SEC Info  
  Home     Search     My Interests     Help     Sign In     Please Sign In  

Capital City Energy Group/Inc · 10KSB · For 10/31/07

Filed On 1/29/08 11:53am ET   ·   SEC File 333-140806   ·   Accession Number 1255294-8-89

  in   Show  and 
  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 1/29/08  Capital City Energy Group/Inc     10KSB      10/31/07    5:72                                     Cane Clark LLP

Annual Report -- Small Business   ·   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Mainbody                                            HTML    261K 
 2: EX-3.3      Articles of Incorporation/Organization or By-Laws   HTML     56K 
 3: EX-31.1     Certification per Sarbanes-Oxley Act (Section 302)  HTML     11K 
 4: EX-31.2     Certification per Sarbanes-Oxley Act (Section 302)  HTML     11K 
 5: EX-32.1     Certification per Sarbanes-Oxley Act (Section 906)  HTML      7K 


10KSB   ·   Mainbody
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page
"Table of Contents
"Item 1
"Description of Business
"Item 2
"Description of Property
"Item 3
"Legal Proceedings
"Item 4
"Submission of Matters to a Vote of Security Holders
"Item 5
"Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
"Item 6
"Management s Discussion and Analysis or Plan of Operation
"Item 7
"Financial Statements
"F-1
"Report of Independent Registered Public Accounting Firm
"F-2
"Consolidated Balance Sheets as of October 31, 2007 and 2006
"F-3
"Consolidated Statements of Operations Year Ended October 31, 2007 and 2006 and period from November 1, 2005 (Inception) to October 31, 2007
"F-4
"Consolidated Statement of Stockholders Equity (Deficit) and Comprehensive Loss for period from November 1, 2005 (Inception) to October 31, 2007
"F-5
"Consolidated Statements of Cash Flows -- Year Ended October 31, 2007 and 2006 and period from November 1, 2005 (Inception) to October 31, 2007
"F-6
"Notes to Consolidated Financial Statements
"Item 8
"Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
"Item 8A
"Controls and Procedures
"Item 8B
"Other Information
"Item 9
"Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act
"Item 10
"Executive Compensation
"Item 11
"Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
"Item 12
"Certain Relationships and Related Transactions, and Director Independence
"Item 13
"Exhibits
"Item 14
"Principal Accountant Fees and Services

This is an EDGAR HTML document rendered as filed.  [ Alternative Formats ]


  mainbody.htm  

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB

[X]
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
     
    For the fiscal year ended October 31, 2007 
     
[  ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
   
   
For the transition period from _________ to ________
     
   
Commission file number 333-140806 

CAPITAL CITY ENERGY GROUP, INC.
(Name of small business issuer in its charter)
 
   20-5131044
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
11741 Costa Blanca Ave.  Las Vegas, NV
89135
(Address of principal executive offices)
(Zip Code)
   
Issuer’s telephone number:  (702) 592-8737
 
   
Securities registered under Section 12(b) of the Exchange Act:  
   
Title of each class
Name of each exchange on which registered
None
Not Applicable
   
Securities registered under Section 12(g) of the Exchange Act:  
None
(Title of class)
 
Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 past 90 days.    Yes [X]       No [   ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes [X]   No [   ]

State issuer’s revenue for its most recent fiscal year.  $1,893

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity, as of a specified date within the past 60 days.    Not Available

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.   9,960,000 Common Shares as of October 31, 2007

Transitional Small Business Disclosure Format (Check One):  Yes: __; No X

 
 
 
 

 
 

 TABLE OF CONTENTS

   
Page
 
PART I
 
PART II
 
PART III

 
 
 
 
2

 
 

 PART I
 I tem 1.   Description of Business

Overview

We were formed on June 27, 2006 to engage in the business of designing, marketing and distributing handcrafted baby blankets and other accessories made from quality fabrics. Our business operations have been conducted through our wholly owned subsidiary, Baby Dot LLC, a limited liability company incorporated under the laws of the State of Nevada. On August 15, 2006, we acquired Baby Dot, LLC from Ms. Jennie Slade, our officer and director, in exchange for 2,000,000 shares of our common stock. In that acquisition, we acquired all assets of the limited liability company, including our website, an existing but limited inventory of products, and all rights to the BabyDot designs.

