, 2017.

Item 2: - Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report on Form 10-Q includes statements about:

·	our marketing plan;

·	our plans to hire industry experts and expand our management team;

·	our beliefs regarding the future of our competitors;

·	our anticipated development schedule;

·	the anticipated benefits of our product;

·	our expectation that the demand for our products will eventually increase; and

·	our expectation that we will be able to raise capital when we need it.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:

·	general economic and business conditions;

·	we may have product liability claims;

·	we may not be successful in commercialization of our products;

·	regulatory changes may hurt the market for our products;

·	we may not be able to protect our intellectual property rights;

·	our auditors have issued a going concern opinion regarding our company;

·	competition for, among other things, capital, products and skilled personnel; and

·	other factors discussed under the section entitled "Risk Factors",

any of which may cause our company's 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.

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.

As used in this report, the terms "we", "us" and "our" mean DKG Capital, Inc., a Nevada corporation. In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our unaudited interim consolidated financial statements and related notes appearing elsewhere in this Quarterly Report.

History and Overview

DKG Capital, Incwas incorporated on October 2, 2013 under the laws of the State of Nevada.

Plan of Operations

After the appointment of Mr. Tesheb Casimir as CEO of the Company on January 11, 2017, the Company were in new business focuses: 1. Mobile application development; 2. Provision of online marketing services; 3. Operation of self-developed social media platform; and 4. Provision of various leisure services to high net worth clients who are users of our social media platform.

Results of Operations

The following is an analysis of components of expenses, and variances comparing the nine months ended September 30, 2017 to the nine months ended September 30, 2016.

We did not generate any revenue during the nine months ended September 30, 2017 and 2016. During this stage, we built our web site and were primarily focused on acquiring, developing and testing products. Our total operating expenses during those periods were general and administrative expense of $15,218 for the nine months ended September 30, 2017 compared to $25,765. Interest expense for the nine months ended September 30, 2017 was $0 compared to $500 for the nine months ended September 30, 2016.

The decrease in operating expenses, for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, is due, primarily, to the reduced professional fees.

Liquidity and Capital Resources

During the nine months ended September 30, 2017, we utilized cash in the amount of $0 to pay for operating activities compared to $20,861 for the nine months ended September 30, 2016. Cash used in operating activities during the nine months ended September 30, 2017 included a net loss of $15,218 compared to a net loss of $26,265 for the nine months ended September 30, 2016.

Investing Activities

We did not use any cash resources for investing activities during the nine month periods ended September 30, 2017 and 2016.

Financing Activities

We did not generate any funds from financing activities during the nine month periods ended September 30, 2017 compared to cash generated from related party note payable of $9,210 during the nine month period ended September 30, 2016.

Material Commitments

We do not have any material commitments for capital expenditures.

Seasonal Aspects

Management is not currently aware of any seasonal aspects which would affect the results of our operations during any particular time of year.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs).

Going Concern

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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 4.

CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2017.

There were no changes in our internal control over financial reporting during the nine month period ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

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 6.

EXHIBITS.

The following documents are included herein:

EXHIBIT
NUMBER		DOCUMENT DESCRIPTION

31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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*

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this November 14, 2017 .