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DLPM > SEC Filings for DLPM > Form 10-Q on 13-Feb-2014All Recent SEC Filings

Show all filings for DEVELOPMENT CAPITAL GROUP, INC.

Form 10-Q for DEVELOPMENT CAPITAL GROUP, INC.


13-Feb-2014

Quarterly Report


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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words "believes," "project," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. However, the safe harbors of forward-looking statements provided by Section 21E of the Securities Exchange Act of 1934 are unavailable to issuers of penny stock. Our shares may be considered penny stock and such safe harbors set forth under the Private Securities Litigation Reform Act of 1995 may not be available to us.

Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Overview

We incorporated on September 27, 2010 under the laws of the State of Florida, as Development Capital Group, Inc. For the years ended March 31, 2012 and 2011, we provided transportation and logistics services for a wide range of manufacturing, industrial and retail customers. In February 2013, there was a change of control and we discontinued old operations. Our current business is focused on the development of commercial websites and related software applications.

Our plan is to identify and invest in early-stage technology companies that have the potential to disrupt traditional industries and transform markets. With experience building successful businesses, we expect our team to help companies who either have undervalued assets or whose existing businesses require capital investment in order to achieve scale. We are currently investing in and working with companies in the transportation, data analysis, and healthcare space.

RealtyValuator.com

We are currently working on an internal application known as RealtyValuator.com, which is a multi-platform application that supports real estate investors by sourcing available properties in the market and providing tools to easily evaluate and capitalize on prospective property investments. With RealtyValuator.com, even casual home investors can access sophisticated analytical tools typically reserved for large property investment firms with a team of analysts on staff. Customers, and real estate investors, can quickly and easily assess a wide range of criteria about a property and determine the variance between a property's list price and its' official valuation, and using that information, can evaluate forecasted returns on investments in a multitude of scenarios.

Given the overwhelming interest in the foreclosed property market, RealtyValuator.com was conceived and developed to help ordinary people evaluate and invest in residential real estate like a professional firm. However, in addition to appealing to a consumer market, we are looking to roll out more features for professional real estate investors that will be able to subscribe to our service. We anticipate having new applications for auction notifications and alerts, customizable fields to make smarter recommendations and recommendations, and are looking at some options to develop a localized mobile app on multiple platforms.

The salient features of RealtyValuator are as follows:

Customizable selection of real estate zones

Comprehensive housing data and analysis tools

Local foreclosure trends, rental rates, and comparatives

Property updates and alerts

Outstanding loan amounts and position on foreclosure properties

Default amounts, auction updates, owner name and lender name

Sales history and property info for 400-500 houses per week

Estimated values, comp sales, comp listings and nearby foreclosure

Equity and loan-to-value amounts for pre-foreclosures and auctions

Judgment information, case number, and owner information

On January 30, 2014, we allowed users to sign up for access to the private beta version of RealtyValuator.com. We plan to allow full public access to the private beta version on February 14, 2014. Such launch would allow users to test our system for free, while we continue to perfect the product, enhance the usability, add more needed tools, fix any bugs, do additional A and B testing.

During our private beta testing we have a) commenced bug and error testing on the database loads, and have fixed the search functionality while implementing some of the custom behavior tracking of users to better user's search patterns;
b) made the website mobile responsive, which allows real estate investors to use the website on most mobile devices; and c) have currently calculated that RealtyValuator.com has over 10,000 properties in our database since launching the private beta version. Immediately after we complete our full beta testing, we plan to do some test marketing to analyze the user acquisition costs, and therefore determine our retail price for new users and subscribers.

For our hard launch, our plan is to promote RealtyValuator.com through a large press launch, with a push out on social media and listings in South Florida press outlets. We plan to target a minimum of 1,000 users, and plan such growth will continue naturally from such promotion. We currently are planning on the initial launch to be in 22 counties in Florida, which can be expanded eventually to 67 counties in Florida.

We are also looking at expanding outside of the Florida market. There are many areas in the United States that have a backlog of foreclosures, but real estate investors don't have a solution in place to help them outside of their local market to evaluate the real estate properly. We anticipate, and plan, that in the next quarter to start discussions with a city outside of the state of Florida to market and expand our services.

Results of Operations for the Nine Months Ended December 31, 2013 and 2012

Our current business plan is to develop websites and applications. We have generated no revenue in connection with our new business operations. For the years ended March 31, 2013 and 2012, we earned revenue from commissions earned through contracted freight services. These operations, however, have been discontinued.

We had operating expenses of $155,123 for the nine months ended December 31, 2013, as compared with operating expenses of $16,189 for the nine months ended December 31, 2012. Our operating expenses for the nine months ended December 31, 2013 consisted of mainly of professional fees and related party consulting fees. In comparison, our operating expenses for the nine months ended December 31, 2012 consisted of mainly of general and administrative expenses and professional fees.

We recorded a net loss of $154,794 from continuing operations for the nine months ended December 31, 2013, as compared with a net loss of $16,189 from continuing operations for the nine months ended December 31, 2012. Our increase in net loss during the current nine month period is primarily attributable to expense related to the development of our new business model.

Results of Operations for the Three Months Ended December 31, 2013 and 2012

We had operating expenses of $62,436 for the three months ended December 31, 2013, as compared with operating expenses of $5,942 for the three months ended December 31, 2012. Our operating expenses for the three months ended December 31, 2013 consisted of mainly of professional fees and related party consulting fees. In comparison, our operating expenses for the three months ended December 31, 2012 consisted of mainly of general and administrative expenses and professional fees.

We recorded a net loss of $62,107 from continuing operations for the three months ended December 31, 2013, as compared with a net loss of $5,942 from continuing operations for the three months ended December 31, 2012. The Company had net losses due to the lack of revenue.

We anticipate our operating expenses will increase as we implement our new business plan. The increase will be attributable to expenses to implement our business plan, and the professional fees to be incurred in connection with our ongoing filing requirements as a reporting company under the Securities Exchange Act of 1934.

Liquidity and Capital Resources

As of December 31, 2013, we had total current assets of $392,606 and current liabilities of $21,307. Thus, we have working capital of $371,299 as of December 31, 2013.

Operating activities used $150,139 in cash for the nine months ended December 31, 2013. Our net loss was the main reason for our negative operating cash flow offset mainly by an increase in accounts payable of $2,943 and an increase in accounts payable - related party of $9,500.

We used a total of $113,888 in cash towards our investing activities which included the issuance of two convertible notes receivable totaling $70,000 and an investment of $43,888 in our software development.

Financing activities consisting of the sale of 12,132,000 shares of the Company's common stock provide cash totaling $578,975. As of December 31, 2013, 2,726,000 shares were unissued.

As of December 31, 2013, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Off Balance Sheet Arrangements

As of December 31, 2013, there were no off balance sheet arrangements.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most "critical accounting polices" in the Management Discussion and Analysis. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results, and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our critical accounting policies are set forth in Note 2 to the financial statements.

Recently Issued 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 operation, financial position or cash flow.

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