Through our subsidiary, we introduced our blanket products in November of 2005, starting with our large 40” by 40” blanket, and later with our smaller 30” by 30” blanket. Our business strategy was to sell quality blankets to the premium market in order to generate higher gross margins and offer significant growth potential. We have sought to indentify a brand image based on superior fabric designs, quality and style. We have carefully selected stylish modern prints and fabrics that we manufactured into a comfortable line of baby blankets. To make our products stand out from others, we have labeled our blankets with a BabyDot logo and design and hand-wrapped them with a satin ribbon prior to delivery.

Because we have not had enough product demand to necessitate large scale manufacturing, our strategy has been to hire talented woman to handcraft each blanket, the majority of which are stay-at-home moms. Every product has been made with great care and attention to detail. Our top priority was a happy consumer.

Since our inception, we have sought to diversify our product line. We have added several products, including children’s clothing, bibs, burp cloths, hats, and other baby accessories. We have also expanded our business to include baby announcements of births, blessings, birthdays, and other important events. Yet despite our efforts to grow, we have only achieved limited sales to date. Our limited sales since November 2005 have largely been the result of the personal efforts of our President, CEO and Director, Ms. Jennie Slade. We developed a website and blog to promote our products, but the bulk of our sales were the result of word of mouth marketing and small vendor shows.

Because demand for our products has been very limited, we have put a hold on our search to develop large-scale manufacturing from third party sources. In order to reserve needed capital to survive, we have also halted specific plans to implement our business plan, including expanding the creativity and functionality of our website, attending the ABC Kids Expo, and other plans.

As of the date of this annual, we are unsure whether our business will continue as a going concern. We have very limited revenues, and the bulk of our cash is from investor funds, which is slowly being depleting with operating expenses associated with running our business and fulfilling our reporting obligations as a public company.
 
 
 
 
 
3

 
 

With these obstacles, our board of directors has rethought moving forward with the company’s current line of business and is considering other options.  Our management is now actively looking for other business opportunities for us to pursue. We have entered into negotiations to acquire the business operations of Capital City Petroleum, Inc., a Delaware corporation (“CCP”). Moving forward in this direction, on January 21, 2007, we changed our name to Capital City Energy Group, Inc., a Nevada corporation. On January 24, 2008, we also filed a Certificate of Designation with the Nevada Secretary of State relating to the establishment of Series A Preferred Stock. The Certificate of Designation sets forth the voting powers, designations, preferences, limitations and relative rights of the Series A Preferred Stock. A copy of the Certificate of Designation is attached to this Annual Report as Exhibit 3.1 and is incorporated herein by reference.

Notwithstanding the name change, the establishment of a series of preferred stock and extensive negotiations with CCP, we still have not finalized an acquisition transaction with that company. We anticipate that should such an opportunity arise, our business direction will change. There can be no assurance that our efforts to acquire such an opportunity will be successful.

 Item 2.   Description of Property

We own no real property. We maintain our corporate office at 11741 Costa Blanca Ave.  Las Vegas, NV. Our President, CEO and Director, Ms. Jennie Slade, provides this space to our company free of charge.

 I tem 3.   Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 I tem 4.   Submission of Matters to a Vote of Security Holders

No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year ended October 31, 2007.

 
 
 
 
4

 
 

PART II

 Item 5.    Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

Market Information

Our common stock is currently quoted on the OTC Bulletin Board(OTCBB”), which is sponsored by the NASD.  The OTCBBis a network of security dealers who buy and sell stock.  The dealers are connected by a computer network that provides information on current "bids" and "asks", as well as volume information.  Our shares are quoted on the OTCBBunder the symbol BBYD.OB.”

The following table sets forth the range of high and low bid quotations for our common stock for each of the periods indicated as reported by the OTCBB.  These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Fiscal Year Ending October 31, 2007
Quarter Ended
 
High $
 
Low $
 
n/a
 
n/a
 
$0
 
$0

Penny Stock

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid

 
 
 
 
5

 
 

and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

Holders of Our Common Stock

As of October 31, 2007, we had approximately thirty (30) holders of record of our common stock.

Dividends

There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

 
 
1.
We would not be able to pay our debts as they become due in the usual course of business; or

 
 
2.
Our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

Recent Sales of Unregistered Securities

None.

Securities Authorized for Issuance Under Equity Compensation Plans

We have no equity compensation plans.

 
 
 
 
6

 
 

 I tem 6.  Managements Discussion and Analysisor Plan of Operation

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.  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 affect 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.

Plan of Operation in the Next 12 Months

We currently have limited business activities. While we still plan to offer our products to purchasing consumers, our long term plan is to identify and evaluate other business opportunities and make arrangements to acquire one that is consistent with our expertise and income needs. At the present time, we have not identified any other business opportunities that management believes is consistent with our expertise and income needs.

We can provide no assurance that we will be successful in finding other business opportunities due to our limited working capital. We anticipate that if we are successfully able to identify a business opportunity, we will require additional financing in order to enable us to complete the acquisition. However, we can provide no assurance that if we pursue additional financing we will receive any financing.

We currently have forecasted the expenditure of approximately $20,000 during the next six to twelve months in order to remain in compliance with the reporting requirements of the Securities Exchange Act of 1934 and to identify additional businesses for acquisition. The completion of our business plan for the next 12 months is contingent upon us obtaining additional financing. If
 
 
 
 
 
7

 
 
 
we are unable to obtain additional financing, our business plan will be significantly impaired. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds. Without the necessary cash flow, we will not be able to pursue our plan of operations until such time as the necessary funds are raised in the equity securities market. If we are successful and identify a business to acquire, we will need additional financing to complete this acquisition.

We do not anticipate purchasing any real property or significant equipment during the next 12 months.

At the present time we have no employees other than our sole officer and director, Ms. Jennie Slade. We do not anticipate hiring any employees until such time as we are able to acquire any additional businesses.

Results of Operations for the Years Ended October 31, 2007 and 2006

We generated $1,893 in revenue for the year ended October 31, 2007, compared with $ 1,880 for the same period ended October 31, 2006. Our revenue during both periods was generated by sales of our BabyDot blankets and baby-accessory products.

Our cost of goods sold was $1,863 for the year ended October 31, 2007, as opposed to $1,016 for the same period ended 2006. Our gross profits were negligible for both periods and suggest that our business plan may not be viable in the long term.

We incurred operating expenses in the amount of $17,412 for the year ended October 31, 2007, compared to $6,489 for the same period ended 2006. These operating expenses are primarily attributable to general and administrative expenses associated with the development of our business, legal expenses, and consulting fees.

The drastic increase in operating expenses for the year ended October 31, 2007, compared with the same period in 2006 is a result of management’s use of proceeds, acquired in our private equity offering in late 2006, to grow and develop our business. Increased funds were also used to pay for the increased expenses associated with being a reporting company under the Securities Exchange Act of 1934.

We incurred a loss in the amount of $17,382 for the year ended October 31, 2007, compared to $5,625 for the same period ended 2006.

Liquidity and Capital Resources

As of October 31, 2007, we had total current assets of $7,131. Our total current liabilities as of October 31, 2007 were $8,999. Thus, we had a working capital deficit of $1,868 as of October 31, 2007. As demonstrated above, we expect to spend upwards of $20,000 during the next six to twelve months in order to remain in compliance with the reporting requirements of the Securities Exchange Act of 1934 and to identify additional businesses for acquisition.
We currently do not have enough cash to satisfy our minimum cash requirements for the next twelve months. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital based upon the company’s desired plan of operation. Our financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

 
 
 
 
8

 
 
 
As discussed above, the completion of our business plan for the next 12 months is contingent upon us obtaining additional financing. We do not anticipate meeting the financing requirements of our current business plan. Thus, we are currently negotiating to acquire other business opportunities, unrelated to our current business operations. We anticipate that we will also need additional financing to acquire another business. If we are unable to obtain additional financing, our business plan and our ability to acquire another business and continue as a going concern will be significantly impaired. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds. Without the necessary cash flow, we will not be able to pursue our plan of operations or any plan of operations until such time as the necessary funds are raised in the equity securities market.

Off Balance Sheet Arrangements

As of October 31, 2007, there were no off balance sheet arrangements.

Going Concern

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 
 
 
 
9

 
 

 I tem 7.   Financial Statements

Index to Financial Statements:

Audited Financial Statements:
 

 
 
 
 
10

 
 
 MOORE & ASSOCIATES, CHARTERED
           ACCOUNTANTS AND ADVISORS
 PCAOB REGISTERED

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
Capital City Energy Group, Inc.
(fka The Baby Dot Company)
Las Vegas, Nevada

We have audited the accompanying balance sheet of Capital City Energy Group, Inc. (fka The Baby Dot Company)as of October 31, 2007 and 2006 and the related statements of operations, stockholders' equity (deficit)and cash flows for the years ended October 31, 2007 and 2006 and from inception on November 1, 2005 through October 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Capital City Energy Group, Inc. (fka The Baby Dot Company)as of October 31, 2007 and 2006 and the results of its operations and its cash flows for the years ended October 31, 2007 and 2006 and from inception on November 1, 2005 through October 31, 2007 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. However, in order for the Company to continue as a going concern, the Company will need, among other things, additional capital resources and developing a consistent source of revenues. Management's plans regarding those matters are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Moore & Associates, Chartered
Las Vegas, Nevada
January 28, 2008

2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7511 Fax (702) 253-7501
 
 
 
 
 

 
 
 CAPITAL CITY ENERGY GROUP, INC.
(FKA THE BABY DOT COMPANY)
(A Development Stage Company)
Balance Sheets
 
ASSETS
       
     
         
CURRENT ASSETS
       
         
Cash
$ 7,131     $ 5,014
Prepaid expenses
  -       5
Inventory
  -       1,147
             
Total Current Assets
  7,131       6,166
             
PROPERTY AND EQUIPMENT, net
  661       -
             
TOTAL ASSETS
$ 7,792     $ 6,166
             
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
           
             
CURRENT LIABILITIES
           
             
Accounts payable
$ 1,250     $ 2,303
Advances from related parties
  7,749       2,488
             
Total Current Liabilities
  8,999       4,791
             
STOCKHOLDERS' EQUITY (DEFICIT)
           
             
Common stock: $0.001 par value;
90,000,000 shares authorized, 9,960,000 and 7,000,000 shares issued and outstanding, respectively
  9,960       7,000
Additional paid-in capital
  11,840       -
Deficit accumulated during the development stage
 
(23,007)       (5,625)
             
Total Stockholders' Equity (Deficit)
  (1,207)       1,375
             
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
$ 7,792     $ 6,166
 
The accompanying notes are an integral part of these financial statements.
 
 
 
 

 
 
 CAPITAL CITY ENERGY GROUP, INC.
(FKA THE BABY DOT COMPANY)
(A Development Stage Company)
Statements of Operations
 
 
For the Year Ended
October 31,
 
From Inception
2005 Through
   
2006
 
2007
           
REVENUES
$ 1,893   $ 1,880   $ 3,773
COST OF SALES
  1,863     1,016     2,879
GROSS MARGIN
  30     864     894
                 
OPERATING EXPENSES
               
                 
General and administrative
  17,412     6,489     23,901
                 
Total Operating Expenses
  17,412     6,489     23,901
                 
NET LOSS
$ (17,382)   $ (5,625)   $ (23,007)
                 
BASIC LOSS PER SHARE
$ (0.00)   $ (0.00)      
                 
WEIGHTED AVERAGE SHARES OUTSTANDING
  8,986,849     2,797,260      
 
The accompanying notes are an integral part of these financial statements.
 
 
 
 

 
 CAPITAL CITY ENERGY GROUP, INC.
(FKA THE BABY DOT COMPANY)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
 
 
Common Stock
 
Additional
Paid-In
 
Deficit
Accumulated
During the Development
 
Total
Stockholders'
 
Shares
   
Amount
 
Capital
 
Stage
 
Equity
                     
Balance, <